Sao Paulo — Two years ago, Grupo Madero, founded and controlled by chef Junior Durski, found itself in one of the most precarious financial situations in the Brazil’s food retail sector. With total debt nearing R$ 1 billion (approximately $177.94 million), clauses that, if breached, could have triggered early loan repayments, cash burning, and just R$ 40 million (about $7.12 million) in reserves, the outlook was grim.
Fast forward two years, and the scenario has improved drastically. Madero is now reaping the rewards of a disciplined financial strategy, operational efficiency improvements through new processes, and a strengthened capital structure, including renegotiation and prepayments of bank debt, leading to cost reductions and extended terms. The company is once again on a path of sustainable growth.
In an interview with Bloomberg Línea, the company’s CEO, Chef Junior Durski, highlighted the improvement in financial indicators across various areas, from operational cash generation that enables partial debt repayment and leverage reduction, to double-digit top-line growth.
Madero’s second quarter results, released on Friday Aug. 2, reflect this new phase for the chain, which operates 275 restaurants across the country. With healthier and improving operational and financial metrics, Madero is once again among the main Brazilian candidates for an IPO (initial public offering) as soon as capital market conditions become more favorable.
Financials on the mend
Net revenue grew 20.9% from April to June year-over-year, reaching R$ 497.1 million (around $88.47 million). EBITDA, a key indicator of operational cash generation, hit R$ 152.4 million (approximately $27.12 million), a 57.5% annual increase. The adjusted EBITDA margin reached 30.7%, reflecting optimized processes and controls.
“As we saw in the first quarter, our EBITDA will be among the highest in the food service sector, considering the major publicly traded chains like McDonald’s, Burger King, and IMC [which operates Pizza Hut, KFC, and Frango Assado in Brazil], which have yet to release their results,” said the CEO.
Over the past 12 months, EBITDA surpassed the R$ 500 million mark (over $88.97 million), reaching R$ 513.4 million (about $91.38 million).
Madero also returned to profitability, reporting a net profit of R$ 43.7 million (approximately $7.78 million) in the second quarter (versus a loss of R$ 28 million, or about $4.98 million, a year earlier).
Revenue growth has been achieved without the need for margin-affecting tactics, such as promotions, which are commonly used by competitors.
“We don’t offer coupons. We don’t engage in that kind of promotion. Customers return to our restaurants because of the ambiance, the quality of the product, and the satisfaction with the service. They aren’t chasing discounts. We’ve achieved same-store sales growth without any promotions.”
Madero’s CFO, Ariel Szwarc, emphasized in the same interview that the group’s focus is on improving profitability indicators without sacrificing profit margins to gain market share.
“We’ve reduced the cost of debt, which was very high. Financially, the debt is now balanced, with extended maturities. Most importantly, we reached this point through operational performance. The company is doing very well in terms of revenue. The results are fantastic,” said the CFO.
The group ended the first half of the year with R$ 285.1 million (approximately $50.75 million) in cash and financial investments.
In July—already in the third quarter—the group completed a R$ 500 million issuance (around $88.97 million) of commercial paper. The funds were used to strengthen the cash position and prepay all bank debt—the fourth debenture issuance and other bilateral debts—which totaled R$ 423.2 million (approximately $75.31 million).
As a result, the average debt maturity extended from 2.4 years in June 2024 to 3.2 years. In the amortization schedule, the amount due by 2025 decreased from R$ 354 million (about $62.99 million) to R$ 192 million (approximately $34.16 million).
Not even the changing macroeconomic outlook, reflected in the depreciation of the real against the dollar and the pause in Brazil’s interest rate cut cycle, has affected the plans.
“We are prepared for the possibility of a small increase in financial costs if it happens. We’ve already gone through the tough task of reducing debt, and the trend is for indebtedness to decrease further,” Szwarc said.
The company’s leverage level (net debt/EBITDA over the last 12 months) closed June at 1.31x. Two years ago, this indicator was at 3.1x, prompting the group to negotiate a debt restructuring last year with the adoption of new covenants (restrictive clauses).
“We don’t foresee any further need for fundraising. We see no need for it,” the CFO stated.
Lower Investment for New Restaurants
In the second half of the year, Madero plans to open five more units. In the second quarter, the company opened just one new unit—in a container format—in São José dos Pinhais (PR).
According to the CFO, Madero expects to ramp up the pace of openings more aggressively starting in the second or third quarter of 2025.
“We are progressing step by step, very slowly. We’ve already managed to reduce the capex [investment] required to open a new unit. Previously, a Madero Steak House unit required around R$ 6 million (approximately $1.07 million). Now we do it with R$ 4 million (about $712,000). There has been a complete reengineering process to better select the structure and equipment,” Szwarc explained.
Junior Durski, on the other hand, highlighted the anticipated return of picanha to the Madero Steak House menu in September, after a year and a half hiatus due to high meat prices.
“We’re conducting some tests for the return of picanha, importing it from the best slaughterhouses in Uruguay. We decided to bring it from there because the best meat I know is from Uruguay,” said the chef.
“It’s a country with strict quality control for meat. Neither Argentina nor Brazil has a strict law requiring that only castrated cattle be slaughtered. This makes a difference in the meat quality. When the animal is castrated, the meat is more tender,” he explained.
Another novelty, according to him, will be a new salad recipe—a “secret from my grandmother.” “It has a German touch, with onions, peppers, and tomatoes. It’s not a dry salad but pickled.”
