Nexpe Participacoes SA

BOVESPA:NEXP3

Earnings Call Transcript 2022-Q1

[Operator]

Good afternoon, ladies and gentlemen. Welcome to the video conference of Nexpe for the discussion of the results regarding the first quarter of 2022. This video conference is being recorded, and the replay can be accessed on the company's website, www.nexpe.com (sic) [ www.brasilbrokers.com.br ] . The presentation is also available for download. [Operator Instructions]

Before proceeding, we would like to clarify that any forward-looking statements are based on the beliefs and assumptions of Nexpe's management and current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors, analysts and journalists must understand that events related to the macroeconomic environment, industry and other factors could cause results to differ materially from those expressed in their respective forward-looking statements.

Here with us in this video conference are Ms. Andrea de Rizzio, CFO and Investor Relations Officer; and Mr. Daniel Guerbatin, CEO of the company. I would now like to turn the call over to Mr. Guerbatin, who will start the presentation.

[Daniel Guerbatin, executive]

Good afternoon. Welcome to Nexpe's first quarter earnings call. We launched Nexpe on March 29 with the aim of consolidating a transformation that has been underway for 18 months. Nexpe is a platform that offers the best and most complete experience in every real estate journey using technology. And our purpose is to make each real estate experience a unique partnership.

Let us move to Slide 3. In this first quarter of the year, we had a strong impact due to the accelerated rise in Selic rate, which went from a level of 6.25% in September last year. And in 6 months, it reached 11.75%. With this rate hike, the real estate market went through a moment where customers were more cautious as to the acquisitions, especially in the months of January and February. We clearly see this behavior following the data released by [indiscernible] on the volume of real estate credit in the banks we have partnership with: Bradesco, Itau and Santander, where even with a lower origination volume, we grew 47% in the market share from 4.4% to 6.4% share.

At the end of the quarter, we already started to see the stabilization of the Selic rate and the recovery of demand with a significant increase in customers making visits to the assets and proposals. This gives us confidence that volume will recover in the following quarter.

I now turn the floor over to Andrea de Rizzio, our CFO and IR Director, who will provide us with more financial and performance details. I'll come back later to bring you more details of our operations.

[Andrea de Rizzio, executive]

Thank you, Daniel. Good morning, everyone. Good afternoon, everyone. Starting our presentation on Slide 4, we will discuss some of our results for the first quarter 2022. Gross revenue in the first quarter reached BRL 26.2 million, well below the same quarter of 2021. This drop was greatly impacted by our real estate credit vertical, which due to the increase in interest rates, there was a drop in production volume. When we talk about our gross result, we see that it followed the drop in revenue, closing the first quarter of 2022 at BRL 13.4 million.

On Slide 5, in the administrative costs, we verified a nominal volume of BRL 22 million in the first quarter of 2022, an increase of 8% when compared to 2021, but an expressive growth when taking revenue into account. We presented adjusted EBITDA without labor liabilities of negative BRL 9.4 million, which was heavily impacted by the drop in revenue.

On Slide 6, when we look at the performance indicators, both costs over revenue and revenue per headcount, both were extremely impacted by the drop in our revenue. It is worth mentioning that nominal costs did not increase significantly, thus maintaining our austerity controlling costs and expenses.

On Slide 7, we verified that our operating cash generation was negative by BRL 19.9 million, strongly impacted by the payment of our liabilities and the drop in revenue. When we look at the total cash, we ended the quarter at BRL 95.5 million. This is due to 2 operations, a capital increase and a structured operation with our partner, Bradesco, as already informed in the Material Fact disclosed to the market.

Finally, we believe that like Nexpe, we will be able to boost our technology platform, reflecting the indicators for the coming quarters. This concludes the results section, and I will turn the floor to Daniel, who will continue our call now talking about the performance of our operations. Thank you very much.

[Daniel Guerbatin, executive]

Thank you, Andrea. On Slide 8, we show a picture of our digital transformation that is already consolidated. We have 70% of our leads coming from digital channels and 75% of our sales already come from these same channels. This channel brings a better customer experience, improves relationships and proves to be more efficient. The explanation for this is that we have developed a system and process that improved the performance in the middle of the funnel and the leads coming from digital channels.

On Slide 9, we can see that Credimorar reached the origination of BRL 895 million this quarter, which represents 6.4% of share in the banks we operate and return to the level of January 2021. The origination of Credimorar is formed by several products such as real estate credit, home equity and consortium.

On Slide 10, we can see the performance of the intermediation of finished properties and in this vertical, which is made up of brands such as the Desenrola, Bamberg and Brasil Brokers, we had a decrease in PSV compared to the same period last year.

On the next slide, #11, we have the distribution of the sales being 58% in the state of Rio de Janeiro, 37% in São Paulo and 5% in other locations. We can also see that we followed our plan to concentrate sales on properties above BRL 1 million. A little more than half of our sales already happened in this market segment.

On Slide 12, I bring you the details of Desenrola leasing or main initiative in this market segment. And we have continuously improved our processes and systems and have already been able to show superior performance in funnel conversion when compared to traditional operations in our history.

On Slides 13 and 14, we see the information on the launch of intermediation segment, where we can see that although the contracted PSV and the number of units launched has gone up, we are selling less, which shows that the sale on offer in those projects we chose to participate in has been slower.

On Slide 15, we see some of the ESG initiatives. We believe that the future is everyone's responsibility and that we need to be committed to doing our part within our ecosystem. The ESG agenda of all Nexpe Group brands is integrated through a multidisciplinary committee that seeks to integrate the business strategy with environmental, social and governance commitments.

On next slide, one of the things that I'm most proud of is the Gigantesca movement under the motto, "Everything fits. There is just no prejudice," which had its evolution designed and completed. And now enables the participation of employees directly, not only in the suggestion of ideas, but also in their implementation, strengthening the culture and deepening the understanding of what it really means to practice the value of the organization. We will focus this year on the issue of inclusion and diversity in order to provide an environment in which all individuals are valued, supported and treated with fairness and respect, have equal access to opportunities and resources and can fully contribute to the success of the group in addition to guaranteeing the conditions for all people to reach their full potential.

Thank you all. And let's open the Q&A session.

[Operator]

[Operator Instructions] Our first question comes from [ Leandro ].

[Andrea de Rizzio, executive]

[ Leandro Koller ], yes, I'm going to read his question. Thank you very much for the question, Leandro Koller. Why did the administrative expenses rise so much?

If we look at the graph, when we see the administrative expenses, that grew from BRL 20 million to BRL 21 million. It grew less than the inflation as you saw in my speech, so it's stable. So the growth that we see there when we compare it to the revenue and since the revenue dropped, the proportion decreases, but the expense is stable. And its growth was lower than the inflation. It continues to show that we have control over all the expenses and costs of the company.

[Operator]

[Operator Instructions] Our next question comes from [ Rafael ]. What is the possibility of monetization of Nexpe?

[Daniel Guerbatin, executive]

Rafael, thank you for the question. [ SAFE ] was launched, it's a [ low-tech ] for the real estate segment, and it has a large prospective of monetization, considering that we are going to use the distribution channel of Credimorar of all real estate units that our partners and the credit institutions -- so that we can make the adaptation of LPG (sic) [ LGPD ]. And we see that this is a reality. The companies need to make adaptations to the LGPD legislation, and it has a lot of difficulty to do this. We went through this adaptation recently as to LGPD, and we would like to share this with all the market of the real estate in a simple way so that it can bring benefit to the whole ecosystem.

[Operator]

[Operator Instructions] Our next question comes from Leandro Koller. This is a question that has already been answered. This was the first question. Does the expansion involve acquisition, M&A?

[Daniel Guerbatin, executive]

Leandro, thank you for the question. There is always the possibility of funding our operations by means of M&A and acquisitions. It's not a possibility that we rule out. Whenever an opportunity comes up, the company really considers.

[Operator]

[Operator Instructions] The Q&A session has come to an end, I would like to give the floor back to Mr. Guerbatin for his final remarks.

[Daniel Guerbatin, executive]

Thank you for taking part in our call and for the questions. I'm sure that we are here improving our processes and systems ever more so that we can bring a better and more comprehensive experience in your real estate journey and bring about better results. Good afternoon, everyone, and thank you, once again.

[Operator]

The video conference of Nexpe is closed. We would like to thank you all for participating, and have a nice day, everybody.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]