Nexpe Participacoes SA

BOVESPA:NEXP3

Earnings Call Transcript 2021-Q2

[Operator]

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to the Conference Call for Earnings of Brasil Brokers for Q2 2021. We inform all the participants that this call and the slides are being broadcasted simultaneously through the internet at www.brbrokers.com.br/ir, where the presentation is available for download. We inform that this event is being recorded. [Operator Instructions].

Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Brasil Brokers' management and on the information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Brasil Brokers and could cause results to differ materially from those expressed in such forward-looking statements.

First, Mr. Daniel Guerbatin, CEO of the company, will present the operational results. Then Mrs. Andrea de Rizzio, CFO and Investor Relations will be -- present the financial results.

Okay. Mr. Daniel Guerbatin, you may proceed.

[Daniel Guerbatin, executive]

Good afternoon, and thank you for participating in our conference call for Q2 2021. It is a great pleasure to be the bearer of excellent news, the results of Q2 '21 and also year-to-date until June 30. In spite of restructuring, the company begins to consolidate. The transformation gets the first results, positive results.

Our gross margin in the first semester is 62%, and this shows that our growth is sustainable. We will present in this call the improvement in revenue and the gross results in all the company's verticals as a result of the constant growth of Credimorar as a platform to distribute financial products based on technology.

Second, the growth of Desenrola is a platform for purchase sale and digital rental. Third, the growth of sales in the primary market. And fourth, a more lean structure and improvement in the efficiency of our sales. These are really victories that we have through technology, improving processes and the constant improvement of the way we work and the construction of a company that is more united. Brasil Brokers operates with strategic pillars, such as profitability, digital transformation, customer experience and ecosystem.

On Slide 2, we can see the constant improvement of our gross results. One of the great indicators that we follow month after month, we reached BRL 25 million in -- with an improvement of 23% in relation to Q1 and BRL 182 million in relation to Q2 2020. This is the result due to improvement of net revenue and also strict variable cost control. The company continues with the division of gross results being well diversified. 38% for financial services; 32% in ready units; 28% in launches, intermediation launch; and 2% in other business.

The highlights in the quarter are: an increase of 16% in units financed by Credimorar in comparison with Q1 '21; growth of 182% in units launched in comparison with Q1 '21; growth of 9% in the average value of the units sold in the ready segment.

Continuing with some highlights on Slide #3. In Brasil Brokers' group, gross revenue had an increase of 23% in relation to the previous quarter, reaching BRL 47 million and 57% coming from financial services of Credimorar; 22% in ready units; 19% in the primary market; and 2%, other business.

We have -- we had -- we did not have new labor lawsuits in the [indiscernible], which shows that the actions that we implemented are correct. In Credimorar, we grew 24% in gross revenue when compared to Q1 this year, boosted with revenues, boosted with the diversification of products, such as home equity and a consolidated distribution channel. And [ Credimorar ] is a system that allows the whole journey of the client to be done in a fluid and transparent way.

In this [ era ], we have approximately [ 2,000 ] pieces of real estate being managed and leasing, and we are -- the system is ready to receive new businesses and to expand the current business with the experience -- with a good experience for the clients. And we already did the rollout for the city of Niterói in Rio de Janeiro in August.

In launches, our average ticket was 11% better than in the previous quarter due to a greater number of launches and also medium-high income units in São Paulo and Rio de Janeiro. Our gross revenue in this segment was 24% higher than in the previous quarter.

On Slide 4, we will detail the segment of ready units where we operate with the brands: Bamberg; Brasil Brokers; and Desenrola. [ BRL 357 million ] with 535 units were working in a [ prioritian ] way in medium- and high-income real estate. We had growth in all the indicators in this [indiscernible].

On Slide 5, we look at rental or leasing where we also work with the brands, Bamberg, Brasil Brokers and Desenrola. In this segment, most of the portfolio is already in the Desenrola model with volume agility and technology in processing the leasing or rental of the real estate. Bamberg has a lot of experience in this segment also with high-value real estate in São Paulo. Part of the process and technology in Desenrola already migrated to Bamberg to help boost this segment with professional pictures, 360-degree tours, digital contracts and also a team for follow-up of leads.

On Slide 6, we have our vertical of financial services with Credimorar, which had a quarter of production with a billing of BRL 1 billion and consolidate -- this consolidates the partnership with the 3 main private financial institutions of the country. All the indicators are improving month after month, showing that the investment in technology, diversification [ on ] products and a team that does their best to make things easy for the client. So -- and this, we continue with Credimorar being the leader in real estate financing with multi -- with many banks.

In Slide 7, we'll see the results of the primary segment where we work with the brands, [indiscernible] in São Paulo and Brasil Brokers in Rio. We launched in this quarter, BRL 2 billion in [ VGV ] with more than 4,000 units that originated a [ VGV ] of BRL 430 million with 726 units sold.

Now I'd like to pass the floor to Mrs. Andrea Rizzio, our CFO and Investor Directors Investor Relations Officer.

[Andrea de Rizzio, executive]

Thank you, Daniel. Good afternoon. I will continue the presentation on Slide 8 where we will give more details about our results. We are very satisfied to have another quarter where we show growth for the company, the consequence of hard work and also strict cost control with responsibility. Our gross revenue in Q2 2021 reached BRL 47 million, 23% above Q1 of 2021 and 107% higher than in the same period in 2020. This due to a correct strategy which was very well explained by Daniel.

When we talk about management expenses, administrative expenses, we see a drop in relation to gross revenue. We went from 69% in Q2 2020 to 48% in administrative expenses in Q2 2021. This demonstrates that the restructuring done was correct and sustainable, giving support to the growth of revenue without interfering the quality of our services. We show an adjusted EBITDA without labor liabilities of BRL 2.4 million. This result is significant for us. We understand that it represents a new landmark for the company.

On Slide 9, we show the results of EBITDA together with structural actions that had an effect on the generation of operational cash of BRL 4.9 million in Q2 of 2021, with a cash consumption of BRL 3.3 million, coming from investments in technology and payments of liabilities from previous years.

On Slide 10, we have the -- we have -- this refers to the inventory of labor liabilities. The same dropped to 355 lawsuits in the same period, a reduction of 22% in lawsuits. I highlight once again that the new lawsuits have dropped in number. Q2 2021 was closed without new lawsuits. Thus, this shows us that we are on the right track.

Finally, I would like to thank the efforts of all our team that is doing an excellent work and to stress to our investors and to the market that we, from Brasil Brokers, we value ethics and responsibility. We are a company listed on [indiscernible] in the stock market, and we aim at profitability with transparency, best practices and also following the rules of the CBM, our SEC.

On the site -- on our Investor Relations' site, you can download the contents of this call, also material fact, communications to the market and shareholder structure. We ask that you always look for trustworthy sources of information. If you have any -- if you need clarification, talk to us, and we will be available to answer. Our email is [e-mail].

With this, I would like to conclude the results section, and I pass the floor back to Daniel who will be -- continue with our call, talking about our transformation.

[Daniel Guerbatin, executive]

Thank you, Andrea. This is certainly one of the topics that is -- that are very important in our management, the cultural transformation of the company.

As you can see on Slide 12, in the last few months, we intensified our project for cultural transformation involving the 6 companies that are part of the group with a participation of 92% of the company in surveys, guided by our purpose of making each experience a unique partnership. We define really our work made up of vision, values and behaviors. These are the pillars of the transformation. And we began a group of ambassadors, cultural ambassadors formed by 22 people who dedicate part of their work to [ intensify ] the building and spreading of this project and its values. At the same time, to be aligned with behaviors and execution, we all consolidate more and more the OKR methodology as a model of management for the company.

This journey of transformation is built on various actions with sustainable objectives to support our business strategy and to form a unique corporate identity based on transparency, agility, collaboration to generate collective commitments, motivate attitudes and improve the customers' experience and profitability.

On Slide 13, we would like to highlight the creation of an area dedicated to ESG practices and the progress of actions that reinforce the company and its commitment to generate a positive impact in the whole ecosystem. In governance, we created policies that clarify topics such as social responsibility, diversity and donations to mitigate the corporate practices that generate environmental impact. We established partnerships with institutions specialized to reprocess and reuse the paper and correct -- and also correct [ disposure ] of technological materials.

We continue on Slide 14, showing the social impact. We structured projects to generate an effective contribution for society with a highlight to the program, the Future Begins at Home, where the company gives financial support to the revamping of families in situations of poverty and vulnerability and also another project, young entrepreneur, which works with volunteers, helping to teach poor, young people. Apart from this, we also collected and donated 1,300 kilograms of food donated to institutions for poor people.

On Slide 15, I would like to share with you our movement called Gigantesca, which was created to arise the corporate conscience on diversity and inclusion. We believe that it's urgent to create plural environments, facilitating expressions, ideas and a horizontal communication which will enable innovation towards this. This project, Gigantesca, promotes monthly meetings with debates on the type of diverse conditions where we have already reached with the participation of 550 people.

Based on this, the company is committed to address and treat these conditions in order to promote the company that is light with good relationships and which is -- really helps in the evolution of the business without any prejudice.

I thank you all and we would like to begin the Q&A session.

[Operator]

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

[Unknown Analyst]

Why did the company have an increase in the wages of the Board and other employees?

[Andrea de Rizzio, executive]

Thank you for the question. Andrea is answering then Daniel can talk about the partnerships.

The company did not have wage increases for the council. We are -- we have a stock option plan, long-term stock option plan, which is considered as compensation, all those stock options are not. That is why we had a meeting to approve the total amount of stock options. There was an increase due to legislation for 1 member of the council and due to legislation of the CBM [ RSCC ]. So there was no increase in wages or fixed compensation nor variable compensation for any of the executives. What we did have is the stock option plan for 5 years.

[Daniel Guerbatin, executive]

Talking about Credimorar. We have partnerships with Bradesco, Itaú and Santander Bank. Credimorar is diversifying its products. It distributes home equity, Santander and other start-ups, such as [indiscernible] cash. So we have been increasing our portfolio, both in terms of products and banks linked to these products.

[Operator]

Since there are no more questions, we would like to pass the floor to Mr. Daniel for his final comments.

[Daniel Guerbatin, executive]

I thank you all for participating in this conference call, and I invite you to the Investor Day on August 28 at 3:00 p.m. To participate, you -- please register yourself. We wish you a good week. Thank you.

[Operator]

The conference call of Brasil Brokers is concluded. We thank you very much, and we wish you a good afternoon.

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