Nexpe Participacoes SA

BOVESPA:NEXP3

Earnings Call Transcript 2022-Q2

[Operator]

Good afternoon, ladies and gentlemen. Welcome to the videoconference of Nexpe to discuss the earnings referring to the second quarter of 2022. This video conference is being recorded, and the replay can be accessed at the company's website at www.nexpe.co. The presentation will also be available for download.

[Operator Instructions]

Before proceeding, we would like to clarify that forward-looking statements are based on beliefs and assumptions of Nexpe management on information currently available to the company. Such statements may involve risks and uncertainties as they refer to future events and therefore, depend on circumstances, which may or may not occur. Investors, analysts and journalists should take into account that events related to the macroeconomic environment to the segment and other factors can cause results to differ materially from those expressed in such forward-looking statements.

Here with us in this videoconference, we have Andrea de Rizzio, CFO and Investor Relations Officer; and Daniel Guerbatin, CEO of the company. I would now like to turn the floor over to Mr. Guerbatin, who will start the presentation.

[Daniel Guerbatin, executive]

Good afternoon. Welcome to the earnings conference call for the second quarter of 2022 of Nexpe. Nexpe is a platform that offers the best and most complete experience using a technology, and our purpose is to make real estate experience a unique partnership.

We're on Slide 3. Nexpe has an excellent performance, growing new verticals as compared to the results of the first quarter of the year. We improved our net revenues by 39%, reaching BRL 31.9 million. Our physical presence is consolidated with our origination given by digital channels, which is due to the strengthening of our digital strategy implemented lately. Credimorar, our platform of multibank financial services, played an important role in this quarter, reaching 20% of market share of Bradesco in June. And in the quarter, we had 6.7% of market share in the banks we operate in; Bradesco, Santander and Itau.

In addition, we had positive advancements in the reduction of our lawsuit liabilities. We implemented a process of negotiation of liabilities, of which 47% of these processes or lawsuits have been approved and the others are pending. That enabled us to reduce the probable losses allowance by a considerable amount, reaching BRL 14.2 million, and we go on to -- close to 0 in the next quarters.

Now I turn the floor over to Andrea de Rizzio, our IR and CFO, who will talk more about performance and financial details. And I'll be back soon to talk more about the operations.

[Andrea de Rizzio, executive]

Thank you, Daniel, and good afternoon, everyone.

Starting our presentation on Slide 4, we will talk a little about our results in the second quarter of 2022. The gross revenue realized in the second quarter was BRL 36.2 million, 38% higher than the previous quarter. This recovery mainly reflects the growth of the secondary market by 34% and our vertical of financial services, which grew by 53% compared to the first quarter of 2022. When we talk about our gross income, it grew by 39% when compared to the first quarter of 2022, showing efficiency in our costs.

On Slide 5, in administrative expenses, we see a nominal value of BRL 25 million in the second quarter of 2022, an increase of 9% when compared to the first quarter as a result of the collective bargaining agreements. However, when we consider revenue, there was a drop of 18 percentage points in relation to the previous quarter. We posted an adjusted EBITDA without labor liability of negative BRL 5.8 million, an improvement of 36% in relation to the last quarter.

On Slide 6, when we look at the performance indicators, both cost over revenue and revenue per headcount, both had significant gains due to the improvement in revenue and the nongrowth of costs and headcount.

On Slide 7, we see that our operating cash generation was negative by BRL 37.7 million, closing the quarter with a balance of BRL 60.6 million. This impact mainly reflects the project to reduce liabilities and the foreclosure that I will demonstrate on the next slide.

On Slide 8, we show the evolution of liabilities, and we made progress in reducing them through the implementation of a project that negotiated 80 lawsuits in the execution phase of which 47 have already been approved and written off and 33 are still pending approval. It was an excellent job performed by our legal department that will result in estimated cash savings of around BRL 8 million.

This concludes the results section. And I'll return the floor to Daniel, who will continue our call talking about the performance of our operations. Thank you very much.

[Daniel Guerbatin, executive]

Thank you, Andrea. On Slide 9, we see the snapshot of our Figital company in which the company's journey happens physically, offline as well as online. The real estate journey will always have the dynamic because although customers may look for real estate online, the physical visit with a qualified broker and the relationship of trust created that is essential to facilitate the purchase. In this quarter, 75% of our sales came from digital channel.

This provides a better customer experience, improves relationships and proves to be more efficient. The explanation for this is that we have developed systems and processes that improve the performance in the middle of the funnel in leads coming from digital channels.

On Slide 10, we see that Credimorar reached -- resumed its growth and reached an origination of BRL 936 million, which accounts for 6.7% in the banks we operate and return to the level of the first quarter of 2021. The origination of Credimorar is found by several products such as real estate financing, home equity and consortium.

On Slide 11, we see the performance of intermediation of finished properties. And in this vertical, which is made up of brands such as Desenrola, Bamberg and Brasil Brokers, we had a resumption of PSV of sold units when compared to the previous quarter.

Moving on to the next slide, #12, we see the distribution of the sales, 66 in Rio, some in Sao Paulo and 4 in other locations. We can also see that we continue to follow our plan to concentrate sales on properties above BRL 1 million. A little more than half of our sales already take place in this market segment.

On Slide 13, I broke down the leasing details of the Desenrola, our main initiative in this market segment, and we have continuously improved our processes and systems and have been able to show superior performance in final conversions compared to traditional operations in our history despite the increased difficulty to generate leads in this quarter.

On Slide 14 and 15, we see information on the launch intermediation segment where we can see that although the contracted PSV and the number of units launched has gone down, we are selling more. And this quarter, we are positioned in products of lower volume, but with a higher average ticket amount. And the teams -- sales team has improved to provide a better journey for our customers.

On Slide 16 and 17, we see some of the initiatives linked to ESG. 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 brands of Nexpe Group is integrated through a multidisciplinary committee of employees that has 27 volunteers today and seek to integrate the business strategy with environmental, social and governance commitments.

On Slide 17, one of the things I'm most proud of is the Gigantesca movement under the motto: Everything Fits. There is just no space for prejudice. And we'll focus on inclusion and diversity this year in order to provide an environment in which all individuals are valued, supported and treated fairly and with respect in which people have equal access to opportunities and resources and can freely contribute to the success of the group, in addition to ensuring the condition so that everyone can reach their full potential.

Thank you all very much. And let's start the Q&A session.

[Operator]

[Operator Instructions]

My first question comes from [ Rafael ]. And it says, "I would like to know what is -- how do you expect to unlock the growth of Desenrola."

[Daniel Guerbatin, executive]

Thank you for your question, Rafael. The growth of this Desenrola is closely related to the city of Sao Paulo. We understand that in this last year, we had to create a model in which capturing the properties was very important. So we concentrated in capturing properties and some -- making some sales, but basically populating our website with properties so that we could have a capacity to sell them because in order to sell properties, having a reasonable amount to supply to offer customers is very important.

It's important to provide more options for customers. So unlocking the growth of Desenrola is on its way, it's in our plan and something very important that we are now, given the technology and also in a systemic way, we've been able to do is to use many of our properties that already exist at the Bamberg unit in the partnership with Desenrola so that we can expedite this development.

[Operator]

Next question comes from [ Rafael Belong ] as well that asks, "I would also like to have some information on how a [indiscernible] SAVYE".

[Daniel Guerbatin, executive]

Thank you again for your question, Rafael. SAVYE is a [indiscernible] initiative that we started recently. Its purpose is to test new products using our distribution channel that already exists, especially Credimorar distribution channel with its business partners, real trade brokers and credit advisers. And the main purpose of this initiative is not so much to generate revenue, but to provide more services in our ecosystem so that our partners may have a better real estate experience in the Nexpe Group.

It was doing well. It was -- had a warm welcome by the partners. And we have some negotiations underway. It's very simple to implement. It's highly technological, and it's been done in partnership with [indiscernible] to cause all the LGPD, which is the Brazilian law on the privacy, can be implemented for partners.

[Operator]

[Operator Instructions]

This Q&A session has now ended. We would now like to turn the floor over to Mr. Guerbatin for his final remarks.

[Daniel Guerbatin, executive]

Thank you for the questions. I would like to take this opportunity to pay a tribute to all real estate brokers for August 27, which is the day of real estate brokers and thank them for the journey with our customers. Thank you all for your time, and have a good afternoon.

[Operator]

The videoconference of Nexpe has now ended. We thank you all for your attending, and have a good day.

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