Nexpe Participacoes SA

BOVESPA:NEXP3

Earnings Call Transcript 2020-Q4

[Operator]

Good morning, ladies and gentlemen, and thank you for standing by. Welcome, everyone, to Brasil Brokers' teleconference to present the results concerning the fourth quarter of 2020. We'd like to inform you that this call and the respective slide deck are being broadcast simultaneously through the Internet at the company's website, www.brbrokers.com.br/ir, but the presentation can also be downloaded. [Operator Instructions]

We would like to inform you that questions can only be posted via telephone. If you are connected through the webcast, you should email your questions directly to the IR team at [e-mail].

Before moving on, we'd like to mention that forward-looking statements made during the company's presentation concerning the company's business outlook, operating and financial targets are based on beliefs and assumptions on the part of the company's management and also on information currently available. Forward-looking statements are no guarantee of performance as they involve risks, uncertainties and assumptions that might affect future events and depend on circumstances that may or may not materialize. General economic conditions, industry conditions and other operating factors might affect the company's future results, thus making the results differ considerably from those expressed in these forward-looking statements.

First, Mr. Daniel Guerbatin, the company's CEO, will present the company's operating results. After that, Ms. Andrea de Rizzio, the company's CFO, will talk about the financial results.

Please, Mr. Guerbatin, you may start the conference.

[Daniel Guerbatin, executive]

Good morning, everyone. It is a pleasure to be able to share with you everything we've done at the company in 2020, especially in the last months of the last year.

We can now move on to Slide #2, please. The pandemic caught us by surprise early in March last year and our lives needed to be adapted. With that, our business model also needed to change fast. This way, the acquisition we had made transformed our operating model through digital transformation and also through diversification of our revenue streams, which happened in previous years. Brasil Brokers was prepared, ready and resilient. And we managed to recover revenues in the second half.

We came out at a level of 40% above that of the first quarter. Our net gross revenue reached BRL 120 million, BRL 70 million of which in the second half of the year.

On the real estate front, changes that were most [ separate ] were that of launches. With our sales trend closed, we were at a halt for almost 3 months. Still, we managed to reach a better adjusted EBITDA, better than in 2019. And from the manager's point of view, we came out positive in the second half.

[indiscernible] segment, we grew by 24% driven by our digital transformation strategy and also driven by an improvement in the process of follow-up of the [indiscernible].

Our fintech Credimorar generated BRL 2.66 billion in real estate financing, thus confirming the lead as a multibank platform for real estate financing. Our cash remained stable during the second half due to all the actions we implemented to cut waste. And with that, our adjusted EBITDA in August came out positive from a managerial point of view.

Now moving on to Slide #3. In line with our strategy to diversify our revenue, Credimorar had a share of 47%. Losses accounted for 25% and finished products of properties, including [ 9% ] from rental, saw a growth of [ 3.7% ] with a very good growth of our Desenrola business and fiscal transactions and another 1%. Besides that, another piece of good news was that our adjusted EBITDA improved by 49% when compared to 2019.

Moving on to Slide 4. The 2 companies that make up the group numbers, Desenrola and Brasil Brokers in Rio de Janeiro, combined by a growth of 24%, both in units and also in PSV. That strong growth was achieved through an improvement of processes at Desenrola and spread across all the companies of the group. The Desenrola business unit has already been operational in Goiânia and also in São Paulo.

Moving on to Slide #5. And so in concentration of our finished properties mid- to low scales -- and strong and real. The objective of the [indiscernible] is to continue growth in that state and but it even -- and boost it even further in São Paulo. All indicators of that vertical are positive and saw a growth when we compare 2019 and 2020.

Moving on to Slide #6. Our administration platform for rental is already operated by Desenrola. We saw a growth in our administration [indiscernible] in 2020. Know the amount of [indiscernible] were high because of the pandemic in the year. We saw an increase in delinquency in the first months of the pandemic and a cash for [indiscernible] owners and tenants, aiming at providing a positive experience. Our net revenue came out slightly below plan because we reduced our administrative fee in order to be able to compete with our digital rental model.

On Slide #7, we see that Credimorar continues to see a contracted growth, a leader in originating real estate financing via multibank, it grew by 23% in the year, generating BRL 2.58 billion in real estate credit. Our net revenue reached BRL 48.8 million, up 10% than in 2019.

Moving on to Slide #8 now. You can see that through the pandemic, the volume of launches in 2020 was quite low. And with that, our performance on that front suffered significantly. However, our managerial adjusted EBITDA came out better than in the previous year again, with a lower net revenue [indiscernible].

On Slide #9, you see that PSV was lower than that in 2019. But in the second half -- the second half accounted for a 6% increase in PSV when compared to the first half. And the last quarter [indiscernible] accounted for 32% of all the sales made in the year.

I now turn the conference over to Andrea de Rizzio, our CFO and IRO, who will share with us information about our labor liabilities and also provide us with more details about our financial numbers.

[Andrea de Rizzio, executive]

Thank you, Daniel. Good morning, everyone. I'll continue with the presentation on Slide #10, we'll -- where we'll see a little more detail about our labor liabilities. New lawsuits by independent brokers fell [indiscernible]. We only had 13 new lawsuits, which represents a drop of 70% when compared to 2019. It shows that the labor reform combined with acts [indiscernible] by the company have led us to a new level of control and stability on that front.

This early in the year, the company has managed to reduce by 22% its inventory of labor lawsuits. We're now concentrating on the [indiscernible] below level in the new lawsuits as mentioned just now. That confirmed the company's capacity to address the challenges [ it encounter. ]

Next slide, #11 [indiscernible] highlight some of our numbers. Our gross revenue in 2020 reached BRL 120 million, very close to what we had in 2019 despite the pandemic driven by the secondary units under our Desenrola platform and also by financial services Credimorar and with [indiscernible] along those segments, namely Desenrola and Credimorar.

Administrative expenses in the pandemic came out at 16% lower level than 2019. This is [indiscernible] when compared to BRL 78.8 million in 2020, which shows our austerity in terms of expenses control.

Despite presenting a negative adjusted EBITDA at minus BRL 43.8 million highly impacted by labor liabilities and contract termination, we're much more efficient compared to 2019 [indiscernible] revenues at a higher -- 5% higher than previous year and a better adjusted EBITDA.

The recovery of the market, along with the structural actions reflects a direct operating cash generation of BRL 23.8 million in 2020, which reflects the company's sustainability.

In summary, our business diversification and the restructuring started in the second half as [indiscernible] to improve our results. Lastly, the mid- to long-run strategy meets the need of the client, which is increasingly more digital. The company's administration anticipate transforming the company into a [indiscernible] combined with the continuous evolution and participation of different market segments, improving our [indiscernible] business fleet, investing in projects that will make the company's business model become increasingly scalable, increasingly attractive and can enhance the [indiscernible] corporate governance [indiscernible] both responsibility and transparency, along with associates, clients, Board of Directors and executives of the company.

Thank you all for participating. And we can now start the Q&A session.

[Operator]

[Operator Instructions] This concludes the Q&A session. I'd like to turn the floor back over to Mr. Guerbatin for his final remarks.

[Daniel Guerbatin, executive]

Thank you. Thank you all for participating in this call and also for [indiscernible] the company has [indiscernible] for this transformation throughout the period. [indiscernible] the pandemic. Just remember that and stay safe. Thank you, everyone. Have a nice day.

[Operator]

Brasil Brokers' teleconference has now ended. Thank you all for participating. Have a nice day.