Nexpe Participacoes SA

BOVESPA:NEXP3

Earnings Call Transcript 2021-Q4

[Operator]

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Brasil Brokers Conference Call to present the earnings result of year 2021. Please note that this conference call and the slides are being transmitted through the Internet through the site https://ri.brasilbrokers.com.br/ where the presentation is available for download.

[Operator Instructions] We would like to inform that questions can only be asked through the chat option of the webcast. So if you are connected by phone only, we encourage you to connect via webcast as well.

Before we go any further, we would like to clarify that forward-looking statements made during this conference call regarding the company's business prospects projections and operating and financial targets, our beliefs and assumptions of Brasil Brokers' management currently available to the company. Future assumptions are not guarantees of performance as they involve risks, uncertainties and assumptions since they are related to future events and, therefore, depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect the company's future results and may lead to results materially different from those expressed in such forward-looking statements.

Mr. Daniel Guerbatin, the company's CEO will make the presentation regarding operating results. Ms. Andrea de Rizzio, CFO and RI, will present the financial results. Mr. Guerbatin, you may go on.

[Daniel Guerbatin, executive]

Good afternoon. Welcome to the Brazil Brokers Group 2021 Earnings Results Call. We're on Slide 3. At the beginning of the year, we defined the company's strategic plan for the next 5-year cycle and reiterated our purpose of making every real estate experience a unique experience. To achieve this purpose, we have been working with 4 strategic drivers: profitability; customer experience; digital transformation; and ecosystem. All of our management indicators day-to-day work focus and decisions we make reflect one or more of these strategic drivers.

To clarify how we do things around here, we have constantly promoted our 6 values: entrepreneurial spirit; fair play; power of relationship; innovate and create value; delight the customer; and result-driven. These 6 values make up our culture and support our purpose. This new culture in Brasil Brokers is in line with and strengthens the results obtained in the last year. We are growing steadily. And this year, we recorded a revenue 40% above that of 2020. We've improved our EBITDA by BRL 4.9 million when compared to the previous year. On the second semester of 2020, we launched CredIntegrados Credimorar system, which has been improving our clients' experience and boosting even more the performance of this business segment.

Our systems are migrating to a cloud environment, giving more flexibility for growth. All our systems that were monolithic are being developed as micro services, and this is part of our digital transformation strategy, since it allows something that is produced for 1 vertical to be leveraged to another, and thus bring better performance to the group companies as a whole.

We remain focused on reducing waste and ensuring that the revenue per head count ratio is stable or better each quarter. Our digital transformation efforts are stronger in Credimorar and Desenrola, and as I mentioned before, are overflowing to the other companies and verticals of the entire Brasil Brokers group.

I now turn it over to Andrea de Rizzio, our CFO and IR Director, who will give us financial and performance details. Then I will come back to bringing more operational details.

[Andrea de Rizzio, executive]

Thank you, Daniel, good afternoon. Starting our presentation on Slide 4, we will talk a bit about our results. In the last quarter, the gross revenue in 2021 totaled BRL 167.8 million, 40% higher than 2020 and 32% higher than 2019. When we talk about our growth results in 2021, we totaled BRL 88.7 million, 39% higher than the previous year.

On Slide 5, going into administrative expenses. We see a nominal value BRL 88.3 million in 2021, 4% less than in 2019. Nonetheless, when we look at this indicator related to gross revenue, we went from 72% in 2019 to 53% in 2021, an improvement of 19 percentage points. This demonstrates our control in relation to administrative expenses. We presented an adjusted EBITDA without labor liabilities in 2021, very close to 0, an important milestone for the company in this moment of transformation. On Slide 6, we will detail more our cost indicators, where in the year 2021, our fixed costs were around 42% over gross revenue. And our revenue per headcount increased from 21% to 29%, thus demonstrating a 38% improvement in efficiency.

On Slide 7, we can see that this set of actions and positive indicators reflected directly in the generation of operating cash of BRL 15 million in 2021 and a total cash consumption of BRL 8 million from investments in technology, structural consultancies and payment of liabilities from previous years. It is worth noting that our label liabilities have dropped from [ 1,315 ] lawsuits in 2020 to 239 lawsuits by the end of 2021, a drop of 24% in our stock of lawsuits. In 2021, there were only 9 new lawsuits in the year. For this reason, we consider this matter controlled in the company.

This concludes the results section, and I give the floor back to Daniel, who will continue with our call, talking about the performance of our operations.

[Daniel Guerbatin, executive]

Thank you, Andrea. On Slide 8, you have a snapshot of our digital transformation. We have 71% of our leads are coming from digital channels, and 77% of our gross revenue is already coming from this channel. So there has been a major conversion of digital leads following our development path to provide better customer experience and greater relationship. This year, we developed systems and processes that improve mid-funnel performance on leads coming from digital channels.

On Slide 9, we see that Credimorar had an incredible year with the origination of more than BRL 4 billion. In the last 4 years, we have already surpassed the BRL 10 billion mark in origination. On Slide 10, we see the performance of the intermediation of ready real estate and this vertical composed by brands such as Desenrola, Bamberg and Brasil Brokers. We had a growth in PSV compared to the recent years, reaching almost BRL 1.5 billion and growth also in the number of brokered units. And we followed our planning of concentrating the sales and properties above $1 million, almost half of our sales already happened in this market segment.

On Slide 11, I bring the rental detail of Desenrola, our main initiative in this market segment, and we have continuously improved our processes and systems and have already shown superior performance in final conversions compared to traditional operations in our history. On Slide 12, we see information from launching intermediation segment, where we can see that the large PSV and the contracted PSV are higher than the last 2 years. We are selling more, which demonstrates that our performance in those projects that we chose to participate have improved. And with that, we serve better the developers. We provide more commissions to the associated brokers and consequently, a better EBITDA for the company.

In the next 3 slides, we see some of the initiatives related to ESG and diversity. We understand that modern companies must look at these issues strategically and all of these initiatives have the full engagement of our employees. One of the initiatives we are most proud of is the Gigantesca movement, which on Slide 15, you can see in details. This movement has already crossed the path of more than 400 people amongst employees, partners and suppliers. We've had meetings on various topics related to diversity, and I believe that [ are ] more diverse and inclusive, companies will bring more innovative ideas, more engagement and certainly better results.

Thank you all. And now we will go to our Q&A session.

[Operator]

[Operator Instructions] We are bringing our Q&A session to an end. Now I would like to hand it back to Mr. Daniel Guerbatin for his final remarks.

[Daniel Guerbatin, executive]

Well, thank you all for participating. I would like to thank the employees, Board members, investors and all our partners for the support, for their effort and for trusting our journey throughout 2021.

During the last year, we consolidated a number upwards to improve the customer experience throughout the real estate journey. We're on the right path to find better results and to provide better experiences. Thank you very much, and good afternoon.

[Operator]

Brasil Brokers conference call has come to an end. We thank you all for your participation, and have a very good afternoon.

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