1Q17 Omni Presentation Safe harbor statement The information - - PowerPoint PPT Presentation
1Q17 Omni Presentation Safe harbor statement The information - - PowerPoint PPT Presentation
1Q17 Omni Presentation Safe harbor statement The information contained herein has been prepared by Linx S.A. (Linxor the Company) and this material does not constitute offering material in whole or part. This material has been
Safe harbor statement
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The information contained herein has been prepared by Linx S.A. (“Linx”or the “Company”) and this material does not constitute offering material in whole or part. This material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment advice. It is not targeted to the specific investment objectives financial situation or particular needs of any recipient. No representation or warranty either express or implied is made as to the accuracy completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this material are subject to change without notice and Linx is not under obligation to update or keep current the information contained herein. The Company their respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This material is intended solely for the use of persons who are market counterparties of intermediate customers (as detailed in the FSA Rules) and is only available to such persons. The information contained herein does no apply to and should not be relied upon by private customers. You should consult your own legal regulatory tax business. Investment, financial and accounting advisers to the extent that you deem necessary and you must make your own investment hedging or trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this material.
LINX at a glance:
Largest and Broadest Retail Technology Platform H I G H L I G H T S 2 0 1 6
~45,000 Clients 84% Recurring Revenues ~99% Client Retention Rates 19% 4-Year Net Revenue CAGR 25.1% Adjusted EBITDA Margin* 37.5% Market Share
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100% Retail Focus
Car Dealers Gas Stations Drugstores Service Retail Food Service Department Stores eCommerce
Apparel
* Adjusted for: (i) partial reversion of an earn-out of Neemu and Chaordic; (ii) an adjustment related to the acquisition of Rezende; (iii) the duplicated condominium and maintenance expenses in São Paulo and Recife due to the move to new locations in these cities.
Our progress since IPO
271% 161% 94%
12,000 44,467 Profitability Retail Business Units Number of Retail Business Units Scale Clients Acquisitions Number of Acquisitions
A T I P O T O D AY
LTM Gross Revenue R$ ‘000) LTM EBITDA (R$ ‘000)* LTM Cash Earnings (R$ ‘000)* 11 22 129,971 67,037 45% 30% 118,839 47,474 586,462 224,478
850 bps 150% +11
Leadership % of Cloud on Recurring Revenues 5 9
+4
Cloud Market Share 37.5% 29%
1,500 bps “At IPO” adjusted for CSI earn out. “Today” adjusted for: (i) partial reversion of an earn-out of Neemu and Chaordic; (ii) an adjustment related to the acquisition of Rezende; (iii) the duplicated condominium and maintenance expenses in São Paulo and Recife due to the move to new locations in these cities.
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Mission
ENABLE RETAILERS TO BECOME MORE PROFITABLE, COMPETITIVE AND SUSTAINABLE THROUGH TECHNOLOGY ONLINE IN-STORE
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Broadest retail technology platform
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LINX is uniquely positioned to capture the opportunity
UNIQUELY POSITIONED ACROSS COMPETITIVE LANDSCAPE
Scale and Leadership Expertise and Focus in Brazil Retail Breadth of Retail Verticals Geographical Coverage Across Brazil Company Sizes Integrated Technology Platform New Entrants International Companies Regional Providers
850 bps Increase Since 2011
37.5%
Market Share
LEADING MARKET SHARE 7
Multiple drivers of growth
Multiple drivers
- f growth
Opportunity Driver
Acquisitions New capacities: technologies, verticals, geographical 1 Cross-sell Share of Wallet Omni-channel 2 Opportunity to access marketing and trade marketing in addition to IT spending New products & partnerships 3 Increased software penetration Formalization, digitalization process and professionalization IT spending 4 Client’s growth Retail growth 5 Expansion of the geographic footprint as retailers 8
Acquisition strategy
Omni-Channel Technology
Geographies Verticals
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Acquisition strategy
What do we seek? Example:
EBITDA 1.5M Company Year 1 Year 3 Revenue 10M 14M 3.6M
Important Answers
Versus 5x Linx We pay an average of 2.5X LTM Revenue
Stand alone growth between 15 and 20%? Margin expansion for Linx average?
Target
Target A Target B Target C Target D Target E Target F Target H Target G
Estimated NOR (R$ 000’s)
50 - 100 50 - 100 25 - 50 25 - 50 0 - 25 25 - 50 25 - 50 0 - 25
Status
Add Technology Target Negotiating
Acquisition Strategy
Add Segment Reinforce Vertical Add Retail Vertical
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Cross-sell
DEVICES TRANSACTIONAL CAPABILITIES INCREASED ENGAGEMENT ANALYTICS IN-STORE PERSONALIZATION BIG DATA
ENABLE RETAILERS TO SELL MORE ERP POS CRM
Internal processes productivity
TEF ELECTRONIC INVOICING CONNECTIVITY
SOCIAL MEDIA MOBILE APPS
ONLINE & IN-STORE
KIOSKS MARKET PLACES WEB STORE TARGETED MARKETING
Omni-Channel platform in the Cloud
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Partnership with Redecard Retail Intelligence DMS Partnership with Itaucard
Cloud Systems transmit, process, analyze and deliver online data to the retail industry daily
Linx technology can directly make real time decisions with promotions, sales, training and general communication with the retail industry
Clients will be able to:
Make real time decisions Perform ROI analysis Focus on stores with the
largest return potential
New market with large number of stores
Integration of Linx’s software to Itaú’s financing system
- Automate the process of lead generation
- Provide a differentiated customer experience
Multi-brand car dealerships: Currently not served by Linx; development of a specialized
ERP product, which will be distributed by Itaú, creates an unique opportunity
Drugstore Retailers Food & Beverage and HPC Companies
3 New products and partnerships
Generate value in two new markets: payments and software to small and micro retailers
Development of Linx´s applications related to payment solutions Efforts of both parties to promote:
- Payment solutions of Rede
- Linx´s management solutions, including the TEF
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556 661 777 876 1.029 1.184 1.294 2011 2012 2013 2014 2015 2016E 2017E
Large, high growth, & underserved market opportunity
Large and Underpenetrated Total Addressable Market in Brazil Retail Management Software
Current Spend on Management software Current Spend on Other software Potential Spend
Total Addressable Market: R$9.5 billion
Continued Growth in Brazil Retail Management Software (R$ MM)
Source: Gartner, IDC
13 10,8% 12,0% 77,2%
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LINX’s customers provide validation of leadership
PRESENCE IN BRAZILIAN LEADING RETAIL CHAINS INTERNATIONAL RETAILERS (50%+ Share)
Source: Euromonitor, Abras, Abrafarma, IBEVAR
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Volkswagen
With more than 600 stores,
Volkswagen is currently the largest automotive company in Brazil
Large, high growth, & underserved market opportunity
Source: Gartner, IDC
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Ipiranga Partnership Boticário (Linx UX) Partnership Habib’s and Volkswagen Partnership
Ipiranga: Unique Opportunity
Second largest fuel distributor in Brazil The largest convenience store network
and loyalty program in Brazil
Excellence in the implementation of
retail business model
Why Linx as a Partner ?
Know-how in retail and capillarity Long-term strategic alignment of
customer experience and innovation
Partnership concept Service recognized by the market
Important Client in the Retail Segment
Boticário is the largest retailer in Brazil Owned stores to initially receive the
product
Significant growth potential into other
stores
400 stores in 2016 with potential of
~4,000 stores
Potential of ~4,000 stores 400 Stores in 2016
Habib’s
With ~400 stores, Habib’s is currently
the largest fast-food retailer in Brazil and the largest Arabic fast-food retailer in the World
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Proven leadership team and solid organizational structure
Organizational Structure
Apparel Gas Stations Drugstores Food Service Car Dealers
Shared Services Bureau (Marketing, Human Resources, Billing, Finance, Legal, Back Office...)
Sales Customer support Services / Implementation R&D Connectivity and Cross Offers Service Retail Big Retail
CORPORATE DIRECTORS
eCommerce
VERTICAL DIRECTORS
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Financial Highlights
Strong and consistent revenue growth
GROSS REVENUE GROWTH
(R$ ‘000)
115.980 129.401 20.104 23.940
136.084 153.341 1Q16 1Q17
257.285 325.868 409.765 479.750 74.049 87.403 95.468 89.455 331.334 413.271 505.233 569.205
2013 2014 2015 2016
Recurring Revenues Service Revenues
RECURRING REVENUE GROWTH
(R$ ‘000) 257.285 325.868 409.765 479.750
2013 2014 2015 2016
115.980 129.401 1Q16 1Q17
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High profitability
30.116 33.596 25,8% 25,1%
1Q16* 1Q17*
82.457 104.362 121.630 126.491 27,9% 28,3% 27,1% 25,6%
2013 2014 2015 2016*
EBITDA (R$ ‘000) AND EBITDA MARGIN
EBITDA EBITDA margin
* Adjusted EBITDA
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High cash earnings generation
13.919 25.554 5.555 5.383 2.324 2.893
21.798 33.830 18,5% 25,2%
1Q16* 1Q17*
NET INCOME AND CASH EARNINGS
(R$ ‘000) Net Income Amortization of Acquisitions Deferred Income Tax
59.519 67.583 63.818 70.500 13.816 19.963 25.445 22.504 6.619 10.004 12.496 13.803 79.954 97.550 101.759 106.807
2013 2014 2015 2016*
*Adjusted Net income and Cash earnings.
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Highly predictable SaaS business model with strong growth and profitability
Growing
19% Revenue CAGR (2013-2016)
Growing customer base of 44.467 customers in 1Q17 (54% CAGR 2012 - 2016) Organic growth, complemented by selective acquisitions Cross-selling opportunities provide additional sources for growth
Around 45% of recurring revenues from cloud
Predictable
Loyal customer base.
Yearly subscription contracts, paid monthly and with automatic renewals/ inflation correction Above 84% of recurrent revenues based on a monthly subscription fee model Monthly subscription model makes our solution more accessible to new clients
Highly Profitable
High degree of predictability EBITDA margin higher than the sector’s average
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