2Q19 Results
Recent Events Acquisition GPTW of Softpar Certification Rational: Valid from-to: New suites Aug/19 – Aug/20 Customer portfolio Gross revenues: R$ 18.2 MM EV: R$ 32.0 MM (+ earnout up to R$ 6.0MM) 2
Record net revenues and recurring revenues Net Revenues Recurring Revenues (R$ MM) (R$ MM | %NR) 2Q19: Record, with organic addition of R$ 1.5MM and 2T19: Record recurring revenues and % of recurrence in line inorganic of R$ 6.5 MM with the record of 1Q19 + 14.1% 82.3% 83.8% 82.2% 76.9% 156.1 136.8 + 21.9% 128.3 105.2 + 23.6% + 25.9% 42.2 34.1 35.3 28.1 2Q18 2Q19 LTM- 2Q18 2Q19 LTM- 2T18 2T19 LTM- LTM- LTM- 2T18 2T19 LTM- LTM- LTM- 2Q18 2Q18 2T18 2T19 2Q19 2T18 2T19 2Q19 3
Impact of extraordinary expenditures and backlog implementation Gross profit Expenses 1 Adjusted EBITDA (R$ MM | Gross Mg.%) (R$ MM | %NR) (R$ MM | EBITDA Mg.%) 2Q19: Slight drop due to higher 2Q19: Increase with consolidation of 2Q19: Growth impacted by higher development and implementation costs expenses of acquired companies and development and implementation costs and extraordinary items (R$ 1.5 MM) extraordinary items (R$ 0.3 MM) 39.4% 14.6% 12.1% 15.5% 11.8% 37.3% 25.7% 23.9% 33.7% 22.7% 21.5% 29.4% + 22.5% -2.4% - 13.1% 40.1 53.9 52.6 21.2 32.8 18.4 -2.7% + 16.9% +2.1% 12.7 12.4 9.0 5.0 5.1 7.7 2Q18 2Q19 LTM- LTM- 2Q18 2Q19 2Q18 2Q19 LTM- 2T18 2T19 LTM- LTM- LTM- LTM- LTM- 2T18 2T19 LTM- LTM- 2T18 2T19 LTM- LTM- 2Q18 2Q19 2Q18 2T18 2T19 2Q18 2Q19 2Q19 2T18 2T19 2T18 2T19 ¹General and administrative (without depreciation, amortization and other expenses). 4
Software Unit Portfolio of recurring contracts (R$ MM) Addition of R$ 55.5 MM (+67.9% vs. 2Q18), of which R$ 13.9 MM organic (+17.0% vs. 2Q18) and R$ 41.6 MM inorganic (R$ 4,4 MM ConsultBrasil, R$ 9.9 MM Atena, R$ 8.2 MM ADSPrev and R$ 19.1 MM Softpar), proving that we have entered a new route of revenue growth +67.9% 137.3 113.5 41.6 92.5 22.6 4.4 85.0 81.8 95.7 90.9 88.1 85.0 81.8 2Q18 3Q18 4Q18 1Q19 2Q19 Organic Inorganic 5
Software Unit Record revenues and compressed margins due to implementations Software Net Revenues Software Gross Profit (R$ MM) (R$ MM | Gross Mg.%) 2Q19: Record, with inorganic addition of R$ 6.5 MM 2Q19: Costs with development and implementation of the backlog + 11.0% 100.4 48.5% 45.7% 39.7% 90.4 34.3% - 9.0% 43.8 39.9 + 33.5% 29.2 21.9 10.0 10.0 2T18 2Q18 2T19 2Q19 LTM- LTM- LTM- 2T18 2Q18 2T19 2Q19 LTM- LTM- LTM- LTM- LTM- 2Q18 2T18 2T19 2T18 2T19 2Q19 2Q18 2Q19 6
Software Unit Costs impacted by development and implementation of the backlog Costs (R$ MM) 3.6 R$ 6.1 MM costs in the quarter to convert 29.6 sales into revenues 2.5 ( 7.5 % of Net Revenues) 16.1 5.5 5.2 2.0 2019 Acquisitions Organic Development Implement. Customization Maintenance Support 7
Services Unit Highest volume of revenues in a 2nd quarter Services Net revenues Services Gross profit (R$ MM) (R$ MM | Gross Mg. %) 2Q19: Highest value in a 2nd quarter, with R$ 0.9 MM 2Q19: Slight reduction mainly due to higher costs in the growth in Outsourcing Outsourcing unit 22.8% 22.2% 21.6% + 20.0% 18.2% 55.7 46.4 + 26.7% 12.7 + 5.7% 10.0 - 13.2% 12.9 12.2 2.7 2.4 2T18 2T19 LTM- LTM- 2Q18 2Q19 LTM- LTM- 2T18 2Q18 2T19 2Q19 LTM- LTM- LTM- LTM- 2T18 2T19 2Q18 2Q19 2T18 2T19 2Q18 2Q19 8
Financial position Increase of net debt, with debentures and Softpar acquisition Gross Cash Gross Debt Net Debt (R$ MM) (R$ MM) (R$ MM) Movement mainly related to the Increase of R$ 16.5 MM due to the Temporary increase, due to the recent raising of debentures, sale of treasury purchase of Softpar and R$ 18.0 MM due acquisition of Softpar, which should shares and acquisition of Softpar to the settlement of the remaining reduce in the coming quarters. portion of the debentures. + 34.0 + 33.3 103,9 4,3x EBITDA + 0.7 78.6 ajust.LTM 25.3 39.6 69,9 45.3 22.6 24.6 64.3 2,5x EBITDA 47.3 ajust. LTM 2Q18 2Q19 1T19 2T19 2Q19 1T19 2T19 1T19 2Q19 2T19 2Q18 2Q18 Acquisition Financial 9
Final Message Sinqia is ready to execute the consolidation strategy even faster! Net Revenues (R$ MM) 2 st Cicle 181.7 Growth of 4x 3 rd Cicle 1 st Cicle Growth of 10x 46.2 4.7 * Pre-PE (2004) Pre-IPO (2012) Today Sinqia’s LTM net revenues (-) consolidated revenue from last 4 acquisitions in the period (+) LTM net revenues from last 4 acquisitions at due diligence base date: ConsultBrasil (May/18), Atena (Oct/18), ADSPrev (Sep/18) and Softpar (Dec/18) 10
(11) 3478-4845 / 4788 ri@sinqia.com.br ri.sinqia.com.br
Disclaimer This material was prepared by Sinqia S.A. (“ Sinqia ”) (B3: SQIA3) and may contain certain statements expressing management's expectations, beliefs and/or forecasts regarding future events or results. These statements involve risks and uncertainties that could cause results materially different from those projections. Such statements are based on information currently available, from Sinqia and the industry in which Sinqia operates, and is not intended to be complete or serve as advice to potential investors, so readers should not rely exclusively on the contained. Investment in securities issued by Sinqia involves certain risks. Before making any investment decision, prospective investors should carefully consider all the information contained in the Reference Form, in the financial statements with the notes and, if applicable, in the offer memorandum, among others. Business, financial condition, results of operations, cash flow, liquidity or future business could be materially adversely affected by risk factors currently known or unknown. This presentation does not constitute an offer to sell or a solicitation to buy any securities of Sinqia. 12
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