4Q17 Omni Presentation
Safe harbor statement 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. 2
LINX at a glance: Largest and Broadest Retail Technology Platform Apparel H I G H L I G H T S ~46,000 Clients eCommerce Drugstores 83% Recurring Revenues 100% ~98% Client Retention Rates Gas Retail Food Service Stations Focus 15.7% 4-Year Net Revenue CAGR Department Car Dealers Stores 25.1% Adjusted EBITDA Margin* 40.2% Market Share Service Retail 3 * In this quarter, there was a small non-recurring expense related to the move to new headquarters in São Paulo in the amount of R$0.3 million.
Our progress since IPO A T I P O T O D AY 1120 Leadership Market Share 29% 40.2% bps 1,500 Cloud % of Cloud on Recurring Revenues 30% 45% bps +4 Retail Business Units Number of Retail Business Units 5 9 283% Clients 12,000 45,935 Scale LTM Gross Revenue R$ ‘000) 224,478 656,137 192% LTM EBITDA (R$ ‘000)* 67,037 143,499 114% Profitability LTM Cash Earnings (R$ ‘000)* 47,474 127,549 169% Acquisitions Number of Acquisitions 11 25 +14 “At IPO” adjusted for CSI earn out. 4 “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.
LINX is uniquely positioned to capture the opportunity UNIQUELY POSITIONED ACROSS COMPETITIVE LANDSCAPE LEADING MARKET SHARE New International Regional Entrants Companies Providers Scale and Leadership Expertise and Focus in Brazil Retail 40.2% Breadth of Retail Verticals Market Share Geographical Coverage 1120 bps Increase Across Brazil Since 2011 Company Sizes Integrated Technology Platform 5
LINX’s customers provide validation of leadership TRADITIONAL RETAIL DIGITAL Intl. 6 Source: Euromonitor, Abras, Abrafarma, IBEVAR
POS + ERP Transactional Portfolio Business as usual Cross Sell New clients Store openings Linx continues to have great opportunities... Expansion Apps fo for Small a and Omni Channel Micro Retailers to LATAM OMS Partnership with REDE Synthesis Acquisition E-commerce Mobile 7 Analytics CRM
New opportunities to increase the Our vision PROFITABILITY OF THE PLAYERS… New addressable New Pockets New Markets clients CPG Industry Marketing A.I. Acquirers Trade marketing Payments Loyalty Programs Market Research Advertising Loyalty Big Data …WITH A SIMILAR BUSINESS MODEL 8
AN ORGANIZATIONAL STRUCTURE PREPARED TO FOCUS ON THE NEW OPPORTUNITIES Business Units Business Units Apparel Gas Stations Payments / Acquiring Business as Fo Food Service ce New markets TEF usual Car Dealers Retail Intelligence ce Service ce Retail Pharma Sales processes Big Retail And more to come… Customer support Omni Channel R&D HR & Marketing 9 Finance & IR
NEW OPPORTUNITIES EXPAND ADDRESSABLE MARKET New Markets Latam Expansion Omni Channel Cross Sell POS / ERP 10
NEW SIZEABLE ADDRESSABLE MARKETS Our vision Market opportunity in Brazil (BRL), p per year TEF ACQ CQUIRING RETAIL APPS ADVERTISING > 300 MM > 2,000 MM INTELLIGENCE > 500 MM TBD > 500 MM 11 Source: Internal survey
Financial Highlights
Strong and consistent revenue growth GROSS REVENUE GROWTH RECURRING REVENUE GROWTH (R$ ‘000) (R$ ‘000) 656,137 567,989 111,197 505,233 88,239 95,468 413,271 87,403 544,940 479,750 544,940 182,118 409,765 479,750 150,550 34,496 409,765 325,868 24,203 325,868 147,622 126,347 147,622 126,347 4Q16 4Q17 2014 2015 2016 2017 4Q16 4Q17 2014 2015 2016 2017 Recurring Revenues Service Revenues 14
High profitability EBITDA (R$ ‘000) AND EBITDA MARGIN 28.3% 27.1% 25.6% 25.1% 25.5% 25.0% 143,499 126,491 121,630 104,362 39,308 33,630 4Q16* 4Q17* 2014 2015 2016* 2017* EBITDA EBITDA margin * Adjusted EBITDA 15
High cash earnings generation NET INCOME AND CASH EARNINGS (R$ ‘000) 127,549 14,699 106,807 101,759 97,550 23,758 13,803 12,496 29.6% 10,004 22,504 19,963 25,445 39,022 17.1% 12,205 26,872 89,092 3,675 5,716 70,500 67,583 63,818 7,260 21,101 15,937 2014 2015 2016* 2017* 4Q16* 4Q17* Net Income Amortization of Acquisitions Deferred Income Tax 16 * Adjusted Net income and Cash earnings.
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