INSTITUTIONAL PRESENTATION

Transcription

1 INSTITUTIONAL PRESENTATION

2 DISCLAIMER The information contained in this presentation and any forward-looking statements that may be made, related to business outlook, operational and financial projections of TOTVS are based on beliefs and assumptions of the Company s management, as well as information currently available. Forward-looking statements are not guarantee of future performance. They involve risks, uncertainties and assumptions as they refer to future events and, hence, depend on circumstances that may or may not occur. Investors must understand that general economic conditions, industry conditions and other operational factors could affect future performance of TOTVS and could lead to results that differ materially from those mentioned in these forward-looking statements.

3 WE ARE TOTVS BUSINESS SOLUTIONS Way beyond technology WHO WE ARE: WE DEVELOP TECHNOLOGY... To make companies even more complete and competitive through intelligent, integrated and scaled solutions. The ERP leader in Brazil, with ~50% marketshare #1 in Brazil and one of the largest in the world 21 st most valuable brand in Brazil, according to Interbrand BUSINESS SOLUTIONS AND SERVICES Highest level of Corporate Governance (Novo Mercado) PLATFORM Clients in 41 countries CONSULTING 12,000 TOTVERS, including franchisees Sustainable financial results

4 GROSS REVENUES AND ADJUSTED EBITDA MARGIN (R$ Million and %) WE ARE TOTVS START UP WARM UP DNA NUMBER 1 BRAZIL THINK TOGETHER PEOPLE, THINGS & BUSINESS 2519 Solutions for the SMB Market Biggest ERP Player in Brazil 1 st IT Company to go public Revenues of R$1.0 billion in Fluig Intera TOTVS % % DIGITAL MODEL % 24.9% % % % Microsiga Franchisees Proprietary Technology Argentina 63 Results Management 8.9% % % % % Mexico % % 126 Specialization by 13.9% 18.4% industry sector 10.5% 11.0% ICMM Company of the Year by Exame Magazine Fluid Technology Essentiality Agile ERP

5 WE ARE TOTVS BOARD OF DIRECTORS STRONG CORPORATE GOVERNANCE 8 out of 9 members of the Board are independent Pedro Passos Chairman Independent member Co-founder and member of the Natura Board of Directors Germán Quiroga Vice-Chairman Independent member Laércio Cosentino Member Founder and CEO of TOTVS Gilberto Mifano Independent Member Former CEO of Bovespa Pedro Moreira Salles Independent Member Itaú Unibanco Chairman Maria Letícia Costa Independent Member Partner of Prada Business Consulting Henrique Trinckquel Independent Member CFO of Petros (Petrobras Pension Fund) Wolney Betiol Independent Member Co-founder of Bematech S.A. Mauro Cunha Independent Member President of AMEC (Associação dos Investidores do Mercado de Capitais)

6 WE ARE TOTVS MAIN EXECUTIVES LAÉRCIO COSENTINO CEO & FOUNDER GILSOMAR MAIA CFO 11 YEARS* FLAVIO BALESTRIN MARKETING, CHANNELS & HR 16 YEARS* ALEXANDRE APENDINO SALES AND SERVICES 4 YEARS* WEBER CANOVA TECNOLOGY & CLOUD 22 YEARS* MÁRIO ALMEIDA FLUIG & MOBILE 2 YEARS* GUSTAVO BASTOS HEAD SUPPLY CHAIN & HEALTH CARE 19 YEARS* RONAN MAIA HEAD CONSUMER 16 YEARS* EROS JANTSCH HEAD MICROENTERPRISES & HARDWARE 24 YEARS* MARCELO EDUARDO HEAD SERVICES & IT 16 YEARS* * Time working for TOTVS or acquired companies

7 WE ARE TOTVS OWNERSHIP STRUCTURE 66.9% OF FREE-FLOAT: A CORPORATION WITH NO CONTROLLING GROUP 98% of the free-float held by institutional investors 96% of the free-float held by non-brazilian investors

8 WE ARE TOTVS HOW WE SELL IN BRAZIL # Employees # Companies in Brazil Large Companies Private More than 500 employees ~6.6 thousand companies Small and Medium (SMB) 57 channels 52 franchisees 5 branches From 10 to 499 employees ~587 thousand companies Micro Companies ~5 thousand resellers Up to 9 employees ~4.2 million companies Source: IBGE

9 WE ARE TOTVS PRO-FORMA REVENUE BY SEGMENT (R$ MM) SPECIALIZED BUSINESS SOLUTIONS FOR COMPANIES OF ALL SIZES IN 11 MARKET INDUSTRIES Agribusiness Construction and Projects Distribution Logistics Educational Financial Services Legal Manufacturing Healthcare Services Retail

10 WE ARE TOTVS OUR PRESENCE TOTVS is present in the main business centers in Brazil and Latin America to be always near you and your company. All of this because BY THINKING TOGETHER, WE DO BETTER. USA TOTVS Labs 2 Development Centers 1 Branch LATIN AMERICA 4 Branches: 2 Argentina, 1 Colombia, 1 Mexico 25 Franchises 1 Development Center Mexico 1 Branch 3 Franchises EUROPE AFRICA 2 Franchises TAIWAN 1 Development Center CHINA 1 Branch 1 Development Center BRAZIL 15 Branches: 3 (SP), 2 (RJ), 3 (MG), 2 (PR), 1 (CE), 1 (GO), 1 (SC), 1(PE), 1(DF) 52 Franchises in the country 5,000 distributors INNOVATION 10 Development Centers structured by segmented knowledge Development Centers Branches TOTVS TOTAL 22 Branches 82 Franchises 15 Development Centers 5 thousand distributors

11 NEW BEHAVIORS AND TECHNOLOGY THINK ABOUT TOMORROW, BUT DO IT TODAY The speed of the changes in the world challenges companies to be prepared for what's new. See how TOTVS works for providing answers to questions still being asked: Fluid Technology Fluid Technology easy to use and implement, simple and mobile, promoting productivity, sharing, and collaboration, impacting a greater number of individuals and companies. Fluid Technology PRODUCTIVE AND COLLABORATIVE AGONOSTIC PLATFORM Essentiality Specific offers focused on "Core Business" for each segment with total adherence. Agile ERP Lighter Management systems and naturally focused on his/her "CORE, in "CLOUD", and "MOBILE", promoting a natural use interface. Essentiality Agile ERP TOTVS V12 MANAGEMENT SYSTEM BY INDUSTRY SECTOR New operating experience and complete adherence. Transactional interface of open systems

12 TOTVS DIGITAL MODEL - COMPONENTS ID Distribution Interface TOTVS DIGITAL MODEL TDM Information & AI Productivity & Collaboration Cloud Business

13 Software User Identity (ID) API Web Services SOFTWARE BUSINESS EVOLUTION Application Software Process Automation Information and Content Generation Control & Management Application Software Platform Process Automation Information and Content Generation Control & Management BY INDUSTRY MOBILITY External Content / AI APPs License Contents AI Subscription APPs + Services Services Maintenance Contract CLOUD Focus: Business: Software: Priority: Competition: Risk of loss: Solutions for Clients License / Maintenance + Services Closed, complex and for users On Premises / Desktop First / Versions Client Quality, functionality or cost (QFC) Focus: Business: Software: Priority: Competition: Risk of loss: Solutions for the Client and its Clients SUBSCRIPTION + Content / AI + APPs + Cloud with Services Open, specialist and for IDs and APPs Cloud / Mobile First / Upgrades Client and/or by Client sharing (QFC) and/or not to grab the usage growth among end users

14 SINGLE SUBSCRIPTION COMPANY BUSINESS MODEL Content and AI $ by information usage TOTVS TDM Subscription INTERA (limited usage by contracted IDs) Monthly $ per ID TOTVS STORE APPs / ADD-ons Subscription Monthly $ per APP or ADD-ons contracted at TOTVS Store Deployment and Customization Services $ per project / service tcloud Monthly $ by CLOUD usage

15 COMPANY S AGENDA LICENSE BASED SINGLE SUBSCRIPTION COMPANY Connecting People, Things and Businesses

16 FINANCIALS 1Q17

17 NET REVENUE (R$ MM)* IN THE LAST 12 MONTHS, TOTVS INCREASED THE PARTICIPATION OF RECURRING REVENUE OVER NET REVENUE AT 5.7 PERCENTAGE POINTS * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

18 NET REVENUE (R$ MM)* NET REVENUE GREW IN THE QUARTER, DRIVEN MAINLY BY THE GROWTH OF SOFTWARE REVENUE * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

19 SOFTWARE (R$ MM) THE GROWTH OF SUBSCRIPTION AND THE INCREASE IN THE CORPORATE MODEL BOOSTED THE SOFTWARE REVENUE GROWTH The Annual Recurring Revenue (ARR) is a metric widely used in the SaaS model to measure the growth of recurring revenue for the next 12 months referring to contracts already signed up to the end of the current period, excluding cancellations already requested.

20 SOFTWARE (R$ MM) 1,073 BEMACASH UNITS WERE SOLD IN 1Q17, DESPITE THE NEGATIVE SEASONAL EFFECT OF THE QUARTER RETAIL TRADE FASHION BAR & RESTAURANT FOOD TRUCK

21 SOFTWARE (R$ MM)* 4Q16 1Q17 1Q/4Q 1Q16 1Q/1Q LTM-1Q16 LTM-1Q17 LTM/LTM SOFTWARE REVENUE % % 1, , % COST OF SOFTWARE (19.3) (20.8) 7.8% (17.5) 19.0% (81.4) (80.6) -0.9% COST DE SUPPORT (33.8) (32.5) -4.1% (31.7) 2.5% (116.2) (131.3) 13.1% R&D (88.6) (83.3) -5.9% (73.1) 14.0% (291.3) (325.6) 11.7% SOFTWARE RESULT % % % CONTRIBUTION MARGIN 59.9% 63.5% 360bp 65.6% -210bp 65.1% 62.1% -300bp * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

22 SERVICES (R$ MM)* 4Q16 1Q17 1Q/4Q 1Q16 1Q/1Q LTM-1Q16 LTM-1Q17 LTM/LTM SERVICE REVENUE % % % COST OF SERVICES (128.8) (127.7) -0.9% (127.8) -0.1% (545.0) (506.4) -7.1% SERVICE RESULT (0.2) % % % CONTRIBUTION MARGIN -0.1% 0.7% 80bp 8.9% -820bp 8.0% 4.5% -350bp * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

23 HARDWARE (R$ MM)* 4Q16 1Q17 1Q/4Q 1Q16 1Q/1Q LTM-1Q16 LTM-1Q17 LTM/LTM HARDWARE REVENUE % % % COST OF HARDWARE (42.6) (35.9) -15.7% (38.6) -6.9% (174.2) (159.7) -8.3% P&D (3.3) (2.6) -22.5% (1.7) 52.0% (8.2) (12.1) 46.9% GOV. SUBSIDIES % % % HARDWARE RESULT % % % CONTRIBUTION MARGIN 37.5% 37.5% 0bp 30.9% 660bp 36.1% 34.8% -130bp * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

24 COMMERCIAL AND ADM. EXPENSES (%/NR)* * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

25 ADJUSTED EBITDA (R$ MM)* * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

26 ADJUSTED NET INCOME (R$ MM)* * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

27 CASH FLOW AND DEBT (R$ MM)* 4Q16 1Q17 1Q/4Q 1Q16 1Q/1Q LTM-1Q16 LTM-1Q17 LTM/LTM NET INCOME, EXCL. NON-CASH ITEMS % % % CHANGE IN WORKING CAPITAL (20.9) (8.6) -59.0% (72.4) -88.2% (166.1) (60.0) -63.9% NET CASH USED IN OPERATIONAL ACTIVITIES % % % NET CASH USED IN INVESTING ACTIVITIES (22.1) (14.4) -34.9% (20.2) -29.0% (588.1) (92.9) -84.2% FREE CASH FLOW % % (315.4) % NET CASH USED IN FINANCING ACTIVITIES (46.8) (59.1) 26.3% (78.6) -24.8% (167.2) (353.9) 111.7% INCREASE (DECREASE) IN CASH (1.3) % (71.0) % (482.6) (139.7) -71.0% GROSS CASH IN THE BEGINNING OF THE PERIOD % % % GROSS CASH IN THE END OF THE PERIOD % % % GROSS DEBT % % % NET DEBT % % NET DEBT/LTM ADJUSTED EBITDA * Pro-forma information for the periods of LTM-1Q16, since they include the results of Bematech

28 Investor Relations +55 (11) (11) (11) (11) Technology + Knowledge are our DNA The success of our client is our success We value competent people who are nice people totvs.com company/totvs blog.totvs.com fluig.com