Q4 2020 Linx SA Earnings Call (In Portuguese With Simultaneous Translation Into English)
Okay.
Good morning, ladies and gentlemen, and thank you for waiting and welcome to link <unk> conference call to discuss the results of the fourth quarter of 2020 with US today is Mr al bathroom and Archie.
C O Rama accused Rodriguez.
Joe and I are old and corrosion of bone She's head of Investor Relations, we would like to inform you that this event is being recorded and time. He can use the translated into English all participants will be on listen only mode. During the company's presentation and after that we will initiate the Q&A session. When further instructions will be.
And it should any participant need assistance. During this call. Please press star zero true reach the operator.
This event is also being broadcast live via webcast and may be accessed through links website at IR dot links dot com Dot BR, where the presentation is also available for download participants may view of the slides in any order they wish the replay will be available.
Shortly after the event just concluded before proceeding let me mention the forward looking statements about future events operating or financial results are all based on the beliefs and assumptions of links management and on information currently available.
The two of the company.
Forward looking statements of our no guarantee of performance as they involve risks uncertainties and assumptions since they refer to future events and therefore depend on circumstances that may or may not occur and investors and analysts should understand that conditions related to macroeconomic.
The industry and other factors could also cause results to differ materially from those expressed in such forward looking statements.
Now I'll turn the floor over to all of the permit us to start the presentation. Mr of them and as you May proceed.
Good morning.
Thank you very much for your interest and trusting links and.
And 'twenty 'twenty, we experienced many new things and Chile, and Joe's brought about by the COVID-19 pandemic.
Among the many social and economic consequences, we saw at the temporary shutdown of stores.
All the sectors deemed nonessential.
The movement occurred all over the country during certain periods of time, while at the same time ecommerce became increasingly pervasive.
And all free our clients.
A very unique opportunity to continue to operate their businesses.
With this backdrop.
Thanks.
With its innovation DNA was once again able to offer alternatives to help retailers remain relevant and keep their businesses active even when their doors were closed some of the solutions that allows retailers to continue to operate their business include fastball.
All of our MA payment link.
Mobile P of web and e-commerce platform that enables the integration with marketplaces and payment gateway and fully integrated with our ERP.
According to the data from the monthly trade survey from the I B G.
And those sales volume was negative in the last two months of the year.
And the full year of 2020 sales were off of by 1.2%. It is the fourth time in the world that retail sales are up year on year.
With the December decline retail sales were the same of I'll say, we're in February prior to the pandemic period and Brazil.
On the same note E Commerce grew 41 per sand piece of the 2019.
Taking a record figure of 87 billion barrels and sales according to EBIT at Nielsen.
Yeah.
We have yet to see any relevant impact on churn due to the unique profile of our customer base and.
And also the low impact of monthly fees charged over retailer sales.
And our opportunities Committee continues to monitor the impact of COVID-19.
In addition to all of the measures to protect our cash put in place since the early days of the pandemic.
Link has also implemented a home office work arrangement for a hungry per sand of its workforce since mid March 2020.
And so far there is no forecast all of the return to the offices.
We reaffirm all of her commitment to the long term, ensuring the safety of our team the service door of customers and suppliers and consequently, the commitment of our business.
Before proceeding with the call.
I would like to highlight the current status of the business combination involving links and stone and formed in a notice to the market dated April seven.
At this time.
College's administrative tribunal is analyzing the technical opinion and of all colleges general and superintendents of which recommended the approval of the combination of business without restrictions.
<unk> will maintain its shell shareholders and the market in general and formed as to develop most of the referred proceeding and the final decision to be granted by colleges Administrated. The tribunal until the final approval is granted links and stone will continue to operate.
And independently.
Now.
I will turn the floor to Rama Pease, who will talk about the results of the fourth quarter of 2020 from a T. You May proceed.
Thank you all back to and good morning, two of you all looking at the presentation on slide three Lynn.
Score of recurring revenue increased 7% year on year and I would like to highlight here are a few points.
When we look at the delivery apps since the acquisition by links in February of 'twenty, and 'twenty, the App posted of hundreds and 135% growth of total recurring revenue and its customer base increased 85 per cent in the same period. Another highlight of the total recurring revenue of ieper that grew 42.
Two per se on when compared to the 12 months of 2019 customer base was up 40% VW December 'twenty and 19 and he paid out the what he's network, where 40% of in 2020.
Big retail recurring revenue grew 11% versus Q4 of 19 and the activation of cross solutions was 56% higher when compared to 2019 and millennia and recurring revenue was up 25% versus Q4 19 with an increase of 94.
Per sat and the number of e-commerce projects when compared to December 2019.
Finally in December links reached 409 franchisees accounting for 30% of all the new acquisitions in Q4, 'twenty and the same franchisee sales were 26% higher when compared to the 12 months of 2019.
Still on slide three we show the main highlights of the link space. The posted the total recurring revenue of annual growth of 26 per cent.
T F increased its share of linked spade total recurring revenue, reaching 49 per se and in the quarter and traded volume was 62 per se on higher in 2020. These of V 2019 the.
The payments link reached more than 14000 registered customers and your cold and pigs, together reached 13000 customers already integrated two links ERP and now they're highlight was gateway sort of recurring revenue that grew 50% quarter on quarter, reaching 3.4 thousand customers in December.
Link space T. P V was four five times higher in 2020 versus 2019.
Steve about length of stay it's important to say that we also identified from unusual operating loss losses arising from our commercial partner of leased space and the total amount of 40 million BRL fully recognized in the fourth quarter of 2020 links has addressed the vulnerabilities that.
Latched to these losses and those events does not impact the business combination of links and stone of as per the conditions set forth and the association agreement now.
Now moving to slide four here, we have the highlights for the links digital total recurring revenue grew 42% of in the quarter when compared to the previous ear as of April 'twenty, 'twenty, and we posted volume similar to of Black Friday every month with the G. M V for ecommerce platform growing 73 per se other and.
2020 versus 2019, the equivalent of two 2.3 billion derails the of traded volume in the year.
The total recurring revenue of links and pulse was up 36%.
Versus the fourth quarter of 2019 of accounting for 67% of the total recurring revenue of linked schedule and also the volume of the ads was 58 per se on higher core.
On quarter.
As for Omni Amit O M. As at the end of the quarter. It had 20 clients and five and 6000 stores for rollout. The total recurring revenue was up 29% of year on year, increasing its share to 10% to the off the total recurring revenue of links digital and in December of 2020 three.
<unk> hundred retailers had already posted their inventories of marketplaces. Following the announcement of the partnerships and finally.
On a quarter on quarter comparison were more than triple the number of agents and certified to sell links digital solutions.
Now before I turn on the floor of two Carol I would like to talk about the provision for loan losses of that was 6.5% of the net revenue in the total for the year, meaning 57 3 million barrels. This figure also reflects the food provision for operating losses operating state.
<unk> is the fact the L. L over of net revenue would be 1.2 per sad on Q4 of 'twenty, 'twenty, and 'twenty and 2% and the full year and the other important point is the request for negotiation involving the maturity date of the invoices of our of buyers have been analyzed on a case by case basis and the other.
The current COVID-19 scenario and by the end of December of 'twenty, and 'twenty of approximately 98 per cent of all of the invoices over the extended maturity and being paid on time, a percentage even higher than the 96 per cent posted at the end of September. Moreover, our cash position is very comfortable I had written and 30 million Bureau.
The net cash.
And excluding the leasing related amount from gross debt, resulting from the Ifr 16, the and the net earn out of accounts payable for acquisitions links adjusted net cash would be 293 million Bureau of ALS and the fourth quarter of 2020 now I'll turn the floor of two apparel our head of <unk>.
And I are well we'll proceed with the presentation.
Thank you of Rama teas, and good morning to you all on slide five we see that the recurring revenue was 228 million BRL accounting for 84 per sad of gross revenue rose revenue was 6% higher when compared to Q4 and 19.
Year to date and links gross revenue totaled 1 billion barrels up 11% year on year.
This quarter linked scorer of represented 70% of the total recurring revenue of whereas length did you do it accounted for 17% and link space, 13%. There's variation is explained by the continued growth and demand for digitalization solutions that started last quarter due to the impacts of the epic.
COVID-19 pandemic.
Now on slide six we have the 5% growth of net revenue of one compared to Q4, 19, and 11% growth year on year, 'twenty, and 2020 and 19.
Moving to slide seven adjusted EBITDA was 42 million barrels of the quarter with an adjusted EBITDA margin of 18% and Q4 'twenty yesterday of adjusted EBITDA was 201 million BRL with and adjusted every top margin up 23% lastly.
On slide eight we show the nonrecurring expenses on the quarter that total of 60 million Brl's. This amount includes mainly the calculation of the unusual operating losses of leg space as mentioned by remedy and legal and financial advisory expenses of rising from stones for.
Bozo.
Links stock option plan and also the impact on the anticipation and assignment of of receivables offered by links by hub allocated to the financial results. Thank you for your attention and now we will move to the Q&A session about the results of the quarter.
Yeah.
Thank you Les.
Ladies and gentlemen, we will now initiate the Q&A session for questions. Please press star one.
And to remove yourself from the list. Please press star two.
Please hold while we collect the questions.
Okay.
Okay.
Okay.
Please hold while we collect the questions.
We now conclude the Q&A session I would like to turn the floor over to Mr. Alberto Milosz and for his final remarks, you May proceed sir.
I would like to thank you all for all of your efforts and your dedication throughout the areas and my special Thanks goes to the Lynx team who have been.
And with less list during this transition phase we've been in during this pandemic moment for over a year.
And now I would like to thank our suppliers I would like to thank stone the.
They've.
Been extremely collaborative throughout this process with kaji and thank you to all of you have been covering our performance. Despite the fact that we are.
And we are still waiting for a cash final approval. Thank you all very much I wish you a very good day and the very good week.
Yeah.
Links conference call has now concluded. Thank you very much for joining us and have a very good day and thank you very much for using chorus call.
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