Q4 2022 Via SA Earnings Call
Speaker 1: Good afternoon, everyone. I'm very happy to be here. Thank you for being here and for your results. horsepower is bad effort is what it requires us to evaluate solely
Speaker 1: I will start with the last part, if I don't have time for any more questions. I will start with a little bit of what we have already said, and then we will move on to the next part, which is the last part.
Speaker 1: This is Reverend Shane talking with us in 2019 regarding the evolution of our technology and what lies ahead at this moment so we coy a new way to continue to future our people and in November 2020 we will have to wait, I don't know, I don't know what to expect.
Speaker 1: technicians used Spark into their new infrastructure. Finally, we slowly added a target in short storage passengers. At this moment, it was attachments came, they put this PBS X on the latest network. They then came to the orbit to a newanuts app to
Speaker 1: the police of CIO is facing, but how do we sustain this evolution in our platform?
Speaker 1: You may hear them from both of you, that they are collaborating using this language and how is thatutt cider made up of thepoints that form them? Is there ever possible a way that this type of seeing works in that way? No, it is wraeeks.
Speaker 1: The technology doesn't market for this, it's mainly for the server, it's valuable to remember that we initially started with...
Speaker 1: quaterter on your selfll determinine I was one com, bed. Set each of your cellers, So mention each. You thir what.
Speaker 2: Directing all of our efforts to the long tail with a focus on increasing recurrence and customers. All of our efforts do have a full force behind the what is known as the long operations in
Speaker 2: So in May of 2022 Ed select the Elia Marketplace and he started taking on our position as people on performance. So I just wanted to say that Allison brilliantly fulfilled his mission here at VIA, starting the digital transformation, supporting us with the evolution of our marketplace and really helping us in the innovation. Allison's share of the
Speaker 2: as an advisor in all of the innovation processes. Having said that, we will also be working on some changes here in reorganizing the CI-level. So, Sergio, he was a CI-level and he was conducting investor relations, communications, and industry.
Speaker 2: He'll accumulate for apartments and he'll stop focusing on logistics.
Speaker 2: Ethnic kids I each show are burial.
Speaker 3: All right. Thank you. You're welcome.
Speaker 2: So, as part of the job description, with this major change that we believe is key to have a bigger advance in the intensive use of technology and data analytics, we believe that we're taking on a whole nother...
Speaker 2: of our performance area, which interacts a lot with all of the evolution of our logistics, access and accuracy of our deliverables.
Speaker 2: to be relayed to humanURA with facilitated collaboration
Speaker 3: So, with our volume of...
Speaker 2: I'm very excited to see what's going on with public health in Manila.
Speaker 2: Please keep fast settings going on.
Speaker 2: that we are planning this. This was a scheduled and planned move and the me that we all have to get working.
Speaker 2: We are absolutely planning this. This was a scheduled and planned move and we thought we would be in a collective move and we are supporting the entire innovation process. The floor is yours and now we can take you on the floor. Thank you everyone.
Speaker 2: For questions from the City Bank, Joanne, you may proceed.
Speaker 2: Thank you, Gayle. Good afternoon. Good afternoon. Thank you, Gayle.
Speaker 2: Well, I'm not sure I've been in plan.
Speaker 2: about your plant dig them, if you're on dispersalNews.com sorry about that thee.
Speaker 3: Thank you.
Speaker 2: I think the last revision when we were thinking about...
Speaker 2: I wanted to hear your questions about the change in expectations.
Speaker 2: And also, if you could talk about the marketplace you've been talking about this a few minutes later...
Speaker 2: I wanted to hear about the average ticket since we're advancing along the scenes that this average ticket brings in a bit of pressure. So we wanted to know about this and how we're looking at 3P going back to expanding and having robust growth.?"
Speaker 2: And if possible, there was a bit of...
Speaker 2: We had significant growth in expenses in the fourth quarter. How do you consider the situation for 2020? Perfect, thank you for that question. We're going to start with the full chart. So we opened six stores. And now we come back to the heart of which is advertisements by you.
Speaker 2: last year and we closed down 21 stores. From these two, basically that's for performance. So something we've been working on this full and here we would be able to fit in about 1680 stores. We've already mapped this out.
Speaker 2: and we closed down 21 stores. From these two, anyone we closed, basically that's for performance. So something we've been working on this full, and here we would be able to fit in about 60 and 80 stores. We've already mapped this out.
Speaker 2: It would be about six to eight, but what is their context going on and the interest rate happening and all these questions. We're ready to change the plans and…
Speaker 4: we've
Speaker 2: We should have about five in stores this year. That's a roadmap we were already studying for a while. POS is being already negotiated. Basically, once scenario is improved, we can accelerate this very quickly.
Speaker 2: So, stores seem to be very busy. The entire period we see 10% in the fourth quarter and therefore the moment that we see,
Speaker 2: This is working. a.
Speaker 2: that we have corFB So, I'm going to go ahead and close the poll. So, I'm going to go ahead and close the poll.
Speaker 2: We can keep up with the same pattern and we believe we need to work on this a little better as things get better. Thank you
Speaker 2: It's one of our relationships with consumers and increases our participation and there's this whole structure behind the store. So for this year, about five to ten new stores. When you look at our strategy, yes, we follow along with the strategy.
Speaker 2: to continue to evolve with average tickets that are a little smaller. We've moved on.
Speaker 2: Not at the below 100 RIs, so that's not our target yet.
Speaker 2: Save.
Speaker 4: Go ahead. call now.
Speaker 4: Thank you.
Speaker 2: that.
Speaker 2: We will continue to go Matthew's long tail.
Speaker 2: because we've seen very good signs.
Speaker 2: We can see the level of recurrence with consumers has been growing in frequency as well as the level of the amount of items.
Speaker 2: This has been growing. We are on 79% in the volume of orders in the first quarter and we were able to balance out the GMV. When we set up the strategy.
Speaker 2: This is Sham.
Speaker 2: in the Mu Thom gospel.
Speaker 2: And then we had a drop in GIM-V.
Speaker 2: We've already bounced this out.
Speaker 2: This growth has continued to see net levels that are higher are the same in San Diego you
Speaker 2: We continue to be extremely focused on the strategy.
Speaker 4: Okay.
Speaker 2: So now the fifth point.
Speaker 2: So now the third point on it.
Speaker 2: It makes sense to have the sponsor, Fabiola, be provided some details on this fourth quarter. But I think it really makes sense to look at the examples year over year, because we have a lot of information that we need to be able to get to. And we have a lot of information that we need to be able to get to. And we have a lot of information that we need to be able to get to.
Speaker 2: that will have a level of expenses that we can say we're prepared.
Speaker 2: a very strong plan that we've been moving along with.
Speaker 2: I think that's a very aggressive plan.
Speaker 2: for performance gains and greater productivity, which is really the fruit of all of the investments we've been doing in the last few years and a reduction in expenses. So I think here we do have room to think of something that's about two points of evidence.
Speaker 2: coming from all of the gains we've been demonstrating this year. So, Paji, they can get into the details of the fourth quarter.
Speaker 5: Thank you.
Speaker 4: So.
Speaker 2: As you mentioned...
Speaker 2: There's a bit of a distortion.
Speaker 2: in regards to some credits that we had seen in that quarter that would be distributed during the year, but they were concentrated in that specific quarter, so it gets a little distorted. But the best indicator really is the level of expenses in the year. We're talking about 24, 24.2. That's pretty much the level that's recurrent.
Speaker 2: without the labor effect, it's about 2,330. That's the recurring level. And,
Speaker 2: It is really difficult to compare the total expenses with the market because we have operations with the DC and the entire operation, which brings in some possible difficulties as well for comparison if we exclude the NPL effect.
Speaker 2: We're talking about a level of expense that is probably the more comparable number when looking at the rest of the retailers in Brazil.
Speaker 2: And.
Speaker 2: So, we have been in this level.
Speaker 2: for the past five quarters. So we've been working on this, and this has been very important for gains in productivity. And Hobart has talked about two points, which is really our target here. We've been focusing strongly on this continuity of...
Speaker 2: our expense reduction plan for 2023. So we have a very strong target as well to search for these two percentage points and increase the profitability of the company.
Speaker 2: Very clear. Thank you very much.
Speaker 2: Thank you, João, for your participation. Our next question is from Pedro from Bradesco. Please, Pedro.
Speaker 6: That the MO.
Speaker 2: I think you're on mute, Pedro.
Speaker 2: Can you hear me now? Okay, great. Thank you, guys.
Speaker 2: All right, good afternoon, everyone, and thank you, Gabriel, for taking my question. I'll work on two here to make things a little simpler. First, we would like to hear from you guys about...
Speaker 2: a bit of the take-off in the year with the sales performance but also the gross margin and not only from a quality perspective in the stock, which seems to be very good, but also considering default impact as well and also taking advantage of the second question.
Speaker 2: I would like to know if we could get a bit of your mindset on…
Speaker 2: on the Capitol structure.
Speaker 2: We can see a big opportunity for market share gains, which would basically require some levels of investment and how we can equate this in the best way if we discount receivables is going to be something like a primary. So we just have these two main topics to discuss and thanks guys.
Speaker 2: Okay, thank you Pedro for that question. About 2023, yes, we did have a challenge right in the beginning for default and so I think we're handling this pretty well. We've seen a bit more rationality in the overall market and this has been quite positive.
Speaker 2: for competitive advantage and this is a scenario we like playing in where profitability can be preserved. So when it comes to the quality of the stock, we have pretty good quality. So we had a significant reduction in the volume of stock. We started off in the previous year.
Speaker 2: where we really focused on the pandemic due to the lack of products. And then as this was structured, we reduced this without margin pressure. So considering the quality of the stock.
We were able to remove all of the stock without pressuring our margins. So that is where we really have the quality of the stock and a very low rupture rate. So we see there is a balance in the margins in the first quarter. And we have a tightrem benignness to the knockdown on one side so that the artist cannot really BirkenIslamep. So let me access the scarf. And we have viewers Who have showed this withstructsur betrayments and we've been giving saviors it. So, look, think about that. Let's take a look. Let's give it a go.
been able to reach levels of market share gains that I'd say now in March we've had some signs where our market share is really at its maximum historic level that we've ever had when it comes to online.
So that does not mean the growth of 1P, 1P is still a little complex. In our 3P we have had strong growth as well and in the stores we continue to be quite strong as well. So we're very...
on purchasing in this store and the physical store. So this is a bit of the radar about the capital structure here. We were able to have a reduction in the stock. We may have some fine tuning. But
on purchasing in this store and the physical store. So this is a bit of the radar about the capital structure here. We were able to have a reduction in the stock. We may have some fine tuning, but we did and would be able to product throw these things out. After that, you
the payment terms that have been completely equal to the level of stock.
have been completely equal to the level of stock.
But this is very important for this growth movement and trend. We've been moving along very well for the renewal and postponing of these payments.
So, this is very positive. We are in a scenario where we can really grow and capture the market share. So, part of our sales come through the Buy Now Pay Later system.
So, we've been able to grow to be able to have this level of growth that we've been estimating. And if we don't have the total, it's very close to the total. So, we believe that the market should have an improvement when it comes to credit throughout the year and also discounts on – –
credit cards are as an option, but at this moment we're not working on
a bigger debt level, and we want to roll out on a bit of the debt that the company sells for this year.
Yeah, that's perfect. We've had very advanced conversations after all of this advance with a big retailer. The banks positively provide some signs that...
that with the payments that are going to be reaching maturity in the second and third quarters, these have been moving along very well. But I want to reinforce one point here. The company had very strong cash generation this year.
So next year, we are forcing a lower cash exit with
The possibility to also keep a level that's very high in monetization for taxes close about two billion to
And this also helps with all of the other elements that Hobart has mentioned that really labors in this achievement of the market share. So thank you everyone.
Thank you, Pedro. Our next question is from Donny at XP.
So, thank you for taking my question. I have two here on my side. First is a follow-up on the EBITDA margin that you mentioned. We have about two percentage points that we should see captured very quickly throughout the year.
If you could bring in a bit of the drivers and even the path for capturing this broad deer, that would be great and it would help us a lot. A second point is getting back to Alicia's point.
If you could maybe give us an update on how the structure is doing in your incentive program and retention for the main executives. You had mentioned that you had some stock options that were a little older and the level of prices. Can you give us a bit of an update if this was...
And if you've been working on this to be able to have the retention on some of the key executives in the company. Thank you. Okay, thank you for that.
I think we have this huge productivity program and so a lot of this is based on what we've been investing in and how we've been investing on the company. So we'll give you an example if you see what we presented on the revolution.
the evolution of GMV or revenue per seller, the productivity gains we've had based on all of them is not comparable and it's a lot greater actually than the pre-pandemic period in 2019. So this is a small example but it's really in all of the companies departments and areas we had a lot of productivity coming from logistics.
So we were able to
a lot of technology and a lot of algorithms that have been really conducting the distribution and allocation of products. This modification now, Edson taking on the physicians' logistics as well, and this expectation that we should accelerate the intensive use even more of technology in logistics.
So we have different initiatives in the company and we also have productivity here at the headquarters. We've also been messaging with this event and we've been able to gain more productivity for a while. We had to duplicate some structures. So we have people who are stepping up and saying, how are you helping us, our employees?
building new things and also people handling the past things and now we can make this become a single structure after this entire cycle.
So there's a bunch of different initiatives going on at this moment at FIA. So we've been obviously...
We have a big challenge here, but...
We are very committed to this and working on this plan. So it's nothing new. This has been...
something we've been working on since the second semester last year. We've been activating this plan and now it's really a sequence for 2023. So about retention for the executives, we've been also working on a recurrent stock option plan in the company and we have another original plan as well in the company which you were referring to back then as the stock price is positioned at about $4.90.
and a few cents I'm not sure, but this is kind of under the water, but everyone at VIA is aware.
what we have as value creation, and be it does not interact with the actual value the company has and the executives are here, they're committed to the company in the long term, and we've been working on some decisions here that are quite difficult in a company that don't value executives in the short term.
postponing of this period with the executives. And in exchange, we had 30 percent restricted, which is going to be maturing in the next years. We also have a study group in our committee for people on performance.
And our board, we've been setting a possible postponing of the execution of this plan from the moment when it's vested by the executive. So the barrier.
in the second semester of next year. And we're debating if this makes sense to postpone and executives would maybe have more time to exercise this if the conversation is doing pretty well. But we still don't have the end of the conversation addressed and we've been working on this topic.
Great, thank you very much.
Thank you, Danny. I wanted to invite Alejandra Namyaka from Morgan Stanley .
Ale, please. Thank you, guys.
for taking my question.
for taking my question. I wanted to focus a bit more on logistics.
especially in the fulfillment model.
that you consider in the fourth quarter. And we saw penetration and fulfillment reaching about 21% if you compare that with the 20% in the third quarter. And 16% if I'm not mistaken in the second quarter. So we are seeing a bit of this penetration also.
starting to reach some saturation. Could you help us understand what would be the level of penetration in this mix of services and logistics that you're seeing within the logistics for the sellers and if there's any additional investments you have to work on when it comes to capacity.
new fulfillment centers to be able to continue to increase this penetration. Well, Alishanjali, thank you for that question. I will start off here and then, Sej, you can help me with the answers. First, now we have not seen a need for investments, so VIA has been reducing stocks for over a year.
So we have room now to work on this operation. We already have our logistical network all set up and we have all of the stores operating as logistical hubs. So we think that when it comes to space allocation we really have an opportunity to bring in more players into our space.
demand for this kind of service so we can be very competitive in putting that the network already exists. And in fulfillment, yeah, we had growth where we were able to start off for the second quarter of last year. And we had exponential growth. We have room to grow still a lot.
There's appetite from the seller and so it's really about one more point of control at this moment than actually being at this limit for growth right? Seju if you could add on to that?
Well, that was very clear, but anyways, just about the difference in the semesters. We started off this Fulfillant Practice in March 2022, and we have this photograph here of the last three months of 2022. So we have less than nine months of evolution, leaving from zero and heading to 20%. So we consider this to be Leave Totally,
healthy growth and it is impacted by a mix of categories in us can use that can kind of interact with the system in so many different seasonalities that we went through in the end of last year with the World Cup as well. But this doesn't remove from our roots a horizon of potential that we see.
as at least double this, so 40 or 50 percent penetration and fulfillment in the amount of orders and requests. You can remember that this is under that umbrella of MVS, so all of the service platforms, where you really see the potential of going from 70 percent to 50 percent.
and growing to a potential horizon of 70 or 80 percent because there's always some people that will work on their logistics themselves, so maybe there's a balance point there. And I want to remind you all that we started off with this service considering the cost competitiveness that we have being able to be.
profitable and we were able to charge below the average market cost. So we're really happy with the evolution we've had.
Now we're going to move on to new horizons and technology intensiveness and logistics with Edson and Eugene coming in. We've seen this pass that we've looked at with...
major potential. We've seen the existence of NPS levels.
for those orders that are processed through greater development and fulfillment. So this also contributes to cost. And along with this, we've been growing a lot as well with our operation that we call the
service which is really open ocean. And that also once again strengthens the density even more and the operational efficiency and density for new growth. So this path continues and we will be expanding to another two D.C.s.
And then when I'm talking about this, we are really thinking about the fulfillment and open ocean. And this continues practically without any investments due to the release of the different areas and the reduction of the stock that I would like to highlight without affecting our stock out.
during last year.
last year. Okay perfect, thank you very much.
Okay, now I'm going to call Gussaba Ferachini from Goldman Sachs. Gussaba, you may proceed. Okay, thank you Gabriel. Hi guys, how's it going? On our set, we basically have two questions here. So the first one is about payment forms and how we noticed a bit of a drop in penetration from the CDC. So, we're going to go ahead and close the question. Okay, thank you. Okay, thank you. Okay, thank you. Okay, thank you. Okay, thank you. Okay, thank you.
and maybe a possible increase in co-branded. I wanted to understand what are the main reasons behind this and how much you're looking at this penetration.
possible increase in co-branded. I wanted to understand what are the main reasons behind this and how much you're looking at this penetration. The second question.
It's more about the credit panorama. How is this deterioration of the NPLs? Or if we reach the bottom?
and what's the appetite for risk to provide these loans.
So, thank you for that question. I'm going to pass it on to Kala Brahi. He can give us a lot of details on this.
Hi, Gustavo, can you hear me? Good afternoon. Thank you for that question. First, I want to talk about participation. So, the fourth quarter historically has a drop in sales, which is really an effect of Black Friday. I was forced to put October about what Trevor
Hi, Gustavo, can you hear me? Good afternoon. Thank you for that question. First, I want to talk about participation. So, the fourth quarter historically has a drop in sales, which is really ineffective of Black Friday.
So in this fourth quarter, there was a setback, a little more about the demand of credit.
We also noticed consumers in the fourth quarter focused most on paying their debts, even with the help from the government support policies, the ELCU at the time. So that's a little bit different than what we noticed historically in the fourth quarter. So this was the same as the fourth quarter of 2021.
So, as we noticed, what you mentioned, we've seen this positive effect. We have the growing participation of the parent and bi-lateral sales.
And also, to be able to recover the indexes of approval and granting that we had in the past. So, for the effects of the Buy Now, Pay Later, that's pretty much it. When you talk about the co-branded card, then we really have had a performance that is very significant in our presentation. And we really have had a performance that is very significant in our presentation. So, for the first time in our presentation, we had a performance that was very significant in our presentation. And we really had a performance that was very significant in our presentation.
highlighted the growth of these participation from co-branded ever since 2020. So we grew this in our sales regardless, well without cannibalizing the portfolio and the binoculars. It's a very safe strategy.
where both modalities of payments grow. And of course, each of them have their own characteristics of the co-branded card. We know that up until a certain level, it has no interest.
These are different target audiences, but about the co-branded card, we've been able to perform in line with our targets. We believe in the growth constantly, just as the Binaul P did in our sales.
I'm going to talk about the fourth quarter and also what we've seen in the first quarter.
So, one is because of that small part because of this setback. We had this reduction in the portfolio.
I also talked about the revision of the policy we had mentioned. We were also noticing a worsening in the scenario. And we have this second effect where we have this positive effect as well because it's a consequence of payments from customers that were already in a portfolio above 90 days. They had
First, the over 90% portfolio has more deterioration because the customers have stopped in this range of delays above 90 days. But this is an extremely positive effect because besides improving our indexes of recovery.
It also contributes to our losses indicators. So our loss indicators, if you notice, they've dropped because of this effect with the recovery in our portfolios and also because of the effect where you kind of hold out to the rollout without lecturer and we kind of
If you didn't have these payments, these payments would pay the overall roll out to the portfolio above 180 days. When it comes to the beginning of the year, January and February , I also mentioned that we had performed some careful openings for our
Because we've had some excellent indicators, this allows us to have provisioning indicators.
and the overall so it's smaller in the next quarter. And also we can sell more in the binocular modality.
Well, very clear, thank you. Our next question is from Nicholas from JP Morgan. Nicholas, please. Well, thank you, everyone. Good afternoon, everyone. Thank you for taking my question. I had two, actually. First, I wanted to know about your guys' plans.
if you've seen better procurement terms in the last month and what your relationship is on this site.
Well, good afternoon. Thank you for the question. From the efficiency perspective, I think that it's going to happen throughout the year. So we'll have this capturing process throughout the year and maybe a little lower now in the first quarter, but a little more accelerated in the second quarter.
There's a lot of things we're doing that won't be full in the quarter. So throughout the year we should see this evolution in the productivity net via. So when it comes to suppliers I'd say that it's a pretty good ratio.
be as super significant in the segments where it operates at 1P. So the ratio is really good. And considering the events that took place, we've seen suppliers looking at us as – Does anybody else want to add something that we can also add a link to?
as a strategic channel to offset new volumes. And so we've been moving along to help this happen without major bets on...
a strategic channel to offset new volumes. And so we've been moving along to help this happen without major bets on...
over volume of purchases and stocking will be accelerating this level of purchases with the industries but things are really under control regardless.
Okay, very clear. Thank you.
Okay, very clear. Thank you. Thank you, Nicholas. Okay, thank you. Thank you,
The next question is from Iago from Junio. Well, good afternoon, guys, and thank you for taking my question. Some of them are already addressed, but I wanted to...
address this point for Nicholas. You guys excellent work so far. Reduce the stock of law without harming the revenue and the margins.
So what can we expect for 2023? Something similar to 2022? Is there better improvements? Could you give us some more granularity? That would be great. Thank you. Thank you. Thank you. Thank you.
Well, thank you, Iago, for that question. We reduced $1.6 billion and 25 days in the stocks, so we are about 95 days at the moment. I'd say that the levels of 2023 should be...
close to 95 days. Maybe, as I mentioned, we have the opportunity to work on something a little bit beyond this, but that seems to be really, really surgical. And there's some technological aspects that are taking place in logistics throughout this year.
And it could open up other opportunities for us, but I would say that it's close to something near this cycle that we're looking at, like 90 to 95 days coverage. And then the stock will vary according to the seasonality. That should – when it comes to the U.S. state, it should be around that. Okay, thank you. defined reviews for this morning's paper illustrations.
Our next question is from Eric from Cins-A-Myr. Hey, good afternoon, guys. Thanks for taking our question. I think on our side we have a point here about the take rate. So we've noticed some news on the overall market.
when you look at profitability. And so just to understand, quarter over quarter you had a bit of a drop in the take rate. I wanted to know if it's more like a personality or occasional. And also when you search for profitability, which seems to be a very frequent topic for all of the players.
I want to understand if besides fulfillment and credit, which other levers you guys are looking at for a possible increase in ticket rates and also considering this moment where everyone is kind of increasing their rates a bit more, do you see a possible opportunity to capture a bigger amount of sellers?
for something in this sense with maybe maintenance of some rates versus the increase in the more generalized way. Well, thank you, Eric, for that question. But what we've seen in the fourth quarter is pretty much the seasonality of the fourth quarter. And we've been able to – we actually were the first ones to increase the tick rates in the market. So, we've been able to increase the tick rates in the market.
us to keep on leveraging the profitability with the sellers and the binoculars in the marketplace is also a big option.
And so we also have various different things going on throughout last year. We're forcing the sale of the sales with interest on credit cards. And it's just been very successful at the stores and so online as well.
which should be matured by the online players in the search for probability. So maybe this is a path we should follow as well.
We also have the adds program that should gain more relevance throughout this year. So we added this and we have some improvements to work on. We've had some news coming along as well. But this will take place throughout the year. So we have different initiatives coming from different areas.
I think the biggest initiatives are really at the fulfillment level where you have profitability gains and productivity gains. So the more we have the turn-overs, the more productivity we have in the distribution centers in our group and also through the biopulator funding items of the marketplace.
Thank you, Eric and Roberto. Now I'll pass the floor to you because we have no other questions. I just want to thank you all for your interest in our earnings call here. Nice to be with you and have a good afternoon.