EARNINGS
RELEASE
3Q21
VIDEOCONFERENCE - PORTUGUESE: November 11, 2021, 11h00 (Brasília)
Webcast: click here.Telephone: +55 11 4090-1621 or +55 11 4210-1803 (access - TOTVS)
Replay: +55 (11) 3193-1012 or +55 (11) 2820-4012 (acesso - 7935507#) until November 17, 2021 or on our website ri.totvs.com
VIDEOCONFERENCE - ENGLISH (Simultaneous Translation): November 11, 2021, 11h00 (Brasília)
Webcast: click here.Telephone: US Toll Free +1 844 204-8942 | International +1 412 717-9627 | Brasil +55 11 4090-1621 ou +55 11 4210-1803 (access - TOTVS)
Replay: +55 (11) 3193-1012 or +55 (11) 2820-4012 (access - 8917528#) until November 17, 2021 or on our website ri.totvs.com/en
3Q21EARNINGS RELEASE .
São Paulo, November 10th 2021 - TOTVS S.A. (B3: TOTS3), the leader in the development of business solutions in Brazil, announces today its results for the Third Quarter of 2021 (3Q21). The Company's consolidated fnancial statements were prepared in accordance with accounting practices adopted in Brazil and in line with the International Financial Reporting Standards (IFRS).
TOTVS TOTAL NET REVENUE ACCELERATES AND GROWS 26%
- New revenue growth locomotives accounted for 42% of total Consolidated Revenue and 73% of YoY growth1
- Management Recurring Revenue grew 20% organically , the highest percentage since 2012, driven by the additional acceleration
of SaaS Revenue, which growth reached 32% YoY - "Rule of 40" reached 48.6%, maintaining a balance between growth and proftability, with an increase of 26.1% in Total Net
Revenue and Adjusted EBITDA Margin of 22.5%
CONSOLIDATED REVENUE | SAAS MANAGEMENT REVENUE | BIZ PERFORMANCE | CREDIT PRODUCTION | ||
RECURRING REVENUE | |||||
R$855 million | R$225 million | R$2.7 billion | |||
R$61 million | |||||
+26% vs 3Q20 | +32% vs 3Q20 | +51% vs 3Q20 | |||
+46%2 vs 3Q20 | |||||
MESSAGE FROM THE MANAGEMENT
Our 3D ecosystem (3 Dimensions - Management, Business Performance and Techfn) is a reality. TOTVS customers already have access to a broader portfolio, which goes far beyond ERP, allowing them to accelerate their digitization journey. This is what we call changing the competitive game.
As a result, we created new and powerful growth locomotives with (i) SaaS Management +32% YoY Revenue, once again driven by new signings, with strong representation form Cloud; (ii) Business Performance +44% YoY, demonstrating the strength and potential of RD Station; and (iii) Techfn +49% YoY, with a new record for quality Credit Production.
Also in the Management dimension, we accelerated the organic recurring revenue to 20% YoY, a record of this metric since 2012, a performance that once again proves that this market is not yet mature.
This additional acceleration of revenue growth came with the support of a healthy EBITDA margin, resulting in a YoY advance of 7 p.p. on the 40 rule. This indicator helps us to manage with fexibility and balance the combination of Dimensions with different moments and
Recurring Revenue (R$ million)
Credit Production (R$ million)
Consolidated ARR
R$2.8 billion
Organic Addition Record
+R$162 million
98.3%
Consolidated
Renewal rate
Credit Portfolio
R$1.6 billion
+55% vs 3Q20
Supplier
Delinquency >90 days
0.6%
190 points below
the Brazilian average3
mandates.
Additionally, the Follow-on, carried out at the right time, expanded our capacity to execute M&A, putting us in an advantage to capture opportunities.
Therefore, we are moving forward at an accelerated pace, transforming the Company, unlocking value and creating a young, innovative and ambitious culture.
Contribution Margin 3Q21 | Adjusted EBITDA |
R$192 million | |
+19% vs 3Q20 | |
Operating Cash | |
Generation | |
R$273 million | |
+32% vs 3Q20 | |
1 | 2 Considers the unaudited results of RD Station from Jan/20 to May/21 and Tail Target from Jan/20 toDec/20 |
1 Management Revenue, plus Business Performance and Techfn revenues on the same comparison basis |
3 Source: Banco Central do Brasil (Brazilian Central Bank, portuguese only) (www.bcb.gov.br/estatisticas/estatisticasmonetariascredito)
This document is a TOTVS' property. All rights reserved © | 3Q21 Earnings Release | 2 |
RECENT EVENTS
Ecosystem far beyond ERP…
TOTVS and B3 Partnership in Dimensa
Dimensa starts now a new stage, with two of the main players in the Financial Services sector in its governance structure
Once all precedent conditions were met, the transaction was concluded on October 1st, and Dimensa now has, in addition to TOTVS as its parent company, B3 as its shareholder holding
37.5% of its voting capital, a stake acquired through the investment of R$600 million in the company.
With reinforced management, autonomy and focus, Dimensa will aim on expanding its investments in innovation and increasing the portfolio of solutions and customers through organic developments, partnerships and acquisitions, in order to become the main option of B2B technology for the fnancial sector.
To access the material fact, click here.
TOTVS performs Follow-on
Focused on potential acquisitions, the public share offering raises R$1.44 billion
With this issuing, the Company intends to continue the construction of an ecosystem of B2B technologies in 3 dimensions (Management, Techfn and Business Performance), allocating the proceeds in acquisition of companies that can contribute to the execution of its strategy.
The book-building process resulted in a demand of 4.3x the issuing, with high quality and broad participation of long-only funds. The total dilution was 6.78%, bringing free-foat to 84.2%.
To access the material fact,click here.
Innovation, trends and releases are the highlights of
TOTVS Trends
This free online event held in August presented the Company's main news to 12 sectors of the economy
Promoted from August 16 to 20, TOTVS Trends presented the main news from the Company's portfolio to support 12 segments of the economy, in addition to addressing innovations and trends in the tech market and promoting discussions that show how and which technological solutions can help companies to increase productivity and
grow their business.
With more than 6,800 participants and fve days of event, a total of 35 segmented panels were held, with the latest news and release of solutions for Retail, Distribution, Agribusiness, Manufacturing, Logistics, Service Providers, Health, Education, Legal, Construction and Hospitality sectors. In addition to the participation of TOTVS specialists, customers and other guests, there was also the presentation of success stories and sharing of experiences.
Click hereto watch the videos from the event. [Portuguese Only]
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RD Hostel: the biggest marketing and sales event in Brazil
With big names of the market, the RD Station event was 100% online.
The online event RD Hostel, promoted by RD Station, took place on October 20th and 21st and consisted of two days immersed in themes related to innovation, social networks, management, leadership, business and technologies.
With a powerful line-up with more than 120 speakers and more than 100,000 participants, RD Hostel is intended to be the main meeting point of the marketing, sales and innovation ecosystem, with the presence of reference names both in the national and international market, such as the author of four New York Times best-sellers, Daniel Pink.
Click hereto watch the videos of the event. [Portuguese only]
ESG (Environmental, Social and Governance)
TOTVS recommended in ESG portfolios
TOTVS is among the top ESG recommendations from XP, BTG and JP Morgan
According to the ESG Radar Report from XP Investimentos, we are the best positioned company in ESG in the Brazilian market. For BTG, the main highlights are in terms of innovation, customer relations, diversity, talent attraction and retention, and data privacy. In the JP Morgan ranking, TOTVS is placed as the company with the highest number of practices in full compliance with those recommended by the IBGC (Brazilian Institute of Corporate Governance).
In addition, TOTVS received the trophy "Transparência 2021" at the ANEFAC - FIPECAFI Award. Held for over 20 years and recognized as the "Accountability Oscar", the award aims to recognize and honor companies that have the best transparency practices in accounting information.
This award reinforces the seriousness with which TOTVS deals with the theme of corporate governance and believes that transparency is no longer a differential, but a requirement, adding more and more value to the businesses for their stakeholders.
Human capital and community relations initiatives
Actions are part of the social pillar, and were based on diversity & inclusion and the strengthening of the relationship with the communities surrounding our operations
TOTVS developed a series of ESG initiatives aimed at the community at the period. In order to increase talent attraction and support the growth and productivity of the technology market in Brazil, TOTVS launched in September its Internship Program for students in technology and design areas. The selection process was fully inclusive, seeking people regardless of any ethnicity, age, gender identity or social status, with a total of 10,000 applicants and 143 generated opportunities.
In this same context, the Company also launched the #ELASNATOTVS talent pool (in English, #WOMENONTOTVS), aimed at women, whether cis- and transgender, encouraging them to apply for our job opportunities, so that more and more women can be here to contribute to so many others who already are a role model and inspiration on our day to day. It also sponsored the PrograMaria Summit Online 2021, one of the largest technology events in Brazil for women and LGBTQIAP+ people, which aims to empower women with skills and interest in technology.
In October, TOTVS and its Diversity and Inclusion Program was recognized in the 4th edition of the Human Rights and Diversity Seal, an initiative of the Municipal Department for Human Rights and Citizenship of the City of São Paulo, which recognizes actions on inclusion in the workplace and in society implemented in the city by public, private and third sector organizations.
This document is a TOTVS' property. All rights reserved © | 3Q21 Earnings Release | 4 |
FINANCIAL AND OPERATIONAL HIGHLIGHTS
3Q21 | 3Q20 | ∆ | 2Q21 | ∆ | 9M21 | 9M20 | ∆ | |||
Rule of 40 (a+b) | 48.6% | 41.6% | 700 bp | 45.7% | 290 bp | 46.8% | 34.3% | 1250 bp | ||
YoY Net Revenue Growth (a) | 26.1% | 17.8% | 830 bp | 21.7% | 440 bp | 22.6% | 12.0% | 1060 bp | ||
Adjusted EBITDA Margin (b) | 22.5% | 23.8% | -130 bp | 24.1% | -160 bp | 24.2% | 22.3% | 190 bp | ||
Growth (in R$ thousand) | ||||||||||
Net Revenue | 854,538 | 677,766 | 26.1% | 763,375 | 11.9% | 2,338,169 | 1,906,583 | 22.6% | ||
Consolidated Recurring Revenue | 651,822 | 490,793 | 32.8% | 582,975 | 11.8% | 1,773,862 | 1,446,039 | 22.7% | ||
% Consolidated Recurring Revenue | 76.3% | 72.4% | 390 bp | 76.4% | -10 bp | 75.9% | 75.8% | 10 bp | ||
% Biz Perform. + Techfin Revenue | 15.9% | 7.4% | 850 bp | 11.1% | 480 bp | 12.0% | 4.0% | 800 bp | ||
Consolidated ARR | 2,819,020 | 2,138,700 | 31.8% | 2,657,038 | 6.1% | n/a | n/a | - | ||
Organic Consolidated ARR Addition | 161,982 | 56,700 | 185.7% | 121,654 | 33.1% | 373,781 | 153,000 | 144.3% | ||
Consolidated SaaS Revenue | 284,724 | 170,705 | 66.8% | 229,216 | 24.2% | 713,287 | 492,665 | 44.8% | ||
Biz Performance Recurring Revenue* | 61,037 | 41,876 | 45.8% | 56,585 | 7.9% | 169,034 | 116,094 | 45.6% | ||
Credit Production | 2,665,874 | 1,761,050 | 51.4% | 2,438,294 | 9.3% | 7,147,184 | 4,663,341 | 53.3% | ||
Profitability (in R$ thousand) | ||||||||||
Adjusted EBITDA Margin | 22.5% | 23.8% | -130 bp | 24.1% | -160 bp | 24.2% | 22.3% | 190 bp | ||
Adjusted EBITDA** | 192,043 | 161,422 | 19.0% | 183,738 | 4.5% | 564,970 | 425,622 | 32.7% | ||
Cash Earnings*** | 111,239 | 96,790 | 14.9% | 91,182 | 22.0% | 299,105 | 235,614 | 26.9% | ||
Cash Earnings Margin | 13.0% | 14.3% | -130 bp | 11.9% | 110 bp | 12.8% | 12.4% | 40 bp | ||
Operating Cash Generation | 272,920 | 207,036 | 31.8% | 102,356 | 166.6% | 557,837 | 471,066 | 18.4% | ||
Operating Cash Generation / Adj. EBITDA | 142.1% | 128.3% | 1380 bp | 55.7% | 8640 bp | 98.7% | 110.7% | -1200 bp | ||
Supplier LTM ROE | 51.9% | 17.5% | 3440 bp | 56.4% | -450 bp | n/a | n/a | - | ||
Stock Market | ||||||||||
TOTS3 (in R$) | 36.10 | 27.10 | 33.2% | 37.65 | (4.1%) | n/a | n/a | - | ||
ADTV 30 (in R$ thousand) | 159,733 | 143,004 | 11.7% | 125,746 | 27.0% | n/a | n/a | - | ||
IBOV (pts) | 110,979 | 94,603 | 17.3% | 126,802 | (12.5%) | n/a | n/a | - | ||
IBrX 50 (pts) | 18,328 | 15,471 | 18.5% | 21,349 | (14.2%) | n/a | n/a | - | ||
- Includes unaudited results from jan-dec/20 of Tail from jan/20-may/21 of RD Station, for comparative purposes only ** EBITDA adjusted by extraordinary items
*** Net Income without the effects of expenses with amortization of intangibles arising from acquisitions
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TOTVS SA published this content on 10 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 November 2021 09:26:03 UTC.