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End-of-day quote. End-of-day quote Bolsa de Valores de Sao Paulo - 12/08
5.77 BRL   -0.52%
11/29VIA S A : 3Q21 Conference Call Transcript
11/12Inflation, weakening demand shrink Brazilian retailers market cap
11/113Q21 Financial and Operating Results Presentation
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Via S A : 2Q21 Conference Call Transcript

08/30/2021 EST

Conference Call Transcript

2Q21 Results

Via (VIIA3 BZ)

August 12, 2021

Daniela Bretthauer:

Good afternoon. Welcome to another earnings call at Via. I am the IR Director, and the slides on this presentation are available for downloading on the IR website at Via.

This presentation is being broadcasted on our YouTube channel. We have simultaneous translation into English. We will go through some slides and after we will open up for Q&A, and these can be submitted by video or by phone.

As you have been monitoring, Via is going through a major transformation. We changed our name and the Company now is only Via, without the Varejo. We changed our address, now we are based in front of Shopping Eldorado, and now we are also changing our ticker on B3. From Monday onwards, on the 16th of August the ticker will be VIIA3.

And to talk about this transformation even more that we are undergoing now and the earnings in the 2Q21, I would like to invite our CEO, Roberto Fulcherberguer, to begin our presentation.

Roberto Fulcherberguer:

Good afternoon, everyone, and thank you so much. Before we begin our presentation here with the slides, I would just like to thank you so much for joining our call today, as you are interested in covering the numbers in the Company. I want to also quickly go over our strategy and the main advances we have had, and some prospects for future growth.

In the last quarters, we have been setting up an ecosystem that is very robust to grow, especially in three main fronts, online, physical retail with financial services and logistics. All of this is going to be operated in an integrated manner, increasing our relationship with our customer base.

The most impressive data in this recent journey is that from January to July this year, the number of sellers on our platform and our marketplace leaped from 10,000 to 70,000. We have already reached in the month of July, 70,000 sellers. This was one of the important levers to be able to achieve a gross GMV of R$11.4 billion in the 2Q, with a 51% increase compared to the same period in 2021.

About 65% of this GMV came from digital sales. In the past seven quarters, we more than doubled our market share online, reaching 16.4% in July 2021. So we are not only growing, we are growing a lot more than the market.

We really believe that our ecosystem has a few advantages compared to other players in the market. The first one is that we have a marketplace that really grants credit to customers, and that will have a strong leap with the banQi, vias fintech that had a license from the Central Bank to operate as a direct credit society, a SCD.

You are probably hearing about the Buy Now, Pay Later explosion in the international market with big companies all over the world creating solutions to fund purchases from customers. There are forecasts from consulting firms saying that the worldwide industry and the BNPL would grow up to 15x, reaching US$1 trillion in gross annual volume for products up until 2025.


Conference Call Transcript

2Q21 Results

Via (VIIA3 BZ)

August 12, 2021

The world may be discovering BNPL now, but we are funding our customers purchases for actually over 60 years already. We just did not use this fancy name called 'Buy Now, Pay Later'. For us, it was just the payment booklet, the carnê. And now this has been digitalized as well, providing to millions of Brazilians that do not have access to credit.

banQi will be a synonym for inclusion and mutual confidence and trust. As we operate with the best rates in the market, we will make access to credit more democratic.

These evolutions retrofit the ecosystem, increasing the purchasing power for Brazilians and opening new connection channels, also generating greater recurrent loyalty and an increase in the lifetime value.

The second advantage is on logistics. So Via currently deliveries at all municipalities in Brazil, we deliver in 100% of the Brazilian municipalities. Our deliveries up to 24 hours, reach 2,500 cities, and our same day delivery scheme reaches 65 cities already. We will reach customers quicker, with better frequency. And soon we will start offering our services for fulfillment to third parties, sellers and open ocean. Completing the suite of services through Envvias.

Another big advantage of Via is our omnichannel approach. We have already launched 19 of the 120 stores, and we will be launching the 120 this year. We are already in the phase of producing the stores, and all of them are set up to meet the e-commerce demand in 1P or 3P.

Our store is not a POS only, it is a relationship spot, as a logistical hub, an accelerator for the sales online, in each location. Over 20,000 sales reps in stores really became an important lever, strengthening our strategy omnichannel. And this quarter, they were responsible for over R$2.1 billion.

Based on these advantages, we will accelerate our growth even more, including other professionals in the platform, with speed and efficiency. So Via accelerated entering the game. We are really excited with what is coming around.

Now I would like to start with a presentation of the slides. Before I start talking about the first slide, which brings in our results, I would like to initially make a remark, which is, after we launched our earnings, that everyone is talking about EBITDA.

And I just wanted to highlight that in the month of April, we had almost the entire amount of our stores closed. So the EBITDA we are looking at this month is not our recurring EBITDA. This EBITDA is coming from what we were able to achieve in a strong recovery, regardless of the stores closed.

And what is different here than the last quarter is that this month of April, we did not have the government support with the Coronavoucher to help with the payment for the employees. So this is an expense we did not have last year and this year we had, without the stores open. So in the same way, the rental negotiations also did not come in at the same speed as the previous year because it was more intermittent in the periods, with the closings.

But I would like to mention that this EBITDA we are noticing in this quarter is not a recurring EBITDA. We continue to like profitability. We are more towards 7, 7.5, which is what we were doing, than the 6.2 that we are demonstrating now.


Conference Call Transcript

2Q21 Results

Via (VIIA3 BZ)

August 12, 2021

About the highlight here in this quarter, we are already the past seven quarters demonstrating the major consistency and gaining market share, In the 2Q, despite having the stores closed in April, we added a record with over R$4 billion in GMV versus the 2Q20. And I want to remind you that in the 2Q20, online for the Company was really strong, because the physical stores were closed. So we were able to reach a total of R$11.4 billion in gross GMV, which is an increase of 51% compared to the 2Q20.

This performance represents strong acceleration when compared to the growth in the 1Q, which was 27%. So we were able to add a lot of growth into the 2Q. 55% of the total GMV came from digital sales. So we had growth of 7% in 1P and 85% in 3P. So 65% of the Company's GMV is already operating digitally.

So here are some relevant data. In the 2Q, according to the Compre & Confie data, online sales grew 36%, compared to an average of 17% in the market. So we continue to grow more than double what the market is growing.

As we had already disclosed, we are able to exchange data with Ebit, so we reviewed our customer base that represented an increase of 10%, the total amount of the market. And in the next slide, we can see the share in the Ebit and the Compre & Confie. For the last seven quarters, the growth was 3x greater than what the market is growing, and this demonstrates our strategy and our strong focus on growth and market gains.

And this quarter was very challenging due to the social restrictions and the closing of the stores. We had the option to expand our investments in order to attract new customers and promote various new categories that entered our ecosystem.

We could have done this through a cashback, reductions and discounts, or a combination of all of these factors, but we decided to expand the activation of customers. And, in our perspective, we were very successful. We had positive growth, gains in share, we grew double what the market grew, so we added 4 million of new customers in our active customer base.

About the 3Q, what is going on is that, in July, for example, the market based on the Compre & Confie data, the market grew 8.5%. Via, in the month of July, grew 43.9%, based on Compre & Confie, and the market without Via grew 3.4%. So in the month of July, we continue this trend of growth, gaining market share above market levels.

Up until the 10th, which is what we have defined here, the total market with Via is growing 25.7%, Via grows 66.1%, the market without Via grew 20.4%. So we gained 4.1 points of share in the month of July compared to last year, and we gained 3.7 market share in the accumulated amount on August 10, based on data from Compre & Confie. So we continue to also in the 3Q with an excellent pathway of growth.

About Vendedor Online, it has been an important lever, our performance online, and it is prepared and incentivized to sell products for 1P and 3P. One interesting data is that about 30% of the customers that use Vendedor Online are new customers of Via, and we also have been able to reactivate many customers, 30% of the customers that are serviced are customers from our inactive customer base. So we are activating this a lot,. It is a very important and powerful tool to add on new customers and activate customers that are inactive.


Conference Call Transcript

2Q21 Results

Via (VIIA3 BZ)

August 12, 2021

So this is an important differential for the increase in GMV in 1P and 3P, and our customer acquisition is also recurring. It was responsible for 18% of the sales on marketplace.

So this is a big differential. Platforms that are just pure marketplaces, or pure digital, do not have the sales rep. So we are heading towards a lot of places that people do not go to. This is one of the big differentials, and I am going to be demonstrating this also, with other differentials as well in Via.

On Investor Day, we mentioned we would be delivering a lot of e-commerce now in the 1H, and it already represents another important tool to potentialize all of our sales team, and online as well

Now I would like to share a video.

Now I am going to talk about the evolution of this, and we are going to present the numbers we have been having in our marketplace. To highlight what I have already mentioned in the call, I have been repeating ever since Investor Day, 2021 is the year of marketplace at Via.

Last year in June, we had 6,000 sellers. We had 10,000 sellers at the end of December, we started the year 2021 with 10,000 sellers, we reached 59,000 sellers, and now in July we are already with 70,000, as I mentioned in our Investor Day. We were confident that we would reach between 70,000 to 90,000 this year, and we are already moving in a strong pace towards the evolution.

We went from 3 million last year and we are already having 31 million active users in our platform. We have connected our first international partner, nocnoc, which allows for the sale of imported products from Asia and the US, and we will have good news as well in our marketplace.

We also highlight that we are not only a sales rep for electronic. We are very lucky to have the infinite shelf, which really help with the recurrence of customers.

The sales in the marketplace increase 85%, reaching 22% of the digital sales. We almost doubled the numbers in 2020. In six months in 2021, we made 80% of the revenue produced last year in 3P.

With this step forward in our marketplace and our capacity to generate demand, and especially our capacity for delivery, the marketplace is another important platform to add on to our ecosystem. And together with the strong potential in 1P and omnichannel approach of Buy Now, Pay Later, and our logistics will really lever more and more our recurrence and the acquisition of new customers.

On the next chart, we can observe some examples of increases in sales in long tail categories in 1P and 3P. The biggest amount of sellers, the increase in the assortment and the amplitude in categories, along with the new strategy and structure dedicated to the marketplace added up with initiatives that are going to come within this year, such as 3P installment plan. Together, it clearly places us at an equal positions with the market, and we are definitely disputing this leadership in the market.

On the next slide, we are going to talk about another strong point, which is our financial solutions platform. Here we have had evolution in all the indicators. Even with the stores


Conference Call Transcript

2Q21 Results

Via (VIIA3 BZ)

August 12, 2021

closed in April, we added more customers and also more TPV. Our portfolio will be reinforced by the SCD license that we recently received, which will fill in a gap for credit granting that is really underdeveloped by the fintechs in the Brazilian market.

banQi is really using the full experience of Buy Now, Pay Later that this company has been building throughout the years. At Via, we have the biggest case of Buy Now, Pay Later in Brazilian market, which really brings excellence in our opportunity.

If we take a look at this slide, as we talk about the opportunities that we have, I bring in a survey from McKinsey that shows the trend for this payment method in the American market. We know that major players for BNPL abroad, like Clarna, After Pay and others have very few installments and with no interest. But at the end of day, this is like a Buy Now, Pay Later, which is basically what we have already done for many years, but of course, customized to the needs in Brazil.

The main message here is not the potential for penetration or the Buy Now, Pay Later in the American market, but the conclusion of the study on the benefits that this tool adds to the ecosystem. This tool brings in a high rate of conversion, it increases the volume of spending, increases the number of customers, increases the recurrence, and it reduces the customer acquisition cost. So everything that the platforms normally search for, these kind of tools can add on to.

On the next slide, as we take a look at our numbers here and our history, no other players in Brazil have the legitimacy and tradition and experience to offer credit as Via does. It is really a pioneer and leader in the Buy Now, Pay Later mentality. There, there is no discussion. We are on this pathway for over a decade.

And now I would like to call it on a video that will talk about what this story is all about.

As you have seen, we certainly have a long history and potentials that can be developed that we are exploring very well. On this slide here, we can see and prove the main benefits as recurrence, frequency, loyally and including customers in our base.

The increase in the penetration to 31% represents a growth of 56% compared to the share we had of Buy Now, Pay Later in 2020. So we continue to intensify this tool, expanding more of its share.

And recurrence, as we can notice in the graph on the right, 51% of the customers that use this payment method with us continue to be loyal. They generate recurrence, they have a new customer credit journey even before the current journey is kept in an indirect manner in our ecosystem. So this adds on another 350,000 new customers per month.

Everything we had seen in that McKinsey study, we can see reflected here in our reality. When you take a look at the slide, on the left side, we can see the evolution of our credit in the physical drive and the distribution of customers that are preapproved per region. In the last 12 months, we are adding more and more customers that are preapproved into our ecosystem.

On the right side, we notice the major capacity to add new customers coming from our digital credit platform. As an example, you can see the Northeast region. This is the second line. We have stores in 82 municipalities, and through online credit, we were already able to reach 361 municipalities where we do not have store. So here, it is pure adds and customer recurrence. So in total we reached 1,500 municipalities where we


This is an excerpt of the original content. To continue reading it, access the original document here.


Via Varejo SA published this content on 30 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 September 2021 11:41:07 UTC.

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Analyst Recommendations on VIA S.A.
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Sales 2021 32 380 M 5 820 M 5 820 M
Net income 2021 -213 M -38,4 M -38,4 M
Net Debt 2021 10 734 M 1 929 M 1 929 M
P/E ratio 2021 -43,5x
Yield 2021 0,29%
Capitalization 9 221 M 1 667 M 1 657 M
EV / Sales 2021 0,62x
EV / Sales 2022 0,51x
Nbr of Employees 47 485
Free-Float 8,16%
Chart VIA S.A.
Duration : Period :
Via S.A. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends VIA S.A.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 13
Last Close Price 5,77 BRL
Average target price 11,88 BRL
Spread / Average Target 106%
EPS Revisions
Managers and Directors
Roberto Fulcherberguer Chief Executive Officer
Orivaldo Padilha VP-Finance & Investor Relations Officer
Raphael Oscar Klein Chairman
Edson Tavares Chief Technology Officer
Abel Ornelas Vieira Vice President-Sales & Operations
Sector and Competitors