Presentation of 1Q17 Results. May 11th, 2017

Transcription

1 Presentation of Results May 11th, 2017

2 Disclaimer The forward-looking statements contained herein are based on our management s current assumptions and estimates, which may result in material differences regarding future results, performance and events. These forward-looking statements include future results, which may be influenced by past results and investments. Actual results, performance and events may differ substantially from those expressed or implied in these forward-looking statements due to a variety of factors, such as general economic conditions in Brazil and other countries, interest and exchange rate levels, future renegotiations or prepayment of obligations or credits denominated in foreign currency, legal and regulatory changes and general competitive factors (whether global, regional, or domestic). 2

3 Agenda 1 Recent Events 2 Results 3 Q & A Session 3

4 Highlights Highlights of CVC Group CVC Group growth in bookings of 11.9% in, driven by higher growth in the leisure segment at CVC and mainly due to the growth of corporate segment at RexturAdvance 11,9% 8,5% 2,6% 3.8%* -0,9% -3,9% 2Q16 3Q16 4Q16 At CVC (leisure), the growth in same store sales (SSS) of 13,3% and strong growth of the international segment of 37% in contributed to the observed results In we added 9 stores, totaling 97 openings in the last 12 months (83 net openings) and closed March 2017 with 1,104 operating stores Long Term Incentive Plan (LTI) In the regular general meeting which took place on April 28 th, the Long Term Incentive Plan (LTI) was approved based on company s stock The plan has the objective to align interests of company, participants and shareholders, in the medium and long term. The company s directors and high potential managers are eligible The executive invests a portion or entire lump sum of the annual variable bonus and receives in exchange company stock, with a 3-year lock-up Next EGM to be summoned A new EGM is to be summoned during this current month of May and it shall cover the following items: Approval for the acquisition of the Trend Group Change in the number of board members and election of the vacant positions New stock option plan (LTI) for the CEO and CFO * The bookings of August were negatively impacted due to the Olympics, the months of Jul and Sept/16 show growth of 3.8% for CVC Group and 8.2% at CVC 4

5 Acquisitions Trend Group Experimento (EX) On May 3 rd, 2017 the company announced the acquisition of 90% of Check In, a member company of the Trend Group and shall consolidate, thereupon corporate restructuring foreseen in the Sales and Purchasing Agreement, all of the relevant businesses of the Trend Group The Trend Group has 25 years or tradition, operates as an intermediary for domestic and international hotels, especially focused on corporate business and reached the figure in bookings of R$ 1.2 billion in 2016 In we completed the integration of the Experimento and CVC Intercambio teams, having maintained the Experimento brand We have approved the annual budget and stores expansion plan for 2017, totaling 10 new openings throughout the year We have made available for the franchiser network new payment/financing alternatives that, combined with the stability of the dollar during this period, has allowed growth in bookings higher than 30% in This acquisition complements the company s portfolio and strengthens the leadership position in the tourism sector We shall summon during this month of May an EGM for the approval of the acquisition, where details of the transaction shall be informed 5

6 CVC Group showed growth in the main metrics in Bookings - R$ mm Net Revenues - R$ mm 11.9% % Adjusted EBITDA- R$ mm Adjusted Net Profit - R$ mm 12.0% % * includes the result of Experimento 6

7 Agenda 1 Recent Events 2 Results 3 Q & A Session 7

8 CVC Bookings grew 15.9% in and for the CVC Group the growth was 11.9% Bookings CVC and EX (R$ mm) Bookings CVC Group (R$ mm) 15.9% % CVC Bookings (Leisure) and Experimento totaled R$1,529.6 million in, representing a growth of 15.9% versus the In the month of March, CVC (Leisure) had its best month in the history of the company, reaching R$ 554 million in Bookings, surpassing the previous record of R$ 538 million in October/2016 Experimento also had the best month of its history, with R$ 20 million in Bookings CVC Group Bookings totaled R$ 2,340 million in the, representing a growth of 11.9% versus the Just as CVC and Experimento, RA also had the best month of its history, with R$ 294 million in Bookings The recovery of RexturAdvance and of the corporate market continue to provide support for the improved performance of the CVC Group * includes the results of Experimento 8

9 Bookings: CVC and Experimento Bookings Growth per Channel (YOY) Same Store Sales (SSS) 19,0% 10,7% 13,3% 9,3% 0,6% 0,5% -10,1% Exclusive Stores Independent Agents Online -4,1% 2Q16 3Q16 4Q16 The growth in Bookings at CVC in was mainly due to the strong growth of same store sales (SSS) and growth in bookings of the international segment of 37.1% The more moderate growth of the domestic segment, reflected in a lower growth in the independent agents channel (share of CVC in this channel is higher in domestic) In the last 12 months, same store sales had a high of 6.2%, surpassing inflation (IPCA ) which in the same period was 4.76%. There still is a gap caused by the last two years to be accounted for, but the current trend is for recovery Obs: Figures exclude RexturAdvance and Submarino Viagens 9

10 Net Revenues CVC Group CVC and EX Net Revenues (R$ mm) CVC Group Net Revenues (R$ mm) 5.9% % Margin %* 15.2% 15.1% Margin %** 12.5% 12.3% Net revenues of CVC and EX were R$ million in, representing a growth of 5.9% compared to the same period in the previous year pro forma Net revenues over boarding were 15.1% in, a drop of 0.1 p.p. when compared to, due to the product mix (greater mix of international in ) The net revenues of the CVC group added up to R$ million in representing a growth of 4.7% when compared to the net revenues of the CVC Group in the The percentage of net revenues over bookings (boarding in the case of CVC and EX and booking in the case of RA and SV) was 12.3% in, a drop of 0.2 p.p. when compared to the Pro forma, due to higher mix of international and also due to higher weight of RA versus SV, whereas the margin % of the first is lower than the second * The net revenue as % of boarding at CVC and EX ** The net revenue as % of boarding at CVC and EX and Booking at RA and SV *** The pro forma results include Experimento 10

11 Reduction in operating expenses of 3% versus 2016 CVC Group Recurring Operating Expenses Details per nature of expense (R$ mm) (R$ mm) 152,4-3.1% 147,6 R$ mm Chg. Operating Expenses % (-) Non-recurring items % Recurring Operating Expenses % Sales Expenses % General and Administrative Expenses % Depreciation and Amortization % Other Operating Expenses % Amortization of PPA % The recurring operating expenses dropped 3.1% in, as a result of the control on expenses and synergisms Sales expenses dropped 8.2% as a result of marketing resource optimization and lower default of consumer installment payments financed through the internal credit desk, resulting from a more restrictive credit policy General and administrative expenses in increased 7.2% especially due to the Dissidio effect (which is an annual adjustment in employee salary imposed by decision of their organization s Union) of 8% (October 2016), being partially compensated by productivity improvement Other Expenses and Operating Revenues affected by GDS* revenue, due to growth of international The increase of non-recurring expenses is due to expenses with M&A and hiring bonus amortization. Due to the approval of the new LTI plan we will revisit the adopted criteria for non-recurring items (to this point), beginning 2Q17 *Global Distribution System Companies that provide connection for airline flight connections for international travel 11 Pro forma results include Experimento

12 EBITDA Growth of 12% CVC Group Adjusted EBITDA (R$ mm) Reconciliation CVC Group EBITDA (R$ mm) 12.0% 167 R$ mm Chg. EBITDA % Margem %* % 55.8% (+) Expenses with Paymt Based in Stock % (+) Extraordinary Bonus and M&A % Adjusted EBITDA % The Adjusted EBITDA for the CVC Group totaled R$166.5 million in, representing a growth of 12.0% versus the CVC Group The margin EBITDA increased from 52.0% in the pro forma to 55.8% in, an increase of 3.6 pp The non-recurring expenses in, are composed of: Salary Program based on stock options: R$ 2.9MM M&A: R$ 0.9 MM Hiring Bonus: R$ 2.7 MM * Adjusted EBITDA as % of net revenue Pro forma results include Experimento 12

13 Growth of 8.1% in Net Profit CVC Group Adjusted Net Profit (R$ mm) Reconciliation CVC Group Net Profit (R$ mm) % 69 R$ mm Chg. Net Profit % (-) Non-controlling Share holders % Net Profit attributed to controlling share holders % (+) Expenses with Pmt based in Stock % Margem %* 22.3% 23.0% (+) Extraordinary Bonus and M&A % (+) Contract Amortization with Franchises % (+) Stores in Rio Adjusted Net Profit % The adjusted Net Profit of the CVC Group totaled R$ 68.5 million in, representing growth of 8.1% versus the of CVC Group The financial expenses in the period increased 19%, if we exclude benefits from exchange rate variation in 2016 (due to advanced payment from hotels) and expenses with bank slips (linked to growth in sales of 12% and not of boarding of 4.7%), the growth would be 5% * Adjusted Net Profit as % of net revenue Pro forma results include Experimento 13

14 Working Capital mainly affected by a greater mix of international and larger volume of prepayment to suppliers Working Capital - R$ mm Normalized* Reclassified** Accounts Receivable (35.5) (35.5) (116.7) (116.7) Prepayment to Supplier 45.2 (26.9) (82.8) (149.8) Advanced Sales of Tourism pkgs (59.6) (59.6) (26.3) (26.3) Suppliers (58.6) (58.6) (126.8) (59.8) Others (net) (19.4) (19.4) (18.6) (18.6) Variation of Working Capital (127.8) (199.9) (371.2) (371.2) Accounts receivable grew 19% versus, above sales growth observed in the period of 12%, as a result of: a) Strong increase in hotel reservations at RA b) Increase in average installment terms (at CVC leisure) from 8.1 to 8.4 months Increase in value of prepayment to suppliers of R$ 123 mm, due to higher volume of prepayment (R$ 100mm) and the effect of mix between regular air tickets and charter flights (R$ 23mm) Advanced sales of tourism packages grew 23% versus, also above sales growth, due to the fact that sales is concentrated in periods with larger boarding (as a consequence of the mix of international) 1 Net Capex and changes in working capital *Supplier prepayment adjusted by prepayment of intern. Hotels in Dec/15 **Reclassification between supplier prepayment lines and Suppliers of R$ 20mm 14

15 Cash Flow affected by Working Capital Operating Cash Flow 1 (R$ mm) Q15 Normal. Operating Cash Flow (R$ mm) Cash Flow - R$ mm Normalized Net Profit Differed Tax Interest Amortization and Depreciation Other Adjustments LL Adjusted for cash effects Variation in Working Capital (127.8) (199.9) (371.2) Capex (14.6) (14.6) (14.9) Others Operating Cash Flow (22.8) (94.9) (265.1) In the cash flow of CVC Group was impacted negatively by approximately R$ 23 million due to increase in sales of regular air travel, where payment is made post booking, while with seat blocking and charter, we pay after boarding (difference of roughly 60 days). The sales with regular travel grew 23% in while the sales of seat blocking or charter dropped 11% in the same period Another item which impacted working capital was prepayments made to suppliers, which in showed increase of roughly R$ 100 million versus It is important to point out that due to the historical seasonality of the business, the 1Q normally consumes cash Cash Flow Seasonality 2014 CVC 2015 CVC* 2016 Grupo CVC* 2017 Grupo CVC Normalized -158 Prepayment to Supplier -265 Jan-Mar Apr-Dec Year Net Capex and changes in working capital *Normalized by hotel anticipation done in Dez/15 15

16 Return on invested capital (ROIC) of 25% ROIC 1 (%) CVC Group ROIC 1 Calculation (%) Acummulated last 12 months 32,4% 24,6% 26,7% CVC Group* R$ mm mar/16 mar/ Normalized* EBIT Income Tax and CS (34%) (153.4) (165.1) (165.1) LTM Mar16 LTM Mar 17 LTM Mar17 Normalized Tax Benefit over surcharge 13.2 NOPAT Fixed assets and Intangible² Working Capital³ , Invested Capital , ,200.8 ROIC 32.4% 24.6% 26.7% The ROIC was 24.6% in the last twelve months with end date 03/31/2017, lower than the last 12 months ended in 2016, consequently there was increase in working capital, due to growth of 23% in regular tickets (international) and higher volume of supplier prepayment It is important to point out that prepayments made to suppliers is of financial character, therefore the resulting profit from such prepayments is not captured in the operating results. If we exclude this effect from the ROIC calculation, it would have been 26.7% 1 ROIC: Operating net profit after taxes divided by the invested Capital (Fixed assets + working capital) *Excluding additional value of R$ 100mm from supplier prepayment 16

17 Debt and Financial Expenses Net Debt (R$ mm) Net Financial Expenses (R$ mm) Discounted Receivables Accounts Payable - Acquisitions Net Debt ,5 19.2% 5.2% , CVC Group CVC Group CVC Group Normalized Adjusted EBITDA 1.3x 1.7x 1.5x LTM Expenses w/bank Slip and Exchange Rate Variation Net Debt was 1.7x debt / LTM EBITDA, already taking into consideration acquisitions and advancing of receivables The increase of indebtedness is mainly caused by the increase of supplier prepayment. Excluding this impact, the group leverage would be 1.5x EBITDA in The financial expenses increased 5.2% in, if we consider the expenses with bank slips and exchange rate variation, it would be 19.2% 17

18 Agenda 1 Recent Events 2 Results 3 Q & A Session 18