Institutional Presentation. July / Aug 2010

Transcription

1 Institutional Presentation July / Aug 2010

2 Market Campaign 2

3 Success Track Record Foundation Strengthening / Expansion Operating Leverage 1,153 1, % Gross Revenue (R$ million) and EBITDA Margin (%) 1 Startup of Microsiga Franchising System Argentina ISO Proprietary Technology % % Focus on management and results % ISO 9001: 2000 (Franchises) % Growth in Margin % Mexico 126 Acquisition 12.4% % Midbyte and BCS Acquisitions Acquisition 247 IPO 13.9% 392 CMMI 18.4% 490 IPO % GROWTH: 17x EBITDA 8.5x Revenue 20.6% LTM (1) EBITDA Margin excludes extraordinary expenses. 33x EBITDA 11x Revenue 3

4 Expanded Business Technology TOTVS Structure of Business Model TOTVS Customer Service and Relationship Software Base and New Clients Services Consulting Digital TV Cross-Selling Value-Added Service 2 ERP CRM Business Intelligence Vertical Modules Synergies Core Synergies 62 Full TOTVS Distribution Channels Flexible Technology + 25,700 customers ~ 5,000 direct employees¹ (1) Does not include close to 4,000 employees of our franchises (2) Inclues Infrastructure, HR BPO, Education and Service Desk 4

5 5 Market Update 7 th worldwide in ERP-Suite* and 1 st in growth ERP Wordwide Ranking - Suite 2009 *Licenses e Maintenance Revenues, in US$ million 2008 vs Evolution SAP (GER) 5, % Oracle (USA) 2, % Sage (UK) 1, % Infor (USA) 1, % Microsoft (USA) % Lawson (USA) % TOTVS (BRA) % Unit4 (NED) % Exact (NED) % Cegid (FRA) % Epicor (USA) % Source: Gartner - ERP Software, Worldwide, 2009

6 6 Market Update Market Share Leadership in Latin America IDC (2009 full year) GARTNER (2009 full year) 38.8% 40.9% 40.7% 38.6% A A 26,8% 15.4% 14.6% 16.0% 18.1% 13.2% 12.2% 21.4% 10.8% B B 15,0% 27,0% Others 31,2% #1 Brazil #3 Argentina #3 Mexico #4 Portugal Source: IDC Latin America Semiannual ERM Applications Tracker, 2009 Source: Gartner Market Share ERP Software, Worldwide, 2009

7 7 Market Update Market Share Absolute leader in Brazil IDC (2009 full year) GARTNER 32.9% 33.2% 34.4% 34.1% 37.9% 32.0% 42.7% 29.9% A 49.1% 10.5% 8.8% 8.3% 7.3% B A 24.4% B 6.8% 1.1% C 1.7% 16.9% D Others Source: IDC Latin America Semiannual ERM Applications Tracker 2009 Source: Gartner Market Share ERP Software. Worldwide. 2009

8 8 TOTVS Differentials Fundamentals and Business Model Market Technology and Product Distribution Licences Services LICENÇA Maintenance

9 TOTVS Business Revenue/Business Model Licences New Customers Base Customers New Licenses Corporate Model Traditional model New Customers Basic Implementation Services Base Customers New Licenses New Modules Consulting and VAS+ Updates Maintenance Upgrades (New version) Corporate model Help-desk new license sold per year Recurring Fees by Metric Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 9

10 Brazilian Market Positioning Users # Companies 1 Penetration Large ~ 25,700 Active Customers 65.6% Market Share (2) Medium ,000 ~ 39,200 using ERP Small 5-50 (revenues of over R$15 million/ year) 468,000 SMB market size (1) Micro 0-5 5,297,000 ~ 8.4 % Penetrated (1) IBGE estimates about the Brazilian market. (2) Source: Gartner Dataquest Insight: TOTVS and the Brazilian SMB ERP Landscape, mar 09 Gartner Estimates % penetrated 10

11 Series C Size Series 1 Series 3 Series T TOTVS Manufacturing TOTVS Agribusiness TOTVS Retail TOTVS Distribution e Logistics TOTVS Health TOTVS Educational TOTVS Construction e Projects TOTVS Financial Serrvices TOTVS Legal TOTVS Services Segment and Size Approach Offering by Segment Offering by Size Série 1 Series T Series 3 Series 1 TOTVS Manufacturing 3 TOTVS 3 Retail Definition TOTVS Manufaturing1 TOTVS 1 Retail TOTVS 1 Health TOTVS 1 Services TOTVS Digital TV Complexity 11

12 12 Segment Approach +200 sugar cane producers = 50% national crop, 120 grain producers = 1 million hectares Agribusiness Health 12 million lives, +9,700 beds, medical registers to 35 specialties 50 out of 100 biggest Brazilian and 20 international builders, 450 engineering and design customers Construction and Projects Legal 7 out of 10 top law firms, 10,000 lawyers +1,600 wholesaler distributors, 20% of shippers customers also have CRM Distribution and Logistics Manufacturing +1,110 extractive and processing customers, +1,000 metal and plastic, +1,400 capital goods +700 Brazilian institutions, +1.5 million students, choice of 67% of the consolidating groups Educational Retail +900 department stores, +140 supermarkets, +280 building materials distributors 22k portfolios, 4k funds, 120k/day consumer credit transactions, R$1.5 tri assets under custody, LA Financial Market Top provider Financial Services Services 2,300 services providers, 400 Utilities providers, 470 travel and passengers transportation

13 13 TOTVS Business Diversified client base Client Breakdown by Sector 1 Revenue Concentration 1 10 Largest Construction and projects 7% Others 18% Manufacturing 39% 6% Largest 12% Financial Services 8% Others 82% Distribution and Logistics 12% Services 16% Datasul and RM Sistemas contributed to diversify even more the company s client base (1) Based on TOTVS Brazil 2009 revenue.

14 14 Technology TOTVS product architecture and platform

15 15 Distribution International Market Gartner: TOTVS ERP Market Share: 31.2% in FY09-1 st company! IDC: TOTVS SMB Market Share: 34.25% in 2009 vs. 29.7% in st company! Latin America Gartner: TOTVS is the 1 st in growth (+8.6% 08 vs. 09) Latam expected growth: 12% CAGR Products over 15 countries Excluding Brazil: +400 clients, +300 employees. +10 Full TOTVS distribution channels, Subsidiaries Franchises Products only Other Geographies 1 subsidiary, Portugal 1 franchisees, Angola +50 clients, over 8 countries

16 16 Results 2Q10 18th consecutive quarter of double-digit organic growth... Net Revenue: historical record, achieving R$ million, a 12.4% growth compared to 2Q09. Licenses Fee Revenue: historical record, 18.9% over 2Q09. Financials Highlights Services Revenue: 12.1% growth (2Q10 vs. 2Q09). Maintenance Fee Revenue: historical record of R$ million. Growth of 12.3% over 2Q09 EBITDA: R$ million in 2Q10, a 6.9% growth against 2Q09. Adjusted Net Income: R$ million in 2Q10, 24.3% higher than 2Q09. Historical record. Operational Highlights 745 new clients in 2Q10. Growth of 31.4% over 2Q09. Licenses sales to 4,585 clients (new + base) in the quarter. 7.9% higher than 2Q09. Recent events TOTVS Day Establishment of partnership with Stanford and San Jose Universities M&A: TOTVS sold Soft Team to Sonda do Brasil S.A. and acquired the remaining stake of Quality in TQTVD.

17 Financial Performance...with a consistent revenue growth... Gross and Net Revenue (R$ million) 1 New Clients Last 12 months , , , ,332 2,454 2Q05 2Q06 2Q07 2Q08 2Q09 2Q10 Net Revenue Gross Revenue 2Q09 3Q09 4Q09 1Q10 2Q10 New Clients in the last twelve months...of two digits percent per quarter (1) Values are pro forma as they include the numbers of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. 17

18 Financial Performance... besides operating indicators improvements... Clients Served Licenses Revenue (R$ million) 1 New Clients Base Clients ,757 3,409 3, , Q07 2Q08 2Q09 2Q10 2Q07 2Q08 2Q09 2Q10 2Q05 2Q06 2Q07 2Q08 2Q09 2Q10... and record on new clients in 2Q... (1) Values are pro forma as they include the numbers of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. 18

19 Financial Performance and robust growth of services and maintenance. Services Revenue (R$ million) 1 Maintenance Revenue (R$ million) Q05 2Q06 2Q07 2Q08 2Q09 2Q10 2Q05 2Q06 2Q07 2Q08 2Q09 2Q10 (1) Values are pro forma as they include the numbers of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. 19

20 20 Business Model Licenses Sales leverage effects Strong growth acceleration (Y/Y) 18.9% +18,9% 745 new clients Growth Licenses Revene 5.4% 8.8% 4Q09 1Q10 2Q10 LICENSES SERVICES MAINTENANCE Marketing Campaigns + Channels Consolidation Channels Consolidation + < working days 2Q10/2Q09 IGP-M index impact in last 12 months Licenses sales impact

21 Financial Performance Gross Revenue Breakdown Gross Revenue (R$ in million) 1 1, % % 24.6% 51.6% % 27.3% 48.7% % 29.4% 47.3% 24.8% 30.3% 44.9% 30.7% 46.2% % 30.8% 46.7% 23.6% 30.4% 46.1% Licences Services Maintenance 2Q09 2Q10 (1) Values are pro forma as they include the numbers of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. 21

22 Financial Performance Costs and Expenses Dashboard 1 R&D (R$ million) x R&D / NR Costs and Expenses¹ (R$ million) 12.0% 13.4% 11.9% 13.1% Q09 2Q10 1H09 1H10 2Q09 2Q10 1H09 1H10 G&A (R$ million) x G&A / NR Marketing Expenses (R$ million) x Mkt.Exp. / NR 7.8% 6.6% 8.4% 6.8% 3.8% 3.2% 2.6% 2.7% Q09 2Q10 1H09 1H10 2Q09 2Q10 1H09 1H10 (1) Excluding depreciation, amortization expenses and non-recurring expenses. 22

23 23 Financial Performance EBITDA and Margin Costs and Expenses / NR vs. EBITDA Margin EBITDA - LTM (R$ million) 1 and 2 Propag./DGA/Honor./Outras Advertising, Management fees, G&A and others -0.2% Sales Vendas and commissions e comissões -4.8% Custo Lic./Serv. e P&D Costs and R&D -2.0% Margem EBITDA EBITDA Margin 3.0% 12.1% 15.1% 16.0% 15.8% 23.3% 25.3% Measures FDES Process and system By You 48.6% 43.8% Q06 2Q07 2Q08 2Q09 2Q10 Impacto EBITDA Margem Margin EBITDA Impact 1S10 1S09 Net Revenue EBITDA Costs and Expenses (1) Values are pro forma as they include the numbers of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. (2) Last 12 months

24 24 Financial and Operational Performance Financial Dashboard 1 R$ million 2Q10 2Q09 Δ Q/Q 1H10 1H09 Δ H/H Net Revenue % % Gross Profit % % EBITDA % % EBITDA Margin 23.2% 24.4% -120 b.p 23.3% 25.3% -200 b.p Adjusted Net Income % % (1) Values are pro forma as they include the numbers of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. (2) Net income adjusted refers to net income excluding the effects of goodwill, amortization, net of tax. Hence, it can be understood as net income from the Company s regular operations.

25 Fundamentals TOTVS Success Equation based on strong fundamentals. 25

26 26 Contacts Safe harbor The material that follows is a presentation of general background information about TOTVS and Datasul activities as of the date of the presentation in May It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. This presentation may contain statements that express management s expectations and/or forecasts about future events. These expectations and/or forecasts involve risks and uncertainties that could cause actual results to differ materially from those projected in such forward-looking statements. Therefore, the future results of the company may differ from current expectations and readers must not base their expectations exclusively on the information presented herein. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on the accuracy, fairness, or completeness of the information presented herein. This document does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. QUESTIONS ir@totvs.com