Institutional Presentation. November/December 2010

Transcription

1 Institutional Presentation November/December 2010

2 Market Campaign 2

3 Gross Revenue (R$ Million) and EBITDA Margin (%) ¹ Success Track Record Foundation Strengthening/Expansion Operating Leverage 1,205 1, % Midbyte and BCS Acquisitions Acquisition % Startup of Microsiga Franchising System ISO Argentina 24 Proprietary Technology % 63 Focus on Management and results 10.0% % ISO 9001: 2000 (Franchises) % Growth in Margin % Mexico % Acquisition IPO 12.4% CMMI 13.9% % % GROWTH: 17x EBITDA 8,5x Revenue 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 74 Full TOTVS Distribution Channels Flexible Technology + 26,200 customers ~ 5,000 direct employees¹ (1) Does not include close to 5,000 employees of our franchises (2) Includes Infrastructure, HR BPO, Education and Service Desk 4

5 5 Market Update 7 th worldwide in ERP-Suite* and 1 st in growth ERP-Suite Worldwide Ranking 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 GARTNER (2009 full year) A 26.8% 31.2% B 15.0% #1 Brazil #3 Argentina #3 Mexico 27.0% Others #4 Portugal Source: Gartner Market Share ERP Software, Worldwide, 2009

7 7 Market Update Market Share Absolute leader in Brazil IDC (2009) GARTNER (2009) 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 Software = Basic Need Licenses Target Market Underpenetrated Market Technology & Product Environment Services Maintenance Distribution Macro / Market Changes

9 Brazilian Market Positioning Users # Companies 1 Penetration Large ~ 26,200 Active Customers 65.6% Market Share (2) Medium ~ 39,900 using ERP 468,000 Small 5-50 (revenues of over R$15 million/ year) 468,000 SMB market size (1) Micro 0-5 5,297,000 ~ 8.5% Penetrated (1) IBGE estimates about the Brazilian market. (2) Source: Gartner Dataquest Insight: TOTVS and the Brazilian SMB ERP Landscape, mar 09 Gartner Estimates² 7.0% penetrated 9

10 TOTVS Business Revenue/Business Model Licenses 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 10

11 11 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.

12 Series 3 Series 1 Series C Series T TOTVS Manufacturing TOTVS Agribusiness TOTVS Retail TOTVS Distribution & Logistics TOTVS Health TOTVS Educational TOTVS Construction & Projects TOTVS Financial Services TOTVS Legal TOTVS Services Size 12 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

13 13 Segment Facts +200 sugar cane producers = 50% national crop, 120 grain producers, 1.5 million hectares Agribusiness Health 12 million lives, +9,700 beds, medical registers to 35 specialties 50 out of 100 Brazilian biggest comps. 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 use our 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 trillion assets under custody, LA Financial Market Top provider Financial Services Services 2,300 services providers, 400 Utilities providers, 470 travel and passengers transportation

14 Comprehensive Portfolio 14

15 15 Technology TOTVS product architecture and platform

16 Innovative Model with Results Vanguard Growth Profitability Public / Private Cloud Application SaaS Framework Middleware Database IaaS by You ESB PaaS Series T Corporate Model (isaas) Op. System Datacenter & Service Desk Hardware by You ECM Series 1 Cloud TCP/IP Protocol 16

17 17 Distribution Presence and Dominance Latin America Brazil Distribution Channels: 6 Branches + 52 Franchisees 40 complementary channels working with TOTVS distribution network +27,000 clients 49.1% Market share (Gartner) Latin America Gartner: TOTVS ERP Market Share: 31.2% in st company! IDC: TOTVS SMB Market Share: 34.25% in 2009 vs. 29.7% in st company! Products over 15 countries Excluding Brazil: 42.7% Market share (IDC) +4,700 Direct employees +400 clients, +300 direct employees +13 Full TOTVS distribution channels Subsidiaries Franchises Products only Other Geographies 1 Branch + 1 Franchise, Portugal 1 Franchise, Angola +50 clients, over 8 countries

18 18 Distribution Final contact with the clients Clients Proprietary Channel Sales Licenses Services Maintenance Licenses Maintenance Franchisee Sales Licenses Commissions Maintenance Commissions Franchisee Services

19 19 Results 3Q10 19th consecutive quarter of double-digit organic growth... Net Revenue: historical record, reached R$ million, a 20.0% over 3Q10. Licenses Fees Revenue: historical record, 44.5% over 3Q09. Financials Highlights Services Revenue: 7.6% growth (3Q10 vs. 3Q09). Maintenance Fees Revenue: historical record, R$ million. Growth of 13.7% over 3Q09. EBITDA: R$ million record in 3Q10, a 32.7% growth against 3Q09. Margin: 29.1% record in the quarter, 280 b.p. over 3Q09. Adjusted Net Income: R$ million in 3Q10, 21.5% over 3Q09. Operational Highlights 854 new clients in 3Q10, 14.6% growth over 2Q10, new historical record. Licenses sales to 4,523 clients (new + base) in the quarter, 5.5% over 2Q10. Recent Events Acquisition of FDES ( Development Franchises). Sale of state of Paraná customer portfolio, allowing 2 Full TOTVS franchises creation in the region. 306,870 share issuance for 15% of debentures conversion.

20 Financial Performance...presenting a consistent revenue growth Gross and Net Revenue (R$ million) Q05 3Q06 3Q07 3Q08 3Q09 3Q10 Net Revenue Gross Revenue 9M05 9M06 9M07 9M08 9M09 9M10 Net Revenue Gross Revenue New Record (1) Values are pro forma as they include the number of RM Sistemas, acquired in April 2006, and Datasul, consolidated in September 2008 in the period analyzed. 20

21 Financial Performance with robust growth of licenses... New clients Licenses Revenue (R$ million) Q07 3Q08 3Q09 3Q10 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 New Record...and record on new clients in 3Q... (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 and services / maintenance improvements. Services Revenue (R$ million) 1 Maintenance Revenue (R$ million) Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 New Record (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. 22

23 Financial Performance Gross Revenue Breakdown Gross Revenue (R$ 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% % 31.5% 44.7% 28.9% 28.5% 42.6% Q09 3Q10 Licenses Services Maintenance (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. 23

24 24 Financial Performance Costs and Expenses Dashboard ¹ R&D (R$ million) x R&D / NR Costs and Expenses ¹ (R$ million) 12.8% 13.0% 12.2% 13.1% Q09 3Q10 9M09 9M10 3Q09 3Q10 9M09 9M10 G&A (R$ million) x G&A / NR Marketing Expenses (R$ million) x Mkt. Exp. / NR 6.9% 6.1% 7.9% 6.6% 3.2% 3.3% 2.8% 2.9% Q09 3Q10 9M09 9M10 3Q09 3Q10 9M09 9M10 (1) Excluding depreciation, amortization expenses and non recurring expenses.

25 Financial Performance Operational Leverage G&A / NR 1 EBITDA - 12M (R$ million) 1 and % 1, % % 8.6% % 6.1% Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q06 3Q07 3Q08 3Q09 3Q10 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. 25

26 Financial Performance EBITDA and Margin EBITDA and Margin (R$ million) 1 EBITDA Margin Behavior % 0, % % , % 26.3% % % % % ,20 0, % 22.1% 20.8% 20.0% 20.4% 19.2% 22.4% 22.2% 21.9% 21.0% 21.3% 20.3% 24.4% 22.1% 23.4% 24.0% 23.2% 0 0, % 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 EBITDA EBITDA Margin 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 New Record (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. 26

27 Integration of Operations We celebrate two years of Datasul incorporation... 9M08 9M10 Back-office Net Revenue R$ 611,427k Brand Net Revenue R$ 833,751k +16.8% CAGR EBITDA R$ 127,392k Distribution EBITDA R$ 211,772k +28.9% CAGR EBITDA Margin 20.8% Net Income R$ 56,033k Development EBITDA Margin 25.4% Net Income R$ 95,510k +460 bp +30.6% CAGR Technology... with effective integration results. 27

28 28 Financial and Operational Performance Financial Dashboard 1 R$ million 3Q10 3Q09 Δ Q/Q 9M10 9M09 Δ 9M/9M Net Revenue % % Gross Profit % % EBITDA % % EBITDA Margin 29.1% 26.3% 280 b.p. 25.4% 25.7% -30 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.

29 Fundamentals TOTVS Success Equation......Based on strong fundamentals. 29

30 30 Contacts Safe harbor The material that follows is a presentation of general background information about TOTVS activities as of the date of the presentation in November 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