Institutional Presentation. November / December 2009

Transcription

1 Institutional Presentation November / December 2009

2 Success Track Record Foundation Strengthening / Expansion Operating Leverage 1,048 Gross Revenue (R$ million) and EBITDA Margin (%) 1 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 % Midbyte and BCS Acquisitions Acquisition 247 IPO 13.9% CMMI % Growth: 14x EBITDA 7.5x Revenue % 21.2% 24.8% PF LTM² (1) EBITDA Margin does not include extraordinary expenses (2) Last Twelve Months. from Oct 08 to Sep 09 24x EBITDA 10x Revenue 2

3 Expanded Business Technology TOTVS Structure of Business Model TOTVS Customer Service and Relationship Software Base and New Clients Services Consulting Digital TV ERP CRM Business Intelligence Vertical Modules Cross-Selling Value-Added Service 2 Synergies Core Synergies Distribution Channels Flexible Technology + 24,200 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 3

4 4 Fundamentals Strong Fundamentals TOTVS 2009 Success Equation 1) Companies Basic need Eletricity, water, telephone and software 4) Macro/Market changes SPED, WC 2014, Olympics 2016, PAC (infra-structure) Brazilian SMB market is 7.0% penetrated according to Gartner 2) Underpenetrated market Latin America 3) Environment

5 5 TOTVS Differentials Fundamentals and Business Model Market Technology and Product Distribution Licences Services LICENÇA Maintenance Low penetrated market Digital Bookkeeping (SPED) Software as Utility Efficiency gains Higher complexity Added value Services offering Digital Bookkeeping (SPED) Catalysts Fiscal changes Features Enhancement Low average ticket Software as Utility

6 Source: Forecast: Gartner Enterprise Software Markets, Worldwide, , 1Q09 Update 6 Market Latin America growth and TOTVS market share Estimates Market Share LA ERP estimated growth Latin America Asia/Pacific Japan N. America Middle East Venezuela 8% Argentina 10% Europe Chile 3% 5.0% 2.3% Peru 3% 7.4% Colombia 2% 11.9% 11.5% 10.5% Latin America ERP spend Brazil 46% 14.6% 38.5% 15.3% 41.1% 41.0% 16.2% 18.3% 13.3% 12.3% 8.9% 8.4% 8.0% 3.7% 3.2% 3.0% A B C D Mexico 28% Source: IDC Latin America Semiannual ERM Applications Tracker 2008

7 Market 8 th Worldwide and leadership in Brazil 2008 ERP Worldwide Ranking Market Share Brazil SAP 5,732 Oracle 2,719 Sage Infor Microsoft Kronos Lawson ,313 1, % 32.6% 35.3% 34.2% 38.7% 32.0% A TOTVS 284 Exact Concur Agresso Cegid Epicor % 9.0% 8.4% 5.7% 5.4% 5.0% 4.0% 3.3% 2.9% B C D IBM 179 Kenexa 163 License and maintenance revenues, in USD million Source: Gartner - ERP Software, Worldwide, Source: IDC Latin America Semiannual ERM Applications Tracker

8 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 No new licenses sold Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 8

9 Market Positioning Users # Companies 1 Penetration Large ~ 24,200 Active customers 64.2% Market Share Medium ~ 37,700 using ERP 468,000 Small 5-50 (revenues of over R$15 million/ year) 468,000 SMB market size Micro 0-5 5,297,000 ~ 8.0 % 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 9

10 10 TOTVS Business Diversified client base Client Breakdown by Sector 1 Revenue Concentration 1 Financial 11% Other 12% Industrial 46% 10 Largest 5% Largest 12% Retail 10% Others 83% Services 21% Datasul and RM Sistemas contributed to diversify even more the company s client base (1) Based on TOTVS 2008 revenue. (2) Industrial sector includes: chemicals, food, plastic, rubber and metallurgy industries as well as others.

11 Hard ware O.S. Database 11 Technology Flexible middleware allows product integration ERP User View. Middleware TOTVS Tec flexibility Framework The language is responsible for communicating application commands, as ERP, to the next technological layer, the middleware. ADVPL 4GL Languages Progress ABL.NET The middleware acts as an interpreter and facilitator, translating and connecting the language commands with the framework. TOTVS Tec, the middleware developed by TOTVS, translates and communicates the ADVPL and 4GL languages to a wide range of operating systems, working with any hardware. It provides platform independence and access to the most advanced resources, such as SOA and Web Services. Oracle SQL DB2 Others The middlewares available in the market work based on a framework. TOTVS Tec s framework is developed in C++ and is able to operate on any operating system, giving the customer flexibility in the choice of the technology platform. Unix Linux Windows Others Intel PowerPC (Intel) Others

12 12 Distribution International Market Latin America Gartner: expected growth: 12% CAGR IDC: TOTVS SMB Market Share: 31% in 2007 vs 27% in st company! Products over 17 countries Excluding Brazil: +600 clients, +25 distribution channels, +380 employees. Subsidiaries Franchises Products only Other geographies 1 subsidiary, Portugal 1 franchisees, Angola +30 clients, over 6 countries Source: Forecast: Enterprise Software Markets, Worldwide, , 1Q09 Update

13 Strong Fundamentals Fundamentals + Focus TOTVS 2009 Success Equation Segment Approach Agrobusiness Distribution Logistics +200 sugar cane producers = 50% national crop, 120 grain producers = 1 million hectares Financial Services 22k portfolios, 4k funds, 120k/day consumer credit transactions, R$1.5 tri assets under custody, LA Financial Market Top provider Legal Health Manufacturing +1,110 extractive and processing customers, +1,000 metal and plastic, +1,400 capital goods 50 out of 100 biggest Brazilian and 20 international builders, 450 engineering and design customers +700 Brazilian institutions, +1.5 million students, choice of 67% of the consolidating groups Educational Retail Small Business Construction and Projects Services 13

14 Strong Fundamentals Fundamentals + Focus TOTVS 2009 Success Equation Segment Approach Agrobusiness Distribution Logistics +1,600 wholesaler distributors, 20% of shippers customers also have CRM Financial Services Legal 7 out of 10 top law firms, 10,000 lawyers 12 million lives, +9,700 beds, medical registers to 35 specialties Health Manufacturing +900 department stores, +140 supermarkets, +280 building materials distributors Specific offering : Vitrine, First, Personal Med and 4Transport 2,300 services providers, 400 Utilities providers, 470 travel and passengers transportation Educational Retail Small Business Construction and Projects Services 14

15 Results 3Q09 TOTVS 2009 Success Equation Strong Fundamentals Segment Approach Consistent Results Financial Highlights Historical record in all revenue lines: Net Revenue: organic growth of 15.6% compared to 3Q08, reaching R$ million in 3Q09. Licenses Revenue: R$ million in 3Q09, 10.9% above 3Q08. Services Revenue: growth of 15.8% (3Q09 vs. 3Q08). amounting to R$ million. Maintenance Revenue: R$ million. Growth of 14.0% in comparison to 3Q08. Costs and Expenses: once again lower than revenue s growth (3Q09 vs. 3Q08). EBITDA: R$ million in 3Q % over 3Q08. Margin reached 26.3% in the quarter basis points (3Q09 vs. Q08). 9M09 closes with margin over 25%. Operational Highlights Recent Events 4,676 clients served (new + existing clients) in the quarter. 17.6% over 2Q new clients in 3Q09. additional 260 compared to 2Q09 and 45.9% over 2Q09. New record. Client base amounts approximately 24.2 thousand active clients. Franchising Model Evolution = TOTVS Franchises TOTVS FINANCIAL SERVICES = YMF + TOOLS + TOTALBANCO 2008 Marketshare growth in Brazil (38.7%, +340b.p. vs 2007) and Latin America (18.3%, +210 b.p.): the only company in the top5 to post growth in both markets. 15

16 Financial Performance New Record in Revenue... Gross and Net Revenue (R$ million) Q05 3Q06 3Q07 3Q08 3Q09 Gross Revenue Net Revenue 3Q08 4Q08 1Q09 2Q09 3Q09 Gross Revenue Net Revenue Historical 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. 16

17 Financial Performance... with licenses surpassing 2Q09... Clients Served License Revenue (R$ million) 1 New Clients Base Clients Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 3Q05 3Q06 3Q07 3Q08 3Q09 Historical 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. 17

18 Financial Performance maintenance and services climbing significantly Services Revenue (R$ million) 1 Maintenance Revenue (R$ million) Q05 3Q06 3Q07 3Q08 3Q09 3Q05 3Q06 3Q07 3Q08 3Q09 Historical 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. 18

19 Financial Performance... delivering EBITDA growth EBITDA (R$ milhões) % 26.2% 26.3% 24.4% 18.1% 19.2% 21.9% 20.3% % 22.1% Q05 3Q06 3Q07 3Q08 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 EBITDA Margin EBITDA Margin Historical 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. 19

20 Financial Performance Revenue Breakdown Gross Revenue (R$ million) % 24.6% % 27.3% % 29.4% 24.8% 30.3% % 29.6% 30.2% % 30.6% % 31.0% % 31.5% 51.6% 48.7% 47.3% 44.9% 45.3% 46.1% 44.6% 44.7% M08 9M09 3Q08 3Q09 Licences 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. 20

21 Financial Performance Scalability Scalability 1 Growth 9M09 x 9M08 G&A as % of the Net Revenue Net Revenue Cost of Services (+) R&D G&A (+) Management fees 9.6% 18.0% 15.7% 13.0% 12.0% 11.0% 10.0% 9.0% Selling expenses Licenses Costs -15.6% 0.6% 8.0% 7.0% 6.0% 3Q06 3Q07 3Q08 3Q09 (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 Expenses 2 (R$ million) 12.8% 12.2% 11.1% % Q08 3Q09 9M08 9M09 3Q08 3Q09 9M08 9M09 G&A (R$ million) x G&A / NR Marketing Expenses (R$ million) x Mkt. Exp. / NR 8.6% 6.9% 9.0% % 4.0% % 3.3% 2.8% Q08 3Q09 9M08 9M09 3Q08 3Q09 9M08 9M09 (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) Excluding depreciation. amortization expenses and non-recurring expenses. 22

23 23 Financial and Operational Performance Financial Dashboard 1 R$ million 3Q08 3Q09 Δ Q/Q 9M08 9M09 Δ 9M/9M Net Revenue % % Gross Profit % % EBITDA % % EBITDA Margin 20.3% 26.3% 600 p.b. 20.8% 25.7% 490 p.b. Net Income Adjusted % % (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.

24 24 Net Debt Cash and debt on 30th September Cash by the end of the period: R$232.1 million Net debt by the end of the period: R$191.5 million Debt by the end of the period: R$423.6 million Prosoft When: 3Q08 Source: BNDES Amount: R$ million Current estimated cost: 8.5 ~ 9% p.a. Period: years Debentures When: 3Q08 Source: debentures holders (BNDES and others) Amount: R$ million Current estimated cost: 10% p.a. Period: years

25 25 Scenario Current scenario 3Q09 Results» REVENUE RECORD Licenses: R$65.8 million Services: R$87.1 million Maintenance: R$123.3 million» OPERACIONAL RECORD 1 New clients: 827; +46% Base clients: 3,849; +12.9%» EBITDA RECORD R$66.5 million Margin of 26.3% (1) Growth over 2Q09

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 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