Institutional Presentation. February/March 2011

Transcription

1 Institutional Presentation February/March 2011

2 Marketing Campaign SHARE THE NEW WORLD Technology, Software (SaaS), Social Network and Consulting 2

3 Gross Revenue (R$ Million) and EBITDA Margin (%) ¹ 3 Success Track Record Foundation Strengthening/Expansion Operating Leverage 1, % Midbyte e BCS Acquisitions 1, % 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: 20x EBITDA 9.8x Revenue 21.9% (1) EBITDA Margin excludes extraordinary expenses. 38x EBITDA 13x Revenue

4 4 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

5 5 Market Update Market Share Leadership in Latin America GARTNER - Latin America (2009) GARTNER - Brazil (2009) A 26.8% 31.2% 49.1% 15.0% B 27.0% Others #1 Brazil #3 Argentina #3 Mexico #4 Portugal A 24.4% B 6.8% 1.1% C 1.7% 16.9% D Others Source: Gartner Market Share ERP Software, Worldwide, 2009 Source: Gartner Market Share ERP Software. Worldwide. 2009

6 6 Market Update Market Share Absolute leader in Brazil Total market Brazil Small & Medium Brazil A B C D A C B D Source: IDC Latin America Semiannual ERM Applications Tracker 1H10 Source: IDC Latin America Semiannual ERM Applications Tracker 1H10

7 7 TOTVS Differentials Fundamentals and Business Model Software = Basic Need Licenses Target Market Underpenetrated Market Technology & Product Environment Services Maintenance Distribution Macro / Market Changes

8 Brazilian Market Positioning Users # Companies 1 Penetration Large ~ 26,200 Active Customers 68.3% Market Share (3) Medium ~ 38,360 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 ~ 8.2% Penetrated (1) IBGE estimates about the Brazilian market. (2) Source: Gartner Dataquest Insight: TOTVS and the Brazilian SMB ERP Landscape, mar 09 (3) Source: IDC Semiannual ERM Tracker 1H10 Gartner Estimates² 7.0% penetrated 8

9 TOTVS Business Revenue/Business Model Licenses New Customers Base Customers New Licenses Corporate New Customers Services Base Customers Model Basic Updates Upgrades Implementation (New version) Traditional model New Licenses New Modules Consulting and VAS+ Maintenance 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 10 TOTVS Business Diversified client base Financial Services 8,2% Client Breakdown by Sector 1 Revenue Concentration 1 Manufac. 36.7% Others 81,0% 10 Largest 5.7% Largest 13.3% Distrib.& Logistic 12.5% Contr. & Project 6.5% Others 14,6% Retail 7,4% Services 14,2% Datasul and RM Sistemas contributed to diversify even more the company s client base (1) Based on TOTVS Brazil 2010 revenue.

11 Software Offering Software: Segmented Approach ERP / CRM / HR / BI Exclusive Modules ECM -> Electronic Content Management (Documents and Processes) Definition Series 3 Size Series T Series 1 Offer by series Complexity 11

12 12 Segment Facts +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 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, +600 freight companies 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 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

13 Innovative Model with Results Vanguard Profitability Growth Public / Private Cloud SaaS Application PaaS Framework by You ESB (isaas) Middleware Database Op. System Hardware Series T Corporate Model Series 3 Corporate Model IaaS (isaas) Datacenter & Service Desk by You ECM Series 1 Cloud TCP/IP Protocol 13

14 14 Technology Offer Integrated Development Envoirment, Tests and Life Cycle Manag.(*). Native integration with TOTVS Applications and Environment. Advanced Cloud Computing, SOA and BPM resources. Technology by over 30 thousand enterprises in the world. By Studio: Customize, Create and Share Applications (*) Supported Languages: Java / ADVPL++ / 4GL / 4GLP /.NET / NCL / LUA/ JavaTV / HTML5 Tools: Application Server, DbAcess e Ajax Server Interfaces: IT & TV Digital (Brazilian standard)

15 15 Technology TOTVS product architecture and platform

16 16 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) 42.7% Market share (IDC) +4,700 Direct employees 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: +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

17 17 Distribution Final contact with the clients Clients Proprietary Channel Sales Licenses Services Maintenance Licenses Maintenance Franchisee Sales Licenses Commissions Maintenance Commissions Franchisee Services

18 2010 Results Vanguard + Growth + Profitability 20th consecutive quarter of double-digit organic revenue growth Net Revenue: historical record, 1,129.5 million, a 14.2% over Licenses Fees Revenue: R$ million, 22.1% over R$ 75.4 million in the quarter, 14.4% over 4Q09. Financials Highlights Services Revenue: R$ million, increase of 10.7% over 2009 Maintenance Fees Revenue: historical quarter record, R$ million. R$561.1 million in 2010, 12.5% over 2009 EBITDA: R$77.8 million in 4Q10, a 21.2% over 4Q % higher in Margin: 25.6% in FY, 40 b.p. over Adjusted Net Income: R$191.8 million, growth of 19.9%. Operational Highlights 2,840 new clients, growth of 9.6%, average ticket record, +34.5% base clients, average ticket record, +17.0%. Licenses sales to 17,520 clients (new + base), total average ticket 24.5% over Recent Events Digital TV: Banco do Brasil hired TOTVS for development. New global partnership with IBM. Interest on equity. 18

19 Financial Performance Annual revenue over R$1bi Gross and Net Revenue (R$ million) ,080 1,129 1,233 4Q05 4Q06 4Q07 4Q08 4Q09 4Q Net Revenue Gross Revenue 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. 19

20 Financial Performance with significant growth in new clients and licenses... New clients Licenses Revenue (R$ million) , ,358 2,476 2, 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. 20

21 Financial Performance Improvements in services and maintenance. Services Revenue (R$ million) 1 Maintenance Revenue (R$ million) 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. 21

22 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% 29.8% 45.5% 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. 22

23 23 Financial Performance Costs and Expenses Dashboard ¹ R&D (R$ million) x R&D / NR Costs and Expenses ¹ (R$ million) 13.9% 12.0% 13.3% 11.4% Q09 4Q Q09 4Q G&A (R$ million) x G&A / NR Marketing Expenses (R$ million) x Mkt. Exp. / NR 7.2% 5.8% 7.7% 6.4% 3.8% 2.6% 3.1% 2.9% Q09 4Q Q09 4Q (1) Excluding depreciation, amortization expenses and non recurring expenses.

24 Financial Performance Operational Leverage G&A / NR 1 EBITDA - LTM (R$ million) 1 and % 989 1, % % % 7.7% % 4Q05 4Q06 4Q07 4Q08 4Q09 4Q 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

25 Financial Performance EBITDA and Margin EBITDA (R$ million) 1 EBITDA Margin Behavior % 25.6% % 21.8% 21.2% 18.6% EBITDA 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. 25

26 26 Financial and Operational Performance Financial Dashboard R$ million 4Q10 4Q09 Δ Q/Q Δ 10/09 Net Revenue % 1, % Gross Profit % % EBITDA % % EBITDA Margin 26.3% 24.0% 230 b.p. 25.6% 25.2% 40 b.p. Adjusted Net Income (1) % % (1) Adjusted net income means net income excluding the effects of intangible amortization from acquisitions.

27 27 Challenges for : Datasul 2009: Branding Distribution Channels Unification Systems and Processes 2010: Development Franchises Organizational Structure 2011 Share the new world

28 28 Unique Business Model Vanguard Growth Profitability 2011 = Solid Fundamentals + Execution

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

31