Brasil Brokers Participações S A : 4Q21 Results Conference Call Transcript

Conference Call Transcript

4Q21 Results

Brasil Brokers (BBRK3 BZ)

March 24, 2022

Operator:

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Brasil Brokers conference call to present the earnings result of year 2021.

Please note that this conference call and the slides are being transmitted through the Internet through the sidehttps://ri.brasilbrokers.com.br/,where the presentation is available for download.

We would also like to inform that all participants will be on listen-only mode during the

Company's presentation, and soon after we will begin the Q&A session, when further instructions will be provided. Should you need assistance during the conference, please ask for an operator by dialing *0.

We would like to inform that questions can only be asked through the chat option of the webcast. So if you are connected by phone only, we encourage you to connect via webcast as well.

Before we go any further, we would like to clarify that forward-looking statements made during this conference call regarding the Company's business prospects, projections and operating and financial targets are beliefs and assumptions of Brasil Broker's management currently available to the Company. Future assumptions are not guarantees of performance, as they involve risks, uncertainties and assumptions, since they are related to future events and therefore depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect the Company's future results and may lead to results materially different from those expressed in such forward-looking statements.

Mr. Daniel Guerbatin, the Company's CEO, will make the presentation regarding operating results. Ms. Andrea de Rizzio, CFO and RI will present the financial results.

Mr. Guerbatin, you may go on.

Daniel Guerbatin:

Good afternoon. Welcome to the Brasil Brokers Group 2021 earnings results call.

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Conference Call Transcript

4Q21 Results

Brasil Brokers (BBRK3 BZ)

March 24, 2022

We are on slide three. At the beginning of the year, we defined the Company's strategic plan for the next five-years cycle, and reiterated our purpose of making every real estate experience a unique experience.

To achieve this purpose, we have been working with four strategic drivers: profitability, customer experience, digital transformation, and ecosystem. All of our management indicators, day to day work focus and decisions we make reflect one or more of these strategic drivers.

To clarify how we do things around here, we have constantly promoted our six values: entrepreneurial spirit, fair play, power of relationship, innovate and create value, delight the customer, and result driven. These six values make up our culture and support our purpose.

This new culture in Brasil Brokers is in line and strengthens the results obtained in the last year. We are growing steadily, and this year we recorded a revenue 40% above that of 2020. We have improved our EBITDA by R$4.9 million when compared to the previous year.

On the 2H20, we launched Credintegrado, Credimorar's system, which has been improving our clients' experience and boosting even more the performance of this business segment.

Our systems are migrating to a cloud environment, giving more flexibility for growth. All our systems that are monolithic are being developed as microservices, and this is part of our digital transformation strategy, since it allows something that is produced for one vertical to be leveraged to another, and thus bring better performance to the Group's companies as a whole.

We remain focused on reducing waste and ensuring that the revenue per headcount ratio is stable or better each quarter. Our digital transformation efforts are stronger in Credimorar and Desenrola, and as I mentioned before, are overflowing to the other companies and verticals of the entire Brasil Brokers Group.

I now turn it over to Andrea de Rizzio, our CFO and IR Director, who will give us more financial and performance details. Then, I will come back to bring you more operational details.

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Conference Call Transcript

4Q21 Results

Brasil Brokers (BBRK3 BZ)

March 24, 2022

Andrea de Rizzio:

Thank you, Daniel. Good afternoon. Starting our presentation on slide four, we will talk a bit about our result. In the last quarter, the gross revenue in 2020 totaled R$167.8 million, 40% higher than 2020, and 32% higher than 2019. When we talk about our gross result in 2021, we totaled R$88.7 million, 39% higher than the previous year.

On slide five, going into administrative expenses, we see a nominal value of R$88.3 million in 2021, 4% less than in 2019. Nonetheless, when we look at this indicator related to gross revenue, we went from 72% in 2019 to 53% in 2021, an improvement of 19 p.p. This demonstrates our control in relation to administrative expenses.

We presented an adjusted EBITDA without labor liabilities in 2021 very close to zero, an important milestone for the Company in this moment of transformation.

On slide six, we will detail more our cost indicators, where, in the year 2021, our fixed costs were around 42% over gross revenue, and our revenue per headcount increased from R$21,000 to R$29,000, thus demonstrating a 38% improvement in efficiency.

On slide seven, we can see that this set of actions and positive indicators reflected directly in the generation of operating cash of R$15 million in 2021, and a total cash consumption of R$8 million from investments in technology, structural consultancies and payment of liabilities from previous years.

It is worth noting that our label liabilities have dropped from 1,315 lawsuits in 2020 to 239 lawsuits by the end of 2021, a drop of 24% in our stock of lawsuits. In 2021, there were only nine new lawsuits in the year. For this reason, we consider this matter controlled in the Company.

This concludes the results sections, and I give the floor back to Daniel, who will continue with our call talking about the performance of our operations.

Daniel Guerbatin:

Thank you, Andrea. On slide eight, you have a snapshot of our digital transformation. We have 71% of our leads coming from digital channels, and 77% of our gross revenue is already coming from this channel. So there has been a major conversion of digital leads following our development to provide better customer experience and greater

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Conference Call Transcript

4Q21 Results

Brasil Brokers (BBRK3 BZ)

March 24, 2022

relationship. This year, we developed systems and processes that improved mid-funnel performance on leads coming from digital channels.

On slide nine, we see that Credimorar had an incredible year with the origination of more than R$4 billion. In the last four years, we have already surpassed the R$10 billion mark in origination.

On slide ten, we see the performance of the intermediation of ready real estate and this vertical composed by brands such as Desenrola, Bamberg and Brasil Brokers. We had a growth in PSV compared to the recent years, reaching almost R$1.5 billion, and growth also in the number of brokerage units. And we followed our planning of concentrating the sales in properties above R$1 million. Almost half of our sales already happen in this market segment.

On slide 11, I bring the rental detail of Desenrola, our main initiative in this market segment. We have continuously improved our processes and systems, and have already shown superior performance in funnel conversions compared to traditional operations in our history.

On slide 12, we see information from launching intermediation segment, where we can see that the large PSV the contracted PSV are higher than the last two years. We are selling more, which demonstrates that our performance in those projects that we chose to participate has improved. And with that, we serve better the developers, we provide more commissions to the associated brokers, and consequently, a better EBITDA for the Company.

In the next three slides, we see some of the initiatives related to ESG and diversity. We understand that modern companies must look at these issues strategically, and all of these initiatives have the full engagement of our employees.

One of the initiatives we are most proud of is the Gigantesca movement, which on slide 15, you can see in detail. This movement has already crossed the path of more than 400 people among employees, partners and suppliers. We have had meetings on various topics related to diversity, and I believe that a more diverse and inclusive company will bring more innovative ideas, more engagement, and certainly, better results.

Thank you all, and now we will go to our Q&A session.

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Conference Call Transcript

4Q21 Results

Brasil Brokers (BBRK3 BZ)

March 24, 2022

Operator:

We are bringing our Q&A session to an end. Now, I would like to hand it back to Mr. Daniel Guerbatin for his final remarks.

Daniel Guerbatin:

Thank you all for participating. I would like to thank the employees, Board members, investors and all our partners for the support, for their effort and for trusting our journey throughout 2021.

During the last year, we consolidated a number of points to improve the customer experience throughout the real estate journey. We are on the right path to find better results and to provide better experiences.

Thank you very much, and good afternoon.

Operator:

Brasil Brokers conference call has come to an end. We thank you all for your participation, and have a very good afternoon.

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