Good afternoon, ladies and gentlemen. Welcome to Eletromidia's conference call to discuss the results for the Q2 2021. The audio and slides of this conference call are being broadcast simultaneously over the internet on the company's IR website, ir.eletromidia.com.br, and on the MZiQ platform. Please be advised that all attendees will only be listening in on the teleconference during the presentation, and then we'll start the Q&A session when further instructions will be provided. If any of you need any assistance during the conference, please request assistance from an operator by typing star zero. We inform you that forecasts about future events are subject to risks and uncertainties that could make such expectations not to materialize or to be different from what is expected. These forward-looking statements issue opinions only on the date that they are made, and the company is not obliged to update them. Today with us, we have Mr. Eduardo Alvarenga, Chief Executive Officer, and Mr. Ricardo de Almeida Winandy, Chief Financial Officer, and Ms. Marina Pereira Melemendjian, Investor Relations and M&A Officer. I would now like to hand over to Mr. Alvarenga, who will start the presentation. Please, Mr. Alvarenga, you may proceed. Good afternoon, everyone. Thank you for your presence and your interest in Eletromidia. It's a pleasure to talk to you about our results of the second quarter 2021 that was marked by a great evolution in our long-term thesis development. At the same time, we still face challenges due to the COVID pandemic, with lockdowns in the main cities of the country. Ricardo, our CFO, will go on further detail regarding finance. I'd like to highlight the gradual evolution of results that we had month after month over the quarter. April and May were hardly impacted by the lockdown, and consequently by our sales cycle, and we had a high acceleration in June due to the vaccination cycle and improvement in the advertiser. We had a normal 60% revenue growth compared to May. A great impact on EBITDA result, a combination between the increase in revenue, adaptation of the cost basis of company with a positive impact of renegotiation contracts that are still underway considering this atypical scenario. In parallel to short-term challenges, maintaining focus in the execution of our expansion thesis, I'd like to tell you about our growth pillars and strategic guidelines of the company. We have three important growth pillars: expansion of the core business, additional business, and digital transformation. We're working unrelentlessly to develop all of them. On the core business expansion that represents growth within the out-of-home market through expansion to new geographies, acquisitions of companies working in out-of-home segment in M&A, new partnerships, and the participation in public bids and new concessions with an important growth map to happen in Brazil. An organic expansion in residential buildings, among others, and we give you more color in a while. Second pillar on the creation of additional businesses that represents new businesses from projects where we work, for example, Trilhos Verdes project, the Wi-Fi implementation, amongst other projects we are creating on top of our contracts. On digital transformation, we focus on solutions and processes that can unlock the potential to access new markets, generate scale for our business, and thus add more value to the company. Now, we're going to mention to you what we've done regarding these three guidelines and during the period. Regarding the core business expansion, we had record residential building raising. Only second quarter, we had 800 new contracts for residential buildings. The funding for the quarter alone is record of our annual funding of 2016. We have a new pace of growth with a new medium of new screens over 150 a week. A second move was the acquisition of Ótima that we've announced recently. One of the great contracts of Latin America in the real estate that actually increases our presence in this transformational initiative of Eletromidia, turning us into a one-stop shop. We can service from A to Z to our customers. We have the crossroads of the largest city of Latin America with a great segment. We see strong potential of digitization of this asset base and the contract, in addition to the implementation of our technology layer that we've mentioned. Previously, to gain scale, we have an estimate for this asset of a bit over BRL 107 million. The third move, still in terms of core business, that is very important in terms of expansion, is the Congonhas Airport. Second largest airport in the country in terms of flow. We started operations in July. Very relevant audience for our market. Clear synergies with the other verticals as, for example, commercial buildings. Obviously, we are in the city of São Paulo, which is a major city for the advertising industry. Congonhas, with a yearly flow of 16 million passengers, is expected to increase from 12 to 30 fingers, 204 flights a day for international flights as well, increasing the activity and relevant for the advertising market. The fourth additional movement in core business is Tembici project in Brazil. A combination of media with urban mobility. Expansion of our vertical street with clear benefit to the population, which is urban mobility. This growth is happening in Brasília, which is a very relevant market to the advertising market with long-term contracts. This project is very attractive, allowing us to take and prove our ability to expand this business with great demand, which is mobility to other cities in Brazil. On additional businesses, I highlight a project that we call Trilhos Verdes, which is green trails or tracks, which is transforming the station into sustainable project contributing. It's an additional business from our contract of CPTM, sustainable project, bringing you some numbers, counting 1,500 sq m of green walls, 234 photovoltaic panels, and all the renewal of the Vila Olímpia station. We're going to expand this project to new stations with new partners. Actually, we signed, quite recently, our second partnership for Cidade Jardim station with a large Brazilian bank. We're bringing a major change to the profile of revenue of the company with long-term contracts over three years with advertisers. Towards developing new strategic guidelines and seeking support of professionals with deep knowledge in relevant topics to our thesis as technology, data, and marketing. We have two new board members, Manoel Lemos and Luiz Felipe Barros. Manoel has been over 24 years and he's a board member of Creditas and Xeppaa, and he acts as director or partner of Redpoint. Luiz has over 15 years' experience in marketing. He's an expert in transformation media, especially data. Very important component to our strategy. With this, I hand over to Ricardo, who's going to give you more detail on our financial performance in this quarter. Thank you, Eduardo. Good afternoon. I thank you all for your participation in our teleconference. We're going to go over the highlights to second quarter 2021 on Slide 9. We had the growth on our total inventory now in terms of number of panels, 4.8% compared to 2020. Reaching 56,500 advertising panels. We had a complete, a more lockdown in the capital cities, which was in April, and May still had great restrictions in circulation. We had the revenue 4 x the largest in the previous years, with a growth of 19% quarter-over-quarter. We've reached over the period gross profit to BRL 32.4 million, 3 x over what we had in the 1st quarter, with gross margin of 45.6% in the period, and BRL 43 million in terms of 2020. We close the quarter with BRL 9 million, a bit of 35.5% above the previous quarter, with a very concentrated result in June, which was the only month that was more normalized in the period. Moving on to Slide 10. From the funding in February, parallel with the M&A initiatives, we've had organic expansion of core business and investment in digital assets and segments that are more profitable, reinforcing the leadership position of the company. We've installed 2,570 new panels of advertising in comparison to 2020, an increase 7% of our total digital properties, with highlight to the growth of buildings of 11.7%, especially residential, increasing our penetration in this premium audience. Another highlight, our streets, where we almost tripled the number of panels through partnerships with bike-sharing companies. We've also sped up in also publicity in the train stations in São Paulo with 86 new properties, amongst them LED panels that are quite large. We close the period with the composition of 7% of digital network against 70% static. On the next Slide 11. Even in a quarter with two months impacted by the lockdown due to the pandemic, they were April, purple environments totally closed, and May with a gradual resumption that was quite shy. We closed the quarter with revenue 4 x the same period, 2020, BRL 83.8 million growth revenue against BRL 20 million previous year. The result is a reflex of the loyalty program and the advertising base, and also trying to customize the goals of customers, verticals with better development in the period with an action plan for all categories in potential advertisers. In comparison to the first quarter of the year, we had sales that were 19% higher, even if the audience is not reaching the levels of January and February. According to the dynamics of seasonality of sales in the industry, publicity investment invests, even in a normalized market, presents a growth that is quite significant in the second quarter, especially in verticals of buildings and streets, reinforcing the investment thesis in those verticals. On Slide 12. Based on the normal dynamics of seasonality in the media sector, first months of the year, we have less investment in publicity with a gradual evolution from March quarter-after-quarter, with more impact in the few months as well. There are important dates for retail and there's more circulation of people. We highlight that this growth in 2021 was locked down from March throughout April. We had a reduction that was quite steep, with an impact in revenue because, well, we have our revenue based on circulation of people. We resumed in a shy way in May with a growth of 14% considering previous month. In June, with an audience that was more normalized, we had a sales growth of approximately 60% compared to the previous month, even with a reduced audience reaching levels that are basic or the basis for the forthcoming months. On the next slide. The performance in terms of revenue in the period added to costs and expenses. We completed the discount and the cost of transfers to partners resulted in a EBITDA BRL 9 million in the period. This result accounts for an improvement of BRL 35.5 million EBITDA year-over-year and BRL 20 million quarter-over-quarter. The result of a quarter was consolidated in June, which was the only month with more normalized revenue, with lower impact of lockdown imposed in 2021. We're still negotiating our main partners to revisit transfer prices considering the reduction in audience due to the pandemic lockdown. Since these are the major causes, they have an impact on our margin. Only part of the agreements have been completed in the first semester. It's important to stress that we have continued working cost negotiation and expense control without hindering the midterm of the company, that we are quite optimistic in terms of going back to normality. We've been investing in people, talents. We reinforced our area funding, installation of new assets, in addition to reinforcing the team of developers in technology. On Slide 14. We will continue investing in the growth of the network in projects that are more commercially attractive, especially digitizing CPTM contract that we won in 2020, buying equipment for the street project with the Tembici project, growth of the building, residential building growth for the time being, and special projects of sustainability totaling BRL 12.6 million in CapEx in the period. We closed the quarter with R$620 million in the cash, excluding BRL 12, and indebtedness of R$12.5 million. 78.5% of amortization of the debt is concentrated in terms over 12 months, distributed over a five-year period. With this, I'd like to invite Eduardo Alvarenga back for the closing remarks. Thank you, Ricardo. Before we move on to the Q&A, I'd like to reinforce some relevant messages for this quarter. First message, we had a major evolution in our results, even in a quarter that was hardly impacted by the lockdown due to the pandemic, which was not expected in our estimates for this year. Even so, we had the growth in revenue of over 300% compared to the previous year, and we had an evolution of 20% compared to the first quarter this year. In addition, we are moving forward significantly in our long-term thesis. We have not let it go. With transformational projects, with the acquisition of Ótima and residential building investment, transforming the cities with new sustainable stations, in addition to bringing intellectual capital with the arrival of our board members, they're going to support in the development of the strategy of the company. Lastly, I'd like to highlight that we're very proud with the new recent acquisitions of Eletromidia. We're working with great focus and discipline to form a more relevant market for the publicity market. Thank you all very much, and we're available for the Q&A session. Thank you. We will now start the Q&A session for analysts and investors. If you wish to ask a question please press star one. If your question is answered you can exit the queue by pressing star two. Please wait while we collect questions. Our first question comes from Mr. Victor Riccetto from the UBS. Good afternoon, Eduardo, Ricardo. Congratulations on your results. Thank you for taking my question. Two questions. First, the margin gain that you presented in the second quarter, EBITDA margin. Has it been happening in all segments where you operate or some specific, if you don't have the revenue sharing, is it more concentrated in the buildings? Second question is that we've seen that you've had a better operation in June. Can you give us some color as to the recovery in the first months and for the third quarter? Thank you. Good afternoon, Victor. With regards to the first question in terms of margin gain, actually, we see an important growth in the segment as buildings and streets, two verticals with greater margins, since they count with low transfer costs. This helps us compose or make up this growth that you've seen in the second quarter. We see an improvement in margin in the vertical of transportation because of the completion of the discount negotiation of transfers due to drop in audience. Transportation, we see an improvement because of that. For the higher level of revenue, since we have good operating leverage, that is reflected in our EBITDA margin. As to the second question, actually, April and May have been months out of the curve due to the lockdown and because of the purple phase implemented in São Paulo. We see a steep drop in audience, only recovered by two, July and August. They tend to be better months than June. We start from this level that is a bit higher since we've seen a reduction in the restrictions of circulation of people and then greater audiences of the next months. Perfect. Thank you. We have a question from the webcast from Mr. Arthur from Itaú. Good afternoon. Thank you for the opportunity. I'd like to know what is the level optimization of your panels and screens. Where should this level be by the end of the year? Good afternoon, Arthur. Thank you for your question. Second quarter, as I've mentioned, we had some atypical months since our presence was varied from 11% in April to 18% in June, with an average of 15.8% of occupancy or utilization. If we use as basis the historical averages, this level of occupation is between 30%-40%, even in years with a fast expansion. The trend is that in the second quarter, especially last quarter, when we see levels of sales seasonally above the two first quarters, we should have a growth and get closer to what we usually fulfill historically. We have one more question from the webcast. From Mr. Salomon Dayan from Equitas. Good afternoon, and congratulations on your results. Could you comment on what will be the impact on Congonhas in the next quarter? Good afternoon. Well, thank you for the question. Congonhas Airport, we started marketing in July, first month with revenue. It's an operation that is still following a sales ramp-up. It is difficult for us to anticipate what will be the impact on the margin for the quarter. Since this is an initial project, it will be an impact that will still be low on the EBITDA of this first quarter of operations. I would like to remind you that if you wish to ask questions, just press star one. Please wait while we collect questions. Please wait while we collect questions. We We have one more question from the webcast from Mr. João Pedro Monforte from Energy Variant. What numbers do you believe are normalized audience? What are the reasons for June audience to be below January and February? Hi, João. Good afternoon. How are you? It's Marina speaking. Considering the current conditions that we've been observing of constant improvements, gradual improvements in the increase of circulation of people, increase in the vaccination rate, we expect that by year-end, we'll overall have a level of circulation and audience close to normalized with some differentials for specific verticals. For example, commercial buildings, considering the current scenario of constant improvement, we have an optimistic vision for the second semester this year. Regarding June being below January, February, June was a month in which we go back from an important drop in circulation of people, the lockdown, and the purple phase of March and April. We had this period of recovery that starts taking up, whilst the January, February were months in which we were coming from a constant improvement period from last year. There was this rupture with the lockdown that actually impacted June regarding January and February. I would like to remind you that if you wish to ask questions, please press star one. Please wait while we collect the questions. We have one more question from the webcast from Mr. Arturo from Itaú Bank. Thank you for the follow-up. When do you expect to integrate Ótima to your results? Do you have an update regarding the pipeline of M&As? Good afternoon, Arturo. We have a synergy plan mapped out regarding Ótima, considering all the areas of the company, both in terms of potential revenue synergies and also regarding cost. Once we complete the transaction, it's a process that will start the next day when we start integrating operations and consequently, actually consolidating results of the company with the results of Eletromidia. What we have today in terms of estimates, considering that we signed the transaction or the negotiation at the end of July, this period between signing and transaction completion should take between four and eight months. From then on, we'll start consolidating the results of our operations. As to the M&A pipeline, we made this acquisition that was quite transformational for our business, quite important within our core segment. Our pipeline is still heated. We have things mapped out. We have conversations underway for acquisitions, both of other companies that act in the same segment as ours, the out-of-home media, and also regarding M&As that may help us in the agenda of technology and attracting talents. Reminding you that if you wish to ask questions, please press star one. Please wait while we collect the questions. Once again, we wish to remind you that if you want to ask questions, please press star one. If your question is answered, you can leave the queue by pressing star two. Please wait while we collect the questions. Since there are no further questions, I would like to hand over to Mr. Eduardo Alvarenga for his final remarks. Thank you all very much for your presence. We're available if you have future questions. See you next time. Thank you. Eletromidia's conference call is closed. We thank you all for your participation and wish you a good day.
Loading workspace