Net Revenue in 1Q22 decreased 12% in relation to the same period of the previous year, totaling R$ 43.7 million, with a significant reduction in the CrediPronto segment, due to the macroeconomic factors already mentioned above. In the annual view by segment, we have:
Intermediation:Increase of 22%, as a result of the increase in GSV and improvement in net commission
Franchise:Increase of 22%, as a result of the expansion of stores and the increase in the average royalty fee.
CrediPronto: the 42% reduction in the period is explained by the reduced profit sharing payments in the period.
c. Net Revenues
Receita Líquida Trimestral[R$ mm]
As seen in table 1, the GSV of intermediation disclosed has the criterion of recognizing only the intermediaries billed which, multiplied by the net commission, result in the gross revenue rcognized in the respective period.
The “Other Income” line includes correspondent banking and profit sharing income, recorded in the CrediPronto, and also income from the payment of royalties from franchised operations.
As previously shown, the franchises GSV in 1Q22 was R$1.184 billion, generating royalty income of R$5.1 million, an average fee of approximately 0.44%.
Table 1 - Gross Revenue Reconciliation (R$ mn) 1Q22
Transactions Closed (a) 1,031
Net Comission (b) 2.11%
Gross Brokerage Revenue (a) x (b) 21.7
Revenue to Accrue from Itaú Operations 3.6
Other revenues 22.8
Gross Revenue 48.1
Table 2 - Net Comission Fee
1Q21 2Q21 3Q21 4Q21 1Q22
BRAZIL 1.97% 2.01% 2.1% 2.09% 2.11%
São Paulo 2.04% 2.17% 2.11% 2.02% 2.05%
Capital 2.32% 2.36% 2.25% 2.04% 2.12%
Other Cities1 1.77% 1.85% 1.84% 1.95% 1.9%
Rio de Janeiro 1.55% 1.71% 1.7% 1.54%
-Others 1.89% 1.79% 2.1% 2.23% 2.17%
Table 3 - Net Comission Fee
Region Fee Contribution Fee Contribution
SP 2.04% 1.22 2.05% 1.13
RJ 1.55% 0.03 - 0.
South 2.17% 0.44 2.27% 0.49
Northeast 1.39% 0.18 2.11% 0.35
Other Markets 1.98% 0.11 2.02% 0.14
Total 1.97 2.11
1Q21 1Q22
2. Costs and Expenses
Cost of Services Provided and Operating Expenses
In the chart to the right, we present the Company's recurring operating expenses before IFRS effects. There is an 8% increase in expenses between 1Q22 and 1Q21.
31.4
1Q21 1Q22
33.8 +8%
Total of Costs and Expenses
No impact from IFRS [R$ mn]
The increase in the company's operating expenses is mainly explained by the increase in commissions at the end of the mortgage loan origination of the Lopes channels, and can be seen in the line of Other Operating Expenses. This increase is part of a strategic move as a result of the increasing competitiveness of other banks, and is fully justified by the significant increase in the average balance of CrediPronto's portfolio and its long-term returns.
A reduction was observed considering the other expense lines as shown in the table below. Highlight for the significant reduction of 71% in provisions for labor and civil contingencies, which reached the amount of R$ 1 million in the first quarter of 2022.
Costs and Operational Expenses 1Q21 1Q22 Var. R$ Var. %
Personnel (15,311) (11,816) 3,495 -23%
Intermediation Costs (138) (90) 47 -34%
Third-party, Advisory and Consulting Services (4,277) (5,161) (884) 21%
Infrastructure (1,922) (1,774) 148 -8%
Telecommunications (836) (685) 151 -18%
Advertising (1,183) (1,453) (271) 23%
Office Supplies (69) (54) 15 -22%
Other Operating Expenses (6,430) (12,333) (5,904) 92%
Equity Equivalence 397 628 231 58%
Itaú Expenses to Accrue (238) (238) - 0%
Stock Option Plan (1,373) (854) 519 -38%
Costs and Expenses [A] (31,378) (33,831) (2,453) 8%
Depreciation (4,636) (3,640) 996 -21%
Total [B] (4,636) (3,640) 996 -21%
3. EBITDA
EBITDA Before IFRS showed a reduction of 47% in the comparison between 1Q22 and 1Q21, totaling R$ 9.9 million and 23% of EBITDA margin.
4. Income Taxes and Social Contribution
The Income Tax (IR) and Social Contribution on Net Income (CSLL) lines totaled R$2.4 million in 1Q22, down 17% from the same period of the previous year.
2.9
1Q22 1Q21
2.4 -17%
Income Taxes and Social Contribution
Before IFRS
[R$ mn]
1Q21 (37%)18,5
1Q22 (23%)9,9 -47%
EBITDA – before IFRS
[R$ mn]
EBITDA Reconciliation (R$ thousand) 1Q21 1Q22 Var. %
Net Income 6,096 5,247 -14%
Income and Social Contribution Taxes 977 2,147 120%
Net Financial Result 6,825 (1,160) -117%
Depreciation and Amortization 4,636 3,640 -21%
Adjusted EBITDA - without IFRS 18,534 9,874 -47%
EBITDA Margin 37.10% 22.60% -1450 bps
5. Net Income Controlling Shareholders - Before IFRS
Controlling Shareholders' Net Income before IFRS totaled R$3.3 million in 1Q22, compared to a profit of R$10.1 million in 1Q21.
Net Income attributable to Controlling Shareholders After IFRS was R$2.3 million in 1Q22 versus R$3.5 million in 1Q21, representing a 33%
reduction in the period.
It should be noted that the non-cash effects caused by IFRS described below distort the comparison of earnings between periods. Therefore, we consider Profit before IFRS to be the most accurate profit indicator to measure the Company's performance.
6. Net Income Controlling Shareholders - After IFRS
(20%)10,1
1Q21 1Q22
3,3 (8%) -68%
Net Income Controlling Shareholders –
Before IFRS
[R$ mn and Net Margin %]
(5%)2,3
1Q21 1Q22
(7%)3,5
-33%
Net Income Attributable to Controlling Shareholders - After IFRS
[R$ mn and Net Margin %]
Net Profit ex-IFRS (R$ thousand) 1Q21 1Q22 Var. %
(=) Net Income attributable to Controlling shareholders 3,457 2,310 -33%
Impacts in Financial Results 7,262 1,151 -84%
Impacts in Income and Social Contribution Taxes (1,933) (277) 86%
Impacts in Depreciation and Amortization 1,889 658 -65%
Impacts in Minorities Interest (564) (561) 1%
(=) Net Income Controlling shareholders before IFRS 10,111 3,281 -68%
Net Margin 20.3% 7.51% -1280 bps
7. IFRS Effects
(1) Amortization of intangible assets;
(2) Gains and Losses with net non-cash effects of earn out accounting and call and put options at subsidiaries, based on the fair value according to future estimates;
(3) Deferred income tax on intangible assets of LPS Brasil;
(4) Effects related to deferred income tax and amortization of intangibles assets at non-controlling shareholders.
8. Indebtedness
On March 31, 2022, LPS Brasil had a debt, recorded in the balance sheet, of R$ 23.7 million.
Of this amount, R$ 20.8 million refers to the payment of put options on the non-controlling interests (Written Put) of the acquisitions carried out, an amount that is concentrated in the short term. In addition, there is an accounting of other liabilities of R$ 2.9 million.
1
3 4 2
1Q22
Description Before IFRS IFRS Effects* After IFRS
Net Revenue 43,705 - 43,705
Costs and Expenses (33,831) - (33,831)
Depreciation and Amortization (2,982) (658) (3,640)
Finance Result 2,311 (1,151) 1,160
Operational Profit 9,203 (1,809) 7,394
Income tax and social contribution (2,424) 277 (2,147)
Net Income 6,779 (1,532) 5,247
Non-controlling Shareholders (3,498) 561 (2,937)
Net Income Controlling Shareholders 3,281 (971) 2,310
9. Cash Flow and Cash Equivalents
Cash from Operations Quarterly [R$ thousand]
14.352
5.882
16.687
In 1Q22, cash generated by operating activities was R$ 0.2 million, a reduction of 87% compared to 4Q21.
Regarding investment activities, there was a generation of R$ 9.2 million, considering the investments made in the context of digital transformation and also gains in financial investments.
The cash consumed by financing activities was R$ 13.5 million and is largely due to the second share buyback program in progress. Other impacts are related to the distribution of dividends to non-controlling partners and leasing.
The balance of cash and cash equivalents at the end of the period, considering financial investments, was R$ 37.6 million.
+9.6 millionshares available in treasury on 3/31/2022
Cash Flow [R$ thousand] 4Q21 1Q22 Variation
Cash and Cash Equivalents (BoP) 35,464 41,710 18%
From Operations 1,275 169 -87%
From Investment Activities 23,583 9,211 -61%
From Financing Activities (18,612) (13,490) 28%
Cash and Cash Equivalents 41,710 37,600 -10%
The following appendices can be found at the end of this document:
• Appendix I – Income Statement
• Appendix II – Balance Sheet
• Appendix III – Cash Flow Statement