Simpar (SIMH3), holding which controls seven companies - among them Movida (MOVI3), Vamos (VAMO3) and JSL Logística (JSLG3), listed on the stock exchange - has benefited from the strong results of its subsidiaries, in addition to its accelerated acquisition agenda, and has shown growth quarter after quarter.
According to the balance sheet published on Thursday evening (4), the holding closed the second quarter of this year with revenue of R$ 5.5 billion, an increase of 73% compared to the same period last year - and the bulk of this revenue comes precisely from its publicly traded subsidiaries.
The car rental company Movida recorded revenue of R$ 2.31 billion, which corresponds to around 42% of the total revenue of Simpar, the logistics company. JSL grossed R$ 1.44 billion, equivalent to 26%, and heavy vehicle rental company Vamos had revenues of R$ 1.2 billion, 22% of the total.
Although these three companies are responsible for most of the results, other Simpar subsidiaries have been registering significant growth - and may go public in the future, according to Denys Ferrez, CFO of Simpar. holding.
"We have at least two [companies] gaining size in an important and accelerated way. The fastest, it seems, is Automob, but we've also seen significant growth at CS Infra. I think there is a possibility [of going public]," said the executive, in an interview with TradeMap Agency.
Automob operates a network of car dealerships, while CS Infra has a portfolio of infrastructure service concessions.
Another driver of Simpar's results has been its acquisition agenda. This quarter alone, the company acquired the Green dealership network and Truckpad, a technological services platform for the logistics sector.
And that, according to Ferrez, shouldn't change from now on. "[The strategy of growing through acquisitions] remains firm. I think it's very valid in the logistics area, due to the pulverization characteristic. But I think there is also a lot of pulverization on the automotive side. It's not that there can't be acquisitions in other companies, but the probability for these is much higher," he says.
Check out the full interview with Denys Ferrez, Simpar's CFO, below.
What do you consider to be the highlights of the result?
We have a number of strategic highlights, such as the upgrade of the rating Fitch, which I consider to be the start of a process. Fitch is recognizing the resilience of our business, of our portfolio, within the Brazilian reality, after we've been through so many crises. It was the first agency to make this move. We're going to work hard to achieve the same as the others, and this will permeate the perception of the market as a whole.
We launched Automob during Simpar Day, which is very important as a vertical for potential value creation. Along with this, we have acquisitions. One of them is Green Automóveis, which was acquired in the quarter. We have Truckpad, which is a technological platform that accelerates not only JSL's digitalization, but also opens up a new opportunity to offer services
In Vamos, which has exposure to agribusiness, which is booming, we opened the largest FENDT dealership in the Americas. In short, we have an alliance with a very interesting manufacturer and we're growing in agribusiness.
On the numbers side, as a result of the investments, net revenue grew by 73%. Remember that part of our investments didn't contribute to the result. We must have invested something like R$ 3.8 billion in the second quarter, which is 1.7 times more than in the same period last year. Ebitda grew faster, almost double what we did in the other period.
Financial expenses have impacted profit. What are you doing to deal with this?
Everyone knows what's happening with interest rates in the country, and it's no different here. But the rise in financial expenses was of a different nature. On the one hand, we had this investment that didn't contribute to the result, but part of which is already on the balance sheet and affects financial expenses.
We also have the front of expanding some businesses, to turn them into something material, through M&A. This is another increase in expenses. And finally, there's the interest itself. The CDI for the second quarter of 2022, versus the same period last year, is four times higher, average against average.
Simpar's contractual structure allows it to pass this on, on the one hand. On the other hand, we have negotiations with clients. This exists to varying degrees within our different companies, but it is happening. Of course, it always happens a little behind the curve, but it is happening and we are calm about this process. It's not that it's over, but I think it's well underway.
On the operational side, how is the process of integrating the latest acquisitions going?
We believe that people make the difference. So when we make these acquisitions, we strive to preserve the people. That said, we have kept the acquired companies independent, preserving their performance and adding benefits without discontinuing the way they are run. We look at, negotiate a lot and acquire good companies. turnaround. So the companies are good and well run.
On the logistics side, the acquired companies, which have been around longer, are doing very well. They have grown organically by around 35%.
Some acquisitions have not yet been included in this quarter's results. When should this happen and what value should be generated?
Inside business In car retail, we still don't have UAB Motors, Autostar and Green in our results. Of the four acquisitions, we only have Sagamar.
Thinking about the timetable that Cade [the Administrative Council for Economic Defense] approved, I think UAB should enter in the third quarter, but Green and Autostar may stay for the fourth.
Speaking of figures, our initial operation plus Sagamar, which has been included in the accounts, would represent R$ 1.5 billion in net revenue on an annual basis. The others would take us to R$ 5.1 billion. We're still 75% on the outside.
Are there more acquisitions in the pipeline?
Activity is constant and dialog is always open on different fronts. But we don't have anything concrete to point to at the moment.
But is the strategy of growing through acquisition still in place?
It's still going strong. I think it's very valid in the logistics area, due to its pulverization characteristic. But I think there is also a lot of pulverization on the automotive side. It's not that there can't be acquisitions in other companies, but the probability for these is much higher.
Simpar's three publicly traded subsidiaries have recorded good results. Are there any plans to take any of them public? Are there any advanced talks in this direction?
We don't have advanced conversations. We have seven controlled companies, three open. We have at least two that are gaining size in an important and accelerated way. The fastest, it seems, is Automob, but we've also seen significant growth on the CS Infra side.
I think there is a possibility. Without a doubt, we're gaining more confidence as we gain more critical mass.
Optionality is beginning to exist in a truer, more tangible way. I think that's what we're building in these two verticals and, at the current rate, certainly between today and three years from now we could have more than enough critical mass to evaluate this.
Capex grew a lot with the investments. What are your expectations for the coming quarters?
We have different business moments. Vamos is taking advantage of a market that is only just beginning. In the past, you either had to buy or not have a truck. Now you have the more economically viable option of renting. Vamos has set an increasingly accelerated pace [of growth]. In three years, origination has grown fivefold, and I think this will continue.
We also have Movida, which has grown dramatically over the last year and a bit. During the pandemic, it first reduced its fleet, then expanded and ended the quarter with more than 200,000 cars.
I think Movida is now continuing to develop, but in a more moderate way, looking for opportunities to focus on efficiency gains and digest this growth. I think that will be the emphasis.
In logistics, there's something I've found quite interesting. Unlike the economy, JSL is delivering a very strong pace of organic growth. There were around R$ 1.4 billion in revenues from new contracts in the second quarter of 2022.
Whenever there is a tighter credit or financial situation in the economy, customers want to rationalize their resources, focusing on their own needs. core business. And there aren't that many logistics service providers with the capacity to make this investment. So it's been a great opportunity to support our client in this quest to focus on resource utilization. We are growing more than the industry.
Each company has different moments, but the trend is to continue developing. So far, Movida has been the biggest Capex borrower in recent years. I'm not saying that this will change this year, but it will moderate.
What are your expectations for the coming quarters?
I think that the homework of trying to navigate this inflationary and high interest rate scenario has continued to be done in an assertive manner. I expect Simpar to continue to do this, looking not only outwards, but also inwards, trying to use our own resources and avoid increasing spending. But I think the group is aware of this challenge and the need to continue this work. We're very excited.