Positivo Informática reports net income of R$30.9 million in 4Q13

Transcription

1 Positivo Informática reports net income of R$30.9 million in 4Q13 Curitiba, February 20, 2014 Positivo Informática S.A. (BM&FBOVESPA: POSI3) announces today its results for the fourth quarter (4Q13) and the full year of The following financial and operating information refers to the consolidated results of Positivo Informática S.A. and is presented in IFRS and in Brazilian reais (R$). All comparisons herein refer to 4Q12 and 2012, except where otherwise indicated. 4Q13 AND 2013 HIGHLIGHTS More than 3 million PCs and tablets sold in 2013, up 27.6%: % in the corporate market; +15.0% in notebooks; % in tablets, which accounted for 16.5% of total hardware sales volume; Increase in market share in 2013: 15.3% in the Total Market - PCs Brazil, the company s highest annual share since 2009, of which 20.4% in the Retail Market, stable over 2012; 5.7% in the Total Market Tablets Brazil, up by 3.1 p.p. over 2012; 10.0% in the Total Market PCs Argentina, up by 1.5 p.p. over 2012; The highest annual and quarterly revenue figures ever registered: net revenue totaled R$769.1 million in 4Q13 (+17.9%), and R$2,566.5 million in 2013 (+22.1%); Net income totaled R$30.9 million (+230.6%), with a net margin of 4.0% (+2.6 p.p.) in 4Q13; Adjusted EBITDA totaled R$54.7 million (+62.7%), with an adjusted margin of 7.1% (+2.0 p.p.) in 4Q13. In 2013, adjusted EBITDA came to R$139.3 million (+40.4%), accompanied by an adjusted margin of 5.4% (+0.7 p.p.); Cash conversion cycle of 99 days, an improvement of 15 days over 4Q12; Capex reduced to R$28.9 million in 2013 (-55.8%). 1

2 1) FINANCIAL HIGHLIGHTS Income Statement Highlights % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Net Revenue , , Gross Profit Net Income (Loss) 9.4 (18.9) (264.0) (48.4) EBITDA Adjusted EBITDA Gross Margin 24.9% 19.7% 23.0% -1.9 p.p p.p. 24.6% 21.4% -3.2 p.p. Net Margin 1.4% -3.4% 4.0% +2.6 p.p p.p. 1.4% 0.6% -0.8 p.p. EBITDA Margin 4.1% 2.7% 5.5% +1.4 p.p p.p. 3.9% 4.1% +0.2 p.p. Adjusted EBITDA Margin 5.2% 4.5% 7.1% +2.0 p.p p.p. 4.7% 5.4% +0.7 p.p. 2) HARDWARE INDUSTRY AND POSITIVO INFORMÁTICA CURRENT SCENARIO As expected, the Brazilian computer market recorded moderate volumes in The volumes were pressured by rising PC prices and the increased demand for tablets, form factor that has been preferred by many Fonte: users CGI (Comitê who Gestor predominantly da Internet) use the product to consume content. Considering computers and tablets together, the hardware market grew 18.9% in volume and 11.1% in revenue over It is worth noting that the Brazilian PC market grew in terms of revenue in 2013, totaling R$22.0 billion, according to IDC. In the last months of the year, we saw the consolidation of the pass-through to prices in the computer market, due to the exhaustion of components purchased at a lower dollar rate by manufacturers. In the case of tablets, this dynamic could be offset by the good demand for the product and the lower prices of certain components in the international market, such as touch screens, following the gains of scale in the mobile device industry. Positivo Informática posted a good sales performance in 4Q13, despite the fierce competition in the retail market, supported by a greater diversification of revenue in terms of products and distribution channels. The growth in tablet and phone sales and the expansion in the corporate and government markets contributed to the record revenue in the quarter, of R$843.1 million (+16.7%). The Company continued the pass-through to prices, sacrificing part of the retail volume, but contributing to resume profitability in the quarter, thus registering adjusted EBITDA of R$54.7 million, accompanied by a margin of 7.1% (+2.0 p.p.), and net income of R$30.9 million (+230.6%). The 4Q13 sales profile follows the main trends sought by the Company for 2014: growth in mobile devices such as tablets and mobile phones, discipline in retail pricing and capture of opportunities in the corporate and government markets. In fact, we can already foresee good volumes for the government market in 2014, of at least 50,000 tablets and 600,000 PCs, accompanied by average prices higher than in The challenges for the year also include directing the Company s efforts to optimize working capital and debt indicators, seeking a better return on invested capital and strengthening liquidity. The Company also expects to maintain its conservative approach in terms of fixed costs and investments, as we can already perceive from its 2013 results, seeking a greater cash generation. 2

3 3) MARKET SHARE In 4Q13, Positivo Informática s share of the Brazilian computer market was 16.1%, a recovery that contributed to the growth of 1.4 p.p. and 2.7 p.p. over 4Q12 and 3Q13, respectively. In 2013, the Company s market share stood at 15.3%, 1.7 p.p. up on 2012, Positivo Informática s highest share of Brazil s Fonte: CGI computer (Comitê Gestor market da since Internet) 2009, according to IDC. The Company also recovered market share in the retail computer market in the last months of the year, despite the pass-through to prices and the fierce competition in entry level products. As a result, Positivo Informática registered market share of 20.5% in 4Q13, 3.2 p.p. down on 4Q12 and 3.7 p.p. up on 3Q13. In 2013, the Company s share of the retail market came to 20.4%, virtually stable over 2012, according to IDC. Positivo s Market Share Trends in Total Market PCs Brazil Positivo s Market Share Trends in Retail Maket PCs Brazil 11.9% 13.9% 13.7% 14.6% 15.1% 16.5% 13.4% 16.1% 19.9% 20.7% 17.8% 23.7% 22.3% 21.9% 16.8% 20.5% 1Q12 2Q12 3Q12 1Q12 2Q12 3Q12 Source: IDC Positivo Informática closed 2013 with 5.7% of the Brazilian tablet market, 3.1 p.p. higher year-on-year. In addition to the stronger sales to government clients, the brand's presence in the most relevant retailers improved throughout 2H13, reflecting the good acceptance of the new product line. Positivo s Annualized Market Share Trends in Total Market Tablets Brazil 5.0% 5.9% 6.1% 5.7% 1.1% 1.3% 1.8% 2.6% 1Q12 2Q12 3Q12 Source: IDC In 4Q13, Positivo BGH computers recorded a market share 10.3% in Argentina, 0.3 p.p. down on 4Q12 and 3Q13. In 2013, the brand s market share stood at 10.0%, 1.5 p.p. up on the previous year. 3

4 Positivo BGH s Market Share Trends In Total Market PCs Argentina 6.5% 7.1% 8.1% 10.6% 9.4% 9.2% 10.6% 10.3% 1Q12 2Q12 3Q12 Source: IDC 4) VOLUME AND REVENUE Fonte: CGI (Comitê Gestor da Internet) 4.1) VOLUME Positivo Informática sold 802,800 computers and tablets in 4Q13, 19.1% up on 4Q12. The period s good performance allowed the company to record the highest quarterly revenue in its history and to exceed the mark of 3 million units sold in the year, a 27.6% increase over Tablets recorded strong sales, 96.6% up on 4Q12, with a higher share of retail sales. Among the sales channels, the company once again recorded strong growth of sales to government and corporate clients, with upturns of 106.3% and 114.9%, respectively, over 4Q12. Mobile phone sales increased by 87.3% in 4Q13, totaling 97,900 units, of which 55,900 were feature phones (+17.6%) and 42,100 were smartphones (+777.6%). In 2013, 266,800 mobile phones were sold, a year-on-year increase of 410.2%. Hardware Sales % Chg. % Chg. % Chg. Volume (units) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 PCs and Tablets* 673, , , ,409,149 3,075, Desktops 164, , , , , Notebooks 440, , , ,638,754 1,885, Tablets 68, , , , , Channel* 673, , , ,409,149 3,075, Retail 521, , ,978 (6.9) ,810,127 1,809,849 (0.0) Government 119, , , ,704 1,030, Corporate 33,465 57,903 71, , , Country* 673, , , ,409,149 3,075, Brazil 603, , , ,194,377 2,604, Argentina 70, , , (11.4) 214, , Mobile Phones 52,287 55,681 97, , , Smartphones 4,792 10,033 42, ,792 75,525 1,476.1 Feature Phones 47,495 45,648 55, , , * Includes 30,576 and 14,392 netbooks sold by the Argentinean company BGH S.A. under the Positivo BGH brand in 4Q12 and 3Q13, respectively. 4

5 Devices Share in Hardware Sales (units) PCs and Tablets Mobile Phones 10.1% 18.8% 15.8% 14.7% 16.7% 65.4% 58.2% 63.6% 64.2% 59.3% 90.8% 70.0% 85.3% 82.0% 57.1% 24.5% 23.0% 20.6% 21.1% 23.9% 42.9% 30.0% 9.2% 14.7% 18.0% Tablets Notebooks Desktops Feature Phones Smartphones Breakdown of Hardware Net Revenue Product Channel NB 51.7% Others 14.2% TB 4.8% MP 0.9% TB 6.8% TC 1.9% Others 10.3% NB 48.6% Retail 70.5% Gov. 19.3% Gov. 28.8% Retail 55.6% DT 28.4% DT 32.4% Corp. 10.2% Corp. 15.6% 4Q12 4Q13 4Q12 4Q13 NB: Notebooks TB: Tablets DT: Desktops MP: Mobile Phones Corp: Corporate Gov.: Government Retail: 60.4% of net revenue in 2013 R$1,528.1 million (+1.7%) PC and tablet sales in the retail market came to 485,000 in 4Q13, 6.9% down on 4Q12, totaling 425,100 computers (-12.7%) and 59,900 tablets (+75.7%). The decrease in the number of PCs sold was influenced by the competition stimulated by a multinational manufacturer in low-configuration products, as well as the Company s average price increase due to the appreciation of the U.S. dollar and the higher prices of certain components in the international market. In addition, the lower volume of computers sold was partially offset by the increase in tablet sales, in line with the projections of the main market research institutes. In 2013, PC and tablet retail sales totaled 1,809,800 units, flat compared to 2012, represented by 1,673,300 computers (-5.3%), and 136,600 tablets (+214.5%). Mobile phone sales totaled 97,900 units, mostly sold in the retail market, representing an 87.3% yearon-year upturn. Smartphone sales recorded good performance, with 42,100 units sold (+777.6%), driven by the high demand for this type of product and the positive response to the launch of the company s new line of smartphones. 5

6 In 2013, mobile phone sales totaled 266,800 units, 410.2% up on 2012, corresponding to 191,300 feature phones (+302.7%) and 75,500 smartphones (+1,476.1%). Government: 27.5% of net revenue in 2013 R$695.8 million (+92.6%) Sales to government clients were strong in 4Q13, totaling 245,800 PCs and tablets, 106.3% more than in 4Q12. These sales, corresponding to 187,100 PCs (+112.1%) and 58,700 tablets (+89.9%), refer chiefly to educational projects involving computer labs, convertible netbooks and tablets. In addition, the company delivered a larger volume of desktop computers to government-owned companies and banks. In 2013, sales to government clients came to 1,030,300 units, an increase of 127.1% over For 2014, the company is beginning the year with an estimated delivery portfolio of approximately 50,000 tablets and more than 600,000 PCs, of which 350,000 in Brazil and 250,000 in Argentina. Corporate: 12.1% of net revenue in 2013 R$307.1 million (+53.0%) Corporate-market sales performed well once again, totaling 71,900 PCs and tablets in 4Q13, 114.9% up on 4Q12. The company increased its direct sales to large companies in the quarter especially tablet sales to private schools, while maintaining a standout performance in its indirect sales platform. In 2013, sales to corporate clients came to 234,900 units, an upturn of 61.6% over ) AVERAGE PRICES In 4Q13, average PC prices in Brazilian reais moved up yet again, with increases of 13.2% and 7.5%, respectively, over 4Q12 and 3Q13. These increases were due to the pass-through of costs to offset the appreciation of the U.S. dollar, which affects around 90% of PC costs, and the higher prices of certain components in the international market. We present below additional factors to the pass-through to prices that influenced the price increase for each form factor. Desktops: 6.1% upturn over 3Q13 due to the higher share of sales to the government and corporate markets, which have more advanced configurations and after-sale services, offsetting the increase in sales of units without monitors. Notebooks: increase of 7.4% over 3Q13, due to the more advanced average configurations, the growth of the Positivo brand, the higher share of the government and corporate markets, and the decrease in netbook sales. Tablets posted a 7.6% quarter-on-quarter decline in average price, fueled by the higher share of 7-inch screen devices in the period. Disregarding the effect from the screen mix, the average price of tablets would have recorded a slight increase in this comparison. The average prices of mobile phones moved up by 27.3% between the quarters, due to the higher share of smartphones, which accounted for 42.9% in 4Q13, a 24.9 p.p. upturn over 3Q13. 6

7 Average Positivo % Chg. % Chg. % Chg. Price(1) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Dollar Average for the Period(2) Desktops In R$ 1, , , , , In US$ Notebooks In R$ , In US$ (1.5) (1.3) Tablets In R$ (17.4) (7.6) (29.1) In US$ (25.0) (6.7) (33.5) Mobile Phones In R$ In US$ ¹ Computers sold in Brazil only. ² Calculated by the Company, weighted by monthly sales to reduce seasonal distortions, based on the sell PTAX of the Central Bank of Brazil. 4.3) GROSS REVENUE The company recorded gross revenue of R$843.1 million in 4Q13, a new quarterly record, representing increases of 16.7% and 38.0% on 4Q12 and 3Q13, respectively. In 2013, gross revenue came to R$2,822.9 million, a 21.2% year-on-year growth. Gross Revenue % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Total Gross Revenue , , Hardware - Product , , Desktops Notebooks , , Tablets Mobile Phones Others (16.1) Hardware - Channel , , Retail (6.1) , , Government Corporate Educational Technology (6.3) 4.4) DEDUCTIONS FROM GROSS REVENUE Deductions from gross revenue, comprising taxes and returns, totaled R$74.0 million in 4Q13 or 8.8% of gross revenue, 0.9 p.p. down on 4Q12, due to higher direct sales to government clients which are exempt from PIS and COFINS taxes. In 2013, deductions from gross revenue totaled R$256.4 million, accounting for 9.1% of gross revenue, virtually in line with

8 4.5) NET REVENUE Net Revenue % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Total Net Revenue , , Hardware - Product , , Desktops Notebooks , , Tablets Mobile Phones Others (15.2) Hardware - Channel , , Retail (7.5) , , Government Corporate Educational Technology (5.2) 5) FINANCIAL PERFORMANCE Fonte: CGI (Comitê Gestor da Internet) 5.1) COST OF GOODS SOLD (COGS) AND GROSS PROFIT Cost of Goods Sold % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Inputs (464.0) (419.1) (564.8) (1,493.6) (1,911.6) 28.0 Depreciation and Amortization (3.3) (3.5) (3.1) (5.4) (9.5) (11.0) (13.3) 21.4 Others (22.5) (20.7) (24.3) (81.1) (92.5) 14.1 Total (489.8) (443.3) (592.2) (1,585.7) (2,017.4) 27.2 Cost of Goods Sold (% of Net Revenue) 75.1% 78.4% 79.3% 80.3% 77.0% 71.1% 74.1% 74.8% 75.9% 73.4% 3.5% 3.7% 3.9% 3.8% 3.2% COGS Inputs Others 8

9 As a percentage of net revenue, COGS came to 77.0%, 1.9 p.p. up on 4Q12 and 3.3 p.p. down on 3Q13. The quarter-on-quarter gain reflects the better ratio between prices and the import dollar prices of components, and the higher dilution of fixed costs due to the increase in revenue. In 2013, COGS consumed 78.6% of net revenue, up by 3.2 p.p. over Inputs In the fourth quarter, raw material and component costs represented 73.4% of net revenue, 2.3 p.p. up on 4Q12, chiefly influenced by the higher prices of components in the international market throughout the year. The 2.5 p.p. improvement over the previous quarter reflects the lower average imported input dollar, which reduced by 1.5% to R$2.25, combined with the Company s higher average sales prices. In 2013, this line accounted for 74.5% of net revenue, 3.4 p.p. up on The variation was caused by the sudden appreciation of the U.S. dollar as of June, the higher costs of memory cards in the international market, and the increased volume of educational tablet and netbook sales to government projects, since input costs account for a higher share of their cost structure. Other Other costs accounted for 3.2% of net revenue in the fourth quarter, reductions of 0.3 p.p. and 0.6 p.p. over 4Q12 and 3Q13, respectively. This is the lowest figure recorded since 2Q07. The highlight was the increased efficiency in labor costs and the higher dilution of the fixed structure due to the record revenue. In 2013, other costs represented 3.6% of net revenue, 0.3 p.p. down year-on-year. Gross Profit Gross profit totaled R$176.9 million in 4Q13, 8.8% and 62.5% up on 4Q12 and 3Q13, respectively, accompanied by a gross margin of 23.0%. In 2013, gross profit totaled R$549.1 million (+6.3%), with a gross margin of 21.4%. 5.2) OPERATING EXPENSES Operating Expenses % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Selling Expenses (111.7) (88.7) (114.0) (371.7) (393.3) 5.8 General and Administrative Expenses (32.3) (22.2) (34.5) (100.4) (110.1) 9.7 Financial Result (11.8) (27.4) (5.3) (55.2) (80.7) (31.1) (59.2) 90.7 Other Revenue (Expenses) (2.5) (131.8) (80.6) Total (158.3) (134.2) (153.0) (3.4) 14.0 (501.7) (554.3) 10.5 Selling Expenses Selling expenses totaled R$114.0 million in 4Q13, representing 14.8% of net revenue. The 2.3 p.p. reduction in the annual comparison was influenced by reduced marketing expenses throughout 2013, due to the greater representativeness in the sales mix of the government and corporate markets, whose selling expenses are lower. The quarter-on-quarter reduction of 1.2 p.p. was chiefly caused by the greater dilution of fixed costs, due to the increase in revenue. In 2013, selling expenses came to R$393.3 million, corresponding to 15.3% of net revenue (-2.4 p.p.). 9

10 Selling Expenses % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Marketing (45.8) (26.3) (28.2) (38.4) 7.1 (144.3) (123.2) (14.6) Tech. Assistance and Warranties (29.2) (32.3) (44.5) (114.7) (143.2) 24.9 Deprec. and Amortization (3.1) (5.4) (5.7) (8.5) (20.3) Others (33.6) (24.7) (35.6) (104.3) (106.7) 2.2 Total (111.7) (88.7) (114.0) (371.7) (393.3) 5.8 % of Net Revenue p.p p.p p.p. Selling Expenses (% of Net Revenue) Marketing Expenses (% of Net Revenue) -1.3 p.p. 17.1% 15.0% 15.6% 16.1% 14.8% 7.0% 5.6% 5.4% 4.8% -1.1 p.p. 3.7% Technical Assistance and Warranty Expenses (% of Net Revenue) Other Selling Expenses (% of Net Revenue) -0.0 p.p p.p. 4.5% 5.3% 5.4% 5.8% 5.8% 5.2% 3.4% 4.1% 4.5% 4.6% Marketing Marketing expenses totaled R$28.2 million in 4Q13, accounting for 3.7% of net revenue, 3.3 p.p. and 1.4 p.p. down on 4Q12 and 3Q13, respectively. In addition to the increased sales to corporate and government clients, markets that receive lower rebates and shared marketing allocations, this reduction was also influenced by the readjustments of retail commercial budgets, aimed at protecting sales margins following the appreciation of the U.S. dollar. In 2013, marketing expenses amounted to R$123.2 million, or 4.8% of net revenue (-2.1 p.p.). Technical Assistance and Warranties Technical assistance and warranty expenses absorbed R$44.5 million in 4Q13, or 5.8% of net revenue, stable over 3Q13. In comparison with 4Q12, this line increased 1.3 p.p. as a percentage of net revenue, also influenced by the increased sales to the government and corporate markets, whose warranties have 10

11 longer periods and special post-sale services. In 2013, these expenses came to R$143.2 million, corresponding to 5.6% of net revenue (+0.1 p.p.). General and Administrative Expenses General and administrative expenses totaled R$34.5 million in 4Q13, 6.9% up on 4Q12, accounting for 4.5% of net revenue (-0.5 p.p.). It is worth mentioning that the Company recognized R$8.1 million in extraordinary expenses with contingencies and consulting services in the period. Excluding these items and mandatory R&D expenses, this line came to R$21.6 million, 2.1% down on the 4Q12 adjusted figure, equivalent to 2.8% of net revenue (-0.6 p.p.). In 2013, general and administrative expenses amounted to R$110.1 million, up 9.7%, and corresponding to 4.3% of net revenue (-0.5 p.p.). G&A Expenses % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Personnel and Management Compensation (10.0) (7.3) (11.0) (38.7) (39.6) 2.5 Deprec. and Amortization (4.2) (4.0) (4.0) (4.0) (0.6) (15.8) (15.9) 0.4 Others (18.1) (10.9) (19.5) (45.9) (54.5) 18.9 Total (32.3) (22.2) (34.5) (100.4) (110.1) 9.7 % of Net Revenue p.p p.p p.p. General and administrative expenses (R$ million) Excluding the R&D effect and extraordinary items Financial Result The 4Q13 financial result was a net expense of R$5.2 million, 55.6% down on 4Q12. The Company had an exchange variation gain of R$0.5 million. This line is represented by the sum of (i) the result from hedge instruments, which were positive by R$15.1 million; and (ii) the effect from the FX variation on outstanding obligations denominated in foreign currency, which was negative by R$14.6 million. It is worth noting that the impact of the exchange variation on imported components is considered in this line only after the goods have entered the country. In fact, most components were imported in October and early November, when dollar prices were lower. As a result, the gain with hedge instruments was partially consumed by the depreciation of the Real in the second half of the quarter, being offset by the lower cost with inputs, as already mentioned. In 2013, the financial result was negative by R$59.0 million, 93.5% up on 2012, chiefly due to greater losses with the exchange variation and expenses with loans. 11

12 Financial Result % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Financial Revenue Financial Expenses (18.2) (17.7) (21.0) (52.6) (67.4) 28.1 Exchange Variation 1 (2.6) (16.8) 0.5 (117.7) (102.7) (14.5) (30.0) Total (11.7) (27.3) (5.2) (55.6) (81.0) (30.5) (59.0) 93.5 ¹ Includes the effects of exchange hedge operations. 5.3) NET INCOME (LOSS) The Company posted 4Q13 net income of R$30.9 million, 230.6% up on 4Q12, reverting the loss accumulated until September, as expected by the Company. As a result, Positivo Informática reported net income of R$15.6 million in ) EBITDA Traditional EBITDA totaled R$42.2 million in 4Q13, up by 57.6% year-on-year, accompanied by an EBITDA margin of 5.5%, 1.4 p.p. up on 4Q12, while in 2013 traditional EBITDA amounted to R$104.0 million (+27.7%), with a margin of 4.1% (+0.2 p.p.). Adjusted EBITDA, which considers 50% of the result of the Company s joint venture in Argentina, totaled R$54.7 million in 4Q13, equivalent to an increase of 62.7%. The adjusted EBITDA margin grew to 7.1% (+2.0 p.p.). In 2013, adjusted EBITDA came to R$139.3 million (+40.4%), accompanied by an adjusted margin of 5.4% (+0.7 p.p.); The improvement in the operating result was fueled by the pass-through to prices, the improved sales profile and the control of costs and expenses throughout the year. EBITDA % Chg. % Chg. % Chg. (R$ million) 4Q12 3Q13 4Q13 4Q13 X 4Q12 4Q13 X 3Q X 2012 Net Income (Loss) 9.4 (18.9) (264.0) (48.4) (-) Deprec. and Amortization (10.7) (13.1) (13.0) 21.0 (0.7) (35.7) (49.9) 40.0 (-) Financial Result (11.8) (27.4) (5.3) (55.2) (80.7) (31.1) (59.2) 90.7 (-) Equity Income (-) Income Tax and Social Contribution (0.1) N/A N/A 0.9 (0.1) (105.9) EBITDA EBITDA MARGIN (%) p.p p.p p.p. Adjusted EBITDA Calculation (+) EBITDA IFSA (Argentina) Adjusted EBITDA Adjusted EBITDA margin (%) p.p p.p p.p. 12

13 Evolution of EBITDA Margin (% of net revenue) Evolution of Annual Adjusted EBITDA (R$ million) +40.4% % 5.1% 4.5% 4.5% 7.1% +36.9% % 4.5% 3.0% 2.7% 5.5% Ajustado EBITDA 50% EBITDA IFSA Adjusted EBITDA As of 1Q13, the Company has disclosed a new adjusted EBITDA metric to present 50% of the result of Informática Fueguina S.A. (IFSA), a company whose control it shares with the Argentinean group BGH. As explained in the 1Q13 earnings release, due to a new regulation, the financial statements no longer record this joint venture s financial information under the proportionate consolidation method, but under the equity method. Note that Equity Income is not included in the EBITDA calculation. The Company believes that due to the unique characteristics of its operations in Argentina, adjusted EBITDA is a more adequate metric than traditional EBITDA to evaluate its consolidated performance. IFSA does not directly access all international component suppliers. This activity is carried out by Positivo Informática, through the operation of purchase and sale of components to IFSA at lower margins, which are usual in the intermediation business. Such efforts are reflected in the working capital and cost structure of the Company. Under the previous accounting rule, Crounal S.A.'s revenue and costs, related to sales to IFSA, were eliminated from Positivo Informática s consolidated financial statements, in the proportion of 50%, as they used to be intercompany. With the exclusion of IFSA from the consolidation process, these revenue and costs are no longer eliminated, generating the adverse effect of increasing consolidated revenue, without proper determination of final EBITDA of operations, which is realized in Argentina by IFSA. Consequently, the presentation of adjusted EBITDA is important to support the Company s consolidated performance analyses. 6) WORKING CAPITAL On December 31, 2013, Positivo Informática s working capital totaled R$767.6 million, in line with The inventory line increased, closing the period with R$660.7 million, due to lower-than-expected sales of computers in the retail market in 4Q13 and the greater acquisition of inputs related to government projects, with deliveries scheduled to the first months of

14 Working Capital WITH Materials in Transit (R$ Million - end of period) Accounts Receivable Inventories Suppliers (382.3) (309.4) (438.5) (443.2) (392.9) Working Capital Working Capital WITHOUT Materials in Transit (in days end of period) (1) In days of net revenue. (2) In days of COGS. Accounts Receivable (1) Inventories 2) Suppliers (2) (48) (40) (60) (65) (37) Cash Conversion Cycle The cash conversion cycle closed 4Q13 at 99 days, 15 days less than in 4Q12, benefitted by the strong revenue increase in the end of In terms of annualized net revenue, working capital accounted for 29.9%, representing an improvement of 6.2 p.p. in the same comparison. Working Capital Trends (in % of the LTM net revenue) Cash Conversion Cycle (in days) -6.2 p.p. -15 days 36.1% 30.5% 24.9% 24.7% 29.9% ) CASH FLOW AND NET DEBT Operating cash flow was negative by R$96.9 million in 4Q13, reflecting the usual working capital consumption in the end of the year, also influenced by the strong revenue expansion and the formation of inventories. In 2013, however, operating cash flow was positive by R$16.3 million, reversing the net balance of R$79.3 million recorded in

15 Cash Flow (R$ million) 4Q12 3Q13 4Q Net Income in the Period 9.4 (18.9) (+) Depreciation and amortization Internal Cash Flow 20.1 (5.8) (+) Working capital (81.4) (8.1) (161.3) (101.9) (8.1) (+) Other assets and liabilities (12.2) (37.6) 20.5 (43.3) (41.2) Operating Cash Flow (73.5) (51.5) (96.9) (79.3) 16.3 (+) Investments (14.4) (6.3) (7.3) (59.9) (29.0) (+) Dividends (7.5) 0.0 (7.5) Decrease (Increase) in Net Debt (87.9) (57.9) (111.7) (139.3) (20.2) Net Debt (Cash) at the Beginning of the Period Net Debt (Cash) at the End of the Period The Company s net debt closed 2013 at R$394.7 million, 5.4% up on The portion represented by BNDES long-term financing lines came to 50.8%, 19.7 p.p. more than on December 31, Net Debt (R$ million)* % 37.0% 74.4% 56.1% 50.8% Net Debt BNDES financing lines *Includes credits from financial instruments 8) CAPEX As part of the austerity measures taken by the Company, investments declined to R$28.9 million in 2013, a reduction of 55.8% over Most of the funds were allocated to R&D activities focused on the development of new products and services, and on educational technology solutions. Because of accounting pronouncement CPC04, which regulates the recognition of intangible assets, a portion of R&D expenditure was recognized as an expense in the result, while disbursements for projects whose future profitability can be measured were booked under intangible assets. 15

16 -55.8% Capex (R$ million) R 2013R 2014E P&D TI Others In 2014, the Company expects to invest R$11.1 million in activities not related to R&D, a reduction of 5.2% over Among IT investments, the most important are the update of the Company s server infrastructure and improvements to the ERP system. The industrial area s projects include efficiency gains in the Curitiba plant, with new serial computer and tablet production lines, and the expansion and modernization of steps of the production process in the motherboard plant. R&D investments are expected to come to R$18.6 million, with the remainder being recognized as an expense in the income statement. It is also worth noting that mandatory R&D investments are a result of the Basic Production Process (PPB) and should total around 1.5% of gross revenue in 2014, including those recognized as an expense in the income statement plus those recognized under intangible assets. 9) CAPITAL MARKET Share Performance Positivo Informática s shares closed 2013 at R$2.87, equivalent to a market cap of R$252.0 million. The table below shows the performance of POSI3 in 4Q13 and Indicators 4Q Closing Price (R$) Minimum Price (R$) Maximum Price (R$) POSI3 Appreciation -27.9% -43.1% 16

17 Free Float Breakdown On December 31, 2013, the Company had 5,800 individual investors who retain 43.1% of the free float, while institutional investors accounted for 50.3%, as shown in the graph below: Free Float Breakdown Retail 43.1% Foreign Institutional 14.0% Treasury shares 6.6% 12/31/2013 Local Institutional 36.3% IR Contact Lincon Lopes Ferraz IR Manager Beatriz Tokarski IR Analyst Phone: (+55 41) Website de RI: 4Q13 and 2013 Conference Call Friday, February 21, > English 11:30 a.m. (Brasília time) 09:30 a.m. (New York time) Calls originating in the United States: 1 (877) Calls originating in other countries: 1(412) Code: Positivo > Portuguese 10:30 a.m. (Brasília time) 08:30 a.m. (New York time) Calls originating in Brazil: (11) Calls originating abroad: 55 (11) Code: Positivo About Positivo Informática: Founded in 1989, Positivo Informática (BM&FBOVESPA: POSI3) has a national and international presence, offering the most advanced technology solutions, from the production of computers to the development of educational tools. The Company operates through two business divisions: Hardware and Educational Technology. The Hardware division portfolio offers a complete line of personal computers (desktops and notebooks), tablets and mobile phones. In order to provide support for all of its activities, it maintains a technical support network covering every Brazilian city, as well as the CRP (Positivo Relationship Center). In the Educational Technology segment, Positivo Informática is renowned for being at the forefront of development and for the high quality of its technological solutions in the three segments in which it operates: Private Education, Public Education and Retail. Positivo Informática s educational solutions are present in more than 14,000 schools and are exported to more than 40 countries. Positivo Informática on the Internet: 17

18 INCOME STATEMENT (Em R$ mil) 4Q12 3Q13 4Q13 % Chg. 4Q13 x 4Q12 % Chg. 4Q13 x 3Q % Chg x 2012 GROSS REVENUE Sales of products 704, , , ,265,102 2,757, Services 18,193 17,278 16,016 (12.0) (7.3) 64,433 65, , , , ,329,535 2,822, SALES DEDUCTIONS Returns and Trade Discounts (15,593) (18,769) (18,489) 18.6 (1.5) (54,094) (70,227) 29.8 Taxes and Contributions (54,337) (39,971) (55,502) (173,289) (186,176) 7.4 (69,930) (58,740) (73,991) (227,383) (256,403) 12.8 NET SALES REVENUE 652, , , ,102,152 2,566, COST OF GOODS SOLD AND SERVICES RENDERED (489,830) (443,288) (592,232) (1,585,670) (2,017,407) 27.2 GROSS PROFIT 162, , , , , OPERATING (EXPENSE) INCOME Selling Expenses (111,709) (88,734) (113,991) (371,708) (393,336) 5.8 General and Administrative Expenses (32,267) (22,222) (34,488) (100,381) (110,083) 9.7 Financial Income 9,067 7,169 15, ,682 38, Financial Expenses (18,270) (17,757) (21,098) (53,197) (67,627) 27.1 Monetary and Foreign Exchange Variations Other net operating income (expenses) (2,588) (16,786) (102.7) (14,545) (29,953) (2,545) 4, (131.8) (80.6) 1,408 8, (158,313) (134,154) (152,954) (3.4) 14.0 (501,742) (554,257) 10.5 EQUITY INCOME 5,111 6,432 7, ,526 20, OPERATING INCOME 9,360 (18,874) 31, (264.3) 29,266 15,644 (46.5) NET INCOME BEFORE TAXES Provision for Income Taxes 9,360 (18,874) 31, (264.3) 29,266 15,644 (46.5) - - (54) N/A N/A - (54) N/A Provision for Social Contribution N/A N/A - - N/A Deferred Income Taxes and Social Contribution N/A N/A (100.0) NET INCOME 9,360 (18,874) 30, (264.0) 30,188 15,590 (48.4) 18

19 BALANCE SHEET (R$ thousand) ASSETS 12/31/2013 9/30/ /31/2012 LIABILITIES 12/31/2013 9/30/ /31/2012 CURRENT ASSETS CURRENT LIABILITIES Cash and Cash Equivalents 164, , ,048 Loans and Financing 386, , ,421 Receivables 499, , ,240 Suppliers 397, , ,302 Inventories 660, , ,638 Accrued Payroll 33,092 38,072 38,333 Receivable Taxes 112,955 98,777 66,512 Provisions 125, , ,934 Advances 16,848 7,963 29,401 Taxes Payables 23,946 12,284 14,716 Short term Deferred Taxes Dividends Payable 3,900 7,548 7,548 Financial Instrument Balance 4, Other Credits 58,165 52,716 36,143 Deferred Revenue 23,375 23,972 30,273 Financial Instrument Balance 5,435 2,755 7,465 Other Payables 11,006 5,719 5,233 Total Current Assets 1,518,068 1,376,591 1,383,982 Total Current Liabilities 1,010, ,407 1,006,225 NON CURRENT ASSETS NON CURRENT LIABILITIES Long term Assets 168, , ,653 Long term Liabilities 223, , ,904 Receivable Taxes 82, ,278 78,288 Loans and Financing 167, ,064 79,627 Deferred Taxes 71,173 71,173 71,173 Provisions 18,978 17,255 13,827 Other Credits 14,618 14,064 13,192 Provisions for Contingencies 32,902 25,050 19,370 Investments Long term Deferred Taxes Investments - Joint Venture 42,657 38,581 39,964 Other Payables 3,810 5,080 5,080 Net Property, Plant & Equipment 61,593 65,201 75,164 Net Intangible Assets 89,259 92, ,399 Total Noncurrent Assets 361, , ,180 Total Noncurrent Liabilities 223, , ,904 SHAREHOLDERS EQUITY Capital 389, , ,000 Capital Reserve 120, , ,309 Income Reserve 178, , ,179 Treasury Shares (35,430) (35,430) (35,430) Cumulative translation adjustment (7,021) (3,934) (1,025) Total Shareholders Equity 645, , ,033 TOTAL ASSETS 1,879,734 1,758,620 1,764,162 TOTAL LIABILITIES 1,879,734 1,758,620 1,764,162 19

20 STATEMENTS OF CASH FLOWS (R$ thousand) 4Q12 3Q13 4Q Net income 9,360 (18,874) 30,949 30,188 15,590 Reconciliation of net income to net cash provided by operating activities: Depreciation and Amortization 10,721 13,059 12,969 35,655 49,928 Provision for labor, tax and civil risks 7,144 4,992 11,310 14,817 24,628 Provision for doubtful debts 1,770 1,083 2,354 3,506 5,239 Provision for obsolete inventory 22,658 14,639 (5,157) (15,581) (5,627) Disposal of property and equipment Interest on loans 13,575 (6,865) (4,292) 15,601 (6,933) Deferred income and social contribution taxes (129) - 54 (922) 54 Equity Income (5,112) (6,433) (7,081) (14,526) (20,776) (Increase) decrease in assets: Trade accounts receivable (79,048) 60,175 (104,957) (26,691) 57,129 Inventories (22,078) (87,252) (1,965) (181,267) (69,695) Recoverable taxes (10,267) (22,351) 3,734 (45,513) (50,521) Advances to suppliers (15,984) 1,818 (8,885) (13,377) 12,553 Others (700) 3,244 (2,998) 23,982 (5,365) Increase (decrease) in liabilities: Suppliers (3,048) 4,695 (50,237) 121,765 10,645 Trade accounts payable 6,609 (10,621) 15,953 (17,629) (3,095) Payroll, related charges and reserves 7, ,662 (2,075) 9,230 Others (2,874) (10,117) (4,647) 8,322 (13,637) Net cash provided by (used in) operating activities (59,895) (58,411) (101,234) (63,745) 9,347 CASH FLOW FROM INVESTING ACTIVITIES Increase in investments Purchases of property, plant and equipment (3,765) (1,315) (991) (22,790) (5,228) Increase in intangible assets (10,682) (5,012) (6,260) (37,150) (23,739) Net cash provided by (used in) investing activities (14,447) (6,327) (7,251) (59,940) (28,967) CASH FLOW FROM FINANCING ACTIVITIES Payments of dividends and interest on capital - - (7,546) - (7,546) Borrowings (repaid), net 132, , ,364 81,129 82,092 Treasury shares Net cash provided by (used in) financing activities 132, , ,818 81,129 74,546 INCREASE IN CASH AND CASH EQUIVALENTS 57,945 56,752 (2,667) (42,556) 54,926 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 52, , , , ,048 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 110, , , , ,974 This report contains forward-looking statements based on Management s current assumptions and estimates that may cause material variations in results, performance and future events. Actual results, performance and events may differ substantially from those expressed or implied in these forward-looking statements as a result of diverse factors, such as general economic conditions in Brazil and other countries, interest and exchange rates, changes in laws and regulations, and general competitive factors (whether global, regional, or national). 20