Allpark Empreendimentos, Participações e Serviços S.A. (ALPK3.SA) Earnings Call Transcript & Summary

Good morning, and welcome to the Third Quarter 2025 of Estapar. We would like to inform you that this conference call is being recorded, and its content will be available at the company's IR website at ri.estapar.com.br, where the complete material for our earnings release is available. Today's presentation can be downloaded through the chat, even the English version. For those who simultaneous translation this feature is available through the platform. [Operator Instructions] We emphasize that the information contained in this presentation as any statements that may be made during this conference call regarding Estapar's business prospects, projections and operating and financial targets of the company are the beliefs and assumptions of the company's management as well as information currently available. Forward-looking statements are no guarantee of performance as they involve risks, uncertainties and assumptions referring to future events that may or may not occur. General economic conditions, market conditions and other operating factors may affect performance and lead to results that differ materially from those expressed in such forward-looking statements. Today, we are joined by Executives Emilio Sanches, CEO; and Daniel Soraggi, CFO and Investor Relations Officer. Now I turn the floor to Emilio Sanches to begin the presentation on the results.

Thank you, Thomas, and good morning, everyone. First of all, I would like to thank you all for joining us today with the update on the figures for the third quarter of 2025 of Estapar. We will refer to the highlights, as we always do, final comments, and then we will open for Q&A. And that's when we have the opportunity to talk to you, investors and everyone who has questions about the results of the company. So starting with the highlights on Page 5. And then Daniel will give us more details on the results. We had a record revenue, BRL 486 million. This is a very strong growth for the company. We were very pleased, 25% growth vis-a-vis the third quarter. And all of that stems from new businesses. We had 30 new inaugurations this quarter and the dedication of our operations team was unparalleled. We have a very strong discipline in all variables, be it revenue, costs and all of that having the growth of the company in mind, as we have always mentioned. EBITDA has followed the revenue is even a little bit greater over 21% this quarter, almost reaching BRL 100 million. We were even frustrated because we didn't hit the mark of BRL 100 million, but BRL 100 million is right around the corner, and we will soon be able to announce that number. Net income we are reducing our losses. We've been reducing in the past quarters. I mean this net income is even better now BRL 7.8 million, which is a significant growth quarter-on-quarter. And we can say that this will be a profitable year for the company. In the past years, maybe this will be the first where we will have -- we will post profits. And this is very important for the company because our investments are paying off. Our financial discipline is already returning revenue even in terms of depreciation and amortization. And as a consequence, the entire work done by Daniel's team concerning our debt, this certainly reduced the cost of debt regardless of this high rate of the [ Zletric. ] But despite all of that, we're able to help the company to grow further. we reached CDI plus 4.5%. And for those of you who have monitored us for a while, so this is quite a significant milestone. And this happens in many other areas of the company. We are also reducing our net debt, and we are very pleased with this result. Well, we had 30 inaugurations. We will elaborate more about it. This was a very strong quarter together with our commercial team. We are doing some excellent work throughout the country. Therefore, we are still very much motivated in the way of working that we adopted in terms of our operations team, commercial team, back office, they are working very much in tune. And we hope that this is the culture going forward, growing inaugurations quarter-on-quarter and posting consistent results going forward. And digital and electromobility revenue, these are 2 business lines that we've been supporting quite a lot. Zul+ is our digital platform, posting good results for us. We have been posting consistent growth without any crazy stuff as many start-ups sometimes do. We've been posting growth and growth, but with a lot of responsibility. We're not spending a lot of money with marketing. But nevertheless, we've been growing a lot. We grew almost 20% vis-a-vis the previous quarter and all of the revenues coming from digital products already reached BRL 26 million. And Zlectric, 42% growth, reaching BRL 6.5 million. I mean the numbers are still timid, I would say, vis-a-vis all of the millions of our revenue, but this is just part of our mid- to long-term strategy being even more present in these areas. Now moving on to next slide, Slide 6. Here, we show some operations that we started throughout the quarter. I mean it's a challenge to open 30 new operations. It's not just the work that we do with the commercial area, but on average, it takes 10 -- I mean, we do 10 operations every month, and they are scattered all over the country. You see that here, we have Brasilia, Sao Paulo, Rio, Santa Catarina, Bahia and Salvador. So we have operations throughout the country. So our team in all of the areas in charge of the operations is still the same, but covering a large spectrum in the country. I know that we always want to open more operations. When we do 20, we think it's not enough, then 30, we think, well, maybe we could do more. So we are always willing to open more operations to keep the pace of growth. So we hope to continue with this pace of openings. It's not easy, but we're very pleased with the results for this quarter. And very soon, we hope to even post better numbers. Now Page 7 here, we give some visibility about the things that we believe are important. I mean shopping malls day-to-day account for 90 operations, slightly over 10% of all the numbers of operations of Estapar are located in shopping malls. But the important thing here is to show the quality and the size of the malls. We just inaugurated in -- I mean, in the fourth quarter, I mean, this is recent. This will not impact the numbers from the third quarter, but we just opened at shopping Aricanduva and the new shopping mall in Ribeirao Preto from the same group. We were chosen to operate the parking lot at that mall. We already operated at the Interlagos mall. We've been there for quite some time. But with the efficiency and quality and the trust they have on us, that's what led us to be chosen to operate the n Ribeirao Preto Mall. And Shopping Center Norte is one of the largest shopping malls in Sao Paulo and Brazil, Shopping Center North, we've been with them for a while, and this was a good opportunity for us to show how well we operate. We have -- I mean, this accounts for about 21% of our revenue, and we have almost 84,000 parking spaces. So this is just to show you the level of assets that Estapar managers, not only in shopping malls, but then I'll show you sports arenas, hospitals, et cetera. Now moving to Page 8. Here, I'll give you an update on Zul+. This is our digital platform. We reached 8.3 million users. This is a very cool number. But we believe that this number can surpass 10 million users next year, and this is part of our goal. We will approach almost 9 million by the end of the year. So we're very excited about this growth. It's a sustainable growth. It's a gradual growth, but our operations, be it Zona Azul or Estapar operations, we are constantly motivating people to reserve parking spaces, pay for traffic tickets, et cetera. So we are growing in many fronts, and this accounts for 20% growth in Zul's revenue. And this revenue comes from digital products. It's not Estapar just to pay for parking, but digital products linked to that generates this result in the revenue line, which is growing year-on-year. We had more than 60 million transactions in 3 months, people paying for Zona Azul, people hiring insurance, Estapar, meaning that there were a lot of transactions that allowed us to reach that BRL 16.9 million, almost 25% growth vis-a-vis last year. And this shows how strong we are in terms of tackling this digital world. And we are very pleased with the numbers. And the total revenue of the company that also includes parking lots through Zul+ already accounts for 22% of our revenue, and this comes through the app. And this includes Zona Azul revenue, clients that reserve parking spaces in a sports arena or at the airport. So through the app, the number also includes Zul+ accounting for 22.2% growth. And hopefully, we very soon reach the mark of 30%. Zlectric on Slide 9, we've been updating you on that. We reached BRL 6.5 million in the quarter. We grew almost 43% organic and consistent growth. We now -- extraordinary things. We also have EV charging station. We almost have 300 and some EV charging stations in the third quarter, we are present in 85 municipalities, and the number is consistently growing. We have 59% of the company. Our partners are really nice. And now moving on to Page 10. Here, we have Pedro. He is Zletric's partner and CEO. We are working together. And these operations are not only inside Estapar, but they are present in many other locations. We have hubs outside Estapar. We just inaugurated a very cool hub in Porto Alegre. We also have charging stations in shopping malls that are not -- that are not necessarily operated by Estapar and even in parking lots not managed by Estapar and also in residential condominiums. This is a partnership we did with VoltBras that double the possibility of Zletric customers charging their cars through the electric app. More and more, we are giving our clients other opportunities. So the Zlectric customer is not just restricted to Zlectric's app. We have now interoperability together with VoltBras, reaching 2,500 charging stations electric charging stations. And this facilitates the lives of our clients. Of course, we have 2 kinds of clients, the clients that are B2B and B2C clients. B2C clients are those that use some sort of Estapar service, Zlectric being one of them. So we're very pleased with our partnership with VoltBras, and we hope that we will grow more in the future with more partnerships and further growth to facilitate the lives of drivers. Now moving on to Page 11. We talk a lot about numbers here, right? Companies that are very disciplined in financial terms, sometimes they do not have a keen eye on people. But this quarter, we received the GPTW seal. This is important not only because of the seal, there are 7,000 Estapar workers that go through this survey, and we extract a lot of information because what we want is to improve our operation. Sometimes we got some criticism, we get some requests for improvement. We also get a lot of praises. And that's what help us to improve and to be better prepared, while at the same time, we keep very stable turnover, which is not easy. Companies like Estapar, we have to deal with turnover. So when we can manage turnover and keep it under control and retain our employees, that makes us very pleased. So we are very happy with that certification. And we think that this mix of people plus discipline and well-orchestrated processes together with innovation is bringing good results to the company, employees and as a consequence, of course, investors. So now I'll turn the floor over to Daniel to go over the numbers, and then I'll come back with the final remarks. So Daniel, over to you.

Good. Thank you, Emilio. Good morning. And once again, it's 11:17, and I'm here live. And again, I'm very proud to present the results of this third quarter of 2025. This was another record quarter with important significant improvements in our fundamentals. These results are not only built by the management, but built by all of our 7,000 employees that are scattered throughout the country. Therefore, we are very proud to present our results starting now on Slide 13. We say here that our portfolio there reached 804 operations in September and 520,000 parking spaces. We grew 10% year-over-year and 30,000 parking spaces on an annual comparison. So all of these parking spaces are mostly concentrated on lease and manage. But I would also like to emphasize that long-term contracts and on street concessions also posted growth. In the municipality of Mauá, that was something that happened at the end of last year, and this is strongly contributing to our results in 2025. And long-term contracts, I mean, for the second quarter, we've been posting growth of 5,000 parking spaces. So this is a segment where we resume growth. And we are growing with everything in place with discipline in the allocation. We will be able to prove that we post a very healthy growth, especially when we talk about net debt and EBITDA. I mean, I always explain what do we mean by churn of 0.5% in the quarter. What do I mean by churn? I mean, we lost some small operations where their results were not very relevant to our portfolio. So it's not just enough to grow, but we have to grow and at the same time, maintain our contracts. We've been very successful in our renewals. Now moving to the financial part of our results on Slide 14. As Emilio already said, we posted net revenue of BRL 486 million. We almost grew 22% quarter-on-quarter, and this growth I mean, includes the growth of operations quarter-on-quarter. It comes from new digital revenues. I mean, Estapar posted -- I mean, 22% of our revenues have to do with Zul+ app. And I would also like to highlight a record number. I mean we are -- for the past 14 quarters, we've been posting growth. 14 quarters means almost 4 years, 3.5 years. In 2022, we had 650 operations. Now we have 804 operations, and the results are increasingly healthier. So I think this is important to mention because this is part of Estapar's trajectory over the years. Now here, we talk about results after our cost discipline management. We posted BRL 130 million. We grew 21% on a quarterly comparison, and we were able to stabilize the gross margin. This gross margin stabilization is related to lease and managed segment. Typically, this segment posts lower margins when compared to other segments because we allocate capital. And this is a trend that has been going on for a few quarters now, and we will maintain a very healthy portfolio mix in terms of operating leverage. This same behavior is also expected for EBITDA. Moving to the next slide. Adjusted EBITDA, we show that we have a better cash generation that reached BRL 96.7 million in the third quarter of 2025, growing 25% on a quarterly comparison. And again, we were able to stabilize the EBITDA margin, which grew almost 20% that reached almost 20%. And this is the same trend and the same explanation that I did before when I talked about the gross profit. Moving to the next slide, now EBIT. We have operating costs and admin expenses. We have expenses with management, not only we are posting nominal growth, but margin growth. Adjusted EBIT in the first quarter was BRL 53 million. And now we are posting over 50% growth on a quarterly comparison. And also, we posted growth quarter-on-quarter. We went in 2022 with a margin of 1% and now our margin is close to 11%. So this is the result of a growth with a lot of capital discipline. Now moving on to another KPI that we say not only this is a goal, but it's an obsession by the company. Here, we are posting structural and sustainable growth in net income. Our net income was BRL 7.8 million. So we grew 150% year-on-year. And when we look at the next slide to the right, we reached BRL 8.3 million growing -- we grew -- he corrects himself, BRL 22 million, growing 8.3%. So the company is in a profitable trajectory, and this is what we expect going forward. The company is growing and growing very -- in a very healthy and profitable way. Now moving to cash and debt management. So I'll start with the cash flow. We started the cash with BRL 324 million, and we ended with BRL 338 million. So this result stems from strong EBIT cash generation with around BRL 100 million, and we had a strong variation of working capital. This variation stems from a very well-orchestrated operation from treasure, and then we prepaid receivables. And now we are reaping the benefits of our digital operation. These are operations that have very attractive cost, not only that, but this helps us to fund our growth. After operating cash generation, we had BRL 40 million in CapEx. On average, this is the average of the past quarters, again, because of allocation. And we also had net debt, which means debt amortization, and this is part of liability management, and we will talk about that and also interest payments. As I always say, Estapar never failed to pay any interest payments. So we always honored our financial commitments. This is what we've been doing. And because of that, we've been very successful with liability management, which is a good thing for our creditors. Now moving on to Slide 20. Here, we show the liability management result. This is some work that started more than 2 years ago, and this will continue going forward. It is easier now, and we are generating even more results for the company. And what do I mean by results? So results, meaning stable debt position, helping the company to growth. Our net debt was BRL 748 million, BRL 749 million. There was a slight reduction quarter-on-quarter. We also reduced the cost of debt, meaning that we were able to swap expensive debt by cheaper debt. So CDI plus 4.5% in 2023, CDI plus 3.8% and now currently, CDI plus 1.63. But we still see room for improvement to compress the spread, thanks to our credit improvement vis-a-vis the capital markets. And finally, which is part of the liability management, we have to maintain the debt at a stable level and also maintain maturities under balance with good operating cash management. We ended with BRL 338 million. Short-term growth is BRL 220 million, and this is very well distributed along the next 4 years. Now moving to final remarks. Again, I would just like to thank you. I mean this result is built by the company, and the company is posting a solid numbers focusing on digital, we will see -- I'll see you again during the Q&A session. So over to you, Emilio.

Okay. For our final remarks, maybe a summary of what we said here. This was a good quarter. Some investors sometimes ask us whether there will be recurrency, whether this will be Estapar as routine going forward. I mean it's hard to say that for sure, but we ended the quarter with excellent results. Therefore, we -- all of us, we believe that we still have a lot more to do. We have a lot more opportunities to pursue. The market is large. We don't think even though we grew a lot, we still have a lot more to go after, but with a very, very fierce financial discipline, be it for us, for those who hire us, we see a win-win relationship. It's not that we always only have the best financial proposition, but money is a commodity. So anyone can do it, not only us. But all the efforts we put on it, all the technology that we have, people recognize that. That's why it's easier for us to renew contracts and to engage in new ones. So this is, in our view, is a great growth potential. When Daniel referred to our cash position, a company like ours having almost BRL 350 million in cash. People speculate a lot. Are you going to pay the debt? Or are you going to invest the money? A little bit of both. We will just have to see what's best for the company. Certainly, it's always good to pay debt, but also it's good to invest in good assets that can give us a return in the short and midterm. So we will not let go of our financial discipline. We will look at all of the investments line by line. I do that and Daniel and everyone, all of the officers discuss extensively all of the opportunities. We also have a financial committee and so we give them all the information. And at the end, there is the Board that ultimately approves investments if the investment makes sense. So this alignment between all the parties involved is what is generating good results. Therefore, we believe that we will have a lot of other good quarters ahead. The commercial area is moving quite well. Operations, back office is moving well. A lot of people ask us, so what is going to change? What is going to change your business? We don't know. We don't have the answer. We still see that there are many opportunities ahead. And so like any other company, we are working hard and finding opportunities to generate further results, but keeping an eye on our core business, keeping an eye on return on investment and focusing on B2B and B2C customers. So I think now Thomas, we can go to the Q&A session. We already got some questions, but I just hope that we come back in March, and we be able to show you even better results.

Thank you, Emilio. Now we initiate the Q&A session. [Operator Instructions] Our first question comes from an individual investor.

I would like to understand that the strong performance in working capital and the strong cash generation in the third quarter are sustainable or whether they include nonrecurring factors that will not be repeated in the coming quarters?

Well, thank you for the question. At the intensity of the third quarter, this was a one-off effect. We will have the opportunity to repeat that. But at that level or with that intensity, it's a one-off thing. This was an operation related to prepayment of receivables in our digital portfolio. In liability management, we are constantly seeking for other alternatives, bilateral, I mean, structured instruments or incentivated instruments. But in this case, it was a trivial market transaction. We found some interesting opportunities for both assets and liabilities. So this is what led us to post those results. But when I say that we could expect good management of working capital is because we see a lot of opportunities going forward. We see opportunities in the different avenues of receivables and sales. And we still have some work to do with accounts payable. When we look at the company's management on the operating side, we have a very strong back-office team that are constantly looking for better opportunities for the business. I would like to congratulate our team in charge of financial management because I think in the future, we would have other good numbers, but maybe not at this intensity.

Just to add to Daniel's answer and directly answering your question, there was a one-off effect in relation to the cash to the cash position, but not in terms of EBITDA. The company's EBITDA is recurrent. So from now on, it will be at that level.

Next question also from an individual investor.

What are the main strategies or tracks that the company needs to follow to improve the liquidity of its shares and to attract more institutional investors?

This is a recurring question. We get it all the time. I think there was a move among shareholders, which -- I mean, which I know that the controlling shareholder is very pleased with the results of the company. And our mandate in the past years was to generate more return to shareholders, and that's what we always try to do. We had a very high debt in terms of EBITDA that was significantly reduced. So we are comfortable with our leverage position. We're also comfort when it comes to operating leverage. So we are on the right track, and we are constantly generating value. And there are more and more investors wanting to join us. And we are certainly working hard. We cannot give you any more concrete information. But I think soon enough, we may have some further opportunities or certainly, the capital market today is not helping very much. So there are 3 factors. The first factor is that the company is an interesting company, and this is the work we are doing. I am very comfortable to say that we are on the right track, and we are a company where investors would like to be. And the second fact is that the market has to open for new -- has to be open for new opportunities, and we have to be prepared. And the third aspect is that investors and ourselves are working to put together a strategy. We are talking to the banks that support us, but maybe soon enough, we'll be able to give you some more news. But in the very short term, there is nothing to do right now.

Next question from [ Leandro Lima ] with Sunny Capital.