Ouro Fino Saúde Animal Participações S.A. (OFSA3) Earnings Call Transcript & Summary

This presentation brings statements about future events that are subject to risks and uncertainties. Such statements are based our management's beliefs and assumptions and on information that the company currently has access to, statements about future events include information regarding our intention, beliefs or current expectations as well as members of Board and company Directors. Welcome to our CEO, Kleber Gomes; and our Director, Financial Director of Marcelo da Silva. Thank you for the presence for both. Kleber, it's your time say, good morning.

Hello, Ju, thank you for the introduction. Good morning for everyone. We are in Friday 13, a very positive day. It's a lucky day for our company. We are -- I wanted to say that we made Ourofino day with [indiscernible] total online in our studio, in the studio for our programs for clients and mainly Ourofino em Campo. And we prepared Ourofino em Campo, Ourofino day with taking care about everything for investors. And these materials are available in our website at our IR website. And if everyone wants to know about our business, it's only -- you can see at our website this information. And we continue to make this company like a very strong company, and we are always looking for this and looking for the people. And we are certified in 2022 for GPTW, for Great Pace to Work, as one of the best companies to work, and our employees participate very strong after the -- as a request, 89% of them. And we know that this is a difference of the company and to keep the company like a success company. We announced at the end of the last year process of acquisition start-up Regenera, is a treatment, [ innovative ] treatment, for companion animals, and we concluded this transaction recently. It's a success [ partnership ], and we are launching this product at the market. And NeoStem is our new [indiscernible]. It's an innovative product for stem cell [indiscernible] for dogs. It's used for osteoarthritis, neurological sequelae and keratoconjunctivitis, dry [ keratoconjunctivitis ]. And the treatment is less invasive and very expected. And we had a lot of information along with that, then we are introduced this product at the market. We will create this product in the market and restart the concentration of the doctors, the [ canine ] doctors and the owners of pets to this treatment. And the part of this work is very attractive, mainly for the TV or radio, and we have some positive way and this new [ territory ] have a good space in their work. And this keeps us in [indiscernible] like connecting with the work. I want to just say about our new launch in 2019. iUse Saber is a digital platform, and we will launch information digitals and solutions. Digital is a platform of knowledge and our purpose is to reimagine the animal health, and we want to lead these sectors and participate very strong in these sectors. And we know that the sector has a [indiscernible]. We know that we need to take this knowledge to the veterinaries, to the field, and we will put a lot of things for the people and this [ discernment ] will be made by our team. We know that in this field, it's important to have a management. And we want to take this help for everyone, for the client or stakeholder. And if anyone wants to know, it will be a digital launch as [indiscernible]. And at night, we will have a lot of other [indiscernible] during the [indiscernible]. I want to say, too, that we integrated regulatories with our financial demonstrative. And this regulator was award by ABRASCA. And we were very happy, and we are -- make a very good regulatory this year, too, with our questions about business, how can work -- the risk of business or regulation and it's available at our website, and there's material to read if you want. I'm very happy with the results. And remember that we have, too, the last 2 years with this new [ directory ]. And we saw very good results. Our workers, another management, the departments and I'm very happy with the results. [indiscernible] We grow [ 20% ] regarding the last year. And if we saw another prospective, we grow not so good at the first semester of the pandemic's time, but we have excellent drivers, a resilience market and a very potential future market. So we're always very strong to prioritize our talent, to make a difference at the market. For example, this [indiscernible], the platform of knowledge. So this is what we want with a very strong energy and take care with the problems, but with very strong, solid internal policies. And now Juliana, please?

Thank you, Kleber, for your participation. Kleber, I say about iUse, we will put the link for iUse to make a description to participate with us. Now I pass for Marcelo. Marcelo, please start [indiscernible].

[Interpreted] Given the pressure within the logistics supply chain, we have a growth, a level of growth at a lot of lines of business, mainly of the IATF. [indiscernible] we show our fixed time that continues to invest in the [ cause ] and the antiparasitic line because this is the biggest challenge in Brazil. At companion animal, our unit business that takes care of our cats and dogs. And talking about net revenue, about the sales, we have grown like 11.3%. And accumulated of first semester, we grew 69%. Companion animal has a growth of 16%. It's a good base of growth. We are in cooperation related in the pandemic time. The last column bring us the favorable mix, but these units make the respective [indiscernible] of the price, and we saw [indiscernible] of recuperation. At international operations, we are keeping growth, a good growth. Regarding that, we have a local operation in Mexico and Colombia. And they -- together, they are very strong. And the growth of 22.6% could be more bigger if we don't have -- doesn't have the inflation in the position of the real against the dollar. The last, margin of 16.2% reflects the [indiscernible] of real. At this part, that this impression is -- the rest operational [ reach ] of EBITDA grew 15.1%. The gross margin was impacted by the top that I saw -- I said before. And we are giving a growth of 15.1% of EBITDA, [ adjusted ] EBITDA and contributes this for the company besides the growth of revenue. The effort to make the management of the cost, we reduced the net revenue 49% in 2022 at the first message of 2022. And the last message of 2022. We had a strong impact of the cost, but now we are giving a growth of revenue. We keep investments in research and development with BRL 15.8 million with research and development, and a lot of -- part of this investment is the initial cycles base of [indiscernible]. We keep generation cash, and we generated BRL 17 million of cash. And now, we can say that this cash could be better, could be more higher. But we have acquisition of Regenera and with the [ cash flow ] like BRL 14 million. And we closed March with a position of cash, very comfortable. But remember that we keep our management with the reduction of -- there are [indiscernible]. We have -- besides the excess was a little bit high, our cost medium of the company at the first message 2022 was 9.2%. We have more than 54% from FINEP, that's the -- it's the biggest [indiscernible] and divest to the company. And this makes us have the capacity to keep our investment schedule. We have 78% of indebtedness in the long term, more than 25% and over 5 years. That show that we have a capacity to keep this schedule for investments for next years, mainly for research or development. I want to say that we are very confident at our growth, and we continue our growth with a generation of cash and to keep capital. And we have a structure of capital to keep this strategy for investment. We have more than BRL 60 million of FINEP to send to us with a very competitive effects in a long-term to pay. And this is our message to you, and I want to thank you for everyone and Kleber and your team. A good week for everyone.

So now we are open to our Q&A. [Operator Instructions] Kleber, I will pass to you to conduce for our first question. Kleber?

Thank you, Juliana. Thank you, [ Carlos ], for your question. [ Carlos ] asked us, how it was our M&A for the company? And your [ projection for the ] company is to see the companies -- we have new molecules or with a similar portfolio to grow this year. As I told you, the company is always looking for the growth, organic growth, and we are better [indiscernible] for the organic growth. And when we saw the market in like a proactive manner, we made this -- the first M&A is a small M&A, but relevant. And we are working on other opportunities with new technologies in the market, digital center markets. With animal health, we have timely synergy with us. And [ Carlos ] is asking, too, if it has a gain of synergy regarding Regenera. Regenera is [indiscernible]. They do the technology, but they are not in market, but we saw the [indiscernible] point is capacity to make the market for this technology because we have good access. We work a very clear -- a [ myriad ] of the veterinary doctors. We are visiting a lot of veterinaries every month. We have a good team who dedicate their time to visit this veterinarian. But remember that this product is not [ sale ] at the market point. We sell these for the veterinary doctors to the tutors. So we will start with -- we have a market plan, a very good for the next month and years at this market. And we are considering the conversation with these veterinary doctors. And with the tutors, too, because they have [ dealt ] with animals with this disease. And to help them to look for these veterinaries to give a good health of the companion animals. We are very positive, and we continually look for the other activities.

There is another question for [indiscernible]. [Operator Instructions] While we are waiting, I will refer you to our iUse launch next Thursday at 17:30 p.m. at Brazilian time. I [indiscernible] to make our inscription to participate and to receive the notification. There is a question. Kleber can you conduce, please?

I wanted to know a little bit about the import risk regarding the logistic problems. I will pass to Marcelo because Marcelo is a financial director responsible for supply issue. Marcelo, please?

Thank you, Kleber. Thank you, [ Enzo ], for your question. It's a good question because anyone are thinking about this. A good [indiscernible] of our raw material comes to India and China, but we are with a continuous process considering one more -- one than or 2 or 3 suppliers. A lot of suppliers for our raw materials. We have a structure in China -- on China. Some people that works to Ourofino and this gives to us to be more near of the suppliers. And likely you saw, now for COVID and for the logistics international crisis and the war at the Russia, we decided to anticipate our stocks for the more important items to avoid any risk of supply. So we don't have this problem now or challenge. A big challenger are at the logistics area. We are deciding to anticipate or buy because we anticipate at the best semester and now to decide or more [indiscernible] items.

Thank you, Marcelo, for your participation. I want to say thank you for this moment. As we don't have another question, we are finished with our space of Q&A. I pass the word for Kleber. And I want to refer that we are here if anyone has question or talk to us. Kleber, could you please say a word, please?

I want to say thank you for everyone. Everyone who is with us and that stay with us day by day. I want to say thank you for every worker for Ourofino. They are always looking for to stay together like [indiscernible]. But we are very confident that this year has a lot of things to do, and we are very confident with -- at our work, our [indiscernible] player there, at our markets that we are -- do, the work. And I'm available for everyone. Thank you for everyone who stay with us. [Statements in English on this transcript were spoken by an interpreter present on the live call.]