Wiz Co Participacoes e Corretagem de Seguros SA

BOVESPA:WIZC3

Good morning, everyone. Welcome to Wiz Co's videoconference on the results for the fourth quarter of '24. [Operator Instructions]

And before proceeding, we would like to clarify that any statements made during this conference call regarding Wiz business outlook, projections, operating and financial targets constitute beliefs and assumptions of the company's management as well as information currently available to the company. Forward-looking statements are not guarantees of performance and involve risks, uncertainties and assumptions as they refer to future events, and therefore, depend on circumstances that may or not occur. Investors and analysts should understand that general conditions, industry conditions and other operating factors may affect Wiz's future results leading to results that differ materially from those expressed in such forward-looking statements.

Including the Wiz Co team, here with us today, we have Mr. Marcus Vinicius de Oliveira, CEO; Mr. Lucas Neves, CFO and Investor Relations Director; and Joao Resende, Investor Relations Manager.

I now turn over to Mr. Marcus Vinicius, who will begin the presentation. Please, Marcus, you may proceed.

Good morning, everyone. Welcome to our conference for the results of the fourth quarter of 2024. Before turning over to Lucas, I would like to share with you the results. We closed '24 very proud of our achievements. The feeling is that we've accomplished a lot. And the figures you will see throughout the presentation represent records on several fronts and reaffirm our commitment to the consistent growth of our business, consistent with what we've been doing. We've kept a tight rein on cash management and progress in generation. We've been disciplined with our costs and haven't stopped investing in proprietary technology because we know that this is our guiding principle for the future.

We also note that 2024 was full of macroeconomic uncertainty and geopolitical tensions. However, we were able to navigate this adverse scenario and strengthen the brand in the Insurance, Credit and Consortium markets. To enforce this, I'd like to start by highlighting two figures. We issued BRL 3.6 billion in insurance premiums, 26.2% more than in 2023 and BRL 16.9 billion in Credit and Consortium in the Brazilian market, 13.9% more than in '23. In other words, between Credit and Consortium and Insurance products, we will distribute over BRL 20 billion in '24. These important figures led the group to a record gross revenue of BRL 1.9 billion in the year, up 9.3% over the same period last year. Consolidated EBITDA closed at BRL 686 million, surpassing '23 by 18.3%. Our consolidated net profit reached BRL 296 million, 25.8% higher than in '23. And the parent company's net profit totaled BRL 160.1 million, 13.1% higher than last year.

When we disregard the nonrecurring effects of Polishop in '24, our profit was BRL 174.1 million, 23% up over last year. In the Insurance segment, we achieved a consolidated EBITDA of BRL 477.16 million (sic) [ BRL 477.6 million ], a performance 33.8% higher than in '23. And consolidated net profit of BRL 270.1 million, 41.7% higher than in the same period last year.

Highlights include Bmg Corretora, BRB Seguros and Wiz Corporate as well as Inter Seguros, which not only saw its net revenue, EBITDA and net profit grow, but also its base of active contracts reaching 5.3 million, more than triple what was recorded in the previous year. In the Credit and Consortia segment, the progress made in '24 also fills us with pride. When compared to '23, we grew adjusted net revenue by 22.2% to BRL 155.3 million. In terms of EBITDA, we grew by 34.6% and delivered BRL 96.1 million net profit, closed at BRL 47.6 million, 72.8% (sic) [ 78.2% ] higher than in '23.

As reinforced, we believe that investments in technology will be one of the main factors in taking us to the next level and has taken us very far. As we look back, I see '24 as a year of great transformation. Our proprietary technology platform, Wiz Pro, has already been used in the routines of the group's 6 units. We have 4 modules that are constantly evolving: sales, management, operations and engagement. The tool is now the main stakeholder in our digital transformation strategy, and it will remain so in '25.

It is inspiring to look back and recognize so many achievements in '24. For the second year in a row, ISO 27001 certification, a seal that proves that we follow the highest standards of information security. Also for the 9th consecutive year, we were included as a Great Place to Work ranking, the GPTW, as one of the best companies to work for in the Midwest and among the 150 best companies to work for in Brazil. Also in the sense, last year, we had more than 40 events reinforcing our presence in the market. We also kept our Pro-Ethics Seal and joined the Brazil Pact for Business Integrity.

For '25, we remain confident in the potential of our business to go on even further. We've done our homework and ready to navigate the macroeconomic scenario that lies ahead. I highlight, for instance, the capacity we had to issue in January '25, the second issuance of simple debentures in the amount of BRL 300 million maturing in 2030. This move extended our debt payment schedule and puts us in a positive position so that we can maintain strict cash management and achieve our goals.

To wrap up, I'd like to express my deepest thanks to all the wizzers who have been part of the development of these beautiful results. I especially thank the members of our Board of Directors, committees and shareholders who were with us on this journey. We remain determined to turn Wiz into a company that positively influences the Insurance, Credit and Consortium markets in Brazil.

Thank you very much. And now I turn over to Lucas Neves, our CFO and Investors Relations person.

So thank you very much. Good morning, everyone. I'm going to start the presentation of the financial results, where I will talk about the highlights and operational and strategic events in the period and the various features delivered last quarter on our technology platform. In the sales module, we've improved our lead capture as well as making progress in offering life insurance and a multi-brand consortium simulator. In operations, we evolved our omnichannel service by including new chat screens and categorization of service via WhatsApp. On the management front, we applied artificial intelligence to read invoices and deliver the automated notifications for commissions and reports. Finally, on the engagement front, we implemented improvements to authentication flows, making the user journey easier and safer.

Moving on with highlights. We ended '24 with a net debt of BRL 445.6 million, BRL 162.9 million lower than in the previous year. The consistent reduction of this indicator is mainly due to the payment of installments of accounts payable for acquisitions. Also saw Wiz Corporate evolve in the main lines of results, setting constant records in different indicators. We made progress in gross revenue, reaching BRL 139.9 million, 36.6% higher than in the previous year, consolidating the best year of the company in this regard. Net profit was also a record, reaching BRL 33.5 million in '24, 64.6% higher than in '23. This is an important milestone for the unit and was supported by a diversified portfolio and customized offers is still on our business unit.

Inter Seguros closed the best year of its history in '24. Gross revenue throughout the period was record, reaching BRL 247.5 million, 43.2% higher than in 2023. Net profit for the year was also a record at BRL 91.1 million, 53.3% higher than in '23. The active contract base grew more than 3x compared to '23, reaching BRL 5.3 million (sic) [ 5.3 million ]. Inter Seguros' business model has allowed to consolidate its leadership position in this segment, combining a diversified portfolio, integrated experiences, scale and profitability.

To conclude with the operational highlights, the largest insurance premium issues and Credit and Consortium distribution in our history was concluded. In total, BRL 20.5 billion was distributed during the year, 15.9% higher than in '23. The progress reflects the good results in the business units throughout '24.

And now moving on to Slide 4. I will talk about the financial highlights for the fourth quarter of '24. We had a record BRL 259.4 million in revenue, down 3.5% on the same period last year. Excluding the net revenue from the Caixa run-off, where we had BRL 208 million in revenue, and the result was mainly impacted by the positive nonrecurring effect of BRL 10.1 million for the reversal of the provision for the cancellation of revenue.

Credit and Consortium revenue was BRL 41.2 million, 17.6% higher than in the same period in the previous years. And premiums issued were BRL 933.2 million, 16.2% higher than in the fourth quarter of '23.

In Slide 5, we present the highlights of the year. As Marcus commented, we achieved a strong result in '24, strengthening Wiz in the Insurance, Credit and Consortium markets. In the year, Wiz business units sold BRL 3.6 billion in insurance premiums with growth of 26.2% compared to '23, reinforcing our relevance in the Brazilian insurance market. Throughout '24, our units expanded and renewed their product portfolios, focusing on the improvement of the value proposition for the customers and promoting greater profitability in their channels of operation, reflecting the good results we present today at Wiz. We reached a volume of BRL 16.9 billion in Credit and Consortium sales, 13.9% greater than last year. Promotiva, the -- incorporated at the end of '22, accounted for a large part of this growth, adding BRL 9.4 billion in the period. As a result, we reached the BRL 1 billion mark in net revenue ex commissions, 9.8% higher than in '23.

Moving on to Slide 7. We have the consolidated results summary. For the fourth quarter of '24, we achieved EBITDA of BRL 174.5 million, down 4.5% over the same period in the previous year, mainly impacted when comparing to '23 by the positive nonrecurring effect of BRL 10.1 million related to the reversal of a provision for the cancellation of revenue. In the annual review, we achieved EBITDA of BRL 686 million, up 18.3% when compared to '23.

And now turning to consolidated net profit. We had a growth of 25.8% year-over-year with a total of BRL 296.8 million. Driven by the operating result of the parent company, net profit reached BRL 160.1 million, which is 13.1% higher than in '23, driven by the better financial result recorded in the year.

In Slide 8, we can see the adjusted results. In this quarter, we made no adjustments to EBITDA, presenting only the adjustments made in the first quarter of '23, which are related to severance costs. In net income, we adjusted the nonrecurring effects with no impact on cash that occurred in the lines below EBITDA. We highlight adjustments to depreciation, amortization and impairment, which in the period amounted to BRL 43.0 million in expenses with amortization of intangible assets recognized by the acquisitions of BRB Seguros, Promotiva and other business units. And also in the period, we advanced in the cycle of write-offs related to the subsidiary Polishop Seguros, recording an adjustment of BRL 7.8 million related to the write-off for impairment of intangible assets and BRL 5.8 million related to the provisions for loss of loan made for payment of the loan contracted by the subsidiary in August '22.

In financial results, we adjusted the effects of present value adjustments of future installments of the acquisition costs for the company's investees. In income tax and social contribution, the amounts presented refer to the tax effect of the adjustments made to D&A and impairment and financial result lines. We closed the quarter with a net profit of BRL 115.8 million, which is 1.4% lower than in the fourth quarter of '23, with a year-to-year date total of BRL 439.2 million, which is 19.2% higher than in '23.

In Slide 9, we evaluated the parent company's results. In the fourth quarter '24, the parent company recorded BRL 69 million in EBITDA, 9.2% higher than in the same period of the previous year. For the year, the parent company had an EBITDA of BRL 272.9 million, up 8.5% for the year of '23, mainly driven by the record business performance of several of the company's business units.

In the year, the parent company recorded BRL 161 million in equity in earnings, a result which is BRL 42.8 million higher than in '23, due to better performance and participation in the results of subsidiaries, as a counterpart to the recognition of equity in the identifiable assets previously recognized in depreciation and amortization.

In net income, the parent company reached BRL 160.1 million in '24, representing a growth of BRL 18.5 million or 13.1% compared to '23. And when the nonrecurring effect of BRL 14 million is excluded, and this is related to the partial write-off of impairment and provision for mutual loss at Polishop Seguros, the parent company's net income would have reached BRL 174.1 million in '24, a growth of 23% compared to '23. This is driven especially by the good business performance of the company business unit and better performance in financial results.

In Slide 11, we will open the results by segments. The consolidation of the results is shown in an attachment to this presentation. In '24, 80% of revenue came from our current operations. The business units consolidated by Wiz in the Insurance segment accounted for 56% of our current results. We continue to see a strong movement towards diversification of results, coupled with continued revenue growth, and this performance was only possible due to our focus on delivering the company's strategic objectives.

And now Slide 12. We remain present and starting with the Insurance segment, in '24, we reached BRL 559.9 million in net commission revenue in the Insurance segment, up 19.4% over the previous year, the effect of a year with record business performance in different units of the segment. The performance of Bmg Corretora, up 37% compared to '23 and Wiz Corporate, up 35.1% compared to '23. Also noteworthy was the performance of Inter Seguros, reaching a record BRL 167.6 million in net revenue in '24, recording BRL 36.1 million in equity for Wiz in the year.

In Slide 13, Consortium and Credit, Promotiva and Wiz Parceiros. In the quarter, we reached BRL 41.1 million in ex commissions, a growth of 17.7% or BRL 6.2 million compared to the same period in the previous year. In the consolidated year, we reached BRL 155.3 million in revenue ex commissions in this segment, 22.2% higher than in '23 and EBITDA of BRL 96.1 million, 34.6% higher than in '23. This result also reflects the good performance of Promotiva's operation, showing growth of 34.3% compared to '23, reaching BRL 120 million in net revenue ex commissions in the year, representing 77.7% of the segment's consolidated revenue in '24.

Slide 14. Here, we have the Services segment, including Wiz Concept unit and the Rede Caixa run-off operation. In the fourth year -- in the fourth quarter, I'm sorry, of '24, the Service segment showed a 17.4% drop in net commission revenue compared to the same period in '23. The EBITDA closed at BRL 10.6 million, a growth of 19.5% compared to '23, and an EBITDA margin expansion of 3 percentage points, reaching 11.5% in '24, maintaining the focus on business profitability.

And finally, on Rede Caixa run-off, we present the result of the stock of revenues relating to sales up to February 14, '21. In the quarter, this line added BRL 48.9 million, a result which is 15.5% down compared to the fourth quarter of '23, reflecting the nonrecurring effect we had in that quarter arising from the restatement of the financial statements, where a reversal of the realization of provision reversals was recorded.

In Slide 15, I would like to highlight the main points about the Corporate. When we look at the results, we can see a total of BRL 13.1 million, which is BRL 1.4 million higher than in the fourth quarter of '23, due to a seasonality of expenses in the quarter in relation to the comparative period. The evolution of Corporate is best reflected in the accumulated review of expenses with growth of 5.3%.

On the other hand, the result of minus BRL 12.5 million in other income and expenses stems mainly from the recognition of capital losses in investee companies. Finally, in the fourth quarter, we had an effective tax rate of 35.9%, mainly due to effect of expenses that are not deductible.

In Slide 16, breakdown of cash flow for the quarter. We ended the quarter with a cash balance of BRL 270.1 million in consolidated and BRL 18.7 million in cash in the parent company. The cash flow of BRL 19.7 million in the period was mainly due to operating cash generation, partially offset by the payment of dividends. In investments, the flow of BRL 14.7 million refers mainly to the adjustment to present value of the acquisitions made by the company in the quarter. We also disbursed dividends to noncontrolling shareholders of our subsidiaries.

Last slide, Slide 17, we present the company's outlook for '25. As Marcus mentioned in his initial message, we are confident in the potential of our business for the future. Our financial discipline will continue to be our core for '25 with action directed at deleveraging the company, reinforcing the sustainability of our growth and optimizing our capital structure. We will continue to make progress in capturing synergies between our operations, extracting greater efficiency and generating business value.

Our Wiz Pro platform will remain as a competitive differentiator, improving our operations and increasing our relevance in the market. Furthermore, we will focus on expanding proprietary sales, consolidating our direct channels as a lever for growth. Finally, we will remain committed to making our operations profitable, guaranteeing solid and consistent growth.

We now conclude our presentation, and we will start the Q&A session. Thank you very much.

I now turn over to Mr. João Resende, who will begin the Q&A session. [Operator Instructions]

Good morning, everyone. It's once again a pleasure to have you here for Wiz conference call on the results of the fourth quarter for '24.

We will start with a question from Ricardo, BTG Pactual, and it will be directed to our members here. "could you give us further detail on the rates of the new debenture issued by Wiz and to the first issuance and explain if we should expect a prepayment of the old debenture in the beginning of the year? Or is Wiz going to wait for the deadline? In addition, now that the debts have been extended and the debt of the company is not high, do you intend to use your generation or cash?"

Well, before I answer this question, I would like to remind you that we are very happy with the results for '24. We have units such as Corporate, Inter, Bmg, Omni, which have grown over 50% this year. Paraná also multiplied the profit we had in the previous year, demonstrating Wiz company to generate more value in the channels we work with. We go from net profit of BRL 140 million going to BRL 170 million. And even with a reduction of 15% in Caixa run-off and even with the important results of Polishop, we still grew over BRL 15 million. So if we remove all these factors, it's as if we've grown BRL 175 million this year, which makes us very enthusiastic for this year, when all of these factors will no longer be in consideration. We are very optimistic.

We've already prepaid, Ricardo, the first debenture. We captured a debenture of BRL 300 million. We paid the debenture of BRL 205 million, generating some money left for us, and we also reduced the financial costs of the first debenture. We reissued the debenture, and that indicates a healthier company with less leverage. And this answers your second question.

As we have generated cash, what are we going to do with the exceeding capital? M&A is not a priority for us. We continue looking for opportunities, but it must make sense to the company in terms of price and value [ proposition ]. We must have a clear value. We're in the middle of this discussion. When we had our discussions for the beginning of the year, we had a change in management. We're discussing with the Board to define what we're going to do with capital allocation in the short term. But we've decided that this process will be concluded with the debenture, and then we'll be able to give you a better answer.

Thank you, Lucas. I would like to make a comment and Emerson, an investor, has also asked a question. He wants to know if Wiz has any plan to rebuy shares. We also have a question from William Barranjard, Itaú BBA. He asks, "First, could you explain the nonrecurring effects of Polishop and the impact of the exchange rate? Should we expect any further effect of Polishop in the future?"

In this scenario where CDI is at the levels they are at, the faster we can do this, the more or the sooner will we have better results for the company. Regarding Polishop, we had two effects. We had an intangible asset in Polishop. We had an impairment on this asset. So this effect will not be seen in the future. And we also have a loan that was hired. And we are considering the default with an impact of BRL 5 million per year if nothing else happens from now on. The impact was much lower than the BRL 17 million we had this year and, therefore, Polishop will not be as relevant from now on.

Second question by William regarding sales. "The premiums continue growing well and the credit environment still seems benign in the first quarter. Does it make sense to consider a good performance of sales?"

Reinforcing what I've said, we are very optimistic with the beginning of this year. We are in March. Our business have grown in the first months. Also to reinforce, '25 is a challenging year, but '24 wasn't a wonderful year. We had a very harsh comparison basis. We launched new products. We considered business strategies, diversified our performance. So it's very important to reinforce that our comparison base is not super benign. The scenario has been complicated for a while now.

Number two, we have to evaluate Wiz's universe, not the credit market. It's not homogenous. But when we look at this combined, we can see some growth in the beginning of the year.

Thank you very much, Lucas. To wrap up, cash and capital allocation generation. "Do you continue -- you continue generating a lot of cash, which is positive. Has there been any change in the way you see capital allocation?"

Well, we've been able to quickly reduce the net debt of the company. In this year, we had a decrease of BRL 160 million. We did BRL 40 million in dividends and made a purchase, which cost BRL 26 million, so the way I paid shareholders. And what or the extent of debt reduction, we had almost [ BRL 260 million ] in cash for '24. It's quite impressive. We have noncash expenses in Wiz. Also in terms of capital allocation, this is a priority in my agenda now, and we will discuss that with the shareholders. But I don't think M&A is not an obvious thing with such high interest rates as we have now. Rebuy is something that should be a goal for every company now that we have such high interest rates. But everything should be seen very carefully.

William, I thank you for the questions, and I will go back to a second question by Ricardo, BTG Pactual. He says, "We have an expectation of the acceleration as we've seen in the results of Brazilian banks. He wanted to understand if the decrease in revenues is reflective of that? And what can we expect in terms of revenue growth for this year?

Ricardo, this is Marcus. I will make a disclosure about this. In Wiz, we have to consider a mix of our business. BRB has a significant representativeness for us. But keeping in mind the 5 businesses we have, only one business has grown in all of them, and one makes up for the other. Our performance in this segment has been very robust. For '25, we expect that things will move on pretty much the same way. We already have a budget hired. We do not expect it to be different even though we are aware that we had a very challenging year.

To note, within the business line we operate with, we don't have this as a main focus. We have other products being launched. We have other sources of revenue, all of them related to security. This mix is always going to be aimed at growth. And this is what has happened in the past 2 years, which were also challenging, as Lucas mentioned. And yes, Ricardo, I would like to add that this is not a single company's product. We have units which are less dependent. So it's not a 1:1 ratio here. And '24 is an example that this is not true.

All of the answers you gave us now have to do with a question asked by Caio Barbosa, Lapin Capital. He asked us to detail the BRB results. And I will read a question by Leonardo Piovesan from Quantzed. He asks if the number of the negative impact of Polishop was 100% for the controller only. And what would have been the net profit of the fourth quarter taking away the impact of Polishop?

Well, I'd like to remind you that we had two impacts. We had Polishop Seguros, which comes to the controller as patrimonial equivalent, and we also have the impact of the default, which is in the results. And when we combine these 2 impacts for the controller, they represent approximately BRL 10 million.

If we exclude that, it would have been BRL 48 million. Net profit very close to the third quarter, which was the company's best quarter ever. So it had an important participation for this quarter and opens an opportunity for much better results in '25, since we will no longer have these effects. Analyzing the consolidated profit, the amount reported for this quarter were approximately BRL 58 million.

Well, thank you very much, Lucas. [ Leonardo Roma ], investor. "Congratulations for the results. I would like to know what is the payout going to be for '24? Also, could you let us know what is the leverage level of the controller for debt EBITDA?"

Leonardo, the company paid is 25% of the net profit. A year ago, we wanted to keep more cash in the company so that we could go through this deleveraging process. We reprofiled our liabilities for this year, leading to better cash generation, opening an opportunity for us to potentially increase the payout. Today, the payout is 25%.

When we talk about net profit, debentures and banks that work with Wiz, they like to analyze the net debt about BRL 450 million divided by the EBITDA by participation. They don't like to use the consolidated EBITDA nor the controller EBITDA because the equivalent is the net profit, not the EBITDA. When we look at this leveraging metric and there is an attachment of our release, you can see that we have onetime EBITDA. This is very healthy. We had a significant reduction over the past year.

Wonderful. Thank you, Lucas. I have one question regarding BRB. Would you like to add anything else? They ask what the expectation for BRB is for the fourth quarter of '23, considering the results compared to the fourth quarter of '23?

Well, one of the things that really makes us enthusiastic, this is an open capital bank, and it's going to be an important leverage for the bank over the future quarters. We don't know exactly if it will be in the first, the second or the third quarter. When we look ahead, this capital increase will play an important role for the company to continue growing.

And another point to complement what Lucas has just said, the expansion process of BRB assures us that in '25, they will be able to carry out their strategic planning. '25 will be a very successful year for BRB.

Wonderful. Thank you, Marcus. Would any of you like to make any additional comments, leave a final message before we close?

I don't think so, but there's one last question there.

Yes, one other question came up in the chat. William, an investor by Terra Asset. He asks, "What are the other expenses item which had a significant increase?"

William, thank you for your question. We had a run-off effect, but it's minor compared to all of the other positive results. We had a BRL 3 million of CapEx. This was identified in the audit and is one of the main responsible factors. Also, we had capital changes. We have a disproportional dividends.

Finally, in the end of the year, we had important gains. We discussed a lawsuit that we won. And therefore, this have to do with the lawsuit. We have a very good opportunity to grow in '25, and this makes us very optimistic.

Okay. We have no further questions. I would like to thank you all for your participation. Wiz is available to any of you in case you have any further questions after this Q&A. Thank you very much, and I wish you a wonderful day.

Wiz Co's video conference is now over, and we thank you all for your participation. Have a wonderful day.