Good morning, everyone. Welcome to Positivo Tecnologia Q1 2022 earnings video conference call. I'm Renata Oliva, I'm the director of RI, and it's a privilege to be here with you. Joining us today, Mr. Hélio Rotenberg, company CEO, and Caio Gonçalves de Moraes, CFO and Director of Investor Relations. We'd like to inform you that this video conference is being recorded and it will be made available at the company's RI, where the slide deck is also available. For those of you who need simultaneous interpretation, this is being made available. We have an icon that looks like a globe at the end of your Zoom bar. Please select that icon and select the language of your preference, either Portuguese or in English. For those of you who are listening to the video conference in English, you have the option to mute original audio in Portuguese.
Just click Mute Original Audio. For the Q&A session, we suggest you send them using the Q&A icon at the bottom of your screen. By default, your names will be announced for you to ask your question live. At this point, a prompt to activate your microphone will appear on your screen. We'd like to emphasize that information contained in this presentation and any statements that may be made during the video conference concerning the company's business prospects, projections, and operating and financial targets are based on management's beliefs and assumptions, as well as on information currently available. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions because they refer to future events and therefore depend on circumstances that may or may not occur.
Investors should understand that general economic conditions, market conditions, and other operating factors may affect the company's future performance and lead to results that differ materially from those expressed in such forward-looking statements. Now, I'd like to turn it over to Hélio so that he can start the presentation.
Good morning. Good morning, everyone. We are going to share our results that we find to be very good and based on the planning that we conducted back in 2018. It proved that we are on the right way. Our gross revenue is BRL 1.2 billion, so almost 50% more than last year, so year-over-year. Why do I say that we really got it right by betting on diversification? Because when one segment is not providing good results, another one is achieving the results we wanted.
That's why we are now balanced. We have a very diversified portfolio, and we operate in different segments. That certainly strengthens our company, and it ensures sustainable growth over time. The EBITDA was BRL 126 million in the quarter. LTM EBITDA, BRL 409 million , historical record. Also, adjusted net income of BRL 28 million this quarter. We are going to also go in depth in these numbers. As for the portfolio mix, it's very, very important because it strengthens us in other segments, except for the consumer unit. When consumer spending is not doing good, and what we see today and since last October is that the entire retail market is really suffering, is having challenges. That's why we see this drop in consumer spending. We see strong increase in corporate business and also public institutions that are public organizations.
With such robust portfolio for corporations, they start with desktop PCs, notebooks to HaaS, to services. This portfolio makes sense to small, mid-size, and large companies, as well as to all public organizations. Besides that, we are strengthening our service unit also as HaaS and tech services. With that, we achieved a growth of 276%. As for dividends, BRL 47.5 million, or BRL 0.34 per common share. As for the pandemic or for that, we had faced many issues in August, but now we are doing much better. This is actually regarding the challenge we faced with the supply chain. We still see some disruption, particularly with the lockdown in China. We see many products being held at the Panama Canal. It takes a little bit longer.
Freight is more expensive, but we still are able to carry on with our activities. We are facing some issues with components, but we are being able to overcome them. We still face some challenges, but not as much as we had in the past. Next slide, please. This is a portrait of what I mentioned about diversification. We can see the chart, and we can see how much it has changed. Consumer spending is low, accounting for only 13%, corporate 28%, and public institutions 59%. Let me first address the corporate segment. We see a strong demand for PCs now that companies are resuming in-person work. In the past, people were working from home, but now the scenario is changing, and we see there's a strong demand for computers, especially in every single segment, small, midsize, and large companies.
We also see some large house projects. The market now is looking for this type of service, and they are coming to us. As for payment solutions, we still did not achieve our potential, but we are growing, and we expect to see an increase in payment solutions. As for public institutions, part of the 60% are from the ballot boxes, and that certainly makes a difference. We are going to deliver more electronic ballots this quarter, mostly on the second quarter, and we have also won another bid of ballot boxes starting 2023. We have also a strong share at the Secretariat of Education in different states. It's very, very important that every student has a laptop on their hands. Now, let me talk about consumer segment.
It's not that we had a significant drop, but sell-through that accounts for the market presented a 10%-15% decrease. The same for smartphones. Starting last September, we started to see this decrease. Retailers expected higher revenues, and they sold 80%-87%. With that, their inventory level was high at the turn of the year. With that, they did not buy. There was no selling. Although the results from the first quarter of 2022 was much better than last year. Last year, we had a 15% drop. This year, 10%, 11%. That did not improve selling because retailers in general had a good inventory level. As we all know, this drop is not only in laptops and smartphones. It's a generalized drop.
We are facing now high inflation rates, high borrowing rates, lending rates, and that's why we expect to see better sales in the second quarter of 2022. Not as high as we had last year, but we expect to see consumer segment increasing in the second quarter. For public institutions, our share is strong and expect to keep it like that. Now let's talk about financial highlights. I'll turn it over to Caio, our CFO and Director of Investor Relations. That Caio can go over these numbers.
Thank you very much, Hélio. I think Hélio has already provided a very good summary of what happened. Starting with the revenue. We can see that we achieved a record gross revenue. Let me remind you that first quarter is usually the weakest one we have. You can see that we are only 5%.
We achieved a number that's only 5% less than last quarter of 2021. That really proves the strong demand from corporate segments and public institutions. Once again, just stressing the importance and how right we were with our diversification strategy. Now let me talk about EBITDA. As for recurring EBITDA and EBITDA margin, as you can see, we achieved also a record BRL 126 million as well as for the last twelve months. EBITDA reflects also the diversification of revenues with increase in our growth avenues that bring better margins such as HaaS services in general. Not to mention leverage coming from other activities that we have implemented. We had an increase in our general costs that certainly reflected the growth of our company, but they increased less than our growth in revenue.
We have a better product mix and also decrease in our general costs, and that improved our EBITDA margin. Next slide. The next two slides, let's talk about our net income. It's very important to understand what happened over the two quarters. This reconciliation starts from the net income of the first quarter in 2021, and we are comparing these numbers. We make an adjustment regarding hedgings from the beginning of 2021. That means that in our quarterly results, we have only what was liquidated for that specific quarter. We generate a delta EBITDA of BRL 73 million. An very strong operating margin. But that is. We have a decrease in that number because of the currency exchange rate. We see really a major difference.
Also when we think about the first quarter of 2022, we had a decrease in the currency exchange rate, i.e. the US dollar. We also had the investment that was done. We know that with the growth of the company, we also need to increase our inventory levels. What you see here is our net income, BRL 28 million. We believe that this is an isolated number, considering sales in the first quarter. First quarter of the year is usually the one in which we sell less. Considering also the future with continuous diversification of revenues. Our inventory levels also reflect that. If we go over our current inventory, we have approximately BRL 3 million, which is certainly achievable if we follow our guidance that is being reaffirmed. That means that we'll have another BRL 4 billion to deliver.
With the decrease of inventory levels, with improvement in retail segment and increase in other segments. Now, considering the future and the delivery of ballot boxes, not to mention some other large corporate and government projects, we will generate more cash, increase our EBITDA, and that certainly allows us to feel very comfortable with our net income. We believe that this level of net income will actually increase in the next months because of the reasons I have already mentioned. We have already talked about net income. This is just the historical numbers quarter after quarter. If we move to slide number nine to talk about ROIC. As we mentioned, return on the capital invested is based on our future projects. In spite of that, we see an increase in our operating income.
You see that we expect to see also an improvement in our ROIC. As for that, although you can see that the number has increased, and especially to fund working capital, I'd say that the debt has a very good quality. We have 50% of the long-term debt that lies in the capital market. Now, I'd like to turn it over to Hélio again, so that he can give us his final remarks.
Our estimate of company's gross revenue for 2022 is between BRL 5 billion and BRL 6 billion. We feel very comfortable because we have already achieved the BRL 3 billion, BRL 900 million coming from the ballot boxes and the rest of that amount coming from also government contracts. We also have a strong delivery for Petrobras. We will deliver the largest server in Latin America. This server ranks 25th.
It's a project that we have been partnering with Atos. As for payment solutions, we are very also. We believe in the growth of payment solutions, both Cielo and Stone, and we already have agreements signed with them, and we expect to sign some others. HaaS agreements, we have already signed many contracts this year, and we see also. We expect to see a growth in this segment. Services, tech services do not represent a large share yet, but we also expect to see good results. As for retail, although we see this downturn, we also expect reasonable results. Because of Infinix. Infinix started to be delivered at stores at beginning of May, so we will start to see sales now in May. We ran a pilot project last year, but we will really see the actual results.
Product smartphones ranging from BRL 1,500-BRL 30,000. I'd say that we really have a great strategy, and that started once again back in 2018. That certainly reflects the good results income, and that's what we expect for next years. We are very optimistic. Thank you very much, and now we open for questions.
Thank you, Hélio. Thank you, Caio, for the presentation. Here are the instructions for the Q&A session. Please feel free to send us your questions. We kindly ask you to send us your questions using the Q&A icon. If you want to ask the question live, just state your name and we will then enable your microphone so that you can ask your question. Once we enable your microphone, you will be prompted to do that on your screen. Bernardo Guttmann from XP. He has a question.
Hello, good morning, everyone. Thank you, Renata, Caio, and Helio, the entire team. I actually have two questions. First one is about consumer segment. I think that Helio and Caio provided us a very good explanations about this downturn in this segment. I'd like to can you please elaborate on the inventory levels in retail. What can you expect regarding consumer segment for the rest of this year. Second question, IoT, so smart homes. Can you please give us some color talking about company's future initiatives to expand your presence, perhaps expanding our portfolio or by creating a network of dealers, or if you are going to keep working on the do-it-yourself model. These are my two questions. Thank you very much.
Good morning, Bernardo. Your second question is really a provocation. Let me start with your first question.
With regard to retail, we expect to see an improvement. Sell-out presented a decrease starting September of 2021, and that happened to entire retail and all types of goods. It was not different for us. That decrease led to high inventory levels at the turn of the year, and that happened to us as well because retailers did not buy as much as we had expected. First quarter was the quarter in which the retail achieved some balance, not achieving the levels of last year, take 10% less, and we expect to have that around that number. Specialists actually state that this year we will see 10% less volume compared to 2021, which is what we are experiencing right now.
Retailers are not buying the first quarter, and that's why our inventory levels are higher in this first quarter regarding components and products to consumers. Now in April and May, we already see larger orders. Our inventory levels should achieve a balance in July, beginning of August. We believe we will achieve our regular levels for retail, and they are not really high. We have really had the high inventory levels regarding what we need to deliver to government and corporates in the second half, particularly electronic ballots. We now have inventory of components for electronic ballots, but we expect also to see a normalization of those levels in the third quarter of 2022. That's my answer regarding inventory. As for your second question, this is certainly our major challenge.
As you well said, we entered the segment by do it yourself. Retail and do it yourself. Although we see an increase in this segment, we also have a very fierce competition. There are no entry barriers, much less than what we expected. We have many companies that actually provide light bulbs. Our share is close to 50%. In spite of that, we don't see the proper consistent revenue. We are expanding our portfolio. We will have lots of robots. An entire line of routers. We will also introduce a new comprehensive lighting system, but we don't expect to see a significant increase in our revenue coming from this segment. For achieving that, we would have to enter the do it for me with the network of integrators, and we are strongly inclined to start that.
We are now taking the first steps for doing that.
Thank you very much for your answer, Caio and Helio. Thank you.
Our next question comes from Mr. Peter Oliveira. He asks, what's the impact of the increase of interest in the company? Funding is increasing working capital with high rates. What about your net margin? Can you expect the same level of net margin that you achieved in 2021, which was 6%, +6%? Caio.
Well, thank you, Peter, for your question. In our presentation, we addressed the impact, BRL 34 million, as I mentioned, but we have also explained that this first quarter of the year is the weakest one in results. Secondly, this impact is for our working capital because we are increasing as a company.
If you think about two years ago, our revenue was BRL 2 billion, and last year we achieved BRL 4 billion. Our guidance is to achieve BRL 5 billion-BRL 6 billion this year. Obviously, we need them to finance our working capital. With these large projects, the ballot boxes and the Petrobras project, large corporate and government projects. For the second half of this year, we may be able to decrease this investment regarding working capital. We may decrease this expense with interest. Your question about achieving the same net margin, yes, we strongly believe so, even surpass that number.
Thank you, Caio, for your answer. Once again, if you have any questions, please make sure that you send us a message on the Q&A icon. Few questions today. Yes, if there are. I really wish we had more questions.
Let me see. Yes, I think we got more questions. We have a question from Guilherme Rocha from Safra Invest.
Good morning. Kudos for your results. Now, I'd like to know about the EBITDA margin, recurrent EBITDA margin delivered by the company. Caio, can you please answer that question?
Sure. Thank you for your question, Guilherme. Our EBITDA margin has increased. Two years ago, it was 6%-7%. We achieved 10% at the end of 2021, and we have been keeping that level. In this first quarter, the number was 12%. Your question is, are we going to keep this level? We believe that we can certainly achieve 10%-12% throughout 2022 with the new projects, our growth avenues. We see an increase in services, payment solutions, all of them deliver better EBITDA than our core business.
Although we see this decrease in consumer segment and laptops, we are still able to keep this margin. This recurrent margin that we saw last year and that we also achieved this year may be achieved over 2022, around 10%-12%.
Thank you, Caio. We have another question from Victor Lopes.
Good morning. Should we expect a variation in your mix of payment solutions according to seasonality? And what about your share coming from public institutions? Will it drop in 2022?
Victor, we believe that consumer spending will increase. We are sure that we will see an increase, but government institutions, share will also remain strong. As I mentioned, BRL 3 billion, considering the ballot boxes and other public organizations.
This is for 2022. If it's a decrease in the first quarter, we will still see a strong revenue coming from the government, particularly ballot boxes in these other quarters.
Thank you for your question. Now we have another question from Mr. Peter Oliveira.
What about the pipeline of your contracts with the government? Are you winning other bids?
Yes. Today, it's approximately BRL 3 billion, and this is what has already been signed. We are working on that. There is a pipeline of future requests for proposals that will achieve BRL 7 billion. We expect to sell tablets, notebooks. The Ministry of Economy also has a bid for desktops and laptops. There are many large projects, and we expect to see this maintain this growth.
Also, we had to hold back some products because we would not have enough components. In the fourth quarter, we expect to embrace more projects.
Thank you, Hélio. Next question from Mr. Floriano Neto.
With the exemption on the urban building and land tax that was announced by the government, how will that have an impact in your future results?
Well, this is still an uncertain area. The government had decreased the IPI, but then the IPI tax on industrialized products. We see a balance of sorts. It won't change anything in Manaus because the tax on industrialized products is already zero, and we also win in some other parts of Brazil. Right now, I'd say it's neutral.
Next question from Paulo Vasconcelos.
Considering your capital structure and capital allocation, what is the leverage level that you find to be healthy?
What are you going to do regarding the managing or generating the excess cash?
Well, I believe that your question has two parts. First, regarding leverage, it's within one to two. What we find healthy for companies such as ours is exactly this one or 1.5 or 2x . Obviously, it's not only a matter of having low leverage, but as I mentioned during the presentation, we should generate more cash in the second half of the year. That is what regularly happens. We know that the fourth quarter is affected by December, in which we see a decrease, but we will generate more cash, so our leverage level should be lower at the end of the year. What is healthy for our company ranges between 1x-2x , because we don't want to be below that nor above that.
Thank you, Caio. Next question. Tiago Wolf.
Can you please talk about the potential Infinix share? Do you expect a very quick ramp up in volume?
I really wish I were able to predict the future. Whenever you launch a product, you don't know. We believe in that product. The product line is very good. I am now trying the 5G product, and I can tell you that it's really great. I believe that we are going to increase share. With regard to the ramp up, it will start slow, but we will increase, and we will achieve our full expectations at the end of third year. It's a matter of brand penetration, market penetration. We are now focusing on retail, Vivo, and direct sales as a first experience. We still need to navigate that first.
Thank you, Hélio. Next question from Victor Rodriguez.
What are the potential impact on Positivo with the lockdowns in China?
Chinese components come from Shenzhen. We faced the challenges in January when that area underwent lockdown for two weeks. We don't have many components coming from Shanghai, so we may have more difficulties if the lockdowns affect Shenzhen, but right now, that's not what we see.
Thank you. Next question by Tiago Wolf.
Do you intend to accelerate execution of share repurchase?
Yes, we have announced a program, and we really plan on carrying it out. Now we need to comply with the Brazilian Securities Commission that requires to be now in the silent period. We do see this possibility, great possibility in that.
Once again, should you have any questions, just send us a message in the Q&A. Send us your question to the Q&A icon.
I don't think we have any other questions. If there are no further questions, we close this video conference, and I'd like to turn it over to Hélio for his final remarks.
Thank you very much for joining us today. Thank you for your questions. We are very optimistic. I am particularly happy with the strategy that we implemented, and I think that we really got it right, and now we are bearing its fruits. Thank you very, very much. Thank you, everyone.