Results presentation

2019 Q1

May 6th, 2019

Agenda

Market performance and operational indicators

Gennaro Oddone

Results

Gennaro Oddone

Return, cash flow and indebtedness

Ramón Pérez

Capital Market and expectations

Ramón Pérez

RESULTS PRESENTATION | Tegma | 2019 Q1 2

Market performance and Tegma indicators(in thousand, except average distance)

528 581

170 100

1Q18 1Q19

Vehicle sales

-41.3%

+10.1%

The 10.1% growth in domestic sales

reflects basically the increase of direct

sales.

Vehicles exports were affected mainly

by the crisis in Argentina, which fell

41.3%.

Source: ANFAVEA

Domestic Exports

Production and imports

The period production was stable when

compared to the same period of the

previous year, mainly due to the poor

export performance. The decrease in

imports was due to the high inventories of

the assemblers.

Source: ANFAVEA/Banco Central

Vehicles Tegma and distance

Tegma carried 179,000 vehicles, a

growth of 1.2%, which is reflected in a 1.3

p.p gain of market share driven by the

gain of market share of a major customer.

The increase in the average distance

from travel mainly reflects the reduction in

the deliveries exports share via port.

668 665

69 68

1Q18 1Q19

Imports

-1.1%

-0.5%

Production

177 179

969 1,053

1Q18 1Q19

0

50

100

150

200

250

+8.6%

+1.2%

24.6% mkt

share

26% mkt

share

Average kmVehicles transported

3RESULTS PRESENTATION | Tegma | 2019 Q1

Tegma results(in R$ million | pro-forma disregarding Cariacica-ES in 2018 and IFRS 16)

Net Rev. per operation

The 16% growth in vehicle

logistics revenue was due to the

growth of the average distance

and number of vehicles

transported, the price

readjustment and other services

of transportation and yard

management

Integrated logistics growth

driven by the good performance

of industrial logistics in the period.

222 259

3738

1Q18 1Q19

Integrated Log.

Vehicle Log.297

259

The increment in the EBITDA

and in margins of vehicle

logistics reflected the increase in

revenues combined with cost

and expense control.

The growth in EBITDA and in

margins of logistics integrated

was due to the growth in

revenues from industrial

logistics.

2338

7

9

1Q18 1Q19

EBITDA Integrated Log.

46

30

The EBIT margin of logistics

automotive industry expanded

450 bps vs. 1Q18 due to

revenue growth and cost control.

The EBIT margin of logistics

integrated expanded 530 bps vs.

1Q18, due to the growth in

revenues from the industrial

logistics operation.

EBIT Mg.

The 94% growth in 1Q19

(excluding IFRS 16) when

compared to 1Q18, resulted

mainly from revenue growth and

operating improvement in the

period, in addition to the

reduction in financial expenses.

1426.6

0

10

20

30

40

50

60

70

1Q18 1Q19

27.2

Net Profit

8%

12%

11%17%

1Q18 1Q19

Integrated Log.

Vehicle Log.

IFRS 16

Mg 9%

Mg 5.3%

Vehicle Log.

Mg 15%Mg 10%

Mg 19%

Mg 23%

Mg 11%

Mg 16%

4RESULTS PRESENTATION | Tegma | 2019 Q1

Return, cash flow e indebtness(in R$ million, consolidated)

ROE and ROIC

The ROIC recovery in 1Q19 vs. 1Q18 was

mainly due to the improvement in operating

results (NOPAT growth of 12% vs. 1Q18). We

remind that the influence of IFRS 16 on ROIC

is negligible if we consider that right of use

amortization is slightly inferior to effective rent

expenses.

Free Cash Flow (ex-IFRS)

Free cash flow in 1Q19 was R$ 46.3

million. If we disregard the effect of IFRS 16,

it would have been R$ 37.4 million.

Compared to 1Q18, free cash flow in 1Q19

was lower due to higher CAPEX, as the

higher cash cycle offset the better operating

results.

The 1Q19 cash CAPEX was higher than in

1Q18 due to improvements in a Sorocaba-SP

yards for the operation of Toyota.

Indebtness

The decrease in gross indebtedness

occurred due to the payment of the principal

and interest of the debentures (1st emission)

in the amount of R$ 48.4 million, even with

the new debt contracted in the amount of R$

30 million.

The sharp decrease in net debt was due to

the strong free cash flow in the quarter. We

remind you that the complementary amount

of dividends payable of R$ 28 million will be

settled on May 7.b

24% 26%

28%36%

4Q18 1Q19

-3 -9

47 46

44 37

1Q18 1Q19

159 143

84 108

75 35

4Q18 1Q19

Operational Cash Gross debt Cash

0.4 x 0.2x

ROIC

ROE

cash” CAPEX

Free Cash Flow Net debtX adjusted EBITDA

5RESULTS PRESENTATION | Tegma | 2019 Q1

Capital markets and expectation

The shares of Tegma increased 9% in the

last 12 months, similar vs the market. We

believe that the uncertainties related to

Brazilian economy that influenced the

volatility of the shares, despite of the last

good results reported.

Multiples TGMA3

The chart above reflects the TEGMA

evolution of the quarterly multiples over 2018

(referring to the expected results for 2019)

and the same for 2019 (referring to

expectations for 2020 results).

Analysis TGMA3

Rating Moody´s

Global B1

Persp.: Stable

National Baa2.br

Sell side Coverage

Safra, Itaú, BTG

Pactual, Empiricus,

BAML and

Santander

Average target

price: R$31

0,4x

6.07.4

23.025.1

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

45,00

May-18 May-19

0,00

2,00

4,00

6,00

8,00

10,00

12,00TGMA3 (in R$) ADTV

12M (R$ mi)

TGMA3

7.8

6.9 6.9

7.8

15.1 12.9

12.713.8

7.5

7.2

13.112.4

1T 2T 3T 4T

EV EBITDA 2019 PE 2019

EV EBITDA 2020 PE 2020

6RESULTS PRESENTATION | Tegma | 2019 Q1

Q&A sectionGennaro Oddone – CEO and IRO

Ramón Pérez - CFO

ri.tegma.com.br/en/