Totvs focuses on development following 20th quarter of double-digit growth

Tuesday, February 1, 2011

Brazilian software development group Totvs (Bovespa: TOTS3) boosted revenues 14.2% to 1.13bn reais (US$678bn) in 2010, but pledged to continue "reshaping and putting more attention on development," executive vice president José Rogério Luiz told BNamericas.

In announcing the company's financial results, Luiz said Totvs was proudest of two trends. First, Totvs increased its market share in Brazil to close 2010 with 45.3%.

"Even in an underpenetrated market, we were able to grow stronger in leading [market share in] Brazil and Latin America," he said.

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Second, Totvs wrapped up 2010 with its 20th consecutive quarter of double-digit organic revenue growth, a 10.6% year-on-year increase in Q4 to 295mn reais. The company's Ebitda, meanwhile, grew 21.2% from the year-prior period.

Growth figures for Totvs units in Argentina and Mexico outpaced figures from Brazil. Still, the firm's home country remained the principal driver of its overall upward trajectory, accounting for more than 60% of growth and 95% of revenues. The strength of Brazil's IT sector, particularly technology purchases among SMEs, propelled Totvs' yearly and quarterly revenues, according to the executive.

"In 2010, we added 2,840 new clients. This was a record for Totvs in terms of new software license sales," he said. "Not only did we increase the number of clients, [but also] the average ticket grew 25%, so the clients are returning to us and buying more software."

The fresh license sales, Luiz noted, will assure Totvs' future revenues from service and maintenance, both of which ended 2010 with quarterly and yearly growth.

While revenue growth outpaced increases in costs and expenses, Totvs spent 13.6% more last year compared with 2009. Luiz said the company foresees continued internal revisions "to dilute fixed costs" and maximize efficiency.

Totvs also plans to emphasize development over the next 2-3 years.

"We have been putting a lot in R&D, but we still feel there's room to improve in our development area," Luiz said. "It's going to be one of our priorities to have better processes."