We show that Wiz (WIZS3) is much more than a contract with Caixa, says CEO about 2Q22 results – Money Times

WIZ - Heverton Peixoto and Guilherme Aguiar
Heverton Peixoto and Guilherme Aguiar, respectively CEO and director of Market Relations and M&A at Wiz (Image: Disclosure/Raul Spinassé)

Announcing the end of a partnership spanning more than four decades with Cashiera Wiz (WIZS3) made it clear to the market that it would further accelerate its strategy of entering new counters without losing focus core business.

Heverton Peixoto, CEO of Wiz, told the Money Times that, following the same line as the first quarter, the balance sheet released this Thursday (11) reinforces the narrative that Wiz has turned the page on losing its contract with the state bank.

“We turned the page. We show that the Wiz it’s much more than that contract [encerrado] that many thought it was a case of ‘let’s give up on this company’”, said the executive.

Second quarter revenue, excluding commissions, grew compared to the same period in 2021, showing that the strategy adopted by the company after the end of the partnership with Caixa is bearing fruit.

Gross revenue totaled R$266.9 million, up 9% over a year earlier, reflecting the performance of the business units BRB Seguroswhich added R$ 66.3 million, BMG Corretorawith R$ 15.2 million, and Wiz Corporate, with R$ 2.6 million. Current gross revenue, excluding Cashier Networkwas R$ 208.2 million, an increase of 84% in the annual comparison.

Net revenue, excluding commissions, increased 10.3% compared to last year and totaled R$ 197.3 million.

In the first half of the year, Wiz reached a record of R$ 500 million in total revenue. The company is optimistic that it will be able to deliver the target of R$920 million to R$1 billion in gross revenue in 2022.

Wiz had a 23.6% drop in net income for the second quarter, to R$57.3 million, as a result of the worsening in the depreciation and amortization lines and the financial result.

On an adjusted basis, net income totaled R$78.6 million, down 7.2% year-on-year.

Managerial Ebitda (earnings before interest, taxes, depreciation and amortization) dropped 3% to R$108.4 million. The margin also dropped year-on-year, but at 54.9%, a level that the Wiz CEO considers “extremely healthy”.

“This level of profitability, this sales force structure, is very close to what we understand as ideal”, says Peixoto.

More room to grow

Wiz’s current focus is on three verticals: bancassurance of financial solutions, bancassurance of car dealerships and retail – the latter via a partnership with Polishop.

According to Guilherme Aguiar, director of Market Relations and M&A at Wiz, the company’s strategy of exploring its core business while complementing the portfolio with new operations has been maturing the business model. Still, Wiz didn’t make it to the top.

“[A Wiz] is a company that is already very mature in the M&A process [fusões e aquisições]. We already have an evaluation and proposal method, on how to integrate, land these businesses and then operate. That’s what makes Wiz a desired partner in the market today, including for future partnerships. But we do not believe that Wiz is at a great level of business, partnership and performance”, he commented.

Aguiar reinforced that, despite expecting a still challenging second semester for the credit market due to high interest rates, there is a lot of opportunity in all Wiz units, with new product launches, execution maturity and strategy maturity.

Aguiar said that Wiz’s strategy, when it enters new branches, is to grow fast in the first quarters and continue on an interesting expansion curve – although not at the same levels as at the beginning.

Ideal solution for retail

The creation of a joint venture with Polishop marks Wiz’s entry into the retail segment. Through the partnership, Wiz will be in charge of the retailer’s sales channels, aiming to boost the result in security.

According to the CEO of Wiz, two factors explain the company’s decision to operate in the retail industry: the interest of retailers in becoming more profitable and the need of players in the sector to offer an increasingly complete offer.

According to Peixoto, with the retail market presenting profitability challenges in a difficult scenario for the Brazilian economy, Wiz and its financial products solution fit like a glove for companies.

In addition, increased competition in the sector has put pressure on market players to complement their operations. Peixoto commented that retail companies that are not diversifying their supply will be left behind. Retailers like Magazine Luiza (MGLU3) and Free market realized this, and are already in this process of diversification, looking more at secondary products.

“When you combine these two factors – retailers’ interest in increasing their profitability and seeking opportunities in a challenging time with the fact that they need to complement their offer – Wiz comes as an ideal solution”, added the executive.

Check out the participation of Heverton Peixoto on the board turnaround of Money Times:

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O Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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