Founded by entrepreneur Laércio Cosentino in 1983, TOTVS is the largest emerging markets software firm and the world’s seventh largest firm specialising in the development and sale of Enterprise Resource Planning (ERP) software. The company has five thousand direct employees and another four thousand indirect employees, operating 208 franchises in Brazil and around the world.
Focused on the IT segment, TOTVS’s growth has been fast, well structured and transparent. As early as 2005, the company adopted an external auditing procedure and it was the first private company to win the national prize awarded by the Brazilian Institute of Corporate Governance (IBGC) recognising the company with the best corporate governance practices in Brazil. Transparency has always been a core value at TOTVS, which sells more than software; it also sells longevity – its own, by investing in research and development, as well as that of its clients, who can count on the company to provide durable and constantly updated solutions.
In 2006, TOTVS became the first Latin American IT company to hold an IPO and to list its shares on the Novo Mercado segment of the São Paulo Stock Exchange. To this day, the company maintains its listing on the Novo Mercado segment, the Bovespa corporate governance category with the most stringent requirements.
The company’s concern for its management is reflected in the composition of its board of directors, which has been comprised of at least 70 percent external members over the past seven years, as well as in its decision to create Auditing and Compensation committees.
Intent on leading the consolidation of its sector, TOTVS has acquired several important competitors in Brazil (such as Logocenter, RM Sistemas and Datasul) significantly increasing its portfolio and its vertical operations, which are divided into specialised market segments and have the ability to serve any client, regardless of size. TOTVS also entered into a joint venture agreement with Quality, creating TQTVD, giving it a presence in the digital television segment. All told, the company is comprised of a total of 23 individual firms and has more than 9,000 employees.
The experience TOTVS has gained through its acquisitions and mergers have positioned the company as an Administrative Operator, an intelligent and challenging concept. More than just supplying software, the company focuses itself on best business practices and positions itself as the provider of a variety of solutions that, in addition to software services, include consulting, technology services and value-added services such as BPO, infrastructure, educational and service desk solutions.
TOTVS is the only Latin American company with a proprietary technology platform for use in the development of its software solutions and it possesses operational expertise in the following 11 segments: health care, agro-industry, legal, financial services, distribution and logistics, retail, education, construction and projects, manufacturing, small businesses (series 1 and 3) and services.
The company currently has operations in 23 countries and owns six units in Brazil and 15 others distributed throughout Argentina, Mexico, Portugal and Angola. TOTVS’s portfolio totals 24,200 clients.
Strength in operations
TOTVS’s goal is to expand its operations in specialised markets, and the company has defined business segments to which it can offer software solutions with specific characteristics. The company’s segment-specific solutions go beyond the automation of back-office operations to include applications with specific functionalities for each of the segments. In order to advance in each of the segments, the company is among the biggest spenders on research and development investment in Brazil. Last year alone, the company allocated $65m to R&D.
An intelligence unit has been created for each segment that, among other activities, is charged with elaborating its operational strategy and is responsible for maintaining relationships with the market, identifying strategic partnerships and communicating material facts and information to the sector. The company’s goal is to offer personalised software solutions for the market in which its clients operates, while taking into consideration the specific challenges and compliance with the legal requirements pertinent to each segment.
Accomplishments
The past year was a period of growth and accomplishment for TOTVS. The company celebrated record sales, an increase in market share (it leads the market with a 38.7 percent share), new acquisitions, brand consolidations, the announcement of new products and the strengthening of its business segments.
In the first nine months of 2009, TOTVS posted $366.6m in net revenue, a 7.6 percent year on year increase. EBITDA totaled $94.1m in the 9M09, a 32.5 percent jump over the 9M08. In the same period, net income came to $58.2m, a 7.9 percent increase over 2008. EBITDA margin rose by 490 basis points relative to the 9M08.
The group’s 26 years of market operations led to a number of prizes in 2009, including Best Corporate Governance in the Technology Segment category and, for the second straight year, recognition in the top five Corporate Governance – Best of Brazil and of Latin America ranking by MZ Consult, a leading investor relations and financial communications firm.
In 2008, the company won IBM’s international award for “Best Partner – Innovation That Matters,” having been identified as one of 50 “local dynamos” in a listing of case studies of successful businesses published by Boston Consulting Group (BCG), one of the largest consulting firms in the world. The company was also mentioned in an article published in the Harvard Business Review that highlighted its business model and the aggressive strategies it has employed in its consolidation of the Brazilian market.
TOTVS is also active in the communities in which it operates. The company understands that corporate social responsibility is an integral part of its business, which is why it has operated the Social Opportunity Institute (IOS), a professional training programme for low-income youths, for 10 years. More than 18 thousand students have already completed the programme. IOS gets help and support from TOTVS’s clients and partners.
Entrepreneurship, leadership, a consolidating spirit and transparency are among the core values of TOTVS, a company that operates in a broad and still little-explored market. These credentials, along with the fact that TOTVS is the only emerging markets company to develop state-of-the-art technology from which to develop its software solutions, are fundamental aspects of the company’s long term prosperity and that of its clients and investors.
For more information, visit: www.totvs.com
