2012 was a year of consolidation for Linx's the business model because the Company was able to present a significant organic and inorganic growth, despite the challenging scenario in Brazil.” Eduardo SamaraIndependent Board Member - Linx

In 2012 the gross operating revenue was R$ 259.2 million, 27.1% higher than the R$ 203.9 million invoiced in 2011. The net operating income totaled R$ 230.9 million in 2012, 25.2% higher than the R$ 184.5 million in 2011. The recurring revenue grew 36.7% year on year, reaching R$ 194.3 million, which represented 75% of Gross Operating Revenues. Among the factors for this growth is the increase in the customer billing and the Linx skills with crossed sales and new customers. Linx focuses its commercial efforts on this type of revenue, which generates predictability and high profitability.
 

Over the year, operating expenses, which include administrative expenses, sales and marketing, research and development and other expenses amounted to R$ 131.2 million, 31.6% above the R$ 99.7 million in 2011 . Considering only the cash administrative expenses (excluding depreciation and amortization), an increase of 30.1% over the period reflects the investment in the new organizational structure, that was started in 2011 and completed in 2012. Expenses on research and development (R & D), synergies identified by the area allowed a percentage reduction of net operating revenues, from 11.5% in 2011 to 10.7% in 2012. The absolute amount, however, was increased from R$ 21.2 million to R$ 24.7 million in the same period.

EBITDA adjusted to the earn-out of CSI was R$ 64.7 million in 2012, 14.4% above the R$ 56.6 million in 2011. This is equivalent to an EBITDA margin of 28%, compared to 30.7% achieved in the previous period.
 

The Linx net financial expenses amounted to R$ 700 thousand in 2012, 34.2% less than the R$ 1.1 million in 2011. This change was a result of the acquisition of Microvix and Compacta, which reduced the Company's cash and therefore its financial returns. These investments mainly comprise short term financial investments, highly liquid and refer mainly to bank certificates of deposit and fixed income funds, remunerated at rates ranging between 99.8% and 108.75% of the Interbank Deposit Certificate (CDI).

Linx net income in 2012, adjusted for earn-out of CSI, was R$ 27 million, 0.1% lower than the R$ 27.1 million recorded in 2011. Given that there are tax benefits that affect the net income without impacting the Company's cash, Linx uses the methodology of calculation of net cash ("cash earnings"), which in 2012 set the earn-out of CSI, was R$ 44.8 million, 16.3% above the R$ 38.5 million in 2011.

The decrease in Linx cash of R$ 31.3 million was mainly due to the acquisition of Compacta. Gross debt, which ended the year with a value of R$ 94.6 million, was made up of loans and working capital with BNDESPar, financial leasing and accounts payable for the acquisition of subsidiaries.

In 2012, the value added of the Company distributed to staff reached R$ 114 million, a 48.6% increase over the previous year, mainly due to investments made in the new organizational structure in 2012. Distribution in taxes and contributions, Linx totaled R$ 39 million in 2012, representing 23% of the total distributed added value. In relation to the remuneration of third party capital in 2012, this amount reached R$ 11.4 million, a decrease of 31.8% due mainly to the reduction in interest payments on loans during the year. Whereas the remuneration of equity was R$ 17.3 million, representing 9.3% of total distributed added value.