6-K 1 linxitr1q21_6k.htm 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR

15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2021

Commission File Number: 001-38954

_____________________

LINX S.A.

(Exact Name as Specified in its Charter)

N/A

(Translation of registrant’s name into English)

Avenida Doutora Ruth Cardoso, 7,221

05425-902 São Paulo, SP

Federative Republic of Brazil

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F: ý Form 40-F: o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)): o

Linx S.A.

Interim financial information

March 31, 2021

with Review Report on the interim financial information

Contents

Management’s report

Independent Auditor’s Report on the Individual and Consolidated Interim Financial Information

Statements of financial position

Statements of income

Statements of comprehensive income

Statements of changes in equity

Statements of cash flows

Statements of value added

Notes to the interim financial information

TO OUR SHAREHOLDERS

The Management of Linx S.A. (“Linx”, “Company”) submits the Financial Statements for the periods ended March 31, 2021 (“1^st quarter of 2021”, “1Q21”) to your appreciation compared to March 31, 2020 (“1^st quarter of 2020”, “1Q20”).

Linx, present in the market for 35 years, is a leader in technologies for retail, using cloud, big data, artificial intelligence, among other innovations, to create a wide portfolio of transactional and performance solutions, which include management software (POS - point of sale and ERP - enterprise resource planning), SaaS (software as a service) with emphasis on Digital (OMS and e-commerce), financial services (TEF and sub-acquiring) and cross selling (NFCe and connectivity), among many others.

The first quarter of 2021 was very hard for Brazil. New variants of the Coronavirus have been detected, the number of infections has skyrocketed across the country, health systems in several cities have collapsed and, unfortunately, the death toll has grown exponentially. As a result, stricter restrictive measures were again implemented throughout the national territory at different times according to the situation in each city or region. We also had the beginning of the vaccination period against COVID-19 for the Brazilian population. In view of this situation, e-commerce continued to be the main alternative for retailers to continue operating safely, enabling the continuity and even the expansion of their businesses.

Linx continues to develop and improve its products, systems and reinforce partnerships to support retail in this challenging period that has already completed more than a year. We integrate fast, efficient and cost-effective solutions into our portfolio for retailers in different industries and profiles. In this context, we highlight the performance of the Pharma and Food verticals; our e-commerce platform that is becoming increasingly robust, intuitive and even more integrated with business management systems and means of payment; in addition to expanding partnerships with the main marketplaces in the country for our entire customer base.

According to the Monthly Survey of Commerce (PMC) of IBGE, the volume of sales in retail trade expanded by 2.4% in March 2021 compared to the same month in 2020. However, the negative results in January and mainly in February, resulted in a decrease of 0.6% in the comparison between 1Q21 and 1Q20.

As a result, Linx Digital now represents 14.7% of total recurring revenue in 1Q21, while Linx Pay also grew and started to account for 13.1% of total recurring revenue in the same period. It is important to note that despite the restrictive measures to the retail operation, the subscription revenue of Linx Core grew 14.6% in 1Q21 when compared to 1Q20.

We still do not register material impacts on churn, due to the differentiated profile of Linx´s customer base, in addition to the low representativeness of the monthly fees charged on retailers' revenues. The accumulated volume of postponements reached BRL 79 million in the quarter, of which 99% of invoices with an extended term were up to date, an even better level than that registered in 4Q20.

We would like to highlight the excellent performance of our products aimed at e-commerce, Linx Commerce, and also for our products for Delivery, such as the Delivery App and Mercadapp, which had exponential growth in this period.

Our Opportunities Committee continues to monitor the impacts of COVID-19. In addition to the various cash protection measures that have been taken since the beginning of the pandemic, 100% of Linx employees remain in home office and, so far, there is no forecast of return to the offices.

On March 19, the CADE´s General Superintendence issued a Technical Opinion favorable to the unrestricted approval of the business combination between Linx and StoneCo. On April 7, we informed that the aforementioned Technical Opinion was appealed and is being analyzed by the CADE´s Administrative Court.

Finally, we reaffirm our commitment to the long term, ensuring the safety of our team, the service to clients and suppliers, and consequently, to the business.

Statutory Management Statement

In compliance with the provisions contained in CVM instructions, the Board of Directors, the Audit Committee and the Fiscal Council of Linx declare that they discussed, reviewed and agreed with the conclusions expressed in the audit report of the independent auditors and with the quarterly financial statements the period ended March 31, 2021, authorizing its disclosure.

Relationship with Independent Auditors

The financial statements of the Company and its subsidiaries are audited by Ernst & Young Independent Auditors.

The Company's policy for hiring services not related to external auditing seeks to assess the existence of a conflict of interest, thus, the following aspects are assessed: the auditor must not (i) audit their own work; (ii) exercising managerial functions in their client and (iii) promoting their client's interests.

São Paulo, May 17, 2021.

A free translation from Portuguese into English of Independent Auditor’s Report on review of interim financial information prepared in Brazilian currency in accordance with accounting practices adopted in Brazil

Report on the review of interim financial information

To the Shareholders, Board of Directors and Officers

Linx S.A.

São Paulo - SP

Introduction

We have reviewed the individual and consolidated interim financial information of Linx S.A. (“Company”), contained in the Quarterly Information (ITR) for the quarter ended March 31, 2021, which comprises the statement of financial position as at March 31, 2021 and the related statement of profit or loss, of comprehensive income (loss), changes in equity and cash flow statement for the three-month period then ended and the explanatory notes.

The Company’s Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Accounting Pronouncement NBC TG 21 and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the presentation of this financial information in accordance with the rules issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Review Engagements (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above is not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34, applicable to the preparation of Quarterly Information (ITR), consistently with the rules issued by the Brazilian Securities and Exchange Commission.

Other matters

Statement of Value Added

We have also reviewed the individual and consolidated statements of value added (DVA) for the three-month period ended March 31, 2021, prepared under responsibility of Company's Management, and presented as supplementary information for IAS 34. This financial information was submitted to review procedures carried out jointly with the audit of Company’s quarterly information. To form a conclusion, we evaluated whether these statements are reconciled with interim financial information and accounting records, as applicable, and whether their forms and contents are in accordance with criteria defined in Technical Pronouncement NBC TG 09 – Statement of Added Value. Based on our review, we are not aware of any other event that make us believe that these statements of added value were not prepared, in all material respects, in according the criteria defined by this standard and consistently in accordance with individual and consolidated interim financial information taken as a whole.

São Paulo, May 17, 2021.

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP034519/O-6

Lazaro Angelim Serruya

CRC-1DF015801/O-7

Linx S.A.

Balance sheets
As of March 31, 2021, December 31, 2020
(In thousands of reais)

	Parent company		Consolidated
	March 31, 2021	December 31, 2020	December 31, 2020	December 31, 2020
Assets
Current assets
Cash and cash equivalents (Note 5)	148	144	42,520	45,562
Financial assets (Note 6)	473,786	472,304	542,504	584,778
Trade accounts receivable (Note 7)	-	-	448,622	477,217
Recoverable taxes (Note 8)	10,124	9,999	39,305	37,702
Other assets (Note 10)	101	283	39,494	48,762
	484,159	482,730	1,112,445	1,194,021

Non-current assets
Long-term assets
Financial assets (Note 6)	-	-	2,663	2,467
Trade accounts receivable (Note 7)	-	-	14,156	16,100
Recoverable taxes (Note 8)	-	-	3,912	4,341
Deferred taxes (Note 20)	6,931	6,923	17,275	14,891
Other assets (Note 10)	-	-	25,690	25,853
	6,931	6,923	63,696	63,652

Investments (Note 11)	1,128,823	1,133,644	-	-
Property, plant and equipment, net (Note 12)	-	-	105,523	109,057
Intangible assets, net (note 13)	-	-	1,207,729	1,209,948
Right-of-use (Note 14)	-	-	91,535	101,655
	1,128,823	1,133,644	1,404,787	1,420,660

	1,135,754	1,140,567	1,468,483	1,484,312

Total assets	1,619,913	1,623,297	2,580,928	2,678,333


See the accompanying notes to interim financial information.

Linx S.A.

Balance sheets
As of March 31, 2021, December 31, 2020
(In thousands of reais)
	Parent company		Consolidated
	March 31, 2021	December 31, 2020	December 31, 2020	December 31, 2020
Liabilities and shareholders' equity
Current liabilities
Suppliers	292	1,712	41,493	49,678
Accounts payable merchants	-	-	222,563	250,618
Loans and financing (Note 15)	-	-	58,031	69,775
Lease (Note 16)	-	-	15,561	29,382
Labor obligations (Note 17)	22	39	72,522	63,067
Taxes payable	108	703	15,800	19,582
Income tax and social contribution	64	-	5,489	4,998
Payables for the acquisition of businesses (Note 18)	-	-	45,152	57,346
Deferred revenue (Note 19)	-	-	23,822	23,938
Debts with related parties	175	164	-	-
Dividends payable	56	60	56	60
Other liabilities (Note 21)	66	452	19,879	19,482
	783	3,130	520,368	587,926
Non-current liabilities
Loans and financing (Note 15)	-	-	213,739	226,199
Lease (Note 16)	-	-	74,483	76,797
Labor obligations (Note 17)	123	103	2,364	2,687
Payables for the acquisition of businesses (Note 18)	-	-	31,230	43,440
Deferred taxes (Note 20)	-	-	84,553	81,415
Deferred revenue (Note 19)	-	-	2,092	2,729
Provision for contingencies (Note 23)	-	-	25,394	28,929
Other liabilities (Note 21)	-	-	7,698	8,147
	123	103	441,553	470,343
Total liabilities	906	3,233	961,921	1,058,269
Shareholders' equity
Capital (Note 22.1)	645,447	645,447	645,447	645,447
Capital reserves (Note 22.2)	1,149,249	1,153,554	1,149,249	1,153,554
Treasury shares	(291,672)	(299,856)	(291,672)	(299,856)
Profit reserves	125,277	124,134	125,277	124,134
Net loss for the quarter	(6,870)	-	(6,870)	-
Other comprehensive income (loss)	(2,424)	(3,215)	(2,424)	(3,215)
	1,619,007	1,620,064	1,619,007	1,620,064
Total liabilities and shareholders' equity	1,619,913	1,623,297	2,580,928	2,678,333


See the accompanying notes to interim financial information.

Linx S.A.

Statements of profit or loss
Three-month periods ended March 31, 2021 and 2020
(In thousands of reais)

	Parent company		Consolidated
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020

Net operating revenues (Note24)	-	-	230,584	208,531

Cost of services rendered (Note25)	-	-	(70,821)	(72,836)

Gross income	-	-	159,763	135,695

Operating income (expenses)
General and administrative (Note 26)

SEC Form 6-K filed by Linx S.A.