São Paulo, April 22, 2019 – LINX S.A. (B3: LINX3), pursuant to the paragraph 4 of article 157 of Law 6404, of December 15, 1976, as amended and in force (“Brazilian Corporate Law”), and the Normative Regulation 358, of January 03, 2002, as amended, in attention to the Letter 229/2019-SLS, dated April 18, 2019 and by the same date, in all the content followed below the transcript, by which B3 requests clarification from the Company on the fluctuations registered with its stock in relation to the increase in the number of trades and the quantity traded, informs that it is unaware of the existence of any fact that may justify the movement of stock issued by the Company at the trading sessions of B3 carried out between April 5 and April 18, 2019, according to the table below:
*Updated at 12h39.
The Company clarifies that in its view the oscillations may be related to the recent offers announced by retail bank acquirers, which has generated market uncertainty about its initiatives in the segment of means of payments.
In spite of the market reaction to the movements in the segment of means of payment, in more than 30 years of operations dedicated to the retail sector in Brazil, we have developed in-depth specialized knowledge and competitive advantages that have allowed us to become the leading player in the Brazilian retail management software market. Consequently, we achieved a 41.3% market the retail management software solutions segment. We have successfully leveraged our extensive customer base to explore cross selling opportunities, resulting in greater economies of scale, greater customer loyalty (as reflected by our high customer retention rates) and lower customer acquisition costs, translating into a hard to replicate business model with strong natural barriers against the entry of competitors.
Therefore, it is important to note that Linx maintains its focus on creating value for the retailer with an end-to-end disruptive platform that combines management software, e-commerce and omnichannel that remains its primary source of revenue and growth. The initiatives related to the acquiring market are in conformity with its business plan, but are still not very representative in relation to the total revenue of the Company.
At last, we reinforce our commitment to the best practices of corporate governance and we put ourselves at the disposal of the Securities and Exchange Commission for any necessary additional clarifications.