ABRASCA: Brazilian Association of Publicly Held Companies. Founded in September 1971, it is a civil entity of national scope, without profitable purposes, whose legal personality is distinct from those of its associates, which are companies legally registered as publicly registered companies.
APIMEC: Association of Capital Market Investment Analysts and Professionals. It’s a non-profit civil association. It brings together capital and related market analysts, promoting sociocultural activities that aim at the integration, training and specialization of its associates.
B3: As a result of the combination between BM&FBOVESPA and Cetip, B3 is born, a company larger than the sum of the shares. A world-class financial market infrastructure company.
BACEN: Central Bank of Brazil. Federal authority member of the National Financial System, being linked to the Ministry of Finance of Brazil. Like the other central banks in the world, The Brazilian is one of the main monetary authorities of the country, the main being the National Monetary Council – CMN.
Balance: Accounting statement of the values of assets, liabilities and shareholders’ equity of a company. It refers to a complete social exercise.
Benchmark: Term used in the financial market to determine an index that will serve as a parameter for comparison between investments. An exchange fund, for example, may have as a benchmark the variation of the U.S. dollar.
Billing: It is the financial result of the sale of products or services of a company.
BM&FBOVESPA: Stock Exchange, Commodities and Futures. Brazilian stock exchange, headquartered in São Paulo and the second largest stock exchange in the world in market value. The São Paulo Stock Exchange (Bovespa) and the Commodities and Futures Exchange (BM&F) merged, giving rise to a new institution that is linked to all Brazilian stock exchanges.
BNDES: National Bank for Social Economic Development. Public Company whose activities are: to study the problems of global economic development and examine specific projects, aiming to boost the country’s economic sector, strengthen the national business sector, mitigate regional imbalances, promote the integrated development of agricultural, industrial and service activities, and promote growth and diversification of exports.
Board: Composed of members elected by the board of directors, or in the absence thereof, by the general meeting, the board is responsible for the representation and management of the company.
Bovespa: São Paulo Stock Exchange. Non-profit civil association where securities are traded. Its main objectives are: to maintain a suitable place or electronic trading system for the purchase and sale of securities transactions; preserving high ethical standards in negotiations; disclose the operations carried out quickly and in detail.
BR GAAP: Accounting practices adopted in Brazil, which are based on the Brazilian Corporate Law, accounting standards issued by IBRACON and CVM and CFC resolutions.
Bylaws: Set of norms and rules in which the institutional or organic principles of a public or private collective or corporation are established.
*Board of Directors: elected or designated members, which jointly oversees the activities of a company or organization.
CAGR: Compound annual growth rate.
Capital Markets: Where transactions are carried out to transfer financial resources of varying deadlines between so-called savers and investors.
Cash Flow: Defines the movement of cash inputs and outflows in a company’s cashier. It also calls a demonstrative and chronological framework for predicting the income and outflows of a cash flow in a future period (days, months, years) that is an instrument of fundamental importance for the financial programming of a company in operation or for the implementation of a project. In the latter case, the cash flow ánalise allows the definition of the enterprise point of equilibrium.
CBLC: Brazilian Liquidation and Custody Company. Department of BM&FBOVESPA, responsible for the custody of shares and other private securities in the Brazilian financial market.
CMN: National Monetary Council. Council, created by Law No. 4,595, of December 31, 1964 with the maximum deliberative power of the National Financial System, responsible for issuing general rules and guidelines for its proper functioning.
Commodity: An English term generally used in the plural as Commedities. In the financial market is used to indicate a type of product, usually agricultural or mineral, of great international economic importance, as it is widely traded between importers and exporters, such as oil, soybeans, meat, cotton, steel, copper, etc.
Common Share:(ON) – Gives the shareholder voting rights at the company’s general meetings. In the distribution of the company’s dividends, its owners only receive their corresponding share after the owners of the preferred shares have received their shares.
Conference Call: Conference call with analysts, institutional investors and individual investors in the period in which the Company reports its financial results for the most recent quarter. The conference should also include information related to the Company’s vision of future.
Corporation: Commercial Company formed by at least two partners, whose respective capitals are represented by the proportional number of shares: the liability of each is limited to the issue price of the shares subscribed or acquired; S.A. may engage in any type of activity considered legally commercial, industrial or service provision. S.A. shall engage in a for-profit activity.
Corporate Governance: Corporate governance are the practices and relationships between shareholders/ quota holders, board of directors, board, independent audit and fiscal council, in order to optimize the company’s performance and facilitate access to capital. The expression is designed to cover matters relating to the power of control and direction of a company, as well as the different forms and spheres of its exercise and the various interests that are somehow linked to the life of commercial companies.
CVM: The Brazilian Securities and Exchange Commission (CVM) is an authority linked to the Brazilian Ministry of Finance, established by Law 6,385 of December 7, 1976, as amended by Law No. 6,422 of June 8, 1977, Law No. 9,457 of May 5, 1997, Law No. 10,303, of October 31, 2001, Decree No. 3,995 of October 31, 2001, Law No. 10,411 of February 26, 2002, under President Ernesto Geisel, and together with the Brazilian Corporate Law (Law 6,404/76) disciplined the functioning of the securities market and the performance of its protagonists. CVM has the power to discipline, normalize and monitor the performance of the various members of the market. Its power to standardise covers all matters relating to the securities market.
Disclosure: When a company discloses information, facilitating investor decision-making and increasing its protection.
Dividend: Value distributed to shareholders, in cash, in proportion to the number of shares owned. It results from the profits obtained by a company in the current year or in past years.
EBITDA: From English earnings before interest taxes, depreciation and amortization. Also known as Lajida or operating cash generation. It corresponds to operating results before financial result and expense with placement of shares, added depreciation and amortization, the variation of technical provisions and revenue due to late payment of customers, less participation of employees on profit. EBITDA is not a line of financial statements by the Accounting Practices Adopted in Brazil and does not represent cash flow for the periods presented. EBITDA has no standardized meaning and our definition of EBITDA may not be comparable to that used by other companies.
Eurobonds: Securities issued by the government or Brazilian companies in the International market.
Equity: The net value of a company’s assets. Represents the difference between the total value of the assets and the value of the debt to third parties.
Equity Value (VPA): The Equity Value of the share is the value of the company’s Equity divided by its number of shares
Extraordinary General Meeting:(AGE) – Meeting of the shareholders of a company on an extraordinary level, this call is not mandatory.
Financial Market: It is the market aimed at the transfer of resources among economic agents. In the financial market, transactions are carried out with a varied time.
Fractional lot: Batch that displays a stock quantity less than the default lot.
Free Float: Number of shares of a company available for trading in organized markets. It is commonly called “Outstanding Shares”, excluding those held by controlling shareholders.
*Fiscal Council: supervisory body of administrative management acts and operates on a permanent basis.
GDP: Gross Domestic Product. Sum of all the wealth generated by the economy of a country in a given time interval (usually one year).
Gross Margin: Gross Profit ÷ Net Revenue, being one of the best productivity indicators: if we buy two companies of the same activity, the one with the highest gross margin is the most productive (either by efficiency in processes, scale gain, cost structure, etc.).
Gross Profit: Difference between Net Revenue and Cost of Goods Sold.
Gross Revenue: Total of reais received by the sale of the company’s products or service, without any deduction.
High Yield: It means high rate of return. Loans in which companies pay significantly high interest rates, and which are usually made on the European market, are classified as High Yield. Investment funds that invest in securities classified as High Yield typically present a higher credit risk.
Holding: Company that maintains control over other (subsidiaries) for majority ownership of the shares. In general a holding company produces nothing, intended only to centralize control over a complex of companies.
Home Broker: It is a channel of relationship between investors and brokerage companies, for trading in the stock market, allowing the sending of purchase orders and sale of shares over the Internet and allowing access to quotations and monitoring of stock portfolios, among several other resources.
IBOVESPA: It is the most important indicator of the performance of the Brazilian stock market, as it portrays the behavior of the main shares traded on the BOVESPA. It is formed from an imaginary application, in Reais, into a theoretical amount of shares (portfolio). Its basic purpose is to serve as an average indicator of market behavior. Therefore, the shares that are part of the index represent more than 80% of the number of trades and trades and financial volume traded in the spot market. As the stocks that are part of this portfolio have great representation, we can say that if most of them are going up, the market, measured by the Bovespa Index, is on the rise, and if it is falling, it is down.
IBrX-100: Brazil/Bovespa Index. It is a price index that values the return of a theoretical portfolio, composed of shares of 100 publicly held companies, selected among the most traded on the São Paulo Stock Exchange, in terms of number of trades and financial volume. The shares that make up the index are weighted by the respective number of shares that are available for trading on the market. The Brazil Index is considered an index that evaluates the total return of the component shares of its portfolio.
IBrX-50: Brazil Index 50. It is an index that values the total return of a theoretical portfolio composed of 50 publicly held companies, selected among the most traded on the São Paulo Stock Exchange, in terms of number of trades and financial volume. The IBrX-50 has the same characteristics as the IBrX-100 – Brazil/Bovespa Index, which is composed of 100 selected shares among the most traded on the São Paulo Stock Exchange.
Independent Advisor: According to the Novo Mercado regulations, the Independent Board Member is characterized by: (i) having no link with the Company, except for capital participation; (ii) not being a controlling shareholder, spouse or relative up to the second degree of that, or not being or not having been, in the last three years, linked to the company or entity related to the controlling shareholder (persons linked to public educational and/or research institutions are excluded from this restriction); (iii) has not been, in the last three years, an employee or director of the Company, the controlling shareholder or a company controlled by the Company; (iv) not to be a direct or indirect supplier or buyer of the Company’s services and/or products, in a magnitude that implies loss of independence; (v) not being an employee or administrator of a company or entity that is offering or demanding services and/or products to the Company; (vi) not being a spouse or relative until the second degree of any company administrator; and (vii) not receiving any other remuneration from the Company other than that of a board member (cash proceeds from equity are excluded from this restriction). “Independent Directors” are also considered those elected by the faculties provided for in Article 141 paragraphs 4 and 5 or article 239 of the Brazilian Corporate Law, which include quoruns and ways for the election of board members by minority shareholders.
Inflation: Persistent increase in prices in general, resulting in a continuous loss of purchasing power of the currency.
Interest on Equity: Form of remuneration to the shareholder of the company, originated by the retained profit in previous periods.
Liquidity: Ability that a security has to be converted into currency. Absolute liquidity is only conferred on paper money, all other securities having lower liquidity, which varies according to investment and economic situation.
Logistics: It is the process of planning, implementation and control of inbound and outbound flows of materials, as well as storage, services and information, which covers from suppliers to customers.
Margin: It is a value fixed by the Futures Exchange or by the registration and settlement box to the buyer or seller of a fixed-term contract that will serve as a guarantee for the fulfillment of the future obligation.
Market share: Measure of the participation of a brand or product in the market.
Market Value: The Market Value (in English, Market Cap) is the company’s value on the stock exchange, that is, hypothetically how much an investor would spend to buy all the company’s shares at the current market price. To obtain this value, we multiply the quotation for each type of company stock by the respective number of shares outstanding.
Net Income: Positive difference in Gross Profit minus Operating and non-Operating Profit, being a final result calculated in a given period, after the record of all revenues and expenses.
Net Margin: Net Income ÷ Net Revenue, being an indication of profitability: if we compare two companies of the same activity, the one with the highest Net Margin is the one with the best profitability in the business, including the operational, financial and extra-operational issue.
Net Revenue: Amount that the company effectively receives for sales of its products, that is, the decreased revenue (gross revenue) of direct taxes, such as ICMS, IPI, ISS, PIS and Cofins.
New Market: BOVESPA’s special listing segment, with differentiated corporate governance rules.
Nominal Interest: Capital compensation rates that do not take into account the variation of any indexer or inflation index.
Operating Expenses: can be subdivided into Administrative Expenses (salaries of administrative staff, office rent, telephone bill and office light, etc.) and Sales Expenses (marketing, disclosure, discounts, commissions, etc.). Thus, Operating Expenses are all expenses related to the company’s activities, but that are indirect (direct expenses are grouped in the Cost of Goods Sold).
Ordinary General Meeting:(AGO) – Meeting of the shareholders of a company, whose convocation is mandatory, so that there is verification of the results, reading, discussion and voting of the board reports and election of the supervisory board of the board of directors of this corporation.
Oscillation: Price change of a given asset over a certain period of time.
Passive: The liability comprises all the obligations and debts of a company.
Press Release: These are documents released by press relations, in this case by Investor Relations, to inform, announce, contest, clarify or respond to the media about any fact involving the advisor, positively or not. It is, in practice, an official and documented public statement of the advisor.
Primary Market: Market for issuing new shares or securities in general.
Promissory Cream (NP): Credit title issued by the companies, for public placement, which confers on its holder the right of credit.
Real Interest: It is the result of the nominal interest rate, discounted inflation or price index.
Secondary Market: Where the trading of securities acquired in the primary market occurs, favoring the liquidity of the securities already issued.
Share Capital: Financially or accounting, it is the portion of the shareholders’ equity of a company that represents investment in the form of shares made in the company by the shareholders, which covers not only the installments delivered to them, but also the amounts obtained by the company and which, by decision of the shareholders, are incorporated into the share capital.
Standard lot: Lot of titles that have identical characteristics. This amount of securities is prefixed by the stock exchanges.
Stock Exchange: Non-profit civil association where securities are traded. Its main objectives are: to maintain a suitable place or electronic trading system for the purchase and sale of securities transactions; preserving high ethical standards in negotiations; disclose the operations carried out quickly and in detail.
Stock Market: market in which the shares are traded, either through the primary or secondary market.
Stock Options: These are options given to managers and employees of a firm as a way to remunerate them, and to align their objectives with the company’s objectives.
Sustainability: Principle of action of a society that maintains the necessary characteristics for a fair, environmentally balanced and economically prosperous social system for a long and undefined period of time. It thus meets the needs of the present without compromising the possibility for future generations to meet their own needs.
Tag along: Right that guarantees minority shareholders the extension of the conditions offered to controlling shareholders in the event of sale of control of the company.
US GAAP: United States Generally Accepted Accounting Principles. These are the accounting standards used in the United States of America, and which must be followed by all companies in other countries that want to trade their shares and / or securities on US Stock Exchanges.
Volatility: Indicates the average degree of variation in the prices of a security in a given period.