1 q09 results presentation

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  • 1. CSU CARDSYSTEM SA investidorescsu@csu.com.br 1
  • 2. DisclaimerThis presentation may include forward-looking statements about future events or results accordingto the regulations of Brazilian and international securities and exchange commissions. Thesestatements are based on certain assumptions and analyses by the Company that reflect itsexperience, the economic environment, future market conditions and events expected by it, manyof which are beyond its control. Important factors that may lead to significant differences betweenactual results and the statements of expectations about future events or results include thecompany’s business strategy, economic conditions in Brazil and abroad, technology, financialstrategy, client business development, financial market conditions, uncertainty regarding theresults of its future operations, plans, objectives, expectations and intentions, among others. As aresult of these factors, the actual results of the Company may significantly differ from thosementioned or implicit in the statement of expectations about future events or results.The information and opinions contained in this presentation should not be understood as arecommendation to potential investors and no investment decision should be based on the veracity,currency or completeness of this information or these opinions. No advisors to the company orparties related to them or their representatives will be responsible for any losses that may resultfrom the use or the contents of this presentation. 2
  • 3. Cards Market and CardSystem Growth of the Cards Market (million, end of March, source: ABECS) Private Label + Credit Market CardSystem 127 Average Annual Growth - 3 years 20.9% 26.0% 109 87 56 70 2008 Growth - 12 months 16.0% 18.1% 153 177 89 102 124 2005 2006 2007 2008 2009 Base growth was greater than market Private Label Credit growth; CSU Card Base Performance The unit has the most modern and (million, end of March) complete processing structure in Brazil; Study of the card market carried out by the Brazilian Central Bank suggests 20.8 13.0 17.6 creation of a specific regulation for the 8.6 10.4 segment and opening up of issuers. 2005 2006 2007 2008 2009Source: ABECS, CSU 3
  • 4. CardSystem – Operational Data Issue of cards in CSUs base (million, quarter issue) 1.7 1.6 1.4 1.3 1.1 1Q08 2Q08 3Q08 4Q08 1Q09 1Q09 was the best quarter in CSU’s history in terms of card issue; 6 million new cards issued in the last 12 months; Issue of new cards will grow each year.Source: CSU 4
  • 5. MarketSystem - Operational Data MarketSystem - Processed Accounts (million) 2.65 2.34 2.38 1.90 1.98 2.03 2.12 1.77 1.84 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1T09 Consistent growth in the number of managed accounts; Growth was solely organic; New programs for hybrid cards continue to perform better than portfolio average.Source : CSU 5
  • 6. TeleSystem / Credit&RiskDecree 6,523 led companies contracting call centerservices to expand the scope of their agreements,consequently increasing the demand for theseservices;Expansion of workstations;Transfer of Credit&Risk’s workstations to TeleSystemto meet the demand for specific operations. PAs in operation at TeleSystem and Credit&Risk 4,095 3,872 3,880 3,596 3,593 3,322 2,966 3,114 3,476 3,445 2,546 2,218 3,314 3,288 758 776 748 619 435 282 305 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 PAs Credit&Risk PAs TeleSystem 6
  • 7. Cardsystem / MarketSystem Gross Revenue Gross Profit and Gross EBITDA and EBITDA (R$ million) Margin Margin (R$ milhões, %) (R$ million, %) 32.7% 62.4 31.1% 19.4% 18.4 20.9 47.0 15.9 15.4 36.5% 36.3% 35.4% 32.1% 1Q08 1Q09 1Q08 1Q09 1Q08 1Q09 32.7% growth in gross revenue at CardSystem / MarketSystem between 1Q08 and 1Q09, driven by the growth in CSU’s card base; The units improved their gross profit and gross margin; Investments in technological upgrade at the unit was one of the reasons for the drop in EBITDA margin; Organic growth of the client portfolio. 7
  • 8. TeleSystem / Credit&Risk Gross Revenue Gross Profit EBITDA (R$ million) (R$ million) (R$ million) 9.0% 44.9 2.0 2.9 41.2 (0.4) (0.6) 1Q08 1Q09 1Q08 1Q09 1Q08 1Q09 The new operational setup at the call centers in Recife has optimized operations, improved service quality and reduced costs; The company plans to extend this structure to workstations at other sites in 2009, to continue the improvement in the units’ profitability indicators. 8
  • 9. Performance of Financial Indicators Gross Revenue CSU (R$ million) 104.9 107.3 101.2 96.9 88.3 1Q08 2Q08 3Q08 4Q08 1Q09 EBITDA CSU (R$ million) 20.5 15.8 16.7 16.9 15.0 1Q08 2Q08 3Q08 4Q08 1Q09 EBITDA Margin (%) 20.6 18.3 17.5 17.7 17.4 1Q08 2Q08 3Q08 4Q08 1Q09 9
  • 10. Results - Units Gross Revenue (R$ million) 61.3 62.39 55.59 50.01 47.03 43.61 46.85 45.57 44.92 42.47 41.23 42.57 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 CardSystem / MarketSystem TeleSystem / Credit&Risk EBITDA (R$ milllion) 16.91 16.72 18.42 13.61 15.42 15.26 0.54 0.18 2.04 (0.42) (0.20) (2.29) 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 CardSystem / MarketSystem TeleSystem / Credit&Risk 10
  • 11. CSU (Consolidated) Gross Revenue Cost of Services Gross Profit and Gross (R$ million) Rendered Margin (R$ milllion) (R$ million, %) 21.6% 13.2% 55.0% 107.3 75.6 23.7 88.3 15.3 66.8 23.9% 18.6% 1Q08 1Q09 1Q08 1Q09 1Q08 1Q09 Organic growth of units drove company growth by almost 22%; Gains in scale led to improved margins; Strict cost control. 11
  • 12. CSU (Consolidated) General and EBITDA and EBITDA Net Result (R$ million) Administrative Expenses Margin (R$ million) (R$ million, %) 24.3% 36.4% 183.7% 15.9 20.5 4.8 12.8 15.0 20.6% 18.3% 1.7 1Q08 1Q09 1Q08 1Q09 1Q08 1Q09 The company chooses to optimize expenses with outsourced services and increases staff; Stability of costs and expenses helps in the 36.4% EBITDA growth; Earnings per share was R$0.10. 12
  • 13. Debt and Capex Debt - R$ million Debt: 1Q09 1Q08 4Q08Short Term Debt 58.0 55.8 62.5 Cash generated in three months enabledFinancing and Debt loan 47.4 33.3 49.7Leasing 10.7 22.5 12.8 the company to reduce net debt from R$Long Term Debt 29.7 58.6 34.0 94.9 million to R$ 86.3 million;Financing and Debt loan 17.9 49.0 25.4Leasing 11.8 9.7 8.6 The company sought to reduce financialGross Debt 87.7 114.3 96.5 expenses by paying off debt installments(-) Cash 1.5 1.8 1.6 on maturity;Net Cash (Debt) 86.3 112.5 94.9 CSU neither has loans indexed to the US Debt Composition dollar nor derivatives contracts. Its debt (R$ million, end of the period) is in Brazilian reais and indexed to the 0.5 0.3 26.3 0.1 - interbank (CDI) rate. 22.7 17.9 4.8 4.0 22.8 10.7 4.6 63.2 68.5 70.8 60.3 2Q08 3Q08 4Q08 1Q09 W. Capital Overdraft Leasing BNDES 13
  • 14. Debt and Capex Impact of Monetary Policy on Cost of Debt Debt: 137 The graph shows the impact of 117 117 115 the interbank rate (CDI) 113 125 variations in recent months on 112 102 the Companys financial 88 84 83 75 expenses. 2Q08 3Q08 4Q08 1Q09 Total Gross Debt - Closing Financial Cost - CDI CDI - Period Monthly Average Capex - R$ million 1Q09 1Q08 Chg. 4Q08 Chg.CAPEX: Systems (SW and HW) 12.4 4.3 188.9% 5.4 130.1% Caixa Project - 0.7 n.a. 0.1 n.a. Recurring maintenance of operations; Other 0.5 0.6 -14.3% 0.7 -20.9% Capex 12.9 5.6 131.0% 6.1 110.4% End of investments in Recife; Expansion of the mainframe’s processing capacity and technological upgrade; Renewal of payment software licenses. 14
  • 15. Social Responsibility and Sustainability CSU carries out the following Socio-Environmental Responsibility projects: CSU Institute Provides job-oriented training Centro Crescer Sorrindo (Grow-up Smiling Center) Crèche in Belo Horizonte for children from low-income communities Environmental Responsibility Selective waste collection for the recycling project, whose sale proceeds are donated to the CSU institute 15
  • 16. Key Strategies for 2009 Maintain investments to ensure growth of all of the Company’s units; Finalize the new organizational structure of TeleSystem and Credit&Risk; Increase profitability and margins of CSU as a whole. 16
  • 17. CSU CardSystem S/A Questions and Answers Décio Burd Phone: (0xx55 11) 3030-3821 Email: investidorescsu@csu.com.br Site: www.csu.com.br/ri 17