2Q07 Conference Call of Results August 16, 2007 1
DisclaimerThis presentation may include forward-looking statements of future events orresults according to the regulations of the Brazilian and International securitiesand exchange commissions. These statements are based on certain assumptionsand analyses by the Company that reflect its experience, the economicenvironment, future market conditions and expected events by the company, manyof which are beyond the control of the Company. Important factors that may leadto significant differences between the actual results and the statements ofexpectations about future events or results include the company’s businessstrategy, Brazilian and International economic conditions, technology, financialstrategy, financial market conditions, uncertainty regarding the results of its futureoperations, plans, objectives, expectations and intentions, among others.Considering these factors, the actual results of the company may be significantlydifferent from those shown or implicit in the statement of expectations aboutfuture events or results.The information and opinions contained in this presentation should not beunderstood as a recommendation to potential investors and no investmentdecision is to be based on the veracity, current events or completeness of thisinformation or these opinions. No advisors to the company or parties related tothem or their representatives should have any responsibility for any losses thatmay result from the use or contents of this presentation. 2
Credit Card Market and New Card Base CardSystem 800 thousands 746 600 400 481 468 468 401 339 200 293 0 Jan Feb Mar Apr May Jun JulCardSystem´s card base average growth was 37.6% in2Q07 over the 2Q06, from 10.1 million to 13.9 million,higher variations than those in market; Brazilian Market´s Cards Evolution At the end of the period - in millionIn July, 2007, CSU reached the mark of more than 745thousand issued cards; 390 348Growth in Losango and Nossa Caixa Card Base. In May 292 832007, Nossa Caixa achieved the volume of 1.5 million 70 56 116issued Credit Cards; 102 87In August, the Brazilian Credit Card market should have a 149 176 191revenue of R$ 15.4 billion (21.4% higher than in 2Q06). jun-05 jun-06 jun-07 Debt Private Label Credit Source: ABECS and other market sources 3
THE CAIXA PROJECTThe platform for processing was delivered to Caixas operating environmentin June;The company is studying with Caixa the additional investments required;A plan will be devised for testing the customization and functionalities. Onlyafter this phase is complete, will testing start for card base migration. 4
TeleSystem and Credit&Risk / MarketSystemTeleSystem and Credit&Risk At the end of the 2Q07, 3.930 workstations (PAs) were inoperation; Improved efficiency in the 2Q07, freeing 909 work stations for newnegotiations; Improvements in TeleSystem operational results due to cost reductions and efficiency gains in June; Renewal of CSU’s certification for its Quality Management System – ISO 9001:00 in June 2007.MarketSystem Average of 1.8 million relationship program accounts showing continuous growth in June. 5
CardSystem Gross Revenue (R$ million) Gross Profit (R$ million) and EBITDA (R$ million) and EBITDA Gross Margin (%) Margin (%) +16.9% +11.7% + 9.2% + 57.3% -10.4% + 26.8% 10.9 10.9 33.6 30.1 33.6 10.0 10.628.8 9.5 9.5 7.0 7.5 40.9% 30.7% 27.0% 30.7% 38.6% 35.3% 25.1% 35.3%2Q06* 2Q07 1Q07 2Q07 2Q06 * 2Q07 1Q07 2Q07 2Q06* 2Q07 1Q07 2Q07 Strong revenue growth compared to 1Q07 (+11.7%) and 2Q06 (+16,9%) due to card base growth in the period; Gross Profit and EBITDA growth outpaced that of Gross Revenue in 1Q07, showing operating efficiency. When compared to 2Q06, costs rose 26% and the card base 37%. 7
TeleSystem and Credit&Risk Gross Revenue (R$ million) Gross Profit (R$ million) and EBITDA (R$ million) and Gross - 7.1% + 13.0% Gross Margin (%) Margin (%)52.7 3.3 49.0 49.0 43.3 - 367.4% 6.6% - 42.5% 1.8 - 123.8% 3.6%2Q06* 2Q07 1Q07 2Q07 2.9% 10.5% - 8.3% 10.5% - 5.7% - 5.7% - 179.7% (1.2) (3.3) (4.8) (4.8) 2Q06* 2Q07 1Q07 2Q07 (2.6) (2.6) 2Q06 * 2Q07 1Q07 2Q07 TeleSystem´s commercial performance still unsatisfactory; Credit&Risk growth in Net Revenue was 15.4% when compared to 2Q06; Seasonal effect impacted operating revenue, which rose 10.2% when compared to 2Q06 in TeleSystem and 22.9% in Credit&Risk; TeleSystem´s operation still in the process of recovering profitability, reducing costs and expanding its client base to use its full installed capacity. 8
MarketSystem Gross Profit (R$ million) Gross Profit (R$ million) and EBITDA (R$ million) and EBITDA Gross Margin (%) Margin (%) - 44.7%8.7 - 4.1% - 33.9% - 17.9% - 25.9% 2.3 - 38.9% 1.8 1.4 4.8 5.0 4.8 1.5 1.5 1.2 0.9 0.9 27.0% 32.3% 38.1% 32.3% 17,1% 18,9% 24,6% 18,9%2Q06* 2Q07 1Q07 2Q07 2Q06 * 2Q07 1Q07 2Q07 2Q06* 2Q07 1Q07 2Q07 The end of a contract in 3Q06 was still affecting revenue performance in 2Q07; In comparison with 1Q07, reduction in revenue performance was basically due to the lower volume of rewards delivered. 9
CSU (Consolidated)General and Administrative EBITDA (R$ million) and EBITDA Net Result (R$ million) Expenses (R$ million) Margin (%) -3.1 % -59.4 % (44)16.247 13.812 -0.4 % 15.742 15.808 15.742 5.4 % 5.614 5.327 5.614 (4.286) (4.286) 16,5% 6,9% 7,3% 6,9% 24.9 % (5.708)2Q06 * 2Q07 1Q07 2Q07 2Q06* 2Q07 1Q07 2Q07 2Q06 * 2Q07 1Q07 * 2Q07 Operating expenses in 2Q07 were smaller than 2Q06 and 1Q07. The highlight was the significant reduction in net financial expenses indicating an improved management performance; EBITDA reached R$ 5.6 million during 2Q07, equivalent to 6.9% of net revenue; Net Result: 24.9% net loss reduction in comparison with 1Q07. 11
Indebtedness and CapexIndebtedness - R$ thousand 2Q07 2Q06 1Q07Short Term 47.2 58.8 33.5 IndebtnessDebt 23.1 36.4 12.5Leasing 24.1 22.4 21.0Long Term 37.6 60.5 43.6 The indebtedness growth in 2Q07Debt 21.4 30.6 21.3 compared with 1Q07 due to CAPEXLeasing 16.2 29.9 22.3 of R$16.3 million.Gross Debt 84.7 119.3 77.1(-) Cash 1.1 85.6 9.8 CAPEX (R$ million)Net Cash (Debt) 83.7 33.7 67.3 1.4 % 26.5 % 16.3 16.3 16.1 1.6 0.9 12.9 0.9CAPEX 2.7 1.4 7.4 7.4 5.4 CSU investments in CAPEX were allocated 11.8 8.0 8.0 to Caixa´s Project (R$ 7.4 million) and in 6.1 projects aimed at maintaining and 2Q06 2Q07 1Q07 2Q07 expanding CardSystem operation. Sistems (SW e HW) Caixa Project Other 12
Recent Developments and OutlookTendency of replacing checkbook with credit card transactions to remain as wemove forward;Strong cost/expense reduction and investment program, impacting futureresults (including 2H07);In addition to strong client card base growth, there is a high expectation of newcontracts in 2H07 to CardSystem;Décio Burd (ex-CardSystem CFO) takes over at TeleSystem and Credit&Risk tofocus on cost reductions and workstation optimization;To align its accounting practices with the norm being appliedin more than a hundred countries and which is becoming theinternational standard (IFRS), CSU changed its standard forclassifying Leasing. 13
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