2 q08 results presentation

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2 q08 results presentation

  1. 1. CSU CARDSYSTEM SA2Q08 Conference CallAugust 8, 2008investidorescsu@csu.com.br
  2. 2. DisclaimerThis presentation may include forward-looking statements about future events or results according tothe regulations of Brazilian and international securities and exchange commissions. These statementsare based on certain assumptions and analyses by the Company that reflect its experience, theeconomic environment, future market conditions and events expected by it, many of which are beyondits control. Important factors that may lead to significant differences between actual results and thestatements of expectations about future events or results include the company’s business strategy,Brazilian and international economic conditions, technology, financial strategy, client businessdevelopment, financial market conditions, uncertainty regarding the results of its future operations,plans, objectives, expectations and intentions, among others. As a result of these factors, the actualresults of the Company may significantly differ from those mentioned or implicit in the statement ofexpectations 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 or partiesrelated to them or their representatives will be responsible for any losses that may result from the useor the contents of this presentation.
  3. 3. Card Market and the CardSystem Market Cards Performance (ABECS) CardSystem Card Base Performance End of July - Million End of July - Million Private Label + Credit Market CardSystem ■ The cards market maintained a constant and linear growth, averaging 18.7% in the past 12 months; CAGR 05 to 08 18.7% 21.4% ■ CardSystem has consistently outperformed market growth. Its CAGR 07 to 08 18.5% 24.6% CAGR between the end of 2Q05 and 2Q08 stood at 21.4% against the market’s 18.7%. The difference was even greaterlast year: 24.6% versus 18.5%.Source: Abecs, CSU 3
  4. 4. CardSystem – Operational Data CSU – Cards Issued (million – End of June)■ The number of new cards issued by CardSystem increases every year; a total of 5.3 million cards were issued in the past 12 months;■ Card issues should increase in the following months due to the consolidation of contracts for the issue of hybrid cards.Source: Abecs, CSU 4
  5. 5. CardSystem / MarketSystem Operational Data CardSystem Card Base Performance MarketSystem – Processed Acounts End of June - Million (million)■ High-growth market;■ Strategically important agreements signed at the end of 4Q07 and in 1Q08, with the effects already seen in the revenues;■ Agreements with huge potential at MarketSystem: Sicred and Porto Seguro.Source: Abecs, CSU 5
  6. 6. TeleSystem / Credit&Risk■ Continued focus on reducing operating costs and improving productivity has stabilized the results;■ Cancellation of unprofitable contracts;■ Focus on differentiated products and services with higher added value;■ New contracts signed in 2Q08 have already impacted the number of workstations in operation. Workstations in operation TeleSystem and Credit&Risk 6
  7. 7. CSU (Consolidated) Gross Revenue Cost of Services Rendered Gross Profit (R$ million) (R$ million) (R$ million) and Gross Margin (%) 10.83% 1.17% 84.2% 20.0% 12.1%■ CSU’s revenues in 2Q08 were R$ 96.9 million, 11% higher than the R$ 87.4 million in 2Q07.■ Cost of services rendered increased by only 1.17%, thus improving net income and gross margin significantly■ Gross profit rose 84.69%, from R$ 9.8 million in 2Q07 to R$ 18.1 million in 2Q08. 7
  8. 8. CSU (Consolidated)General and Administrative Expenses EBITDA (R$ million) Net Result and EBITDA Margin (%) (R$ million) (R$ million) -8.07% 181.5% 17.5% 6.9% 14%■ General and Administrative expenses fell by 8,07%, from R$ 10,9 million in 2Q07 to R$ 10.2 million in 2Q08.■ EBITDA jumped 181.5%, from R$ 5.6 million in 2Q07 to R$ 15.8 million in 2Q08, thanks to the higher growth of revenue in comparison with costs and expenses.■ Net Result improved significantly to R$ 2.1 million from a negative R$ 4.3 million. 8
  9. 9. Cardsystem / MarketSystem Gross Revenue Gross Profit (R$ thousand) EBITDA (R$ thousand) (R$ thousand) and Gross Margin (%) and EBITDA Margin (%) 30.1% 33.0% 47.1 % 35.5% 32.9% 34.9% 29.2%■ Growth of 30.23% in the Gross Revenue of CardSystem/MarketSystem between 2Q07 and 2Q08, thanks to the increase in the number of cards in the base and the accounts managed;■ Gross Profit rose by 33% and EBITDA rose by 47%;■ The higher growth in Gross Profit and EBITDA in comparison with revenues shows the improvement in operational efficiency and economies of scale 9
  10. 10. TeleSystem / Credit&Risk Gross Revenue Cost (R$ million) (R$ million) -4.3% -12.4%■ Gross Revenue fell by 4.3% between 2Q07 and 2Q08 due to the cancellation of unprofitable contracts at the end of 2007.■ Cost of services dropped from R$ 48.1 million in 2Q07 to R$ 42.2 million in 2Q08. 10
  11. 11. TeleSystem / Credit&Risk Gross Profit EBITDA (R$ million) (R$ thousand) n.d. n.d.■ Results improved significantly compared to the 2Q07. CSU’s profitability increased, both in terms of Gross Profit and EBITDA. Once again, this is a result of the restructuring carried out in the Call Center unit.■ Margins are expected to improve. Workstations in operation in 2Q08 offer products that are either different from or complementary to those offered by our competitors.■ The company will maintain strict control over the units TeleSystem and Credit&Risk in order to optimize operations and achieve higher profitability. 11
  12. 12. Financial Indicators PerformanceGross Revenue (million)CSU EBITDA (R$ million)EBTIDA (R$ million) 12
  13. 13. Results - UnitsGross Revenue (million) 48.96 48.91 47.03 50.01 43.61 46.85 41.96 42.47 41.23 38.43 2Q07 3Q07 4Q07 1Q08 2Q08 CardSystem / MarketSystem TeleSystem / CreditSystemEBTIDA (R$ million) 13 13
  14. 14. Debt and Capex Debt Breakdown (End of the Period– R$ million)Debt – R$ million 2Q08 2Q07 1Q08Short Term Debt 47.4 40.8 55.8Financing and Debt loan 29.7 23.1 33.3Leasing 17.6 17.7 22.5Long Term Debt 53.3 45.9 58.6Financing and Debt Loan 44.7 21.4 49.0Leasing 8.6 24.5 9.7Gross Debt 100.6 86.7 114.4(-) Cash 2.7 1.1 1.8Net Cash (Debt) 98.0 85.6 112.6Debt■ CSU reduced its net debt from R$ 112.6 million to R$ 98 million in 3 months;■ Reduction in short-term debt and use of the short-term working capital lines;■ The company’s debt profile remains comfortable;■ Cash generation and excellent working capital management are the main factors for the improved debt situation. 14
  15. 15. Debt and CapexImpact of the MonetaryPolicy on Cost of Debt Debt ■ The graph beside shows the impact of the variation of the Interbank Rate (CDI) in recent months on the Companys financial expenses. CAPEX ■ Investments focused on CardSystem and MarketSystem. Investments 2Q08 2Q07 Chg. 1Q08 Chg. R$ million Systems (SW and HW) 4.4 6.8 -35.3% 4.3 2.2% Projeto Caixa 0.1 7.4 -98.8% 0.7 -86.6% Others 0.8 0.9 -10.9% 0.6 38.5% Capex 5.3 15.1 -65.1% 5.6 -5.0% 15
  16. 16. Main Strategies■ Growth, with focus on the electronic payments processing unit■ Rigorous control of operational management and profitability at TeleSystem and Credit&Risk;■ Improve profitability and margins of CSU as a whole. 16

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