2006 investor’s meeting presentation
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2006 investor’s meeting presentation 2006 investor’s meeting presentation Presentation Transcript

  • Meeting with Investors December 2006 1
  • DisclaimerThis presentation may include forward-looking statements of future events or results according to theregulations of the Brazilian and International securities and exchange commissions. These statements arebased on certain assumptions and analyses by the Company that reflect its experience, the economicenvironment, future market conditions and expected events by the company, many of which are beyondthe control of the Company. Important factors that may lead to significant differences between the actualresults and the statements of expectations about future events or results include the company’s businessstrategy, Brazilian and International economic conditions, technology, financial strategy, financial marketconditions, uncertainty regarding the results of its future operations, plans, objectives, expectations andintentions, among others. Considering these factors, the actual results of the company may be significantlydifferent from those shown 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 is to be based on the veracity, currentevents or completeness of this information or these opinions. No advisors to the company or parties relatedto them or their representatives should have any responsibility for any losses that may result from the useor contents of this presentation. 2
  • Company Overview Company Profile 3
  • Leading Technology Services Provider In Brazil 11.3 million cards* The largest independent administrator of 117 million processed transactions credit cards 44% of market share Largest independent call center in Brazil 2,837 Workstations Leading collection services provider 594 Collection Workstation Leading loyalty programs 4.0 million managed accounts management Revenue in 2005** Gross Profit in 2005** R$ 357 mm R$ 71 mm TeleSystem CardSystem 45% 67% TeleSystem 18% CardSystem Credit&Risk Credit&Risk 33% 15% 4% MarketSystem MarketSystem 7% 11%* Does not include the cards from Caixa Econômica Federal Contract 4** Reflects MarketSystems Pro-forma results
  • CSU Is The Backbone Of The Credit CardBusiness Of Its Clients CARDHOLDER Card Issuance Billing Customer Support/ ACQUIRER – NETWORK Call Center ISSUERS Credit analysis and Authorization processing Collection Processing Operational Control Other COMMERCIAL CREDIT CARD BRAND ESTABLISHMENT Purchase Data exchange Withdrawal Fraud Prevention CSU Provides its Clients a Fully Outsourced Solution to Card Administration 5
  • Our Excellence In Credit Card Administration Fostered Other Leading Business UnitsFull Service Credit System Customer Card and Fraud Interchange Transaction Operational Loyalty development/ Support Issuance Collection Prevention Process Control ProgramsImplementation analysis Diversification brought us: New business opportunities/ cross-selling Lower costs from scale gains High switching cost 6
  • Timeline Establishment of 3 new Business UnitsCardSystem Ltda. - are created: CSU first independent CSU is the first IPO TeleSystem, CSU credit cards company to work Credit&Risk and administrator in with the 3 major MarketSystem Ltda. Brazil credit card labels CardSystem becomes Change of the largest name to CSU independent credit CardSystem cards administrator in Latin America 1992 ... 1994 ... 1996 1997 1998 1999 2000 2001 ... 2004 2005 2006 CSU expands and CardSystem starts operation in becomes a 7 sites located in Implementation CSU receives important cities of card Corporation CSU develops the the ISO 9001 embossing, electronic Voucher Certification MarketSystem Ltda. credit analysis, using the Smartcard is incorporated to product safety technology CSU, becoming a and collection new business unit: procedures CSU MarketSystem 7
  • Initial Public Offering Registered in Brazil and United States, with international sales efforts under Reg S and rule Offering 144A Structure Listed in Bovespa´s Novo Mercado (Symbol CARD3) Total offering’s volume reached R$ 341 million with the issuance of 18.9 million common shares Offering (price of R$ 18.00 per share) Size Primary offering amounted to R$ 100 million (5.5 million per share) Secondary offering amounted to R$ 241 million (13.3 million per share) The book of orders exceeded the offer by 8 times Demand Demand split in foreign (65%) and local investors (35%) About 70 investors were contacted during international road shows (USA and Europe) Shareholder Composition Shareholder Composition Free Float 39% Controlling Group 61% 8
  • Company Overview Our Businesses 9
  • Attractive Industry Fundamentals ToCredit Cards… Credit Cards per ‘000 Inhabitants* Credit Cards per ‘000 Inhabitants* Most Used Credit Instruments in Brazil Most Used Credit Instruments in Brazil In 2003 C.C Interest Free Purchases 59% Brazil 264 Singapore 835 Payment Book 37%United Kingdom 1,200 C.C. Interest Bearing USA 1,257 Purchases 21% Japan 1,990 C.C. Minimum Payment Invoice 16% C.C. Payment in Equal Number of Credit Cards -- Brazil Number of Credit Cards Brazil Installments 15%Million 75.0 Overdraft Facility 15% 68.0 52.5 Personal Loans 8% 47.5 41.5 % 35.3 18 28.0 GR 23.6 CA Real State Loans 3% Payroll Deductible 3% Credit 1999 2000 2001 2002 2003 2004 2005 Sept/06 Source: Abecs and O Globo 10
  • … And the Call Center Industry Showing Consistent Growth Potential Call Center Services Revenue -- Global Call Center Services Revenue Global Call Center Services Revenue -- Brazil Call Center Services Revenue Brazil In US$ bi In R$ million 92.0 7.7 83.5 6.9 74.3 6.1 65.7 5.3 58.151.4 4.6 4.02005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010Annual Annual 13% 13% 13% 12% 10% 15% 15% 15% 13% 12%growth growthFonte: IDC 11
  • Leading Competitive Position Among Independent Players Market Share: Market Share: Market Share: Market Share: Credit Card Processing Segment * Credit Card Processing Segment * Largest Call Center Operators Largest Call Center Operators In Outsourcing Independents EDS and 9% Fidelity 16% 20% Orbitall 27% 44%* Notes:- CSU’s Market Share considers credit cards from Caixa 2005 data- Orbitall: 100% owned by Itaú 12- Fidelity (51%): 49% owned by ABN Real and Bradesco Sources: Cardnews and IDC
  • Caixa Econômica Federal ProjectThe largest contract in industry(3 million credit cards) Strong growth potentialBeginning of monthly revenue starting on Feb/07Initial period of rendering services does not change (2 years) 13
  • Recent Achievements and Products LaunchedCardSystem TeleSystem and MarketSystem Credit&Risk• Carrefour / Visa • Terra • Nossa Caixa• Panamericano • Bradesco / Finasa • Telemar• HSBC / Losango • Banco IBI 14
  • CSU – Strong and Diversified Clients Portfolio 15
  • Financial Information Operational and Financial Information 16
  • Strong Growth Track RecordCards base* Workstations* Billing contacts**(‘000) (‘000) CAGR 17% CAGR 83% CAGR 28% 10,059 3,308 41,627 11% 8,077 2,638 7,387 2,290 2,096 25,347 2,149 23,162 19% 7,421 991 5,238 5,787 2003 2004 2005 2003 2004 2005 2003 2004 2005 Credit Cards Private Label * Annual average * Monthly average ** Active and receptive 17
  • Operational Performance by Business Units TeleSystem and Credit&Risk – TeleSystem and Credit&Risk – CardSystem -- Cards CardSystem Cards Workstations Under Operation Workstations Under Operation In thousand Average of the period 20.8%* 4,8% 3,575 -4.0% 4,8% 11,349 3,431 10,067 9M05 9M06 9M05 9M06 * Adjusted by the credit cards data base’s cleaning MarketSystem – Loyalty Accounts MarketSystem – Loyalty Accounts 60.8% 4,8% 4,029 2,505 9M05 (Pro Forma) 9M06 18
  • Consolidated Financial Performance Net Revenues Net Revenues Gross Profit Gross Profit R$ MM 313.6 R$ MM 63.7 CAGR 20% CAGR 34% 55.3 229.4 42.3 177.9 37.0 30.6 134.4 96.7 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 EBITDA EBITDA Net Profit Net Profit R$ MM R$ MM 16.1 CAGR 25% CAGR 37% 60.3 12.9 46.3 10.2 34.2 6.6 6.5 22.9 17.0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 19
  • Business Units’ Gross Revenue Evolution CardSystem CardSystem TeleSystem TeleSystemR$MM R$MM CAGR 14% CAGR 57% 163.3 118.0 97.6 91.2 107.3 66.4 2003 2004 2005 2003 2004 2005 Credit & Risk Credit & Risk MarketSystem* MarketSystem*R$MM R$ MM CAGR 27% 51.8 CAGR 26% 41.1 23.7 32.3 22.6 14.9 2003 2004 2005 2003 2004 2005 20 * Pro-forma
  • Consolidated Financial Performance Net Revenue Net Revenue Gross Profit Gross Profit R$ MM R$ MM 11.5% 4,8% -20.3% 4,8% 253.5 43.9 227.4 35.0 9M05 9M06 9M05 9M06 EBITDA EBITDA Net Profit Net Profit R$ MM R$ MM 6.0% 4,8% 42.5 45.0 10.1 -3.3 9M05 9M06* 9M05 9M06* 21 * Adjusted by the IPO’s expenses
  • Financial Performance of the Business Units CardSystem CardSystem TeleSystem TeleSystem R$ MM R$ MM 122.1 122.0 95.3 84.0 31.0 34.1 38.4 29.8 11.2 11.9 3.4 (2.7) Gross Revenue Gross Profit EBITDA* Gross Revenue Gross Profit EBITDA* Credit & Risk Credit & Risk MarketSystem** MarketSystem**R$ MM R$ MM ** MarketSystem 2005 pro-forma 25.7 37.3 30.0 17.0 5.6 7.2 5.2 1.7 0.8 2.9 (3.7) (2.0) Gross Revenue Gross Profit EBITDA* Gross Revenue Gross Profit EBITDA** Adjusted by the IPO’s expenses 9M05 9M06 22
  • Cash and Debt Position Cash at the end of the period Cash at the end of the period Gross Debt* // EBITDA last 12 months Gross Debt* EBITDA last 12 months R$ MM R$ MM 42.5 1.7x 1.5x 103.2 93.0 20.5 1.4 0.7 2003 2004 2005 Sept./06 2005 9M06 Gross Debt Gross Debt / EBITDA * Bank debt + leasing 23
  • Capex and Dividends Capital Expenditures Capital Expenditures Dividend Payout* Dividend Payout*R$ MM R$ MM 43.6 11.8 11.4 20.7 5.6 15.6 4.0 12.5 10.9 3.2 9.8 2001 2002 2003 2004 2005 9M06 2001 2002 2003 2004 2005 % Net Profit 85% 49% 116% 31% 71% * Includes Interest on Shareholder´s Equity 24
  • Gross Revenue EvolutionR$ MM 93 93 92 90 90 83 76 68 64 56 57 48 49 46 40 38 39 34 29 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 2002 2003 2004 2005 2006 25
  • Financial Information Value Creation Agenda 26
  • Strategy OBJECTIVEMAINTAIN AND EXPAND OUR LEADERSHIP AS AN INDEPENDENT COMPANY IN THE BRAZILIAN MARKET OF CREDIT CARDS ADMINISTRATION, CALL CENTER, CREDIT PROCESSING, COLLECTION AND LOYALTY PROGRAM SERVICES Implementation Strategy Focus on ourBusiness Model: Develop New Efficient Expand our - Independence Business Management activities - Diversification Opportunities of our Operations rapidly - Technology - Specialization 27
  • Growth Opportunities Entrance in New Markets Organic Cross-Selling Market Growth Opportunities Acquiring New Clients & Outsourcing 28
  • Main Strategic Actions - 2007 CSU Corporate • Complete the commercial achievements and strategies of 2005 and 2006 • Expansion of volumes – growth of the businesses already conquered • Enlargement of profitability by cost management and scale gains • Entrance in new business segments and new markets CardSystem • Implementation of Caixa Project– Feb/07 • Focus on Co-Branded Private Label Cards • Leverage in business based on our competitive advantages TeleSystem and Credit&Risk • New Management in charge of the Units • Strengthening of structure, commercial processes and financial management • Strong emphasis on commercial efforts MarketSystem • Focus on gaining clients of the financial, telecommunication and retail industries 29
  • High Level of Corporate Governance 100% common shares Bovespa´s Novo Mercado (100% Tag Along) Free float of 39% voting shares Active Board of Directors, with diversified and complementary experiences and presence in the business management: Independent members: Mailson F. da Nóbrega e Rubens Barbosa Solid relationship track record with minority shareholders Private Equity funds investment in 1997 30
  • High Level of Corporate Governance Controlling Committee held by an Independent Member of the Board of Directors Code of Ethics / Disclosure and Stock Trading Policies Dedicated Investor Relations Team Development of a Stock Option program for the executives Alignment of interests between administration and shareholders 31
  • Social Responsibility 10,051 employees (Sep/06) CSU Institute CSU University Incentive to social and educative programs along withAbrinq and other Institutions Encouragement to voluntary work First Trainee Program launched in 2006/2007 32
  • Conclusion: Attractive Investment Opportunity Attractive Industry Growth Market Leadership Fundamentals Impressive Growth In All Strong Growth Prospects Financial Metrics Premium Diverse Client Superior Corporate Portfolio with Excellent Governance Relationship Track Record 33
  • www.csu.com.br 34