3 q09 results presentation
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  • 1. CSU CARDSYSTEM S.A. 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. 22
  • 3. Cards Market and CardSystem Growth of the Cards Market (million, source: ABECS) 14.3% 324 Private Label + Credit Market CardSystem 297 284 237 133 124 Average Annual Growth - 3 years 21.7% 30.7% 197 119165 93 79 Growth - 12 months 14.3% 22.1% 68 173 165 191 118 144 972005 2006 2007 2008 3Q08 3Q09 On October 1, the Brazilian Central Private Label Credit Bank published a notice stating that it will soon announce the new rules CSU Card Base Performance for the accreditation market. (million) 22.1% Base growth continues quicker than market growth 23.2 16.6 20.1 19.0 Trend of replacing private label cards 12.19.0 with hybrid cards2005 2006 2007 2008 3Q08 3Q09 33
  • 4. CardSystem – Operational Data Issue of cards in CSUs base (million) 2.4 1.7 1.6 1.4 1.3 1.4 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Issue of more than 6.7 million new cards in the last 12 months Card issues resumed pre-crisis levels Flex Cards with increasing share of total card issues Seasonal growth in card issue expected in the fourth quarter 44
  • 5. MarketSystem – Operational Data MarketSystem -Processed Accounts (million) 2.8 3.1 2.3 2.4 2.7 1.9 2.0 2.0 2.1 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Managed accounts 30% up year-on-year Annual average growth of 26.9% in the last 24 months 100% organic growth in the periodSource: CSU 55
  • 6. CSU.Contact / Credit&RiskAlphaview project, a new Contact Center concept;The new unit will have a sixty-month productivity;Alphaview will improve operators’ quality of life, improveservice standards and reduce operating costs. PAs in operation at CSU.Contact and Credit&Risk 4,095 3,880 3,596 3,593 3,582 3,496 2,996 3,476 3,445 2,218 3,314 3,288 3,238 3,191 748 619 435 282 305 344 305 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 PAs Credit&Risk PAs CSU.Contact 66
  • 7. CardSystem / MarketSystem Gross Revenue Gross Profit and Gross Margin EBTIDA and EBTIDA Margin (R$ million) (R$ million, %) (R$ million, %) 36.3% 21.6% 16.7% 24.8 20.6 64.9 16.9 18.2 41.4% 34.3% 55.6 35.3% 32.8% 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 Economies of scale in card processing operations 100% organic growth of the client portfolio Development of higher added-value agreements improves gross margin 77
  • 8. CSU.Contact / Credit&Risk Gross Revenue Gross Profit and Gross Margin EBTIDA and EBTIDA Margin (R$ million) (R$ million, %) (R$ million, %) -9.2% 572.3% 0.8 45.6 3.0 41.4 2.0% 7.9% (0.5%) 0.5 -0.2 1.1% 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 Stable revenue levels Renegotiation of communication fees reduces the unit’s costs Higher gross margin and EBITDA margin 88
  • 9. Performance of Financial Indicators CSU Gross Revenue (R$ million) 107.3 108.6 106.2 104.9 101.2 3Q08 4Q08 1Q09 2Q09 3Q09 CSU EBITDA (R$ million) 20.5 20.5 21.3 16.7 16.9 3Q08 4Q08 1Q09 2Q09 3Q09 CSU EBITDA Margin (%) 20.6 21.6 20.4 17.7 17.4 3Q08 4Q08 1Q09 2Q09 3Q09 99
  • 10. Results - Units Gross Revenue (R$ million) 62.39 62.27 64.86 61.31 55.59 45.57 43.57 44.92 46.34 41.36 3Q08 4Q08 1Q09 2Q09 3Q09 CardSystem / MarketSystem CSU.Contact / Credit&Risk EBITDA (R$ million) 18.7 20.5 16.9 16.7 18.4 0.2 2.0 1.9 0.7 (0.2) 3Q08 4Q08 1Q09 2Q09 3Q09 CardSystem / MarketSystem CSU.Contact / Credit&Risk 10 10
  • 11. CSU (Consolidated) Gross Revenue Gross Profit and Gross Margin Cost of Services Rendered (R$ million) (R$ million, %) (R$ million, %) 49.2% 16.7% -6.3% 27.8 75.5 106.2 18.6 28.2% 101.2 70.7 19.8% 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 Higher share of electronic payment methods in revenue Organic growth of the units fuels company growth of over 12% The group’s operating margins improved thanks to: (i) result-oriented management, (ii) new controls, (iii) new policies, (iv) scale gains 11 11
  • 12. CSU (Consolidated) Operational Expenses EBTIDA and EBTIDA Margin Net Result (R$ million) (R$ million, %) (R$ million, %) 44.3% 27.6% 346.7% 21.3 4.7 24.6 16.7 17.1 20.4% 17.5% 1.0 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 Expenses with Alphaview, the increase in the workforce and the collective bargaining agreement led to a 44.3% upturn in general and administrative expenses in the quarter The final provisions and restructuring expenses related to the Contact Center City project were booked in the quarter Year-to-date earnings per share of R$0.29* * Excluding reserves 12 12
  • 13. Debt and Capex Debt - R$ million Debt: 3Q09 3Q08 2Q09 Period cash flow enabled a reduction inShort Term Debt 35.7 49.7 46.4Financing and Debt loan 24.2 35.1 36.5 net debt from R$ 77.5 million to R$ 67.2Leasing 11.5 14.6 9.9Long Term Debt 40.1 46.5 31.6Financing and Debt loan 25.6 38.4 20.0 million;Leasing 14.5 8.1 11.6Gross Debt 75.8 96.2 78.0 Extension of the average debt term -(-) Cash 8.6 1.1 0.5 R$ 23 million renegotiated at the CDINet Cash (Debt) 67.2 95.2 77.5 rate + 3.4%; CSU has no dollar-indexed debt nor does Debt Composition (R$ million, end of the period) it make use of derivatives contracts. All debt is in Brazilian reais and indexed to 17.9 22.8 the interbank (CDI) rate. 4.0 4.6 15.9 6.5 39.1 70.8 60.3 0.1 49.8 25.9 4Q08 1Q09 2Q09 3Q09 W. Capital Overdraft Leasing 13 13
  • 14. Debt and Capex Impact of Monetary Policy on Cost of Debt Debt: (Basis: 1Q08 = 100) The adjacent graph shows the impact of the CDI variations in 83 75 recent months on the 63 125 102 66 Companys financial expenses 77 63 The decline in the CDI rate, 91 89 80 74 combined with reduced debt, 4Q08 1Q09 2Q09 3Q09 helped reduce financial Total Gross Debt - Closing Financial Cost - CDI expenses CDI - Period Monthly AverageCAPEX: Capex - R$ million Recurring investments in the 3Q09 3Q08 Chg. % 2Q09 Chg. % Systems development and customization of the 4.6 3.8 21.7% 4.6 -1.2% Hardware 0.3 2.9 -90.9% 0.6 0.0% Super VisionPlus software Alphaview 6.3 - n.a 1.5 313.3% Other 0.6 1.8 -66.0% 0.0 3155.5% Capex 11.7 8.4 39.0% 6.8 72.8% Investments in the Alphaview project 14 14
  • 15. Key Strategies for 4Q09 Maintenance of investments to ensure growth of all of the Company’s units; Consolidation of the recent changes in CSU’s sales and relationship areas; Strengthening of sales efforts; Conclusion of CSU.Contact and Credit&Risk’s new organizational structure, transfer of the workstations from the old site to Alphaview; Maintenance of cost and quality levels. 15 15
  • 16. CSU CardSystem S/A Questions and answers Décio Burd Telephones: (0xx11) 3030-3821 Email: investidorescsu@csu.com.br Site: www.csu.com.br/ri 16 16