3Q12 Presentation

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  • 1. Earnings Release November 8th, 2012 3Q12
  • 2. 3Q12 summary • Improvement in profitability margins in 3Q12 Y-o-Y: net margin of 6.0% (+1.9 p.p.) and EBITDA margin of 17.8% (+1.8 p.p.); • Consistent expansion of gross margin of the CSU Contact unit, reaching 9.8% in 3Q12; • Net income in 3Q12 reaches R$ 5.4 million, an increase of 28.8% Y-o-Y. • Commercial strategy focused on the expansion and diversification of the revenue streams; • CSU consolidated itself as a complete solutions provider to manage and generate electronic transactions, enhancing the potential synergy among its activities and the markets in which it operates. • CSU Investors’ Day; CARD3 • Non deal roadshow in New York and Boston, seeking to put CARD3 back on the radar screen of foreign investors. 2
  • 3. Strategic driver• Focus on CSU’s commercial expansion: enlarge addressable markets, operating in new segments and leveraging existing assets• Growth recovery: conclusion of the HSBC card processing contract in 2012 – corresponding to about 15% of CSU’s annual sales. Its migration temporarily impacts the scale of the electronic payment business until organic growth and the startup of new clients will recover the level of results generation. Launch, until the end of 2012, of products in fast growing markets HIGH TECHNOLOGY WITH PROFITABILITY 3
  • 4. Outlook for our markets Traditional means of payment Electronic means of payment Electronic transactions CSU is ready to act as a complete service provider in the business of management and generation of electronic transactions 4
  • 5. Development of innovative services New products with effective distinguishing characteristics are in the pilot stage, and will be rolled out in 2012, integrating the unique expertise and capability of the various business units of CSU, with priority to:  Value added solutions using latest generation technology  Compliant to the needs and demands of the market  New market verticals 5
  • 6. C360: CSU’s competitive edge Web platform composed of a database, campaign managers and online and off-line multiple contact channels; Turn-key solutions, combining intelligence, technology and process automation; Designed to increase contact efficiency and generate cost reductions. CSU is the only company in the market to offer an integrated solution. Intelligence Marketing Automation Contact Channels Data Modeling/ Campaign Multiple Treatment scoring Management Channels Automated Workflow 6
  • 7. C360 Market Potential OthersCollections and Telemarketing are the 6%major growth drivers in the contact center Collections Customermarket (19% and 13% p.a., respectively) 35% Care 43%Addressable Market: R$ 7.5 billion Tele marketing 16%Opportunity: to expand the scopeof CSU services, with a differentiated business model, in new operations and segments. Verticals Services Finance Collections andShift towards “technology intensive” Anti-attrition vs. “labor intensive” Convergence Sales & Retail Acquisition Insurance Relationship Utilities 7
  • 8. CSU Platform: Partner Hub PARTNERS HUB – WEBSERVICE STRUCTURE MULTI DISCOUNT COALITION E-BUSINESS E-BILLING CATALOGUE SHOPPING NETWORKSLoyalty and Incentives Closed loop e-commerce Open loop e-commerce (...) Opportunity: expand the scope of CSU MarketSystem solutions well beyond those of credit card loyalty programs. • More than 25 loyalty programs managed in 10 years • 6 million loyal clients • + 30 billion points issued • 200,000 awards delivered/year • 500,000 call center calls/year 8
  • 9. Moment for CSUMarketSystem expansion TWO COMPLEMENTARY REVENUE LINES MARKETING SERVICES AWARDS Reward & Recognition Financial and Strategic Planning, Implementation of Program Management for Acquisition, Sales And Loyalty Programs Solutions for awards and recognition for loyalty programs • Processing • Intelligence/Management • Multi-catalogue of awards • Data Management • Complete solution for Loyalty • Data Analysis Travel • Multichannel Communication • Digital Solutions (Collective • Presence in Social Networks Buying, On-Line Auctions) • Advantage Networks Technology Platforms: Loyalty System • Vouchers III, BI (Cognos), Statistical Modeling • Social Networks (SPSS), Campaign Management (Unica), Relationship Portals, E-mail Marketing, SMS, Voicer 9
  • 10. State-of-the-art technology: Datacenter Tier III • Designed to fully attend the clients that need Servers, IT Infrastructure, HOSTING Telecommunications and Internet; • The vendor assumes responsibility for IT operations. • A kind of service through which the client migrates all of his servers and COLOCATION services to make use of the data center infrastructure; • The client continues to be responsible for IT. • Hardware resources can be virtualized, divided and shared among CLOUD various environments and operating systems and executed COMPUTING simultaneously; • This service type offers scalability and speed to meet clients’ needs. • A business model where the vendor assumes all of the clients’ IT FULL services and processes;OUTSOURCING • This service maximizes the ability of the client to focus on its core business. 10
  • 11. State-of-the-art technology: Datacenter Tier III Datacenter Market – Revenues 2011 (US$ billion) 6,0 Growth 2011-2015 5,6 5,0 0,9 CAGR % 0,9 6.3% 4,6 4,1 0,8 3,7 0,8 0,7 0,7 4,7 5,1 3,8 4,2 3,4 10.7% 3,0 2010 2011 2012 2013 2014 2015 Hosting Full Outsourcing Opportunity: to develop new businesses based on competences and capability of existing assets, with the generation of new and scalable revenues. Transfer of the current back-up datacenter to Alphaview/Barueri. 11
  • 12. Relevant expansion of 28.8% in Net Income Gross Revenue Gross Revenue Share (R$ thousand) ( % of Total Revenue) - 2.3% 58% 55% 319,326 312,099 50% - 9.1% 50% 42% 45% 109,811 99,865 3Q10 3Q11 3Q12 3Q11 3Q12 9M11 9M12 CSU CardSystem CSU Contact EBITDA x EBITDA Margin Net Profit and Net Margin (R$ thousand and % of Net Revenue) (R$ thousand and % of Net Revenue) + 21.6% + 31.4% 56,760 20,000 19,036 400 100.0% 18,000 350 46,683 90.0% 16,000 14,485 - 0.6% 80.0% + 28.8% 30 70.0% 14,0000 25 60.0% 12,0000 50.0% 10,000 20 16,341 16,242 40.0% 8,000 5,435 150 19.8% 30.0% 6,000 4,220 15.7% 6.6% 100 20.0% 4,000 4.9% 10.0% 5. 16.0% 17.8% 2,000 4.1% 6.0% 0.0% - 0. 3Q11 3Q12 9M11 9M12 3Q11 3Q12 9M11 9M12 12
  • 13. Performance in electronic paymentsBilled and Registered Cards(in millions of units) • The CSU CardSystem business unit is 25.3 23.8 implementing 2 new projects: Banco do 22.6 22.9 20.7 20.5 20.5 19.4 19.2 19.0 Nordeste and Banpará; • During 3Q12, 803 thousand new cards were issued by CSU existing clients; 3Q11 4Q11 1Q12 2Q12 3Q12 • Gross profit contraction is explained by revenue mix changes. Billed cards Registered Cards Gross Revenue Gross Profit and Gross Margin (R$ thousand) (R$ thousand and % of Net Revenue) + 7.2% - 7.2% + 6.4% 80,000 68,878 180 70,000 - 16.8% 63,934 160 - 0.9% 160,670 170,894 140 60,000 50,000 120 100 40,000 46.5% 80.0 30,000 23,242 19,336 41.1% 55,332 54,810 60.0 20,000 40.0 10,000 45.6% 20.0 39.1% - 0.0% 3Q11 3Q12 9M11 9M12 3Q11 3Q12 9M11 9M12 13
  • 14. Performance in contact centerNumber of Workstations(units) • Focus on profitability drives sales efforts for selective growth; 4,207 4,090 4,163 4,016 4,050 • Strict cost management, orientation for operating efficiency and payroll tax exemption295 340 409 272 306 provided a record gross margin of 9.8% in 3Q11 4Q11 1Q12 2Q12 3Q12 3Q12. Training TotalGross Revenue Gross Profit and Gross Margin(R$ thousand) (R$ thousand and % of Net Revenue) 9.8% 8.9% 12 - 11.0% 7.8% 28,000 7. 40.0 23,000 - 17.3% 158,656 4.2% + 88.1% 20.0 2. 141,205 18,000 + 1.7% 0.0% 13,000 11,644 -3 -20. 54,479 6,191 -40. 45,054 8,000 (2,000) 4,003 4,072 -8 -60. 3,000 3Q11 3Q12 9M11 9M12 -80. (2,000) -100 3Q11 3Q12 9M11 9M12 3Q11 3Q12 9M11 9M12 14
  • 15. Capital Expenditures & Cash BalanceCapex(R$ millions) • Capital expenditures of R$ 4.7 million 42.3 in 3Q12, totaling R$ 15.5 million in 9M12 28.5 18.6 8.6 15.5 •The concentration of the contact 23.6 3.4 center operation in the sites of 19.9 12.2 Alphaview and Recife contributed to lower investments 2,010 2,011 9M12 CSU CardSystem CSU Contact • New tools and products for the revenue streams diversification are in trial, which launch is set to take place until the end of this year. • At the end of 3Q12, the cash position of the Company amounted R$ 29.6 million, 33.8% higher than 3Q11. 15
  • 16. Strategic positioning to maximizereturn on assets Competitive advantages in the Expansion to new electronic market verticals transactions market Innovative Solutions Maximization of with high value added processing capacity with integrating intelligence Datacenter Tier III and contact channels Consistent growth with gains in profitability of core business 16
  • 17. Additional Information Mônica Hojaij Carvalho Molina Antonio N. Donato Filho Investor Relations Tel: +55 (11) 2106-3821 E-mail: ri@csu.com.br Web Site: www.csu.com.br/riThis material is the property of CSU CardSystem S.A., and any partial or total reproduction without the Company’s writtenapproval is prohibited. All rights reserved. Opinions expressed in this document are subject to change without prior notice. 17