07 27-2011 - 2 q11 earnings results presentation

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07 27-2011 - 2 q11 earnings results presentation

  1. 1. 2Q11 EARNINGS PRESENTATIONJuly 27, 2011
  2. 2. DISCLAIMERThe Company makes forward looking statements that are subject to risks anduncertainties. These statements are based on the beliefs and assumptions of our management as wellas on information currently available to us. Forward-looking statements include information regarding ourcurrent intent, beliefs or expectations, in addition to those of the members of the Board of Directors andExecutive Officers of the Company.Forward-looking statements also include information regarding our possible or assumed future operatingresults, as well as statements preceded or followed by, or that include, the words believes”, may”,will”, continues”, expects”, anticipates”, intends”, plans”, estimates”, or similarexpressions.Forward-looking statements are not guarantees of performance. They involve risks, uncertainties andassumptions, for they relate to future events, thus depending on circumstances that may or may notoccur. Our future results and the creation of value to shareholder s may differ significantly from thoseexpressed in or suggested by these forward-looking statements. Many factors determining theseresults and values are beyond Cielo’s ability to control or predict. 2
  3. 3. HIGHLIGHTS 2Q11 X 2Q10 Transaction financial volume totaled R$74.6 billion, +21.2% Credit volume totaled R$ 46.8 billion, +20.4% Debit volume totaled R$ 27.8 billion, +22.7% Operating revenue + net prepayment of receivables totaled R$ 1.119 billion, +6.7% Adjusted EBITDA totaled R$ 716.5 million, -2.6% Net income totaled R$ 423.6 million, -7.5% 2Q11 X 1Q11Net income margin at 37.8%, -1.4 p.p.Adjusted EBITDA margin at 64.0%, +0.8 p.p. OtherCielo expands its mobile payment solution to Android devicesCielo´s ADR begin trading on OTCQXCielo moves forward in e-commerce with acquisition of BraspagElected the best Brazilian company in the SpecializedServices category by Exame Magazine. 3
  4. 4. MACROECONOMIC SCENARIO | BRAZIL GDP (%) 7.5 18 Retail Trade Sales (%) 16 5.7 6.1 14 5.1 12 4.0 3.9 10 3.2 8 6 6.2 4 -0.2 2 0 2004 2005 2006 2007 2008 2009 2010 2011(E) Source: IBGE Source: IBGE (E) Estimate. Focus Report (Central Bank) Credit Credit Evolution Credit/GDP Unemployment (%) (R$million)11 1,704 1,804 50.0 1,60010 1,414 45.0 1,400 40.0 1,227 9 59% 1,200 60% 35.0 1,000 936 56% 30.0 8 733 57% 25.0 800 7 607 54% 20.0 600 55% 15.0 6 400 56% 44% 40% 41% 10.0 200 46% 43% 44% 45% 5.0 5 0 0.0 2005 2006 2007 2008 2009 2010 mai/11 Source: Individuals Legal Entities Credit/GDPSource: IBGE BCB 4
  5. 5. CIELO | FINANCIAL INDICATORS Financial 2Q11 X 2Q11 X 2Q11 2Q10 1Q11 Indicators 2Q10 1Q11 Financial Volume 74,622.6 61,567.4 21.2% 70,203.7 6.3% (R$ million) Transactions 1,094.2 965.1 13.4% 1,058.7 3.4% (million) Net Revenue 1,119.3 1,048.9 6.7% 1,082.1 3.4% (R$ million) Cost of Services (342.4) (257.5) 33.0% (311.5) 9.9% (R$ million) Cost of Services ex Subsidiaries and (276.3) (242.4) 14.0% (255.0) 8.4% additional fees (R$ million) Operating Expenses (119.2) (102.6) 16.2% (139.9) -14.8% (R$ million) Adjusted EBITDA 716.5 735.3 -2.6% 684.3 4.7% (R$ million) Net Income 423.6 457.7 -7.5% 424.7 -0.3% (R$ million)Blended Net MDR (bps) 101 120 (19) 105 (4)Credit Net MDR (bps) 117 145 (28) 122 (5) Debit Net MDR (bps) 74 79 (5) 76 (2) 5
  6. 6. CIELO | OPERATING PERFORMANCE Cielo- Financial Volume (R$ million) Cielo- Number of Transactions (million) 261,675 4,039 CAGR: 24.0% CAGR: 19.5% 3,427 213,958 98,742 2,952 1,716 175,552 1,424 79,166 2,389 136,5001,978 1,232 64,655 21.2% 987 110,749 13.4% 48,534836 39,552 74,623 1,094 162,933 61,567 2,003 2,323 965 134,792 27,802 1,720 455 110,897 22,666 1,403 401 71,197 87,9661,142 46,821 564 639 38,9022006 2007 2008 2009 2010 2Q10 2Q11 2006 2007 2008 2009 2010 2Q10 2Q11 Credit Debit Credit cards Debit cards Cielo- Number of Active Merchants (thousand) 1.133 1.140 1.153 1.115 Quarter-on- 996 quarter, the 824 number of 679 active merchants in 60 days increased 2.8% 2006 2007 2008 2009 2010 2Q10 2Q11 Active Merchants ( transactions in the last 60 days) 6
  7. 7. CIELO | REVENUE Revenue- Activity (%) Net Revenue ( R$ million) 4,354.4 45.2% 44.6% CAGR 22.3% 48.4% 48.2% 46.5% 3,627.8 2,892.9 16.6% 2,402.2 6.7% 15.4% 16.2% 17.7% 16.4% 1,945.1 21.7% 22.5% 21.5% 1,119.3 26.2% 23.4% 1,048.8 8.6% 9.8% 11.0% 6.8% 8.4% 3.1% 3.8% 5.5% 6.1% 6.3% 2Q10 3Q10 4Q10 1Q11 2Q11 2006 2007 2008 2009 2010 2Q10 2Q11Other revenues Prepayment of Receivables POS Rental Debit cards Credit cards Equipment Rental Revenue (R$ million) Commissions Revenues (R$ million) CAGR 20.1% 3,103.3 CAGR: 18.4% 1,169.9 2,649.9 785.4 1,067.1 2,184.8 903.1 637.9 1,810.7 517.9 745.9 1,493.0 401.3 596.0 317.1 -12.8% 2,317.8 1,666.9 2,012.0 741.3 14.4% 754.9 1,409.3 304.1 265.1 1,175.9 179.0 204.8 562.3 550.1 -2.2% 2006 2007 2008 2009 2010 2Q10 2Q11 Credit Debit 2006 2007 2008 2009 2010 2Q10 2Q11 7
  8. 8. CIELO | PREPAYMENT OF RECEIVABLES Revenue of Prepayment of Receivables ex Adjustments (R$ million) 137.7 41.8% 119.4 120.8 113.3 97.1 2Q10 3Q10 4Q10 1Q11 2Q114,000.0 Prepayment of Receivables 10.0% Average Term (days) 3,376.9 69.7 72.0 3,236.9 9.0%3,500.0 66.1 3,016.7 8.0% 62.93,000.0 2,669.6 58.5 2,460.4 7.3% 7.0%2,500.0 7.2% 6.4% 6.7% 6.0%2,000.0 6.3% 5.0% 4.0%1,500.0 3.0%1,000.0 2.0% 500.0 1.0% - 0.0% 2Q10 3Q10 4Q10 1Q11 2Q11 Financial prepayment volume % Prepayment over Credit Financial Volume 2Q10 3Q10 4Q10 1Q11 2Q11 8
  9. 9. CIELO | COSTS AND EXPENSES Total Costs of Services (R$ million) Costs (R$million) CAGR 14.4% 1,180.8 40.6 936.3 851.1 25.5 771.0690.2 33.0% 342.4 342.4 276.3 242.4 257.5 14.0% 2Q11 Reported Costs related to Additional brands 2Q11 Adjusted 2Q10 Adjusted2006 2007 2008 2009 2010 2Q10 2Q11 subsidiaries fee Unit Costs + Expenses 2Q11 2Q10 1Q11 2Q11X2Q10 2Q11X1Q11 Reported Unit Costs + Expenses (0.422) (0.373) (0.426) 13.1% -1.1% Unit Costs + Expenses Ex- Subsidiaries (0.382) (0.354) (0.391) 7.9% -2.2% Unit Costs + Expenses Ex- Subsidiaries and Additional (0.359) (0.354) (0.370) 1.3% -2.9% Brand Fee* *Considering 2Q10 as comparison Operating Expenses (R$ miilion) 427.4 441.0 401.1 351.5 353.9 16.2% 102.6 119.2 2006 2007 2008 2009 2010 2Q10 2Q11 9
  10. 10. CIELO | FINANCIAL PERFORMANCE Adjusted EBITDA (R$ million) Net Income (R$ million) 2,000.0 60.00%3,000.0 2,924.3 70.00% 1,829.3 2,450.7 1,800.0 800.0 735.3 55.00%2,500.0 716.5 1,600.0 1,536.7 500.0 457.7 75.00% 67% 700.0 423,6 68% 50.00% 44% 450.0 65.00% 50.00% 1,400.0 600.0 70% 400.0 1,764.32,000.0 65.00% 1,200.0 1,115.3 45.00% 40.00% 64% 350.0 500.0 1,409.5 1,000.0 883.9 61%1,500.0 60.00% 55.00% 300.0 38% 400.0 42% 40.00% 30.00% 1,038.8 800.0 657.9 42% 250.01,000.0 59% 300.0 45.00% 200.0 55.00% 600.0 39% 35.00% 20.00% 200.0 37% 150.0 500.0 35.00% 400.0 34% 100.0 100.0 30.00% 10.00% 53% 200.0 50.0 0.0 25.00% 0.0 50.00% 0.0 25.00% 0.0 0.00% 2006 2007 2008 2009 2010 2Q10 2Q11 2006 2007 2008 2009 2010 2Q10 2Q11 Adjusted EBITDA Adjusted EBITDA Margin Net Income Net Income Margin 10
  11. 11. CIELO | STRATEGIC PLANNING STRATEGIC MATRIX VAN* Non-Payment Services Transactions Mobile / eCommerce Payment Transactions * Value Added Network Card Present Card Absent 11
  12. 12. CIELO | ESTIMATESIndicators YTD 11 Guidance Dec 2011Net MDR - Credit Card 119 bps 112 – 116 bps - Debit Card 75 bps 70 - 73 bpsIndicators YTD 11 Guidance 2H2011Financial Transaction Volume(Credit and Debit cards) - % 20.5% 19.5% – 21.5% - R$ billion 144.8 168.8 – 171.7Investment in POS 98 210 – 230(R$ million)Indicators YTD 11 Guidance 2011Unit Costs + Expenses excluding R$ 0.387 R$ 0.406subsidiaries 12
  13. 13. Investor Relationsri@cielo.com.br 13
  14. 14. 2Q11 EARNINGS PRESENTATIONMay 27, 2011

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