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08 18-2010 - santander guarujá presentation

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  • 1. 11a Conferência do Santander - GuarujáAugust, 24, 2010
  • 2. DisclaimerThe Company makes forward looking statements that are subject to risks anduncertainties. These statements are based on the beliefs and assumptions of ourmanagement as well as on information currently available to us. Forward-lookingstatements include information regarding our current intent, beliefs or expectations, inaddition to those of the members of the Board of Directors and Executive Officers of theCompany.Forward-looking statements also include information regarding our possible or assumedfuture operating results, as well as statements preceded or followed by, or that include,the words believes”, may”, will”, continues”, expects”, anticipates”, intends”,plans”, estimates”, or similar expressions.Forward-looking statements are not guarantees of performance. They involve risks,uncertainties and assumptions, for they relate to future events, thus depending oncircumstances that may or may not occur. Our future results and the creation of value toshareholder s may differ significantly from those expressed in or suggested by theseforward-looking statements. Many factors determining these results and values arebeyond Cielo’s ability to control or predict
  • 3. Cielo in a nutshell  Approximately R$4 billion revenue company  1,058 employees  Around 7% of Brazilian GDP captured by Cielo’s network  R$ 22 billion market cap  1.8 million merchants covering 97.9% of Brazilian municipalities  R$ 8.4 billion IPO in June, 2009 – the largest in Brazil  Fully integrated acquirer: Acquiring Processing Settlement present in the complete value chain 01
  • 4. Performance CIEL3 CIEL3 Snapshot150  Recent IPO (June/09)140  Dividend yield 2009(1): 6.6%130  P/E 2009 (1): 13.64120  High cash generation, no leverage110  ADR level I program100  Disclosure in IFRS 90 80 Actions 70  Constant monitoring of liquidity 60  Targeting to drive IR actions  Initiatives to enhance ADR program (1) Considering closing price on 12/30/2009 = R$15.34/share 02
  • 5. Cielo- New Competitive Landscape  Capturing transactions of the 3 main international brands  Partnership with the Ticket brand  Acquisition of 50.1% of M4U capital stock 03
  • 6. Macroeconomic Scenario - Brazil 1 Unemployment Rate- % 2 GDP Growth ( %) 7.2 12 5.7 6.1 11 5.1 10 4.0 3.2 9 8 7 -0.2 6 2004 2005 2006 2007 2008 2009 2010(E)Source: IBGE(E) Market Estimative- Focus Report - BCB (07/16/2010) Source: IBGE Retail Trade Sales- % 3 Credit Credit Evolution 4 Credit/GDP (%)18 (R$million)16 45,0 1.600 1,52914 1,414 40,0 1.40012 1,227 35,0 1.20010 55% 30,0 1.000 936 56% 10.2 25,0 8 57% 800 733 6 607 20,0 54% 600 499 15,0 4 55% 400 56% 2 59% 45% 10,0 43% 44% 200 45% 46% 5,0 0 41% 44% 0 0,0 2004 2005 2006 2007 2008 2009 jun/10Source: IBGE Source: BCB Individuals Legal Entities Credit/GDP 04
  • 7. Cards Market - Brazil Penetration of Card as means of payment in the 1 Volume Growth (R$ Billion) 2 Private Consumption Expenditures (PCE) 444 22,5% CAGR: 22.0% 20,7% 375 18,9% 17,1% 302 245 20.1% 126 105 2006 2007 2008 2009 2006 2007 2008 2009 2Q09 2Q10*Source: ABECS and IBGE Source: ABECS Number of the Cards Issued 3 (million) Average Ticket (R$/Transaction) 4 10.5% 4.7% 80,5 597 77,5 CAGR: 13.4% 565 540 76,9 514 74,9 452 388 71,9 69,0 2006 2007 2008 2009 2Q09 2Q10 2006 2007 2008 2009 2Q09 2Q10* Source ABECSSource: ABECS (*) Considering only Credit and Debit(*) ABECS Estimatives 05
  • 8. Cielo – Financial and Operating Highlights Financial Highlights 2Q10 2Q09 1Q10 2Q10 X 2Q09 2Q10 X 1Q10 Financial Transaction Volume (R$ million) 61,567.4 50,520.4 58,771.1 21.9% 4.8% Number of Transactions (million) 965.1 814.9 927.6 18.4% 4.0% Net Operating Revenue (R$ million) 1,048.9 862.9 1,020.1 21.6% 2.8% Total Cost Of Services (R$ million) (257,459) (228,412) (251,658) 12.7% 2.3% Operating Expenses (R$ million) (102,573) (90,673) (99,246) 13.1% 3.4% Adjusted EBITDA (R$ million) 735,329 582,921 713,619 26.1% 3.0% Net Income (R$ million) 457,720 364,814 440,213 25.5% 4.0% Operating Highlights 2Q10 2Q09 1Q10 2Q10 X 2Q09 2Q10 X 1Q10 Afilliated Merchants (thousand) 1,839 1,537 1,759 19.6% 4.5% Active Merchants in 60 days (thousand) 1,153 1,038 1,129 11.1% 2.1% Total POS (thousand) 1,606 1,408 1,641 14.1% -2.1% Employees (thousand) 1,058 1,099 1,047 -3.7% 1.1% 06
  • 9. Cielo – Operating Performance Cielo- Number of Transactions ( million) 1 Cielo Transactions- Financial Volume (R$ million) 2 CAGR 20.1% 3,427 213.958 CAGR: 24.5% 2,952 1,424 175.552 2,389 79.166 1,978 1,232 136.500 64.655 987 18.4% 110.749 836 48.534 21,8% 21.9% 965 39.552 2,003 815 1,720 134.792 50.521 61.567 1,402 332 401 110.897 1,142 87.966 22.665 71.197 18.377 483 564 32.144 38.902 2006 2007 2008 2009 2Q09 2Q10 2006 2007 2008 2009 2Q09 2Q10 Credit Debit Credit Card Debit Card Growth Comparison: Industry x Cielo ( 1Q06=100) 3 Cielo- Number of Merchants (thousand) 4260 1,839 Cielo CAGR: 24% 239 1,706240 Industry CAGR: 22% 1,537220 196 1,408 222 1,180 1,153200 1,133 1,038 997180 185 996 159 824 679160 156140 127120 124 2006 2007 2008 2009 2Q09 2Q10100 Afilliated Merchant Active Merchants( transactions in the last 60 days)* 2Q06 2Q07 2Q08 2Q09 2Q10 Setor Cielo * Merchants that have carried out at least one transaction in the last 60 days 07
  • 10. Cielo – Revenues Performance Revenue per Activity (%) 1 Net Revenue (R$ million) 2 3.627,8 CAGR 23.1% 52,6% 51,6% 49,9% 50,2% 48,4% 2.892,9 54,4% 2.402,2 1.945,1 21.5% 15,8% 14,8% 15,4% 14,7% 15,0% 16,0% 1,048.9 26,2% 862,9 27,8% 26,4% 27,2% 27,6% 27,9% 0,0% 0,0% 0,5% 4,5% 4,7% 6,8% 3,3% 4,6% 3,9% 3,4% 3,2% 3,1% 2006 2007 2008 2009 2T09 2T10 2006 2007 2008 2009 2Q09 2Q10Outras Receitas Antecipação de Recebíveis Aluguel de POS Cartão de Débito Cartão de Crédito Credit and Debit Revenue( R$ million) 3 Equipment Rental Revenue (R$ million) 4 26.2% 179.0 562.3 1.067,1 16.8% CAGR: 21,4% 21.4% 141.8 903,1 745,9 596,0 481.6 16.6% 260,7 304,1 2Q09 2Q10 2Q09 2Q10 Credit Revenue Debit Revenue 2006 2007 2008 2009 2Q09 2Q10 08
  • 11. Cielo – Prepayment of Receivables3.000,0 Prepayment of Receivables 1 10,0% Average Term (days) 2 2.460,4 9,0% 69,72.500,0 2.193,3 8,0% 66,1 61,8 2.009,4 7,0%2.000,0 54,4 1.604,7 6,0% 48,5 1.466,5 6,3%1.500,0 5,8% 5,0% 4,6% 4,7% 5,3% 4,0%1.000,0 3,0% 2,0% 500,0 1,0% - 0,0% 2Q09 3Q09 4Q09 1Q10 2Q10 Financial prepayment volume % Prepayment over Credit Financial Volume 2Q09 3Q09 4Q09 1Q10 2Q10 Revenue of Prepayment of Receivables ex Adjustments 3 ( R$ million) 97,1 73,3 65,5 49,7 46,3 2Q09 3Q09 4Q09 1Q10 2Q10 09
  • 12. Cielo – Financial Performance Total Costs of Services ( R$ million) Operating Income Expenses (R$ million) 2 1 CAGR 10.7% 427,4 936,3 401,1 851,1 353,9 351,5 771,0 690,2 12.7% 228.4 14,6 257.4 13.1% 6.3% 242.9* 102,6 90,7 2006 2007 2008 2009 2Q09 2Q10 * excluding Visa fee 2006 2007 2008 2009 2Q09 2Q103.000,0 Adjusted EBITDA (R$ million) 380,00% Net Income (R$ million) 4 1.800,0 60,00% 2.450,7 75,00% 1.600,0 1.536,72.500,0 55,00% 1.400,0 70,00% 1.764,3 50,00% 1.115,32.000,0 70% 1.200,0 1.409,5 68% 67% 65,00%1.500,0 1.000,0 883,9 45,00% 1.038,8 61% 60,00% 657,9 44% 42% 800,0 42% 40,00% 59% 735,31.000,0 582,9 55,00% 600,0 39% 457,7 364,8 35,00% 37% 500,0 53% 400,0 34% 50,00% 30,00% 200,0 0,0 45,00% 0,0 25,00% 2006 2007 2008 2009 2Q09 2Q10 2006 2007 2008 2009 2Q09 2Q10 Adjusted EBITDA Adjusted EBITDA Margin Net Income Net Income Margin 10
  • 13. Cielo – Strategic Planning STRATEGIC MATRIX Non-Payment Transactions VAN* Services Mobile / eCommerce Payment Transactions* Value Added Network Card Present Card Absent 11
  • 14. Cielo – Product Breadth and InnovationPotential from comprehensive suite of products and services: Information Services Information Services: Mine captured data from existing transactions to offer new value-added services Data Mining Analytics Credit Scoring Alternative Transaction Services Alternative Transaction Services: Leverage processing infrastructure and customer base to Healthcare Transportation Loyalty ATM process other types of transactions - e.g. Orizon Emerging Payment Technologies Emerging Payment Transactions: Extend card usage of the traditional POS equipment to eCommerce Mobile Payments emerging technologies - e.g. Visa Mobile Pay Traditional Card Transactions Traditional Card Transactions: Increase the Credit Debit Prepaid Commercial penetration, activation and usage of cards at the point-of-sale - e.g. Debit Activation, B2B transactions,etc Cielo will continue to create new products and drive merchant acceptance by fostering card usage and non-payment transactions 12
  • 15. Cielo – M4U Aquistion  Founded in 2000  innovation in the development of technological mobility platforms  largest mobile top up and mobile payment platforms in the country  developed several applications under the most diverse cell phone standards for a wide range of clients in the financial and telecom markets  Founders will continue to head the businessDeal  Total amount of R$ 50.1 million  R$ 25.05 million already paid and the other half will be payable after 37 months from the closing date (as long as the contractual targets are met)  7,2 X EBITDA (forecasted 2010) 13
  • 16. Cielo – Mobile Payment PositioningM-payments is an strategic priority at Cielo... M4U acquisition is critical to Cielo in the M-payments segment Expansion in the mobile top up business Top up through M4U distributors Top up on customer’s own mobile Recurring top up with cards Access to M-payments platform (currently in use by Oi Paggo)- opportunity to extend the platform to other clients and products Advanced step to Cielo in the development of M-payments solutions, both in the capturing technology and in the issuing business focus and agility 14
  • 17. Cielo - Our Competitive AdvantagesOur advantages: • RELIABILITY • DISTRIBUTION • INNOVATION • DIFFERENTIATED RELATIONSHIP • DIFFERENTIATED PRODUCTS 15
  • 18. Thank You!Investor Relations Contacts:ri@cielo.com.br

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