Transcript of "11 01-2011 - 3 q11 earnings results presentation"
3Q11 EARNINGS PRESENTATIONNovember 01, 2011
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
HIGHLIGHTS 3Q11 X 2Q11Net Income totaled R$ 457.6, +8.0% and Net Margin of 37.8%Adjusted EBITDA totaled R$ 741.2, +3.4% and Adjusted EBITDA Margin of 61.2%POS Rental revenue increases 2.7% qoq, for the first time in the last 5 quarters, with average rental ofR$64.7- the highest in the market ; 3Q11 X 3Q1O R$80.5 billion,+20.4% andAccording to market criterion, transaction financial volume totaledaccording to accounting criterion volume totaled R$ 79.8 billion, +18.6% Credit volume totaledR$ 50.3 billion, +21.2% Debit volume totaled R$ 29.4 billion, +14.4%Net Operating Revenue + prepayment of receivables totaled R$ 1.211 billion, +6.5% Others Cielo and Credicard partner to capture Diners transactions Discover transactions; and soon Elected the best company in the Specialized Services by economic publications Exame, Valor Econômico and IstoÉ Dinheiro Magazine , and one of the best 150 Companies to work being the best in Strategy and Management according to Você S/A Magazine (Exame); Cielo joins the Global Compact. 3
costs of services renderedCIELO | COSTS depreciation and amortization unit per transaction Costs Comparison 3Q11 X 3Q10 (R$ million) The impact of the unit cost 365.6 excluding the subsidiaries and 60.4 42,2 the additional brand fees was a 298.6 301.4 -0.9% reduction of 11.9%. 24.7 48.6 60.4 305.2 If the impact of depreciation is 238.2 252.8 eliminated in the same analysis, the reduction would have been 3Q11 Reported Costs related to Additional brands fee 3Q11 Adjusted 3Q10 Adjusted 16.2%. subsidiaries 0.313 0.036 0.021 0.256 0.290 Costs Comparison 3Q11 X 2Q11 (R$ million) The impact of the unit cost 365.6 excluding the subsidiaries and the additional brands fee was a 60.4 42.2 298.6 294.0 reduction of 4.9%. 24.7 60.4 1.6% 57.7 305.2 238.2 236.3 If the impact of depreciation is eliminated in the same analysis, 3Q11 Reported Costs related to Additional brands fee 3Q11 Adjusted 2Q11 Adjusted the reduction would have been subsidiaries 5.5%. 0.313 0.036 0.021 0.256 0.269 11
CIELO | OPERATING EXPENSES Operating Expenses Composition – 2Q11 to 3Q11 (R$ million) In both comparison (3Q11 X 3Q10 and 23.6 0.1 0.1 (0.8) 23.6 3Q11 X 2Q11) the main impact for the 165.7 increase in the 119.2 expenses were due to: 2Q11 Other Expenses Marketing Personnel Depreciation General and 3Q11 and Administratives Amortization •other expenses- provisions for tax Operating Expenses Composition – 3Q10 to 3Q11 (R$ million) and labor contingencies; 0.3 • marketing- trade 6.5 6.0 17.4 marketing , loyalty 26.7 programs to clients 165.7 and campaigns with 108.8 partners (banks and clients) 3Q10 Other Expenses Marketing Personnel General and Depreciation 3Q11 Administratives and Amortization 12