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3Q11 EARNINGS PRESENTATIONNovember 01, 2011
DISCLAIMERThe Company makes forward looking statements that are subject to risks anduncertainties. These statements are ba...
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%...
BRAZIL | MACROECONOMIC SCENARIO                                         GDP ( %)    7.5                                   ...
CIELO | FAIR SHARE                                        Financial Volume Breakdown (in R$)      Considering the 2 main p...
CIELO | FINANCIAL INDICATORS  Financial Indicators                    3Q11                  3Q10      3Q11 X 3Q10    2Q11 ...
CIELO | OPERATING PERFORMANCE                                                                                             ...
CIELO | MERCHANTS BREAKDOWN                          Financial Volume       38%      39%              40%             39% ...
CIELO | REVENUES              Commissions Revenues (R$ million)                                            Equipment Renta...
CIELO | PREPAYMENT OF RECEIVABLES                                             Revenue of Prepayment of Receivables ex Adju...
costs of services renderedCIELO | COSTS                                                                                   ...
CIELO | OPERATING EXPENSES         Operating Expenses Composition – 2Q11 to 3Q11 (R$ million)                             ...
CIELO | FINANCIAL PERFORMANCE              Adjusted EBITDA (R$ million)                                           Net Inco...
CIELO | COMPREHENSIVE VALUE PROPOSITION                 DATA CAPTURE                                                   PAY...
ri@cielo.com.br+ 55 11 2596 1701
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11 01-2011 - 3 q11 earnings results presentation

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Transcript of "11 01-2011 - 3 q11 earnings results presentation"

  1. 1. 3Q11 EARNINGS PRESENTATIONNovember 01, 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 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
  4. 4. BRAZIL | MACROECONOMIC SCENARIO GDP ( %) 7.5 Retail Trade Sales (%) 18 6.1 16 5.1 14 4.0 12 3.3 10 8 6 6.2 4 -0.2 2 2006 2007 2008 2009 2010 2011(E) 0Source: IBGE(E) Estimates-Focus Report- BCB Source: IBGE Credit/GDP Credit Credit Evolution Unemployment (%) (R$million) 1,704 1,929 11 1.600 45,0 10 1,414 1.400 59% 40,0 1,227 1.200 60% 35,0 9 1.000 936 56% 30,0 8 57% 25,0 800 733 54% 20,0 7 600 55% 15,0 400 40% 41% 10,0 6 43% 44% 200 45% 46% 5,0 5 0 0,0 2006 2007 2008 2009 2010 sep/11 Source: BCB Individuals Legal Entities Credit/GDP Source: IBGE 4
  5. 5. CIELO | FAIR SHARE Financial Volume Breakdown (in R$) Considering the 2 main participants, Cielo gained Considering the top three participants our market 0.2 p.p .quarter-on-quarter share remained resilient quarter-on-quarter 40.4% 43.1% 42.8% 42.3% 42.1% 40.6% 43.7% 43.6% 43.3% 43.3% 59.6% 57.7% 57.9% 59.4% 56.3% 56.4% 56.7% 56.7% 56.9% 57.2% 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Cielo Others Cielo RedecardSource: Earnings reported by the acquiring companiesOthers: Redecard and Santander/GetNet 5
  6. 6. CIELO | FINANCIAL INDICATORS Financial Indicators 3Q11 3Q10 3Q11 X 3Q10 2Q11 3Q11 X 2Q11 Financial Volume 79,775.2 67,256.8 18.6% 74,622.6 6.9% (R$ million) Transactions 1,167.0 1,037.7 12.5% 1,094.2 6.7% (million) Net Revenue* 1,210.9 1,137.4 6.5% 1,119.3 8.2% (R$ million) Cost of Services (365.6) (317.1) 15.3% (342.4) 6.8% (R$ million) Operating Expenses (165.8) (108.8) 52.3% (119.2) 39.1% (R$ million) Adjusted EBITDA 741.2 760.9 -2.6% 716.5 3.4% (R$ million) Net Income 457.5 488.1 -6.3% 423.6 8.0% (R$ million)Blended Net MDR (bps) 103 121 (18) 101 2 Credit Net MDR (bps) 118 146 (28) 117 1 Debit Net MDR (bps) 77 79 (2) 74 3* Including prepayment of receivables present value adjusted 6
  7. 7. CIELO | OPERATING PERFORMANCE Cielo - FInancial Volumes (R$ millions) Cielo - Number of transactions (millions) 12.5% 18.6% 79,775 1,167 74,080 74,623 67,257 70,2031,038 1,108 1,094 1,059 29,407 29,163 27,802 489 25,701 25,885 440 487 447 455 6.7% 6.9% 44,917 44,318 46,281 50,368 41,556 598 621 611 639 682 3Q10 4Q10 1Q11 2Q11 3Q113Q10 4Q10 1Q11 2Q11 3Q11 Credit Card Debit Card Credit Debit Cielo - Number of Active Merchants (1 transaction in the last 60 days) 0.5% 1,153 1,147 1,140 1,115 1,085 3.4% 3Q10 4Q10 1Q11 2Q11 3Q11 7
  8. 8. CIELO | MERCHANTS BREAKDOWN Financial Volume 38% 39% 40% 39% 41% 62% 61% 60% 61% 59% 3Q10 4Q10 1Q11 2Q11 3Q11 Large Merchants Small and Medium Merchants Revenue 64% 67% 67% 66% 67% 36% 33% 33% 34% 33% 3Q10 4Q10 1Q11 2Q11 3Q11 Large Merchants Small and Medium Merchants 8
  9. 9. CIELO | REVENUES Commissions Revenues (R$ million) Equipment Rental (R$ million) 1.3% 295.7 -7.9% 823.1 812.8 815.9 735.1 754.9 275.5 272.3 204,2 225,1 9.0% 226,5 268.4 204,8 265.1 196,2 2.7% 608,6 590,8 596,6 538,9 550,1 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Credit DebitMDR 3Q10 4Q10 1Q11 2Q11 3Q11 POS 3Q10 4Q10 1Q11 2Q11 3Q11Net MDR AverageDebit 79 76 76 74 77 Rental 74.8 71.7 69.2 65.4 64.7 (R$/month)Net MDRCredit 142 131 122 117 118 Installed POS 1,318 1,281 1,293 1,351 1,402 (thousand) 9
  10. 10. CIELO | PREPAYMENT OF RECEIVABLES Revenue of Prepayment of Receivables ex Adjustments (R$ million) 41.1% 159.9 137.7 119.4 120.8 113.3 16.1% 3Q10 4Q10 1Q11 2Q11 3Q114. 000 5 , Prepayment of Receivables 100 ,% Average Term (days) 3,894.6 72,0 66,1 9, % 04. 000 0 , 3,376.9 62,93. 000 5 , 3,016.7 3,236.9 8, % 0 58,5 56,03. 000 0 , 2,669.6 7.7% 7, % 0 6.7% 7.3% 7.2% 6, % 02. 000 5 , 6.4% 5, % 02. 000 0 , 4, % 01. 000 5 , 3, % 01. 000 0 , 2, % 0 5000 , 1, % 0 - 0, % 0 3Q10 4Q10 1Q11 2Q11 3Q11 Financial prepayment volume 3Q10 4Q10 1Q11 2Q11 3Q11 % Prepayment over Credit Financial Volume 10
  11. 11. 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
  12. 12. 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
  13. 13. CIELO | FINANCIAL PERFORMANCE Adjusted EBITDA (R$ million) Net Income (R$ million) 600 0, 600% ,800 0, 760.9 741.2 750% , 715.9 716.5 488.1 684.3 500 0, 457.5 550% ,700 0, 457.6 700% , 424.7 423.6 500% ,600 0, 400 0, 3.4% 650% ,500 0, 67% 8.0% 450% , 63% 64% 300 0,400 0, 62% 600% , 43% 61% 400% ,300 0, 39% 200 0, 550% , 39% 38% 38% 350% ,200 0, 500% , 100 0, 300% ,100 0, 0, 0 450% , 0, 0 250% , 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Adjusted EBITDA Margin Net Income Margin 13
  14. 14. CIELO | COMPREHENSIVE VALUE PROPOSITION DATA CAPTURE PAYMENTS SOLUTIONS SOLUTIONSCielo POS, Cielo ECR | Mobile Checkout and IP One Cielo CreditCielo Customized Data Capture | Shared POS, Visa Cielo DebitVale Pedágio (Tolls) Cielo Parcelado / Parcelado Loja (Instalment)Cielo Mobile | iPhone, iPad and iPod touch App Cielo Vouchers | Food, Autoand Androide System Cielo Financing | Agro / Store, DistribuitionCielo E-Commerce | Braspag VALUE ADDED ANTI-FRAUD PRODUCTIVITY SOLUTIONS SOLUTIONS SOLUTIONSCielo Premia (Loyalty and Rewards) Cielo Lynx Cielo Vcorp (Corporate)Cielo Saque (Cash Advance) Cielo Stand InCielo Recarga | Top up Cielo MISCielo Correspondente | Banking services Cielo Renova Cielo Pre-Auth
  15. 15. ri@cielo.com.br+ 55 11 2596 1701
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