20120629 apresentação institucional junho atualizada

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20120629 apresentação institucional junho atualizada

  1. 1. Corporate PresentationJune, 2012
  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. BRAZIL | CARD INDUSTRY Penetration Of Cards as Means of Payment in the Private Consumption Expenditure (PCE) 26.9% 27.1% 24.3% 22.5% 20.7% 18.9% 17.1% 2006 2007 2008 2009 2010 2011 1Q12* Source: ABECS e IBGE * the Q1 numbers are estimated) 3
  4. 4. BRAZIL | MACROECONOMIC SCENARIO GDP ( %) 18 Retail Trade Sales (%) 7.5 16 6.1 14 5.1 12 10 4.0 8 2.7 2.7 6 4 2 0 -0.2 2006 2007 2008 2009 2010 2011 2012(E) Source: IBGEPIB: IBGE(E) Estiimates- Focus Report- BCB Unemployment (%) Credit Evolution Credit/GDP Credit11 1,704 2,030 2,070 (R$million)10 1.600 45,0 1,414 60% 59% 1.400 40,0 9 1,227 1.200 56% 35,0 8 57% 30,0 1.000 936 7 54% 25,0 800 55% 20,0 6 600 15,0 400 40% 41% 5 43% 44% 10,0 200 45% 46% 5,0 4 0 0,0 2007 2008 2009 2010 2011 Mar/12 Source: BCB Individuals Legal Entities Credit/GDPSource: IBGE 4
  5. 5. BRAZIL | ECONOMIC SCHEME MERCHANTS The brand defines the interchange fee. The acquirer negotiates the gross MDR with the merchant. Gross MDR Net MDR Interchange Fee 5
  6. 6. BRAZIL | TRANSACTION FLOW Credit Transaction Debit TransactionISSUER ISSUERCARD HOLDERS MERCHANTS CARD HOLDERS MERCHANTS 6
  7. 7. MAIN ENTRY BARRIER | BANKINGDISTRIBUTIONBrazil has a total areaof 8,514,876 km²Banking distribution is the mainbarrier to new players70% of the affiliations are donethrough banks NUMBER OF BRANCHES NORTH 293 277 82 48 92 35 0 0 3 NORTHEAST 1,127 833 288 196 411 56 3 7 9 MIDWEST 459 344 293 95 193 105 1 6 6 SOUTHEAST 2,338 2,387 2,528 1,832 1,137 427 7 103 69 SOUTH 1,049 772 637 356 501 239 441 10 16 TOTAL 5,266 4,613 3,828 2,527 2,334 862 452 126 103 7 SOURCE: BRAZILIAN CENTRAL BANK , MARCH 2012
  8. 8. CIELO | TIMELINE 1995 2009 2010 4 Visa acquirers R$ 8.4 billion IPO Multi-brand acquirer June 2009 + Single Visa Acquirer 8
  9. 9. CIELO | OWNERSHIP 655.096.224 common shares 0.3% 28.6% 42.4% 28.6% Banco Bradesco Banco do Brasil Free-float Treasury 9
  10. 10. CIELO | PLANNING MATRIX Partnership with Cybersource 10
  11. 11. CIELO | PORTFOLIO OF BRANDS UPCOMING SOONCREDIT AND DEBITVOUCHER 11
  12. 12. CIELO | LOYALTY PROGRAM Cielo Fidelidade is the largest B2B loyalty program in Latin America Cielo Fidelidade Scheme: accrual of points based on the merchant’s is the only loyalty volume with Cielo and program developed redemption of points for more exclusively to merchants than 20 thousand products 12
  13. 13. CIELO | ADDING VALUE TO MERCHANTS CIELO INNOVATES ONE MORE TIME AND BRINGS AN ADVANCED TECHNOLOGY CHANGING THE CULTURE OF CARRYING OUT PROMOTIONS AT THE POINT S OF SALES CIELO PREMIA IS THE MOST FLEXIBLE AND THE EASIEST TO USE PROMOTIONAL MARKETING TOOL IN THE MARKET 13
  14. 14. CIELO | PREMIA’S MAIN ADVANTAGES The card owner with a differentiated SURPRISES payment experience The card owner through multiple ENGAGES gifts and discounts The promotion according to your needs SEGMENTS (Bank/Card Brand/Card type/Purchasing option: Debit or Credit) The promotion automatically MANAGES reducing operational costs strongly 14
  15. 15. CIELO | FIXED DAY AND TIME IT GIVES THE CLIENT A GIFT OR A DISCOUNT ON A SPECIFIC DAY / TIME ADVANTAGES TO CIELO CLIENT IT INCREASES THE RETURN FREQUENCY ON A DAY WITH LOW MOVEMENT 15
  16. 16. CIELO | FIXED DAY AND TIME *** CONGRATULATIONS!*** DISCOUNT TO YOU 10% discount At the end of the day On Mondays PRIZE BALANCE -------------------------- EXPIRING DATE: 01/31/2011 16
  17. 17. CIELO | INNOVATIVE PRODUCTS  Unprecedented payment solution application in Brazil for iPhone, iPad and iPod touch as well as Android system and Blackberry  Devices used as POS terminal for mobile payment with Visa, MasterCard, American Express and Elo cards 17
  18. 18. INNOVATION – MOST RECENTLYLAUNCHED PRODUCT CREDIÁRIO: WHAT IS IT? Crediário is a recently launched unique and exclusive technology developed by Cielo that allows the merchant to sell from 2 to 48 installments, accessing the credit approved by the banks to the consumers and available in their credit cards. 18
  19. 19. INNOVATION – MOST RECENTLYLAUNCHED PRODUCT CREDIÁRIO: who can benefit? Cardholders of Visa from Banco do Brasil and Bradesco – with R$100 billion in credit available to the product. In the coming months others banks will join (HSBC and Caixa Ecônomica Federal). Merchants of Cielo who would like to offer an additional payment scheme without directly financing the cardholder. 19
  20. 20. INNOVATION – MOST RECENTLYLAUNCHED PRODUCT CREDIÁRIO: more advantages to participants MERCHANT • More sales volume – 20 million plus cardholders from BB and Bradesco with pre-approved lines of credit; • Better cash flow as funds are received in D+1; • Increase in average ticket; CARDHOLDER • Pre-approved credit line from the bank; • Attractive interest rates; • Additional limit besides credit card’s limit; • Simulation at the point of sale; CIELO • More sales volume; • Merchant Discount Rate of credit in installments. 20
  21. 21. CIELO | ORIZON AQUISITION  Founded in 2006  Ownership interest of 40.95%;  Interconnection between healthcare and dental operators and services providers 21
  22. 22. CIELO | M4U AQUISITION  Founded in 2000  innovation in the development of technological mobility platforms  largest mobile top up and mobile payment platforms in the country  developed several applications under the most diverse cell phone standards for a wide range of clients in the financial and telecom markets  Founders will continue to head the businessDeal  Announced August 2010  Total amount of R$ 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) 22
  23. 23. CIELO | Paggo Soluções JV  Combine Oi’s mobile payment experience with Cielo’s coverage and experience with electronic payment networks, in order to create a joint venture to offer acquiring and transaction capture services using mobile devices  Creation of a new company controlled by both Oi and Cielo  Announced September 2010 23
  24. 24. CIELO | BRASPAG AQUISITION  Deal announced May 2011  Total amount of R$ 40 million  Founded in 2005  Leader as a gateway for e-commerce in Brazil, with approximately 65% market share  Platform integrates online stores, financial institutions and acquirers, and is responsible for capturing, routing and managing payment transactions with cards, collection slips and online debit 24
  25. 25. CIELO | BRASPAG POSITION Acquirers Card Gateways Slip Debit Wallets Banks 25 Source: Company, Broker reports, Cybersource
  26. 26. CIELO | ADR Cielo has a sponsored Level I ADR Ticker: CIOXY ADR Ratio (ADR:ORD): 1:1 Depositary bank: Deutsche Bank Trust Company Americas Depositary bank contacts: ADR broker helpline: Tel: +1 212 250 9100 (New York) Tel: +44 207 547 6500 (London) Email: adr@db.com ADR website: www.adr.db.com Depositary bank’s local custodian: Banco Bradesco 26
  27. 27. CIELO | FINANCIAL INDICATORS Financial Indicators 1Q12 1Q11 1Q12 X 1Q11 4Q11 1Q12 X 4Q11 Financial Volume (R$ million) 88,081.8 70,203.7 25.5% 91,252.7 -3.5% Transaction (million) 1,269.4 1,058.7 19.9% 1,301.8 -2.5% Net Revenue* (R$ million) 1,399.5 1,082.1 29.3% 1,383.1 1.2% Cost of Services (R$ million) (399.1) (311.5) 28.1% (405.7) -1.6% Operating Expenses (R$ million) (129.9) (139.9) -7.1% (207.9) -37.5% Unit Costs + Expenses ex subsidiaries (0.37) (0.39) -4.3% (0.44) -15.2% Adjusted EBITDA (R$ million) 943.8 684.3 37.9% 833.2 13.3% Net Income (R$ million) 566.6 424.6 33.4% 504.5 12.3% Blended Net MDR (bps) 105 105 - 105 - Credit Net MDR (bps) 119 122 (3) 119 - Debit Net MDR (bps) 81 76 5 81 - 27* Including prepayment of receivables present value adjusted
  28. 28. CIELO | OPERATING PERFORMANCE Cielo- Number of Transactions (million) Cielo Financial Volume ( R$million) 19.9% 1,302 1,269 25.5% 91,253 88,082 79,775 1,167 74,6231,058 1,094 70,205 35.219 31.296 572 531 29.407 455 489 98.742 118.315 447 -2.5% -3.5% 50.368 56.034 56.786 639 678 730 738 162.933 197.541 611 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Credit cards Debit cards Credit Debit Cielo- Number of Active Merchants ( 1 transaction in the last 60 days) 11.7% 1.212 1.199 1.153 1.115 1.1% 1.085 1Q11 2Q11 3Q11 4Q11 1Q12 28
  29. 29. CIELO | FAIR SHARE Financial Volume Breakdown (in R$)Considering the 2 main participants , Considering the 3 main participants, Cielo gained 0.7 p.p. quarter-on- Cielo gained 0.5 p.p. quarter-on- quarter quarter 42,8% 42,3% 42,1% 40,5% 39,8% 43,6% 43,3% 43,3% 42,0% 41,5% 57,2% 57,7% 57,9% 59,5% 60,2% 56,4% 56,7% 56,7% 58,0% 58,5% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Cielo Others Cielo Redecard Source : Public information, released by the companies Others = Redecard and Santander/GetNet 29
  30. 30. CIELO | FAIR SHARE Financial Volume Breakdown (in R$) Considering the 2 main participants , Cielo gained 0.7 p.p. quarter-on-quarter 42,8% 42,3% 42,1% 40,5% 39,8% 57,2% 57,7% 57,9% 59,5% 60,2% 1Q11 2Q11 3Q11 4Q11 1Q12 Cielo Redecard Source : Public information, released by the companies 30
  31. 31. CIELO | REVENUES BREAKDOWN Revenue Breakdown (%) 45,2% 44,6% 44,6% 43,8% 43,8% 16,4% 16,6% 16,9% 18,7% 16,5% 22,5% 21,5% 20,4% 19,4% 21,1% 9,8% 11,0% 11,6% 11,7% 11,6% 6,1% 6,3% 6,6% 6,4% 7,0% 1Q11 2Q11 3Q11 4Q11 1Q12 Credit cards Debit cards POS Rental Prepayment of Receivables Other revenues 31
  32. 32. CIELO | REVENUES Commissions Revenues (R$ million) Equipment Rental (R$ million) 21.1% 342,9 26.2% 955.4 296,1 927.8 268,4 265,1 272,3 823.1 754.9 286,4 254,1 735.1 9.7% 226,5 -2.9% 196,2 204,8 669,0 673,7 538,9 550,1 596,6 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Credit DebitMDR 1Q11 2Q11 3Q11 4Q11 1Q12 POS 1Q11 2Q11 3Q11 4Q11 1Q12Net MDR AverageDebit 76 74 77 81 81 Rental 69 65 65 67 71 (R$/month)Net MDRCredit 122 117 118 119 119 Installed POS 1.293 1.351 1.402 1.484 1.524 (thousand) 32
  33. 33. CIELO | PREPAYMENT OF RECEIVABLES Revenue of Prepayment of Receivables ex Adjustments (R$ million) 57.4% 193,1 190,1 159,9 137,7 120,8 -1.6% 1Q11 2Q11 3Q11 4Q11 1Q126.000,0 Prepayment of Receivables 20,0% Average Term (days) 5.289,9 62,9 4.899,2 18,0% 58,55.000,0 16,0% 56,0 55,8 55,7 3.894,6 14,0%4.000,0 3.236,9 3.376,9 12,0%3.000,0 10,0% 8,7% 9,3% 8,0%2.000,0 7,3% 7,2% 7,7% 6,0% 4,0%1.000,0 2,0% - 0,0% 1Q11 2Q11 3Q11 4Q11 1Q12 Financial prepayment volume % Prepayment over Credit Financial Volume 1Q11 2Q11 3Q11 4Q11 1Q12 33
  34. 34. Costs of services renderedCIELO | COSTS Depreciation and amortization Unit per transaction Costs Comparison 1Q12 X 1Q11 (R$ million) 399.2 17.4%  Reduction of 2.1% of the unit 71,8 46,9 324.1 cost excluding the subsidiaries 276.1 and the additional brands fee 28,1 71,8 52,5  If the impact of depreciation is 327,4 252,4 eliminated in the same 223,6 analysis, the reduction would have been 5.9% 1Q12 Reported Costs related to Additional brands fee 1Q12 Adjusted 1Q11 Adjusted subsidiaries 2.1% 0.314 0.037 0.022 0.255 0.261 Costs Comparison 1Q12 X 4Q11 (R$ million) -2.8%  Reduction of 0.3% of the unit 399.2 359.9 370.1 cost excluding the subsidiaries 71,8 46,9 62,4 and the additional brands fee 7,6 71,8  If the impact of depreciation is 327,4 288,1 307,7 eliminated in the same analysis, the reduction would have been 4.0% 1Q12 Reported Costs related to Additional brands fee 1Q12 Adjusted 4Q11 Adjusted subsidiaries 0,3% 0.314 0.037 +0.006 0.283 0.284 34
  35. 35. CIELO | EXPENSES Operating Expenses Composition- 1Q11 to 1Q12 (R$ million) 6,7 3,6 0,6 (8,2) (12,6) 139,9 129,9 In both comparison 1Q11 Personnel Other Expenses Depreciation General and Marketing and 1Q12 and Administratives Sales Expenses (1Q11 x 1Q12 and Amortization 4Q11 x 1Q12) the main impact for the Operating Expenses Composition - 4Q11 to 1Q12 (R$ million) reduction was due to marketing and sales expenses. 0,3 (1.3) (5.6) (12.5) (58.8) 207,9 129,9 4Q11 Depreciation Personnel Other Expenses General and Marketing and 1Q12 and Administratives Sales Expenses Amortization 35
  36. 36. CIELO | FINANCIAL PERFORMANCE Adjusted EBITDA (R$ million) Net Income (R$ million) 33.4% 37.9% 600,0 566,6 60,00%1.000,0 943,8 75,00% 833,2 504,5 900,0 741,2 55,00% 716,5 500,0 457,5 684,3 70,00% 800,0 424,7 423,6 12.3% 13.3% 50,00% 700,0 400,0 67% 65,00% 600,0 45,00% 500,0 63% 64% 60,00% 300,0 61% 40,00% 400,0 60% 41% 55,00% 200,0 39% 300,0 38% 38% 35,00% 37% 200,0 50,00% 100,0 30,00% 100,0 0,0 45,00% 0,0 25,00% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Adjusted EBITDA Adjusted EBITDA Margin Net Income Net Margin 36
  37. 37. CIELO | WHY INVEST?Leader in a fast growing marketStrong balance sheet, highcash generation and lowcapex requirementsMinimum dividend payout of 50% of net profit*distributed twice a yearFocus on innovationand continuous growth 37
  38. 38. Investor Relations Contacts:www.cielo.com.br/riEmail: ri@cielo.com.brPhone.: + 55 11 2596 1701

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