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111103 divulgação de resultados 3 t11 ingles

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  • 1. 3Q11Earnings Release November 4, 2011
  • 2. Disclaimer• This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks and uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice.• This material has been prepared by Multiplus S.A. (“Multiplus“ or the “Company”) includes certain forward-looking statements that are based principally on Multiplus’ current expectations and on projections of future events and financial trends that currently affect or might affect Multiplus’ business, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of each could cause actual financial condition and results of operations to differ materially from those set out in Multiplus’ forward-looking statements. Multiplus undertakes no obligation to publicly update or revise any forward looking statements.• This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. 2
  • 3. 3Q11 results Operating highlights Item 3Q11 YoY QoY Points issued 20.0 bln +38.5% +7.9% Points redeemed 12.5 bln +171.7% +14.7% Breakage rate 24.0% +140bps +70bps Financial highlights Item 3Q11 YoY QoY Gross Billings of points R$ 397.3 mln +32.4% +12.1% Net Revenue R$ 321.5 mln +147.3% +12.8% EBITDA R$ 78.1 mln +64.5% -14.6% (margin of 24.3%) Adjusted EBITDA R$ 82.3 mln -7.0% +1.3% (margin of 22.2%) Net Income R$ 51.3 mln +15.3% -36.8% (margin of 16.0%) 3
  • 4. Currency Hedge Fundamentals Position in September 2011 (USD mln) 4Q11 2012 2013 Total• Multiplus is exposed to NOTIONAL 51.0 303.0 255.0 609.0 foreign exchange risk as PUT* 1.75 1.80 1.88 1.83 most of the agreements with CALL* 1.85 1.90 1.99 1.93 financial institutions are * average strike prices (BRL/USD) denominated in USD.• These partners represented SENSITIVITY ANALYSIS approximately 70% of Impact on company’s cash flow (Notional: USD 609.0 mln) R$ million Multiplus’ gross billings in 15,2 15,2 15,0 13,8 11,9 12,1 3Q11. 11,2 11,2 9,0 9,0 9,0 8,5• The Financial Risk 5,4 5,8 5,8 6,0 6,3 3,8 3,8 4,0 3,9 2,5 Policy determines coverage 1,5 0,1 limits and the list of eligible -0,7 -0,7 -1,1 -0,5 financial instruments -1,6 -1,9 -1,8 -3,1 -6,1 -5,5 -6,6 -6,6 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 R$1,65/USD R$1,75/USD R$1,85/USD R$1,95/USD 4
  • 5. Hedge Accounting in 4 steps 1 2 3 4 HedgeHEDGE Mark-to-Market Hedge Expiration ConstructionMULTIPLUS Points PointsPOINTS Sale Redemption Zero Cost Collar Intrinsic Value Cash results of hedge Cash results of hedge (purchase of a put recorded in Equity operations are operations areCOMMENTS option and the sale of a and Time value in assigned to some recorded in operating call option) or other Financial results. points sold in the same results instruments. period (based on first Intrinsic Value out rule) Balance Sheet EQUITY OperatingRESULTS Time Value Balance Sheet Results Financial EQUITY AND CASH Results NON-CASH Item Main variables IMPORTANT:Option value Intrinsic value + Time value The Company does not have any CSA in placeIntrinsic value Strike price and Current exchange rate and thus cannot be called for margin in any of its derivative contracts whichever the scenario.Time value Maturity, Volatility and Interest Rate Differential (BRL vs USD) 5
  • 6. Business Model Partnerships network Outsourcing CRM Accrual Redemption Coalition Partners Partners Partners Partners Partners buy Multiplus buys Two-way flow: points from points, products exchange of Multiplus MultiplusMultiplus to award or services from points, products manages the leverages the its customers partners to deliver and services (buy loyalty program of database from its(Ex. banks, parking to its members and sell) between the partner network and and stores) (Ex. donation and Multiplus and (systems and offers CRM tickets) coalition partners operations) services (Ex. air travel, e-commerce and gas station) Status Status Status Operational Planning Planning 6
  • 7. Strategy: to diversify gross billings and redemptions Gross billings of points what? to diversify gross billings Current Long term target and redemptions 24% why? 3% • Average unit price increase • Average unit cost reduction 15 to 20% 73% • Controlled breakage decline, favoring member experience TAM Retail, Industry and Services Banks and volume growth Costs of rewards Long term margin expansion Current Long term target how? 98% • Expanding partnerships network 2% 15 to 20% • Increasing marketing actions • Improving client experience Air Tickets OthersNote: based on 3Q11 7
  • 8. Expanding partnerships networkNew partnerships Expanding partnership network # +26.3% +4.3% Drugstore Group buying 166 161 168 151 133 7 12 15 19 20 Pension Plan Car Rental 3Q10 4Q10 1Q11 2Q11 3Q11 Total Coalition NOTE: Some partnerships with bad performance were canceled in 2Q11. Tickets Donation Increasing non-airline redemptions As % of total points redeemed 3,2% 2,0%Roadmap 0,8% 0,8% 0,9% Groceries, entertainment, restaurants, beauty, others. 3Q10 4Q10 1Q11 2Q11 3Q11 NOTE: it includes points issued before 2010 (TAM’s inventory) 8
  • 9. Increasing marketing actions (1/2) New positioning Vision Values Together we can do much more. Simplicity Agility Mission Reliability Connecting companies and people through a relationship Fun network in which everybody wins. Innovation New brand 9
  • 10. Increasing marketing actions (2/2) Media investments Expanding member base Together is so much better. Together is Multiplus. In millions +17.4% +3.7% On board videos TV commercial 8,6 8,9 8,0 8,3 7,6 Press media 3Q10 4Q10 1Q11 2Q11 3Q11 Radio spots, etc Growing gross billings R$ millions 32.4% +12.1% Point-of-sale materials 397,3 325,2 339,9 354,6 300,0 3Q10 4Q10 1Q11 2Q11 3Q11 (collect points here) 10
  • 11. Improving client experience Point of Sale Accrual and balance checking at the point-of-sale • spread the loyalty concept • speed up the capillarity strategy penetrating new market segments • increase sales in retail market Standard rule: 1 Real ($) = 1 Multiplus point Special rules allowed (such as minimum ticket) adding more value to the partner Multiplus as one product of Redecard’s sales team New website coming soon Other actions Call Center improvements Educational mailings Systems improvements 11
  • 12. Investor Relations +55 11 5105 1847Thank you. invest@multiplusfidelidade.com.br www.multiplusfidelidade.com.br/ir