120815 investor presentation full

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120815 investor presentation full

  1. 1. Investor Presentation August 2012
  2. 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. 3. About Multiplus R$ 457.1 mln of Gross Billings in 2Q12 Shareholders’ Structure (+28.9% YoY) TAM S.A. About R$ 7.5 bln Market Cap (Aug/12) IPO with R$ 2.6 bln Market Cap 73,14% 26,86% (Feb/10) R$ 974 mln of dividends* already distributed (Fev/10-Dez/11) Innovative Business Model Strong cash generation Low CAPEX requirement Negative working capital Scalable business Debt free Dividend playerNOTE: * Including Dividends, Interest on Capital and Capital Reduction 3
  4. 4. Multiplus is a growing loyalty network 10.1 mln members can gather 207 partners gain a powerful Members, in R$ million points from several programs in support acquiring and one single account retaining clients 10,1 207 Members, in million 9,8 200 9,4 Number of partners 190 8,6 8,9 168 161 2Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 4
  5. 5. Innovative business modelFour Sources of Profit Sources of Profit (Joint Venture) outsourcing and CRM points selling 4 services redemption unit revenue less unit cost 1 spread point expiration 3 breakage # of months 0 ~10 24 CASH IN CASH OUT ~10 months float 2 interest income 5
  6. 6. Growing coalition network… Members can collect and also redeem points in any coalition partner. Magazine Air Travel Travel Agency Gas Stations Bookstore Hotels Telecom Pay-TV Apparel Education Suscriptions Insurance Stock Exchange Exclusive and Strategic Relationship with TAM Stock Broker Drugstore Long term agreement (15 years + additional 5 year periods) Most desired airline in Brazil (Ibope Research) and Star Real Estate Alliance member Air tickets: most appealing redemption with high value perception Universities e-Commerce Beauty and Cargo Furniture and Gym Food Home Centers Groceries Car Rental Group Buying Pension Plan Healthy Transportation DecorationNote: blank slots refer to targeted segments 6
  7. 7. … and strong accrual and growing redemption network* Accrual Redemption Charity Hotels Financial Institutions Leisure Car Rental Retail and others Other Magazines and Newspapers *non exhaustive 7
  8. 8. Strategy: to diversify gross billings and redemptions Points sold what? to diversify gross billings Current Long term target and redemptions 14% why? 3% • Average unit price increase • Average unit cost reduction 83% 15 to 20% • Controlled breakage decline, favoring member experience TAM Retail, Industry and Services Banks and volume growth Points redeemed Long term margin expansion Current Long term target how? 96% • Expanding partnerships 4% network 15 to 20% • Increasing marketing actions • Improving client experience Air Tickets OthersNote: based on 2Q12 8
  9. 9. Delivering Results Strong Growth More than R$ 457 million in “Non-air” redemptions surpassed gross billings in 2Q12 4% of total for the first time 457 Gross Billings, R$ million “Non-air” redemptions, in % of total redemptions 434 430 4,3% 4,0% 397 355 2,9% 2,6% 1,5% 0,5% 0,5% 0,6% 0,2% 0,3% 2Q11 3Q11 4Q11 1Q12 2Q12 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 NOTE: it includes points issued before 2010 (TAM’s inventory) 9
  10. 10. Loyalty market has multiples growth opportunities Expanding credit card usage in Brazil Increasing domestic consumption Credit Card Transaction Value (R$ billions) Personal Consumption Expenditure (R$ billions) CAGR +22% CAGR +12% 2.499 386 2.249 314 1.980 1.787 256 1.595 1.429 215 174 142 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Source: ABECS Source: IBGE Growing passenger traffic (Airline Segment) Improving wealth distribution RPK in Brazil (billions) Social classes in Brazil* (% of the population) Multiplus’ target CAGR +15% 81 70 57 44 48 40 2006 2007 2008 2009 2010 2011 2003 2014 Source: ANAC Values updated for 2010 Source: Social Policies Center of FGV-Rio *Note: Average income of classes D and E - R$ 6,126/year; class C - R$13,944/year; and classes A and B - R$ 75,942 /year. 10
  11. 11. Achievments and acknowledgments Almost 300,000 redemptions per month 21% of members became active through an coalition partner in 2Q12 vs 8% in 2Q11 and 2% in 2Q10 Melhores e Maiores (Best and Largest Companies) Exame Ranking 1st place in Wealth generation per Employee Ranking 363th place in General Ranking: climbed 352 positions Page 536 – Exame Magazine, Special Edition Jul/12
  12. 12. Appendix Currency Hedge Income Statement Balance Sheet and Cash Flow 12
  13. 13. Appendix I:Currency Hedge Position in June 2012 (USD mln) 2012 2013 2014 Total NOTIONAL 150.0 283.0 18 519.0 PUT* 1.81 1.89 1.97 1.89 CALL* 1.92 2.00 2.07 2.00 * average strike prices (BRL/USD) SENSITIVITY ANALYSIS Impact on company’s cash flow (Notional: USD 519.0 mln) 7,4 7,4 7,9 7,5 R$ million 4,4 4,4 3,1 2,7 1,7 1,9 1,2 1,0 1,1 -0,9 -0,2 (1,1) -2,1 (3,1) -3,3 -3,1 -5,0 -4,7 -7,0 -7,9 -8,9 -8,6 -11,7 -15,2 3T12 4T12 1T13 2T13 3T13 4T13 1T14 R$1,80/USD R$1,90/USD R$2,00/USD R$2,10/USD 13
  14. 14. Appendix II:Income Statement (R$ thousand) 2Q12 vs 2Q11 2Q12 2Q12 vs 2Q11 1Q12 Income Statement 1Q12 Gross revenue 314,568 352,226 12.0% 382,586 -7.9% Sale of points 224,200 309,715 38.1% 319,572 -3.1% TAM Airlines 44,821 47,138 5.2% 54,918 -14.2% Banks, Retail, Industry and Services 179,379 262,577 46.4% 264,655 -0.8% Breakage 83,621 42,664 -49.0% 62,248 -31.5% Hedge 3,448 -963 -127.9% -72 1236.9% Other revenues 3,299 810 -75.4% 837 -3.2% Taxes on sales -29,505 -32,710 10.9% -35,461 -7.8% Net Revenue 285,063 319,515 12.1% 347,124 -8.0% C ost of the points redeemed -174,085 -236,592 35.9% -252,591 -6.3% Air tickets -171,880 -228,154 32.7% -244,614 -6.7% Other products / services -2,205 -8,438 282.7% -7,977 5.8% Total cost of services rendered -174,085 -236,592 35.9% -252,591 -6.3% Gross Profit 110,978 82,923 -25.3% 94,534 -12.3% Gross Margin 38.9% 26.0% -13.0p.p. 27.2% -1.3p.p. Shared services -1,907 -1,907 0.0% -1,907 0.0% Personnel expenses -6,991 -11,467 64.0% -8,559 34.0% Marketing -4,175 -3,406 -18.4% -1,943 75.3% Depreciation -1173 -2,203 87.7% -2,109 4.5% Other -6,399 -17,089 167.1% -19,152 -10.8% Total Operating Expenses -20,645 -36,071 74.7% -33,669 7.1% Total Costs and Operating Expenses -194,730 -272,663 40.0% -286,260 -4.7% Operating Income 90,333 46,852 -48.1% 60,865 -23.0% Operating Margin 31.7% 14.7% -17.0p.p. 17.5% -2.9p.p. Financial Income/Expenses 33,825 21,032 -37.8% 25,561 -17.7% Hedge 0 -1,004 N.A. 8,504 -111.8% Income before income tax and social 124,158 66,881 -46.1% 94,929 -29.5% Income tax and social contribution -42,990 -23,614 -45.1% -33,344 -29.2% Net Income 81,168 43,267 -46.7% 61,585 -29.7% Net Margin 28.5% 13.5% -14.9p.p. 17.7% -4.2p.p. 14
  15. 15. Appendix III: Balance Sheet and Cash Flow(R$ thousands) 2Q12 vs 2Q12 vs (R$ thousand) 2Q11 2Q12 1Q12Balance Sheets 2Q11 1Q12 Cash Flow 2Q11 2Q12 1Q12Assets 1,013,420 1,324,454 30.7% 1,181,671 12.1% Net Income 81,169 43,267 61,585 Depreciation/Amortization 1,173 2,203 2,109Current assets 830,818 1,224,355 47.4% 1,031,114 18.7%C ash and cash equivalentes 23,820 1,188 -95.0% 21,505 -94.5% Accounts Receivable -10,208 2,827 313Investments 644,884 1,038,175 61.0% 813,250 27.7% Accounts Payable -14,712 -8,021 10,093Accounts Receivable 131,529 144,308 9.7% 147,135 -1.9%Related Parties 22,320 21,928 -1.8% 22,042 -0.5% Taxes 4,882 -8,293 13,023 C urrent account 22,320 21,928 -1.8% 22,042 -0.5% Deferred Taxes 530 -20,645 15,060 Prepaid expenses 0 0 N.A. 0 N.A. Related Parties 45,822 114 17,383Deferred income tax and social contribution 1,823 3,388 85.8% 2,725 24.3%Instrumentos Derivativos 5,540 0 N.A. 8,271 N.A. Prepaid Expenses 0 0 0Other receivables 901 15,368 1606.6% 16,186 -5.1% Prepaid Expenses C onsumption 179,699 30 -355Non-current assets 182,602 100,098 -45.2% 150,556 -33.5% Deferred Revenue and Breakage liabilities 46,301 104,699 48,612Prepaid expenses 0 0 N.A. 15,309 N.A. Derivative Instruments -2,877 55,895 -37,727Long term investments 155,588 11,866 -92.4% 85,110 -86.1%Deferred income tax and social contribution 268 25,959 9577.8% 5,976 334.4% Other assets and liabilities -2,714 2,676 599Instrumentos Derivativos 0 66 N.A. 2,110 -96.9% Operating Cash Flow 329,063 174,752 130,696Demais C ontas a Receber 0 14,256 N.A. 0 N.A.Property, plant and equipment 1,127 2,312 105.2% 1,340 72.6%Intangible 17,900 34,482 92.6% 29,204 18.1% C apex -3,672 -8,104 -1,971Intangible assets 7,720 11,158 44.5% 11,507 -3.0% Cash Flow from Investing Activities -3,672 -8,104 -1,971Liabilities and shareholder’s equity 1,013,420 1,324,454 30.7% 1,181,671 12.1% Net proceeds from public offer 0 0 0Current liabilities 779,941 1,137,577 45.9% 1,019,374 11.6%Suppliers 3,151 116,956 3611.6% 124,977 -6.4% C apital -600,014 0 0Taxes and fees payable 15,465 18,153 17.4% 26,446 -31.4% Dividendos / Juros sobre C apital Próprio 0 0 -261,420Interest on Equity and Payable Dividends 0 0 N.A. 0 N.A. C apital Reserve 2,300 -35,284 24,830Deferred revenue 604,173 813,535 34.7% 725,580 12.1%Breakage liabilities 133,683 134,073 0.3% 117,329 14.3% Legal Reserve 0 0 0Instrumentos Derivativos 2,663 38,498 1345.5% 9,515 304.6% Remuneration Plan 2,300 2,994 2,243Other liabilities 20,806 16,362 -21.4% 15,526 5.4% Hedge 0 -38,278 22,587Non-current liabilities 0 26,091 N.A. 9,494 174.8% 0 0 0 0Related Parties 0 0 N.A. 0 N.A.Derivative Instruments 0 26,091 N.A. 9,494 174.8% Cash Flow from Financing Activities -597,714 -35,284 -236,589Equity 233,479 160,786 -31.1% 152,803 5.2% Increase (Decrease) in Cash -272,323 131,364 -107,865C apital 69,049 70,401 2.0% 70,401 0.0%Hedge 0 -49,902 N.A. -11,624 329.3%Remuneration Plan 6,455 16,690 158.6% 13,696 21.9% C ash at beginning of period* 1,096,614 919,865 1,027,730Reserves 5,919 18,745 216.7% 18,745 0.0%Retained Earnings (loss) 152,056 104,852 -31.0% 61,585 70.3% C ash at end of period* 824,292 1,051,229 919,865 15
  16. 16. Strong cash generation Low CAPEX requirement Contact IR team +55 11 5105 1847Negative working capital Scalable business invest@multiplusfidelidade.com.br www.multiplusfidelidade.com.br/irDebit free Dividend player

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