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Investor Presentation - March 2012

Investor Presentation - March 2012

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Investor Presentation Investor Presentation Presentation Transcript

  • Investor Presentation March 2012
  • 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
  • About Multiplus R$ 1.5 bln of Gross Billings in 2011 Shareholders’ Structure (+36% YoY) TAM S.A. About R$ 5 bln Market Cap (Feb/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
  • Multiplus is a growing loyalty network 9.4 mln members can gather 190 partners gain a powerful Members, in R$ million points from several programs in support acquiring and one single account retaining clients Members, in million 9,4 Number of partners 190 8,6 8,9 8,3 166 168 8,0 161 7,6 151 6,9 7,2 133 121 125 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 4
  • 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
  • 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
  • … 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
  • Strategy: to diversify gross billings and redemptions Points sold what? to diversify gross billings Current Long term target 21% and redemptions why? 3% • Average unit price increase • Average unit cost reduction 15 to 20% 76% • 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? 97% • Expanding partnerships network 3% 15 to 20% • Increasing marketing actions • Improving client experience Air Tickets OthersNote: based on 4Q11 8
  • Delivering Results Strong Growth More than R$ 1.5 billion in “Non-air” redemptions: gross billings in 2011 almost 1.2 billion points of 2011 Gross Billings, R$ million “Non-air” redemptions, in million of points 434 397 564 355 340 325 425 300 264 230 248 89 101 57 73 33 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 NOTE: it includes points issued before 2010 (TAM’s inventory) 9
  • 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% 2,226 386 1,966 1,787 314 1,594 1,429 256 215 174 142 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 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
  • Appendix 4Q11 Results in Brief Breakage Revenue Recognition Air tickets pricing model Currency Hedge Income Statement Balance Sheet and Cash Flow 11
  • Appendix I:4Q11 results in brief Operating Highlights Financial Highlights 12
  • Appendix II:Breakage Revenue Recognition Accounting Effect Lower Breakage Revenue in 4Q11 and 2012: (non-cash) with no impacto to FCF or Adjusted EBTIDA Same methodology since Company’s IPO - improvements to this methodology as systems and controls has permitted - simplified version of the formula has been available on IR website for more than one year Breakage Revenue recognition is distributed over the quarters following the speed of redemptions of points Breakage revenue speed of redemption revenue recognition Breakage liabilities in the following periods higher faster tends to zero lower (eg: Banks) lower slower persistent more stable (eg: TAM) 13
  • Appendix III: Air tickets pricing model Flights with Flights with Simple and high load factor low load factor robust model Unit cost = [Revenue Displacement + Marginal Cost] / # of points Unit cost of standard redemptions DEC/11: periodic review FEB/10: R$622M prepayment (~10% reduction) (~13% discount) Unit Cost (R$) AUG/10: R$400M prepayment (~4% discount) Jan Jun Jan Jun Feb Jul Oct Jan Jun Feb Jul Sep Oct Feb Mar Jul Sep Oct Mar Apr May Mar Apr Apr Aug Sep May Aug May Aug Nov Dec Nov Dec Nov Dec 2010 2011 2012 Contractual cost (model) Cost after commercial discounts (prepayments)NOTE: assuming current unit cost for 2012 14
  • Appendix IV:Currency Hedge Fundamentals Position in December 2011 (USD mln) 2012 2013 Total• Multiplus is exposed to NOTIONAL 303.0 267.0 570.0 foreign exchange risk as PUT* 1.80 1.89 1.84 most of the agreements with CALL* 1.90 1.99 1.95 financial institutions are * average strike prices (BRL/USD) denominated in USD.• These partners represented SENSITIVITY ANALYSIS approximately 70% of Impact on company’s cash flow (Notional: USD 609.0 mln) R$ million 16,2 16,2 16,0 Multiplus’ gross billings in 14,8 11,9 12,1 4Q11. 11,2 11,2 9,7 9,7 9,7 9,2• The Financial Risk 5,8 5,8 6,0 6,3 4,1 4,2 4,3 4,2 Policy determines coverage 1,5 0,1 limits and the list of eligible -0,7 -0,7 -1,0 -0,4 financial instruments -3,1 -1,9 -1,8 -5,5 -6,6 -6,6 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 R$1,65/USD R$1,75/USD R$1,85/USD R$1,95/USD 15
  • Appendix V:Income Statement (R$ thousand) 3Q11 vs 3Q11 vs 3Q10 3Q11 2Q11 Income Statement 3Q10 2Q11 Gross revenue 225,996 439,123 94.3% 353,652 24.2% Sale of points 168,898 360,671 113.5% 249,834 44.4% TAM Airlines - TLA 32,464 68,240 110.2% 54,605 25.0% Banks, Retail, Industry and Services 136,434 292,431 114.3% 195,229 49.8% Breakage 51,225 70,851 38.3% 93,130 -23.9% Hedge 0 -804 N.A. 7,097 -111.3% Other revenues 5,872 8,406 43.1% 3,591 134.1% Taxes on sales -20,485 -40,834 99.3% -32,172 26.9% Net Revenue 205,510 398,289 93.8% 321,480 23.9% Cost of the points redeemed -132,190 -312,940 213.3% -218,818 43.0% Air tickets -131,729 -306,036 132.3% -214,890 42.4% Other products / services -461 -6,904 1396.9% -3,928 75.8% Accounting Adjustments 0 -1,209 N.A. 1,209 -200.0% Total cost of services rendered -132,190 -314,149 137.6% -217,609 44.4% Gross Profit 73,320 84,139 14.8% 103,870 -19.0% Gross Margin 35.7% 21.1% -14.6p.p. 32.3% -11.2p.p. Shared services -2,367 -1,907 -19.4% -1,907 0.0% Personnel expenses -6,845 -7,642 11.6% -8,750 -12.7% Marketing -9,838 -6,564 -33.3% -6,457 1.7% Depreciation -1,026 -1,529 48.9% -1,288 18.7% Other -12,531 -7,001 -44.1% -8,612 -18.7% Total Operating Expenses -32,607 -24,642 -24.4% -27,014 -8.8% Total Costs and Operating Expenses -164,798 -338,791 105.6% -244,623 38.5% Operating Income 40,713 59,498 46.1% 76,856 -22.6% Operating Margin 19.8% 14.9% -4.9p.p. 23.9% -9.0p.p. Financial Income/Expenses 16,918 21,421 26.6% 21,286 0.6% Hedge - 12,763 N.A. (19,347) -166.0% Income before income tax and social contribution 57,631 93,682 62.6% 78,796 18.9% Income tax and social contribution -14,355 -22,809 58.9% -27,480 -17.0% Net Income 43,276 70,872 63.8% 51,316 38.1% Net Margin 21.1% 17.8% -3.3p.p. 16.0% 1.8p.p. 16
  • Appendix VI:Balance Sheet and Cash Flow(R$ thousands) 4Q11 vs 4Q11 vs 4Q10 4Q11 3Q11 (R$ thousand)Balance Sheets 4Q10 3Q11 Cash Flow 4Q11Assets 1,403,549 1,308,434 -6.8% 1,140,986 14.7% Net Income 81,169Current assets 1,330,844 1,093,202 -17.9% 929,163 17.7%C ash and cash equivalentes 17,186 9,186 -46.5% 5,372 71.0% Depreciation/Amortization 1,173Investments 851,830 880,535 3.4% 474,115 85.7%Accounts Receivable 68,699 147,449 114.6% 175,483 -16.0% Accounts Receivable -10,208Related Parties 388,507 39,425 -89.9% 267,435 -85.3% Accounts Payable -14,712 C urrent account 56,629 39,425 -30.4% 28,916 36.3% Prepaid expenses 331,879 0 N.A. 238,520 N.A. Taxes 5,412Deferred income tax and social contribution 3,769 5,219 38.5% 2,298 127.1% Related Parties 45,822Derivative Instruments 0 2,465 N.A. 3712 -33.6%Other receivables 852 8923 946.7% 747 1094.4% Prepaid Expenses Increase 0Non-current assets 72,705 215,232 196.0% 211,823 1.6% Prepaid Expenses Reduction 179,699Prepaid expenses 0 16,416 N.A. 0 N.A. Deferred Revenue and Breakage liabilities 46,301Long term investments 50,280 138,009 174.5% 160,572 -14.1%Deferred income tax and social contribution 1,217 18,542 1423.3% 20,039 -7.5% Derivative Instruments -2,877Derivative Instruments 0 77 N.A. 36 113.9%Property, plant and equipment 935 1,381 47.7% 1,158 19.3% Other assets and liabilities -2,714Intangible 18,997 10,010 -47.3% 16,852 -40.6% Operating Cash Flow 329,063Intangible assets 1,276 30,797 2313.0% 13,166 133.9%Liabilities and shareholder’s 1,407,471 1,308,434 -7.0% 1,140,986 14.7% Investiment -3,672equity Cash Flow from Investing Activities -3,672Current liabilities 648,869 1,020,888 57.3% 847,427 20.5%Suppliers 20,502 114,884 460.4% 3,569 3118.6%Taxes and fees payable 2,328 13,423 476.7% 10,996 22.1% Net proceeds from public offer 0Deferred revenue 484,055 666,371 37.7% 666,455 0.0%Breakage liabilities 130,495 127,926 -2.0% 124,158 3.0% C apital -600,014Derivative Instruments 0 20,489 N.A. 23,514 -12.9% Dividends 0Other liabilities 11,490 77,795 577.1% 18,734 315.3% Other 2,300Non-current liabilities 0 28,408 N.A. 33,464 -15.1%Related Parties 0 0 N.A. 0 N.A. Cash Flow from Financing Activities -597,714Derivative Instruments 0 28,408 N.A. 33,464 -15.1%Equity 758,602 259,138 -65.8% 260,095 -0.4% Increase (Decrease) in Cash -272,323C apital 669,063 70,401 -89.5% 69,049 2.0%Hedge 0 -34,211 N.A. -27,231 25.6%Remuneration Plan 1,538 11,453 644.5% 8,984 27.5% C ash at beginning of period* 1,096,614Reserves 5,919 211,495 3472.9% 5,919 3472.9%Retained Earnings (loss) 82,082 0 -100.0% 203,373 -100.0% C ash at end of period* 824,292 17
  • 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