Presentation of 4 q06 results

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Presentation of 4 q06 results

  1. 1. Conference Call 4Q06 Results March 23, 2007 1
  2. 2. DisclaimerThis presentation may include forward-looking statements of future events or results according to theregulations of the Brazilian and International securities and exchange commissions. These statementsare based on certain assumptions and analyses by the Company that reflect its experience, theeconomic environment, future market conditions and expected events by the company, many of whichare beyond the control of the Company. Important factors that may lead to significant differencesbetween the actual results and the statements of expectations about future events or results includethe company’s business strategy, Brazilian and International economic conditions, technology,financial strategy, financial market conditions, uncertainty regarding the results of its future operations,plans, objectives, expectations and intentions, among others. Considering these factors, the actualresults of the company may be significantly different from those shown or implicit in the statement ofexpectations about future events or results.The information and opinions contained in this presentation should not be understood as arecommendation to potential investors and no investment decision is to be based on the veracity,current events or completeness of this information or these opinions. No advisors to the company orparties related to them or their representatives should have any responsibility for any losses that mayresult from the use or contents of this presentation. 2
  3. 3. Credit Card Market and CardSystem Brazilian Cards Market CSU - Card Base (million) (million) 12.1% 379 Period Average End of the Period 338 277 78 68 13.7% 11.5% 23.1% 53 112 27.9% 12.1 99 2.9% 32.5% 9.710.8 8.7 13.8% 9.8 86 6.8 7.0 7.2 10.5% 189 2.7 3.6 3.0 3.4 138 171 Cartões de Private Total Cartões de Private Total dec/04 dec/05 dec/06 Crédito Label Crédito Label Debt Private Label Credit 2005 2006 2005 2006 Market share- Independent Processors * Company A • Growth of CSU card base in 2006, with higher 17% variations than those in the market; – + 23.1% (December/06 vs. December/05) • Leadership consolidation in terms of market CardSystem shareCompany B 56% 27% • Increase in the number of transactions shows more activity in cards processed by CSU – + 33.0% (4Q06 vs. 4Q05 – CSU base) * Including credit cards from Caixa 3
  4. 4. CAIXA Project StatusImplementation expected for second half of April 2007;Monthly revenues to start on May/07;The largest contract in industry(~ 4.1 million of active credit cards);Strong growth potential;Contract establishes a two-year initial service rendering period 4
  5. 5. TeleSystem and Credit&Risk / MarketSystem• TeleSystem and Credit&Risk – 4.283 workstations in operation in December 2006; – Final stage of the reorganization process in commercial and operational areas; – New executive team and implementation of innovative Operating Management System should contribute to the unit’s upturn in 2007; – New clients announced in January; – Execution of RFPs processes, suggesting new businesses potential for 2007; – Contact center’s market is expected to grow by 15% in 2007. Revenues from Call Center Services in Brazil (R$ bi) 6.91 7.68 5.34 6.14 3.96 4.64 2005 2006 2007 2008 2009 2010 Actual Estimated Source: IDC Brazil Call Center Services, 2006• MarketSystem – Revamping of the unit’s costs after contract termination with Santander; – Portfolio shows solid increase in 2006 - average number of accounts expanded 25.4% in comparison to 2005. 5
  6. 6. CSU - Gross RevenuesR$ Million and % in the total +5.6% R$ 354.4 R$ 335.7 0.8 8.5 15.4 11.1 R$ 92.3 -11.8% 81.4 44.7 48.7 2.8 5.5 15.7 11.4 44.7 35.7 44.7 35.2 36.8 38.4 2005 2006 4Q05 4Q06 CardSystem TeleSystem Credit&Risk MarketSystem * MarketSystem - 4Q05 and 2005 shows figures for December only. 6
  7. 7. CardSystem Gross Revenue (R$ million) Gross Profit (R$ million) and Adjusted EBITDA (R$ million) and Margin (%) Margin (%) +7.2% -10.7% +3.7% 126.5 47.4 44.9 46.6 118.0 42.3 -8.1% -50.0% 43.2% -46.2% 16.4 36.7% 40.4% 41.0% 15.134.0 31.3 52.0% 8.2 8.2 48.1% 28.5% 28.4%4Q05 4Q06 2005 2006 4Q05 4Q06 2005 2006 4Q05 4Q06 2005 2006 CARDSYSTEM HIGHLIGHTS: • Non-recurring revenues registered in 4Q05 (Gross: R$ 7.2 million / Net: R$ 6.6 million) - Considering only the current gross revenues, the change between 4Q06 and 4Q05, would be: Gross Revenues: +16.4% Gross Profit: -16.4% EBITDA: -4.8% • Increase in costs reflects expenses related to “Mailing”, CAIXA Project, Hardware Upgrade and the expansion of our card base. 7
  8. 8. TeleSystem and Credit&Risk Gross Revenue (R$ million) Gross Profit (R$ million) and Adjusted EBITDA (R$ million) and Margin (%) Margin (%) -8.1% 215.1 16.0 15.0 197.6 7.9% 7.4% 3.0 -18.0% 2.3 5.8% -11.7% 4.3% -6.1% -1.5%55.7 -9.8% 45.7 -5.0 -2.8 -4.2 -11.3 4Q05 4Q06 2005 2006 4Q05 4Q06 2005 20064Q05 4Q06 2005 2006 TELESYSTEM E CREDIT&RISK HIGHLIGHTS: • Lower- than-expected performance of business activities in the units in 2006; • Costs affected by the restructuring of operations in our units throughout 2006 and also by the cease of the contract with Natura. 8
  9. 9. MarketSystem Gross Revenue (R$ million) Gross Profit (R$ million) and Adjusted EBITDA (R$ million) and Margin (%) Margin (%) 9.1 6.4 30.2 31.5% 1.8 1.2 22.3% 4.52.6 2.6 0.4 0.4 0.4 0.4 42.9% 28.2% 16.4% 16.4% 16.9% 16.9%4Q05 4Q06 2005 2006 4Q05 4Q06 2005 2006 4Q05 4Q06 2005 2006 MARKETSYSTEM HIGHLIGHTS: • 4Q06 results impacted by contract termination; • Adequate cost management contributed to the improvement of gross margin in comparison to 3Q06. * MarketSystem - 4Q05 and 2005 shows figures for December only. 9
  10. 10. CSU Consolidated Gross Revenue (R$ million) Costs of Service Rendered (R$ +5.6% million) +15.6% 354.5 335.7 288.9 249.9 -11.8% +5.9%92.3 81.4 66.4 70.34Q05 4Q06 2005 2006 4Q05 4Q06 2005 2006 Gross Profit (R$ million) and Margin (%) 63.7 -37.1% 40.1 20.3% 19.8 -74.5% 12.2% 23.0% 5.1 6.7% 4Q05 4Q06 2005 2006 * MarketSystem - 4Q05 and 2005 shows figures for December only. 10
  11. 11. CSU Consolidated General and Administrative Adjusted EBITDA (R$ million) and Adjusted Net Result (R$ million) Expenses (R$ million) Margin (%) -12.7% -16.7% 38.6 16.1 60.3 34.2 50.2 5.9 +4.5% -70.8% 19.2%11.1 11.6 17.8 15.3% 20.6% 5.2 -8.5 6.9% -11.8 4Q05 4Q06 2005 20064Q05 4Q06 2005 2006 4Q05 4Q06 2005 2006 HIGHLIGHTS: • Increase in General and Administrative Expenses due to company reorganization • Adjusted EBITDA excluding IPO’s expenses in 2006 (R$ 7.8 million) • Net results were affected by the provisions which, in turn, increased operating expenses in 4Q06: - Provision for Tax : R$ 1.9 million - Labor contingencies: R$ 380 thousand - Payment of Imposto sobre Serviços/ISS (Services Tax): R$ 886 mil * MarketSystem - 4Q05 and 2005 shows figures for December only. 11
  12. 12. Indebtedness and CapexDebt - R$ thousand Expenses Highlights: 4Q06 3Q06 4Q05Gross Debt 45,649 41,135 42,125 • Reduction of Cash between 3Q and 4Q(-) Cash 37,241 42,471 20,492 related to non-recurring expenses in HRNet Cash (Debt) 8,408 (1,336) 21,633 division (R$ 4.2 million); • Reduction in financial expenses (from R$ 3,8 million in 3Q to R$ 2,7 million in 4Q); • Comfortable debt level: Net Cash (Debt) / EBITDA = 0.2x Investments Highlights: • Capex of R$ 28.9 million in 2006 (45% related to Capex (R$ million) CAIXA Project); 28.9 0.9 • New leasing operations (R$ 15.1 million) in 2006 (purchasing of equipment and software). 13.0 8.2 0.1 15.0 5.3 2.8 4Q06 2006 Systems (SW e HW) CAIXA Project Other 12
  13. 13. Recent Developments and Outlook• Outlook for the Credit Card and Telecommunications Industries in 2007 is extremely positive;• Announcement of new contracts and business expansion in the TeleSystem and Credit&Risk Units during January;• Several projects with relevant business volumes are being developed;• Implementation of CAIXA Project expected for the second half of April;• New hiring process for the TeleSystem and Credit&Risk Units and trainee program selection;• Discussion of Stock Options program in the next General Meeting;• Analyzing the possibility of hiring Market Maker during this year. 13
  14. 14. Conference Call 4Q06 Results www.csu.com.br 14

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