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2Q11 Earnings Presentation

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2Q11 Earnings Presentation

  1. 1. 2Q11Earnings Release August 5, 2011
  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. 1Q11 Highlights OPERATING HIGHLIGHTS • 18.5 bln points issued, a growth of 51.4% versus 2Q10 and of 9.2% versus 1Q11 • 10.9 bln points redeemed, compared to 3.2 bln points in 2Q10 and 9.0 bln points in 1Q11 • Average Breakage rate (12 months) of 23.3%, versus 23.0% in both periods 2Q10 and 1Q11 FINANCIAL HIGHLIGHTS • Gross Billings of points of R$ 354.6 mln, an growth of 34.3% versus 2Q10 and of 4.3% compared to 1Q11 • Net Revenue of R$ 285.1 mln, compared to R$ 93.5 mln in 2Q10 and R$ 242.0 mln in 1Q11 • Net Income of R$ 81.2 mln, versus R$ 23.1 mln in the 2Q10 and R$ 70.9 mln in 1Q11 (margin of 28.5%) • Adjusted EBITDA of R$ 81.3 mln, 3% higher than 2Q10 and 8.8% lower than 1Q11 (margin of 24.8%) 3
  4. 4. Operating Performance BREAKAGE RATE (12 MONTHS AVERAGE) % +30 bps +30 bps 23,3% 23,0% 23,0% 22,6% 22,6% 2Q10 3Q10 4Q10 1Q11 2Q11 MEMBERS PARTNERSHIPS In millions # +28.8% +19.5% +4.0% -3.0% 166 161 8,3 8,6 151 7,6 8,0 133 7,2 125 12 15 19 7 7 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Accrual Coalition NOTE: Some partnerships with bad performance were canceled in 2Q11. 4
  5. 5. Coalition Partnerships Network (members can earn and redeem points) Magazine Air Travel Travel Agency Gas Stations Bookstore Hotels Telecom Pay-TV Apparel Education Suscriptions Universities Stock Exchange Gym Drugstore Food Beauty and Group buying Furniture and Home Centers Groceries Car Rental Insurance Pension Plan e-Commerce Healthy DecorationNote: blank slots refer to targeted segments 5
  6. 6. Points Issued and Gross Billings POINTS ISSUED GROSS BILLINGS OF POINTSIn billions R$ millions +51.4% 34.3% +9.2% +4.3% 18,5 339,9 354,6 17,0 325,2 16,1 300,0 14,4 264,0 12,2 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 6
  7. 7. Currency Hedge FUNDAMENTALS POSITION IN JUN 2011 (USD mln) 2011 2012 2013 2014 Total NOTIONAL 48.0 84.0 37.0 2.0 171.0• Multiplus is exposed to PUT* 1.67 1.68 1.74 1.77 - foreign exchange risk as most of the agreements with CALL* 1.78 1.80 1.85 1.87 - * average strike prices (BRL/USD) financial institutions are denominated in USD.• These partners represented SENSITIVITY ANALYSIS approximately 70% of Impact on company’s cash flow (Notional: USD 171.0 mln) R$ million Multiplus’ gross billings in 5,3 5,3 5,3 5,3 R$1,45/USD 5,2 2Q11. R$1,55/USD• The Financial Risk 4,0 3,5 R$1,65/USD 3,3 Policy determines coverage 2,9 2,9 2,9 2,9 3,1 limits and the list of eligible 2,5 2,2 2,1 1,9 1,9 financial instruments 1,3 1,3 1,0 1,0 0,9 0,9 0,6 0,6 0,6 0,6 0,7 0,7 0,6 0,4 0,2 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 7
  8. 8. Financial Performance POINTS REDEEMED NET REVENUEIn billions R$ million +242.8% +205.0% +21.7% +17.8% 285,1 10,9 242,0 9,0 205,6 7,7 130,0 4,6 93,5 3,2 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 COSTS OF SERVICES RENDERED (COGS) OPERATING EXPENSES (SG&A)R$ million R$ million +240.0% +86.5% +27.8% 174,1 32,6 -7.0% 132,3 136,2 22,2 20,6 69,0 11,1 13,5 51,2 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 8
  9. 9. EBITDA EBITDA ADJUSTED EBITDAR$ millions R$ millions +3.0% +193.5% +3.2% -18.0% +8.2% -8.8% 103,3 95,0 91,5 88,5 89,1 84,6 78,9 82,1 81,3 84,7 59,9Margin 47,5 46,2 41,7 Margin 31,2 33.4% 36.5% 20.3% 35.0% 32.1% 32,5% 33,8% 32,2% 34,6% 19,9% 15,4% 28,6% 33,2% 24,8% 25,8% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Adjusted EBITDA Adjusted EBITDA with previous periods effects NOTE: “previous periods effects” refer to unit cost and Breakage rate variation effects on the balance of points to be redeemed in the previous period 9
  10. 10. Net Income and Free Cash Flow NET INCOME FREE CASH FLOW TO EQUITY R$ million R$ millions R$ millions +250.9% +7.7% +26.3% 326,6 327,7 304,3 285,5 259,4 +14.5% 81,2 70,9Margin 44,5 43,3 23,1 24.7% 34.2% 21.0% 29.3% 28.5% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Note: Excluding dividends and capital reduction effects 10
  11. 11. Main Long Term Goals Gross Billings of points Multiplus sells points … Costs of rewards TAM Air Tickets Retail, Industry and Services …and buys rewards Others Banks Current* Current* 26% 98% Sources of Profit 3% Spread 2% Margin between point price and 71% cost of rewards z Breakage Points expiring without being redeemed Long Term Target Long Term Target Interest income on the float Gap between sales and redemptions of points Cross-selling of services Outsourcing and CRM 15 to 20% 15 to 20%*2Q11 data 11
  12. 12. Capilarity Project CONCEPT 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 TIMELINE Since June 2011: Pilot at 2 restaurants (Japengo) August 2011: rollout to 50 merchants in São Paulo December 2011: rollout to at least 350 merchants in Brazil Collect points here 12
  13. 13. Non-airline tickets redemptions POINTS REDEEMED IN NON-AIRLINE TICKETSAttractive offers to members As % of total points redeemed 2,5%Books Fuel 2,1%Clothing HotelsCourses Magazines 0,8% 0,4% 0,4% 0,4% 0,5% 0,4% 0,5% 0,5% 0,5%Donations Pay-TV 0,2% 0,2%DVDs Telecom services dez/10 jul/10 mar/11 jan/11 ago/10 set/10 nov/10 fev/11 out/10 mai/11 jun/10 abr/11 jun/11Electronics Tickets NOTE: it includes points issued before 2010 (TAM’s inventory) COALITION AND REDEMPTION PARTNERSOPERATIONAL IN SETUP PROCESS ROADMAP Car rental Groceries Entertainment Restaurants Beauty Others 13
  14. 14. Thank you. Investor Relations +55 11 5105 1847 invest@multiplusfidelidade.com.br www.multiplusfidelidade.com.br/ir

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