Earnings Release 4Q11


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February 10, 2012 - Earnings Release 4Q11

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Earnings Release 4Q11

  1. 1. 4Q11Earnings Release February 10, 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. 4Q11 Results 4Q11 Results in Brief Breakage Revenue Recognition Air tickets pricing model 3
  4. 4. 4Q11 Results Summary Operating Highlights Item 4Q11 vs 4Q10 vs 3Q11 Points issued 20.6 billion +28.4% +3.2% Points redeemed 17.4 billion +126.2% +39.9% Breakage ratio 24.1% +150bps +10bps Financial Highlights Item 4Q11 vs 4Q10 vs 3Q11 Gross Billings of points R$433.6 million +33.3% +9.1% Net Revenue R$398.3 million +93.8% +23.9% EBITDA R$61.0 million +46.2% -21.9% (15.3% margin) Adjusted EBITDA R$92.8 million +55.0% +12.8% (23.2% margin) Net Income R$70.9 million +63.8% +38.1% (17.8% margin) 4
  5. 5. 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 revenuespeed 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) 5
  6. 6. Air tickets princing 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$400M prepayment (~4% discount) Jan Jun Jul Jan Jun Jul Jan Jun Jul Aug Feb Aug Sep Feb May Aug Sep Feb Sep Apr May Oct Nov Dec Apr Oct Nov Dec Apr May Oct Nov Dec Mar Mar Mar 2010 2011 2012 Contractual cost (model) Cost after commercial discounts (prepayments)NOTE: assuming current unit cost for 2012 6
  7. 7. Delivering Results Strong cash generation and maximization of shareholders return Strong Growth Consistent Strategy 7
  8. 8. Delivering Results Strong cash generation and maximization of shareholders return More than Cash balance at the end of 2011 R$ 1 billion Total Dividends, Interest on Capital and More than Capital Reduction paid in 2011 R$ 680 million Total Dividends and Interst on Capital More than already approved to be paid in 2012 R$ 261 million 8
  9. 9. Delivering Results Strong Growth 1.5 million new 190 partners in the network members in 2011 (coalition, accrual and redemption) Members, in R$ million Number of partners 9,4 190 8,9 8,6 168 8,0 8,3 166 161 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 9
  10. 10. 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) 10
  11. 11. Delivering Results Consistent Strategy Growth Margins Network expansion Higher share of retail (members and partnerships) segments in points accrual marketing and IT investments Higher share of non-air redemptions Controlled Breakage decline 11
  12. 12. Delivering Results Consistent Strategy • Established methodologies and good • Brand equity and strength of Multiplus track record in loyalty programs and TAM Group management • Know-how on Brazilian environment • Expertise in data analytics tools and relationships network • Experience in greenfield • Major loyalty “currency” in the market • Know-how on data privacy • Expertise in loyalty programs (key for clients from financial services management from TAM’s loyalty program segment) Joint Venture Main services: designing, developing, managing and consulting on data analytics services for third- party loyalty and incentive programs Status: startup 12
  13. 13. Investor Relations +55 11 5105 1847Thank you. invest@multiplusfidelidade.com.br www.multiplusfidelidade.com.br/ir