apresentação institucional 2012
DESCRIPTION
TRANSCRIPT
Corporate Presentation
August, 2012
DISCLAIMER
The Company makes forward looking statements that are subject to risks anduncertainties. These statements are based on the beliefs and assumptions of our management as wellas on information currently available to us. Forward-looking statements include information regarding ourcurrent intent, beliefs or expectations, in addition to those of the members of the Board of Directors andExecutive Officers of the Company.
Forward-looking statements also include information regarding our possible or assumed future operatingresults, as well as statements preceded or followed by, or that include, the words ''believes”, ''may”,''will”, ''continues”, ''expects”, ''anticipates”, ''intends”, ''plans”, ''estimates”, or similarexpressions.
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties andassumptions, for they relate to future events, thus depending on circumstances that may or may notoccur. Our future results and the creation of value to shareholder s may differ significantly from thoseexpressed in or suggested by these forward-looking statements. Many factors determining theseresults and values are beyond Cielo’s ability to control or predict.
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BRAZIL | CARD INDUSTRY
3
Source: ABECS e IBGE* the Q1 numbers are estimated)
17.1%18.9%
20.7%22.5%
24.3%
26.9% 27.1%
2006 2007 2008 2009 2010 2011 1Q12*
Penetration Of Cards as Means of Payment in the Private Consumption Expenditure (PCE)
BRAZIL | MACROECONOMIC SCENARIO
4
4.0
6.1
5.1
-0.2
7.5
2.71.9
2006 2007 2008 2009 2010 2011 2012(E)
GDP ( %)
PIB: IBGE(E) Estiimates- Focus Report- BCB
0
2
4
6
8
10
12
14
16
18Retail Trade Sales (%)
Source: IBGE
9.0
4
5
6
7
8
9
10Unemployment (%)
Source: IBGE
45% 46% 43% 44% 40% 47%55%
54%57%
56%60%
53%
0,0
10,0
20,0
30,0
40,0
50,0
0
500
1.000
1.500
2.000
2.500
2007 2008 2009 2010 2011 jul/12
Credit/GDPCredit (R$million)
Credit Evolution
Individuals Legal Entities Credit/GDP
936
1,2271,414
1,704
Source: BCB
2,0302,167
BRAZIL | ECONOMIC SCHEME
Gross MDR
Net MDR Interchange Fee
The brand defines the interchange fee.
5
The acquirer negotiates the gross MDR with the merchant.
MERCHANTS
BRAZIL | TRANSACTION FLOW
MERCHANTSCARD HOLDERS CARD HOLDERS MERCHANTS
ISSUER ISSUER
Credit Transaction Debit Transaction
6
Brazil has a total areaof 8,514,876 km²
MAIN ENTRY BARRIER | BANKING DISTRIBUTION
NUMBER OFBRANCHES
NORTH 293 277 82 48 92 35 0 0 3
NORTHEAST 1,127 833 288 196 411 56 3 7 9
MIDWEST 459 344 293 95 193 105 1 6 6
SOUTHEAST 2,338 2,387 2,528 1,832 1,137 427 7 103 69
SOUTH 1,049 772 637 356 501 239 441 10 16
TOTAL 5,266 4,613 3,828 2,527 2,334 862 452 126 103
Banking distribution is the mainbarrier to new players
70% of the affiliations are donethrough banks
SOURCE: BRAZILIAN CENTRAL BANK , MARCH 2012
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1995
4 Visa acquirers
2009 2010
June 2009
Single Visa Acquirer
R$ 8.4 billion IPO
+
Multi-brand acquirer
CIELO | TIMELINE
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28.6%
28.6%
42.4%
0.3%
Banco Bradesco Banco do Brasil
Free-float Treasury
655.096.224 common shares
9
CIELO | OWNERSHIP
CIELO | PLANNING MATRIX
10
Partnership with
Cybersource
UPCOMING SOON
VO
UC
HER
CR
EDIT
AN
D D
EBIT
CIELO | PORTFOLIO OF BRANDS
11
Cielo Fidelidadeis the only loyaltyprogram developedexclusively to merchants
Scheme: accrual of pointsbased on the merchant’svolume with Cielo andredemption of points for morethan 20 thousand products
Cielo Fidelidadeis the largest B2Bloyalty program inLatin America
CIELO | LOYALTY PROGRAM
12
CIELO PREMIA IS THE MOST
AND BRINGS AN ADVANCED TECHNOLOGYCHANGING THE CULTURE OF CARRYING OUTPROMOTIONS AT THE POINT S OF SALES
FLEXIBLE AND THE EASIEST TO USE
PROMOTIONAL MARKETING TOOL
IN THE MARKET
CIELO INNOVATES ONE MORE TIME
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CIELO | ADDING VALUE TO MERCHANTS
SURPRISES
ENGAGES
SEGMENTS
MANAGES
The card owner with a differentiatedpayment experience
The card owner through multiplegifts and discounts
The promotion according to your needs (Bank/Card Brand/Card type/Purchasing option: Debit or Credit)
The promotion automaticallyreducing operational costs strongly
CIELO | PREMIA’S MAIN ADVANTAGES
14
IT GIVES THE CLIENT
ON A SPECIFIC DAY / TIMEA GIFT OR A DISCOUNT
ADVANTAGES TO
IT INCREASES THE RETURN
FREQUENCY ON A DAYWITH LOW MOVEMENT
CIELO CLIENT
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CIELO | FIXED DAY AND TIME
*** CONGRATULATIONS!***
DISCOUNT TO YOU
10% discount
At the end of the day
On Mondays
PRIZE BALANCE
--------------------------
EXPIRING DATE: 01/31/2011
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CIELO | FIXED DAY AND TIME
CIELO | INNOVATIVE PRODUCTS
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Unprecedented payment solution
application in Brazil for iPhone, iPad and
iPod touch as well as Android system
and Blackberry
Devices used as POS terminal for mobile
payment with Visa, MasterCard,
American Express and Elo cards
Crediário is a unique and exclusivetechnology developed by Cielo through
which merchants can offer an
additional payment method that
allows cardholders to pay in up to 48 installments, accessing a pre-approvedcredit line from their checking accounts
through their bank cards.
Banco do Brasil and Bradesco made
available R$100 billion in credit to the
product. In the coming months others banks will join (HSBC and Caixa Ecônomica
Federal).
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CIELO | CREDIÁRIO PRODUCT
MERCHANT• More sales volume: more than 20 million cardholders from BB and
Bradesco with pre-approved lines of credit;• Additional payment scheme without directly financing the cardholder;• Better cash flow as funds are received in D+1;• Increase in average ticket;
CARDHOLDER• Pre-approved credit line from the bank;• Attractive interest rates;• Additional to credit card’s limit;• Simulation at the point of sale;
CIELO• More sales volume;• Merchant Discount Rate similar to credit in installments.
CREDIÁRIO: more advantages to participants
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CIELO | CREDIÁRIO PRODUCT
CIELO | MeS ACQUISITION
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MeS Highlights• Leading e-Commerce payment services
provider with full range of merchant acquiring, e-Commerce & fraud management solutions
• Proprietary, internet-based, next-generation technology platform with best-in-class scalability, analytical capabilities, delivery speeds and cost of services
• In-house development of products and services provides superior transaction economics across the value chain
• Portable platform with upside for expansion
• Good organic revenue growth, margins and free cash flow
• Seasoned management team
Rationale
• Enhancement of Technology Platform
– Opportunity to leverage MeS’ technology to the Brazilian market and Rest of World
– MeS platform designed to achieve maximum scalability, efficiency and reliability at a low cost
• E-Commerce Improvement
– E- Commerce is fastest growth merchant category in payments
– MeS has expertise and proprietary technology tailored to serving e-commerce merchants
• Strong MeS Financial Performance
– High organic growth and attractive margins
Agreement to acquire 100% of MeS for $670 million
• End-to-end payment processing functionality:
– e-Commerce
– Business-to-Business
– Mobile Commerce
– Card present and card not present merchants
– Recurring Billing
– Risk Management
WEB-BASED DELIVERY
• A white-label and fully customizable business solution:
– Transaction Processing & Reporting
– E-Commerce & Mobile
– Risk Management
– Product & Pricing
– Compliance Administration
– Sales Training and Marketing
– Business Analytics
FULL RANGE OF ACQUIRING, E-COMMERCE & MOBILE PAYMENT SERVICES
* Last twelve months ended May 31, 2012
MERCHANTS AGENT BANKS
MERCHANT e-SOLUTIONS AT A GLANCE
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Year Founded 2000
Number of
Merchants
70,000+
Processing
Volume
$14bn+
# of Settled
Transactions
130mm+
LTM Net Revenue of
$124 million*
CIELO | ORIZON AQUISITION
Founded in 2006
Ownership interest of 40.95%;
Interconnection between healthcare and dental operators and services
providers
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CIELO | M4U AQUISITION
Founded in 2000
innovation in the development of technological mobility platforms
largest mobile top up and mobile payment platforms in the country
developed several applications under the most diverse cell phone
standards for a wide range of clients in the financial and telecom
markets
Founders will continue to head the business
Deal
Announced August 2010
Total amount of R$ 50.1 million
R$ 25.05 million already paid and the other half will be payable
after 37 months from the closing date (as long as the contractual
targets are met)
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CIELO | Paggo Soluções JV
Combine Oi’s mobile payment experience with Cielo’s
coverage and experience with electronic payment networks, in
order to create a joint venture to offer acquiring and transaction
capture services using mobile devices
Creation of a new company controlled by both Oi and Cielo
Announced September 2010
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CIELO | BRASPAG AQUISITION
Deal announced May 2011
Total amount of R$ 40 million
Founded in 2005
Leader as a gateway for e-commerce in Brazil, with approximately
65% market share
Platform integrates online stores, financial institutions and
acquirers, and is responsible for capturing, routing and managing
payment transactions with cards, collection slips and online debit
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CIELO | BRASPAG POSITION
Card
Slip
Acquirers
Wallets
Gateways
BanksDebit
Source: Company, Broker reports, Cybersource26
CIELO | ADR
27
Cielo has a sponsored Level I ADRTicker: CIOXYADR Ratio (ADR:ORD): 1:1Depositary bank: Deutsche Bank Trust Company AmericasDepositary bank contacts:
ADR broker helpline:Tel: +1 212 250 9100 (New York)Tel: +44 207 547 6500 (London)
Email: [email protected] website: www.adr.db.com
Depositary bank’s local custodian: Banco Bradesco
Financial Indicators 2Q12 2Q11 1Q122Q12 X 2Q11
2Q12 X 1Q12
Financial Volume(R$ million)
91,720.8 74,622.6 88,081.8 22.9% 4.1%
Transaction(million)
1,282.0 1,094.2 1,269.4 17.2% 1.0%
Net Revenue *(R$ million)
1,470.1 1,119.3 1,399.5 31.3% 5.0%
Cost of Services(R$ million)
(407.7) (342.4) (399.1) 19.1% 2.1%
Operating Expenses(R$ million)
(223.8) (115.4) (125.9) 94.0% 77.7%
Unit Costs + Expenses ex subsidiaries
(0.44) (0.38) (0.37) 17.8% 20.8%
Adjusted EBITDA (R$ million)
914.1 720.2 947.8 26.9% -3.6%
Net Income(R$ million)
548.9 423.6 566.6 29.6% -3.1%
Blended Net MDR (bps) 102.6 101.2 105.3 1.5 (2.7)
Credit Net MDR (bps) 116.1 117.5 118.6 (1.4) (2.6)
Debit Net MDR (bps) 78.9 73.7 81.2 5.2 (2.3)
CIELO | FINANCIAL INDICATORS
28* Including prepayment of receivables present value adjusted
CIELO | OPERATING PERFORMANCE
29
13.4%
4.1%
79,775
91,72188,082
22.9%
74,623
91,2531,269 1,282
1,0941,167
1,302
1.0%
17.2%
4.3%
639 678 730 739 751
455 489572 531 531
2Q11 3Q11 4Q11 1Q12 2Q12
Cielo- Number of Transactions (R$ million)
Credit Debit
46.821 50.368 56.034 56.786 58.571
27.802 29.407 35.219 31.296 33.150
2Q11 3Q11 4Q11 1Q12 2Q12
Transaction Financial Volume (R$ million)
Credit cards Debit cards
1.115
1.153
1.1991.212
1.264
2Q11 3Q11 4Q11 1Q12 2Q12
Cielo- Number of Active Merchants (1 transaction in the last 60 days)
CIELO | FAIR SHARE
30
Source : Public information, released by the companiesOthers = Redecard and Santander/GetNet
Financial Volume Breakdown (in R$)
Considering the 2 main participants , Cielo gained 0.9 p.p. quarter-on-
quarter
Considering the 3 main participants, Cielo gained 0.5 p.p. quarter-on-
quarter
57,7% 57,9% 59,5% 60,2% 61,1%
42,3% 42,1% 40,5% 39,8% 38,9%
2Q11 3Q11 4Q11 1Q12 2Q12
Cielo Redecard
56,7% 56,7% 58,0% 58,5% 59,0%
43,3% 43,3% 42,0% 41,5% 41,0%
2Q11 3Q11 4Q11 1Q12 2Q12
Cielo Others
CIELO | REVENUES
31
POS 2Q11 3Q11 4Q11 1Q12 2Q12
AverageRental(R$/month)
65 65 67 71 75
Installed POS (thousand) 1,351 1,402 1,484 1,524 1,586
MDR 2Q11 3Q11 4Q11 1Q12 2Q12
Net MDR Debit
74 77 81 81 79
Net MDR Credit
117 118 119 119 116
24.7%
1.4%
34.2%
9.5%
955.4927.8
941.2
823.1
754.9
550,1 596,6669,0 673,7 679,7
204,8226,5
286,4 254,1 261,4
2Q11 3Q11 4Q11 1Q12 2Q12
Commissions Revenues (R$ million)
Credit Debit
265,1 272,3
296,1
342,9 355,8
2Q11 3Q11 4Q11 1Q12 2Q12
Equipment Rental (R$ million)
CIELO | PREPAYMENT OF RECEIVABLES
32
54.2%
11.7%
3.376,9 3.894,6
4.899,2 5.289,9
6.162,2
7,2% 7,7%
8,7%9,3%
10,5%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
10,0%
11,0%
12,0%
13,0%
14,0%
15,0%
16,0%
17,0%
18,0%
19,0%
20,0%
21,0%
22,0%
23,0%
24,0%
25,0%
26,0%
27,0%
28,0%
29,0%
30,0%
-
1.000,0
2.000,0
3.000,0
4.000,0
5.000,0
6.000,0
7.000,0
8.000,0
9.000,0
10.000,0
2Q11 3Q11 4Q11 1Q12 2Q12
Prepayment of Receivables (R$ million)
Financial prepayment volume % Prepayment over Credit Financial Volume
58,5 56,0 55,8 55,7 57,7
2Q11 3Q11 4Q11 1Q12 2Q12
Average Term (days)
137,7
159,9
193,1 190,1
212,4
2Q11 3Q11 4Q11 1Q12 2Q12
Revenue of Prepayment of Receivables ex Adjustments (R$ million)
CIELO | COSTS
33
Reduction of 5.3% of the unitcost excluding the subsidiariesand the additional brands fee
If the impact of depreciation is eliminated in the sameanalysis, the reduction wouldhave been 8.7%
Costs of services rendered
Depreciation and amortization
0.318 0.261 0.276
Unit per transaction
0.040 0.017
Increase of 2.0% of the unitcost excluding the subsidiariesand the additional brands fee
If the impact of depreciation is eliminated in the sameanalysis, the increase wouldhave been 2.0%
0.318 0.283 0.2780.040 +0.005
407.7
334.9301.8
407.7
352.3362.8
11.0%
-5.3%
3.0%
2.0%
333,9
261,1 244,1
73,8
50,7
22,1 73,8
57,7
2Q12 Reported Costs related to subsidiaries
Additional brands fee 2Q12 Adjusted 2Q11 Adjusted
Costs Comparison 2Q12 X 2Q11 (R$ million)
333,9 289,0 280,5
73,8 50,7
5,8 73,8 71,8
2Q12 Reported Costs related to subsidiaries
Additional brands fee 2Q12 Adjusted 1Q12 Adjusted
Costs Comparison 2Q12 X 1TQ2 (R$ million)
CIELO | EXPENSES
34
In both comparisons (2Q12 x 2Q11 and 2Q12 x 1Q12), the main impact for the increase was due to sales and marketing expenses (with the realization of some initiatives and campaigns that were postponed from 1Q12 and the incentives paid to partner banks due to shared sales and marketing expenses.)125,9
223,80,0 0,7
20,822,4
54,0
1Q12 Depreciation and
Amortization
Personnel General and Administratives
Other Expenses Sales and Marketing Expenses
2Q12
Operating Expenses- 2Q12 X 1Q12 (R$ million)
115,4
223,80,6 2,615,4
33,9
55,9
2Q11 Depreciation and Amortization
Personnel General and Administratives
Other Expenses Sales and Marketing Expenses
2Q12
Operating Expenses- 2Q12 X 2Q11 (R$ million)
CIELO | FINANCIAL PERFORMANCE
35
-3.6%-3.1%
Adjusted EBITDA (R$ million) Net Income (R$ million)
29.6%26.9%
423,6457,5
504,5
566,6 548,8
38% 38%37%
41%
37%
25,00%
30,00%
35,00%
40,00%
45,00%
50,00%
55,00%
60,00%
0,0
100,0
200,0
300,0
400,0
500,0
600,0
2Q11 3Q11 4Q11 1Q12 2Q12
Net Income Net Margin
720,2 747,0
839,8
947,8
914,1
64%
62% 61%
68%
62%
45,00%
50,00%
55,00%
60,00%
65,00%
70,00%
75,00%
0,0
100,0
200,0
300,0
400,0
500,0
600,0
700,0
800,0
900,0
1.000,0
2Q11 3Q11 4Q11 1Q12 2Q12
Adjusted EBITDA Adjusted EBITDA Margin
CIELO | WHY INVEST?
Leader in a fast growing market
Strong balance sheet, high cash generation and low capex requirements
Minimum dividend payout of 50% of net profit*distributed twice a year
Focus on innovationand continuous growth
36