earnings presentation 3q11

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  • 1. Earnings Release3Q11 November 10, 2011

2. Quarter Highlights Gross Revenue totaled R$ 109.8 million, a record amount, and exceeded 3Q10s revenues by 6.0%ResultsResultado Evolution of the growth indicators and profitability during the year: revenues, net profit and EBITDA, with a highlight being the 40.4% p.a. increase in gross profit at CSU Contact, with a net margin of 7.8% in 3Q11 Number of cards processed reached 25.3 million, with an increase of 26.5% YoYOperations A 21.3% p.a. rise in CSU Contacts APs, ending the period with 4,207Negcios workstations Launch of the Fans Engagement loyalty program and the Pre-paid Flex card Creation of Board of Directors Advisory Committees, focused on Strategyand Development, Marketing and Markets, and Finance and RisksGovernanceGovernana Consistent execution of the CARD3 share buy-back programs 2 3. Strategy: profitable growth Commercial focus Only platform in the Expansion of addressable Focused on theaimed at diversification market that is testedmarketsmiddle marketof the client base and in operation Fans Engagement New issuers and Improved financialcurrent PL issuers Search for new Incorporation of the Web performance clientsuniverse in the solutions Innovation: productsoffered Broader scope ofand technologies International partnershipssolutions Pre-paid Flex card3 4. Clear and consistent resumptionof expansionGross Revenue Business Units Gross Revenue Share(R$ million)(% of revenues - LTM)109.0 109.8 103.6100.5CSU ContactCSU 97.8 48%CardSystem52% 3Q104Q10 1Q112Q113Q11 Main Indicators EvolutionIn the first nine months of (R$ million) 2011, gross revenues totaled R$ 102.0 101.1 319.3 million, up 1.4% over the 101.1101.1 102.0 102.0 same period of 2010 96.0 93.593.593.591.027.3 27.3Companyprovesits25.722.2 22.2 25.7 resiliency, with an increase in15.1% 15.9% 16.316.3 13.2% 14.4% growth and profitability indicators 15.2% 15.915.914.4 14.4 during the course of the year: net1Q11 1Q112Q112Q113Q104Q103Q11 3Q11 1Q112Q11revenue, gross profit and EBITDA3Q11 Gross Prof itit Gross ProfEBITDA EBITDA Net Income Net RevenueNet IncomeOperating Expenses * 2010s numbers were adjusted to reflect the effects of full adoption of the accounting convergence effective for each quarter of 2010.4 5. Management of Costs and ExpensesTotal Costs SG&A Expenses(R$ million and % of net revenue) (R$ million and % of net revenue)75.5 74.8102.0 102.071.3101.1 101.1 65.9 66.1 15.5 14.5 14.514.6 15.9%93.593.5 91.0 91.0 15.9%15.2%15.1%14.4% 76.3%13.2%74.6%73.3%15.1%72.7% 15.9% 14.4% 15.2%15.1%15.9%14.4% 15.2%13.2% 13.2% 68.7%3Q10 4Q10 1Q112Q113Q11 3Q104Q10 1Q112Q11 3Q11*Net RevenueOperating Expenses Net RevenueOperating Expenses EBITDA x EBITDA Margin(R$ thousand and % of net revenue)20,582 17,304 16,341 15,94114,40021.4%19.0% 15.8%16.0% 15.4% 3Q10 4Q10 1Q11 2Q11 3Q11 * 3Q11 SG&A disconsider the one time effect of R$ 0.7 million referring to employees dismissals within a cost reduction program.5 6. The evolution can be measured month after month In 12 months, CSU presented strong organic growth, of 22% in revenues and 30% inEBITDA, comparing the months of September The business unit CSU CardSystem improved revenues and gross profit by 12% p.a.; CSU Contact, besides contributing to a significant revenue diversification for theCompany, expanded its profitability, generating positive EBITDA in the month.Sep-11Sep-10%CSUNet Revenues33,716 27,646 22.0%Gross Profit 9,7537,408 31.7%EBITDA 6,6165,080 30.2%CSU CardSystemNet Revenues17,000 15,114 12.5%Gross Profit 7,8597,025 11.9%EBITDA 6,2695,9365.6%CSU ContactNet Revenues16,716 12,531 33.4%Gross Profit 1,894383394.5%EBITDA 347 (856)n.a. 6 7. PerformanceGross Revenue Gross Profit and Gross Margin(R$ thousand)(R$ thousand and % net revenue) QoQ: -0.4% YoY: -7.7%YoY: -14,6%QoQ: -5,4% 59,94855,560 54,251 55,33227,218 49,778 24,96924,579 23,242 21,05849.2% 49.6% 48.1% 45.7%45.6%3T104T101T112T11 3T113T10 4T10 1T112T113T11Billed and Registered Cards(in millions end of period) 26.8% increase in the number of YoY 26.8%24.123.6 25.3cards registered, with organic22.620.020.6 22.0 growth and migration of Sicredi 17.3 17.117.0 cards (808,000)Reduction of revenues and gross profit due to the alteration of the card mix, with a greater share from 3Q10 4Q101Q11 2Q11 3Q11 PL Billed cardsRegistered Cards 7 8. PerformanceNumber of Workstations 4,207 workstations, up 21.3%(units)21.3% over 3Q10;4,433 3,7573,918 4,207 Reduction in number of 3,468 workstations in RJ; low profitability operation not 556 compatible with the 400426 442 295 Companys objectives 3Q104Q101Q11 2Q11 3Q11 Training Total Workstations per Type of Service BPO Current positioning seeks to BPO 0.7%Infrastructure13.8%12.6%Infrastructure win over premium segmentsCollection9.3% 8.2% of the market, forCollection8.4% example, with increasingTelemarketing21.1%CustomerCustomerCare participation as a BPOTelemarketing Care 56.3% 16.2%49.3% services provider Dec/10Sep/11 8 9. PerformanceGross RevenueGross Profit and Gross Margin(R$ thousand)(R$ thousand and % Net revenue)QoQ: 1.9%YoY: 24.9% YoY: 40.4%QoQ: 270% 53,454 54,479 4,003 50,723 43,61643,533 2,851 7.8% 7.0%1,107 1,081 2.3% 2.2%3Q104Q10 1Q11 2Q113Q113Q10 4Q10-0.3% 1Q112Q113Q11 (117) Revenue growth prioritizes contracting of workstations with adequate pricing focused atprofitability expansion Gross margin of 7.8% in 3Q11 signals correct execution of strategy Company continues to seek additional opportunities for productivity gains* 2010s numbers were adjusted to reflect the effects of full adoption of the accounting convergence effective for each quarter of 2010.9 10. Investments Capex during the quarter rose 20.1% in comparison with same quarter of 2010: R$ 5.0 million for the CSU CardSystem business unit, used consistently to create newproducts and services and software development to receive new clients R$ 2.7 million invested by CSU Contact, a decline of 67.2% compared to the previousquarter, due to concentration of new implementations in 2Q11Capex - R$ million3Q11 3Q10 %2Q11 %CSU CardSystem 5.0 4.3 16.7%5.5 -9.8%CSU Contact2.8 2.2 27.1%8.4-67.2%Capex7.8 6.5 20.2%13.9-44.3% 10 11. Innovation with synergy between the business divisionsEnd-to-end solutions in theclients life-cycleNew generation of loyalty programs: accumulation & redemptions; wide range of benefits & privileges; discounts and exemptions for tickets;and FANS differentiated credit cards program as ENGAGEMENTan integrating element.End-to-end solutions in thedelivery of strategic and financialplanning through execution ofpromotions, delivery of awardsand measurement of the results11 12. Pioneerism overcomes cultural barriers Solution for cultural barriers of paying tariffs for the pre-paid cards Access to non-traditional segments : teaching institutions, drugstores, football clubsPre-paid card converts to a credit cardand fan clubs.automatically : credit analysis based on individualbehavior; strong sales appeal, with lower CAC; good profitability and scale for the issuer; solution for private label or branded card PRE- CREDIT FLEX CARD CARD PAID12 13. Awards 2011National Tele-services PrizeCategory: RetailCase History: Operation Carrefour Customer ServiceABT Garrido Prize. Category: Third-Party Operations (Active)Case History: NET Telemarketing. Category: Third-Party Operations (Receptive)Case History: Operation TVAMarketing Best PrizeHistory: CSU AcquirerCSU GroupAbrasca Prize for Best Annual ReportFinalist13 14. Further InformationMnica Hojaij Carvalho Molina Carlos Montenegro Thatiana ZagoInvestor Relations Phone: (+55-11) 2106-3821E-mail: [email protected]: www.csu.com.br/ir This material is the property of CSU CardSystem SA. Total or partial reproduction without the written approval of theCompany is prohibited. All rights reserved. The opinions expressed in this document may change at any time without notice.