Post on 28-Nov-2014
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2Q11 EARNINGS PRESENTATIONJuly 27, 2011
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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HIGHLIGHTS
Transaction financial volume totaled R$ 74.6 billion, +21.2%
Operating revenue + net prepayment of receivables totaled R$ 1.119 billion,
+6.7%
Net income margin at 37.8%, -1.4 p.p.Adjusted EBITDA margin at 64.0%, +0.8 p.p.
2Q11 X 2Q10
2Q11 X 1Q11
Adjusted EBITDA totaled R$ 716.5 million, -2.6%Net income totaled R$ 423.6 million, -7.5%
Credit volume totaled R$ 46.8 billion, +20.4%Debit volume totaled R$ 27.8 billion, +22.7%
Cielo expands its mobile payment solution to Android devices
3
Other
Cielo´s ADR begin trading on OTCQXCielo moves forward in e-commerce with acquisition of BraspagElected the best Brazilian company in the Specialized Services category by Exame Magazine.
MACROECONOMIC SCENARIO | BRAZIL
5.7
3.24.0
6.15.1
-0.2
7.5
3.9
2004 2005 2006 2007 2008 2009 2010 2011(E)
GDP (%)
Source: IBGE(E) Estimate. Focus Report (Central Bank)
4
44% 45% 46% 43% 44% 40% 41%56%
55%54%
57%56%
60%59%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
0
200
400
600
800
1,000
1,200
1,400
1,600
2005 2006 2007 2008 2009 2010 mai/11
Credit/GDPCredit (R$million)
Credit Evolution
Individuals Legal Entities Credit/GDP
607733
936
1,227
1,414
1,704
Source: BCB
1,804
5
6
7
8
9
10
11Unemployment (%)
Source: IBGE
6.2
0
2
4
6
8
10
12
14
16
18Retail Trade Sales (%)
Source: IBGE
FinancialIndicators
2Q11 2Q102Q11 X 2Q10
1Q11 2Q11 X 1Q11
Financial Volume (R$ million)
74,622.6 61,567.4 21.2% 70,203.7 6.3%
Transactions (million)
1,094.2 965.1 13.4% 1,058.7 3.4%
Net Revenue (R$ million)
1,119.3 1,048.9 6.7% 1,082.1 3.4%
Cost of Services(R$ million)
(342.4) (257.5) 33.0% (311.5) 9.9%
Cost of Services ex Subsidiaries and
additional fees (R$ million)
(276.3) (242.4) 14.0% (255.0) 8.4%
Operating Expenses (R$ million)
(119.2) (102.6) 16.2% (139.9) -14.8%
Adjusted EBITDA (R$ million)
716.5 735.3 -2.6% 684.3 4.7%
Net Income (R$ million)
423.6 457.7 -7.5% 424.7 -0.3%
Blended Net MDR (bps) 101 120 (19) 105 (4)
Credit Net MDR (bps) 117 145 (28) 122 (5)
Debit Net MDR (bps) 74 79 (5) 76 (2)
CIELO | FINANCIAL INDICATORS
5
CIELO | OPERATING PERFORMANCE
6
71,197 87,966 110,897
134,792 162,933
38,902 46,821
39,552 48,534
64,655
79,166
98,742
22,666 27,802
2006 2007 2008 2009 2010 2Q10 2Q11
Cielo- Financial Volume (R$ million)
Credit cards Debit cards
110,749136,500
175,552
213,958
61,56774,623
CAGR: 24.0%
21.2%
261,675
679
824
996
1.133 1.140 1.153 1.115
2006 2007 2008 2009 2010 2Q10 2Q11
Cielo- Number of Active Merchants (thousand)
Active Merchants ( transactions in the last 60 days)
1,142 1,403 1,720 2,003 2,323
564 639
836987
1,2321,424
1,716
401 455
2006 2007 2008 2009 2010 2Q10 2Q11
Cielo- Number of Transactions (million)
Credit Debit
CAGR: 19.5%
13.4%
1,9782,389
2,952
3,427
965 1,094
4,039
Quarter-on-quarter, the number of active merchants in 60 days increased 2.8%
CIELO | REVENUE
7
3.1% 3.8% 5.5% 6.1% 6.3%6.8% 8.4% 8.6% 9.8% 11.0%
26.2% 23.4% 21.7% 22.5% 21.5%
15.4% 16.2% 17.7% 16.4% 16.6%
48.4% 48.2% 46.5% 45.2% 44.6%
2Q10 3Q10 4Q10 1Q11 2Q11
Revenue- Activity (%)
Other revenues Prepayment of Receivables POS Rental Debit cards Credit cards
1,945.1 2,402.2
2,892.9
3,627.8
4,354.4
1,048.8 1,119.3
2006 2007 2008 2009 2010 2Q10 2Q11
Net Revenue ( R$ million)
6.7%
CAGR 22.3%
1,175.9 1,409.3 1,666.92,012.0
2,317.8
562.3 550.1
317.1401.3
517.9
637.9
785.4
179.0 204.8
2006 2007 2008 2009 2010 2Q10 2Q11
Commissions Revenues (R$ million)
Credit Debit
1,493.0
1,810.7
2,184.8
2,649.9
3,103.3
741.3 754.9
CAGR 20.1%
14.4%
-2.2%
596.0
745.9
903.1
1,067.1 1,169.9
304.1 265.1
2006 2007 2008 2009 2010 2Q10 2Q11
Equipment Rental Revenue (R$ million)
-12.8%
CAGR: 18.4%
CIELO | PREPAYMENT OF RECEIVABLES
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2,460.42,669.6
3,016.73,236.9
3,376.9
6.3%6.4% 6.7%
7.3% 7.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
2Q10 3Q10 4Q10 1Q11 2Q11
Prepayment of Receivables
Financial prepayment volume
% Prepayment over Credit Financial Volume
69.7 72.066.1
62.958.5
2Q10 3Q10 4Q10 1Q11 2Q11
Average Term (days)
97.1
113.3119.4 120.8
137.7
2Q10 3Q10 4Q10 1Q11 2Q11
Revenue of Prepayment of Receivables ex Adjustments (R$ million)
41.8%
CIELO | COSTS AND EXPENSES
Unit Costs + Expenses 2Q11 2Q10 1Q11 2Q11X2Q10 2Q11X1Q11
Reported Unit Costs + Expenses (0.422) (0.373) (0.426) 13.1% -1.1%
Unit Costs + Expenses Ex- Subsidiaries (0.382) (0.354) (0.391) 7.9% -2.2%
Unit Costs + Expenses Ex- Subsidiaries and Additional Brand Fee*
(0.359) (0.354) (0.370) 1.3% -2.9%
*Considering 2Q10 as comparison
9
690.2771.0
851.1936.3
1,180.8
257.5342.4
2006 2007 2008 2009 2010 2Q10 2Q11
Total Costs of Services (R$ million)
CAGR 14.4%
33.0%
351.5 353.9
427.4401.1
441.0
102.6 119.2
2006 2007 2008 2009 2010 2Q10 2Q11
Operating Expenses (R$ miilion)
16.2%
342.4 276.3 242.4
40.6
25.5
2Q11 Reported Costs related to subsidiaries
Additional brands fee
2Q11 Adjusted 2Q10 Adjusted
Costs (R$million)
14.0%
CIELO | FINANCIAL PERFORMANCE
10
1,038.8
1,409.5
1,764.3
2,450.7
2,924.3
53%
59%
61%
68%67%
50.00%
55.00%
60.00%
65.00%
70.00%
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
2006 2007 2008 2009 2010
Adjusted EBITDA
Adjusted EBITDA (R$ million) Net Income (R$ million)
657.9
883.9
1,115.3
1,536.7
1,829.3
34%37%
39%
42%42%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
55.00%
60.00%
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
2006 2007 2008 2009 2010
Net Income
735.3 716.5
70%
64%
25.00%
35.00%
45.00%
55.00%
65.00%
75.00%
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
2Q10 2Q11
Adjusted EBITDA Margin
457.7
423,644%
38%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
2Q10 2Q11Net Income Margin
CIELO | STRATEGIC PLANNING
Mobile / eCommerce
Card Present Card Absent
Payment Transactions
Non-Payment Transactions
STRATEGIC MATRIX
VAN* Services
* Value Added Network
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Indicators YTD 11 Guidance 2H2011
Financial Transaction Volume (Credit and Debit cards)
- % 20.5% 19.5% – 21.5%
- R$ billion 144.8 168.8 – 171.7
Investment in POS(R$ million)
98 210 – 230
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CIELO | ESTIMATESIndicators YTD 11 Guidance Dec 2011
Net MDR
- Credit Card 119 bps 112 – 116 bps
- Debit Card 75 bps 70 - 73 bps
Indicators YTD 11 Guidance 2011
Unit Costs + Expenses excludingsubsidiaries
R$ 0.387 R$ 0.406
Investor Relations
ri@cielo.com.br
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2Q11 EARNINGS PRESENTATIONMay 27, 2011