02 05-2010 - 4 q09 earnings results presentation
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TRANSCRIPT
4Q09 Results PresentationFebruary, 5th, 2010
Disclaimer
The Company makes forward looking statements that are subject to risks and
uncertainties. These statements are based on the beliefs and assumptions of our
management as well as on information currently available to us. Forward-looking
statements include information regarding our current intent, beliefs or expectations, in
addition to those of the members of the Board of Directors and Executive Officers of the
Company.
Forward-looking statements also include information regarding our possible or assumed
future operating results, as well as statements preceded or followed by, or that include,
the words ''believes”, ''may”, ''will”, ''continues”, ''expects”, ''anticipates”, ''intends”,
''plans”, ''estimates”, or similar expressions.
Forward-looking statements are not guarantees of performance. They involve risks,
uncertainties and assumptions, for they relate to future events, thus depending on
circumstances that may or may not occur. Our future results and the creation of value to
shareholder s may differ significantly from those expressed in or suggested by these
forward-looking statements. Many factors determining these results and values are
beyond Cielo’s ability to control or predict
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
jan/05 jul/05 jan/06 jul/06 jan/07 jul/07 jan/08 jul/08 jan/09 jul/09
Sector Growth
Source: ABECS*December, 2009 = ABECS Estimates
Evolution of Card Industry Revenues against the same period previous year (%)
26%
Annual Growth
3
23% 23% 24% 18%*
Growth comparison: Industry x Cielo (2006 =100)
100,00
120,00
140,00
160,00
180,00
200,00
2006 2007 2008 2009
Setor(*) Cielo
Fonte: ABECS*Dezembro de 2009 = Estimativa ABECS
Sector Growth X Cielo
4
Cielo keeps growing ahead of the market based in:
More comprehensive distribution network system
Complete and unique portfolio of products
CAGR: = 25%
CAGR = 22%
5
Institutionals Highlights
Change in corporate name to Cielo S.A, with subsequent change in stock name and symbol to Cielo and CIEL3, respectively;
Data Security Standard( DSS) from the Payment card Industry Council (PCI) certification;
Announcement of the Level 1 ADR Program, as another alternative for investors and to increase Cielo’s visibility abroad;
4Q09 Earnings Release consolidated in accordance with IFRS, anticipating in adopting corporate governance best practice;
Registered a new record of numbers of transactions at Christmas season, with over 35 million transactions on December 23 and 24, maintained 100% availability
(R$ million) 4Q08 4Q09 4Q09/4Q08 2008 2009 2008/2009
Net Operating Revenue 838.1 1,027.2 22.5% 2,892.9 3,627.8 25.4%
Adjusted Net Income 248.9 442.0 77.5% 1,115.3 1,536.7 37.8%
% Net Margin 29.7% 43.0% 13.3 p.p. 38.5% 42.4% 3.9 p.p.
Adjusted EBITDA 434.7 700.6 61.1% 1,764.5 2,450.7 38.9%
% Adjusted EBITDA Margin 51.9% 68.2% 16.3 p.p. 61.0% 67.6% 6.6 p.p.
Credit Cards
Financial Transactions Volume
31,121.5 37,961.2 22.0% 110,896.9 134,791.8 21.5%
Number of Transactions (million)
467.6 549.0 17.4% 1,719.3 2,002.9 16.5%
Debit Cards
Financial Transactions Volume
19,874.5 23,592.1 18.7% 64,654.9 79,165.8 22.4%
Number of Transactions (million)
360.0 413.7 14.9% 1,232.4 1,432.8 15.5%
6
Financial Highlights 4Q09 x 4Q08
475,5 569,2
1.667,4
2.012,0
4Q08 4Q09 2008 2009
Cartão de Débito (R$ milhões)19,9%
7
Cards Revenue Performance
Debit Card
(R$ Million)
Credit Card*
(R$ Million)
*Important to point out that Cielo recognize the credit
cards revenues according to the maturity of
installments
19.8%
20.7%
21.6%
23.1%
163,2 198,4
517,9
637,8
4Q08 4Q09 2008 2009
8
Rental Revenues Performance
Revenue – Rental of Equipments
(R$ Million)Number of POS (thousand of equipments)
15.7%
18.2%
19.4%
243.7 282.0
902.6
1,067.2
4Q08 4Q09 2008 2009
1,361.9 1,310.1 1,400.6
1,536.5 1,630.2
4Q08 1Q09 2Q09 3Q09 4Q09
9
Prepayment of Receivables(*)
Average term (Days)
98.1
732,9
1.700,01.466,5
1.604,7
2.009,4
0.3%
2.4%
5.6%4.6% 4.7% 5.3%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
18,0%
20,0%
0
500
1.000
1.500
2.000
3Q08 4Q08 1Q09 2Q09 3Q09 4TQ9
Financial Volume of Prepayment % Prepayment over Credit Financial Volume
Financial Prepayment Volume(R$ Million)
Net Revenue– ex/adjustment to present value(R$ Million)
*1Q09 was concluded an operation with a large cap merchant
21.4 22.3
51.348.5
54.4
61.8
3Q08 4Q08 1Q09 2Q09 3Q09 4909
1.8
15.1
56.6
46.3 49.7
65.5
3Q08 4Q08 1Q09 2Q09 3Q09 4909
10
Operating (Expenses) Income
(R$ million) 4Q08 4Q09 4Q09/4Q08 2008 2009 2009/2008
Cost of Services Provided (222.5) (210.9) -5.2%(*) (725.6) (789.6) 8.8%(*)
Depreciation (51.6) (43.5) -15.7% (150.0) (160.3) 6.8%
Operational Expenses (180.9) (115.7) -33.6% (402.9) (387.6) -3.8%
TOTAL (455.0) (370.1) -18.6% (1,278.5) (1,337.4) 4.6%
TOTAL (VISA Fee Constant) (455.0) (357.4) -21.4% (1,278.5) 1,296.2) 1.4%
* The costs of services provided is impacted by Brand fees. Excluding the additional paid to brand, the
reduction in 4Q09 is 10,9% and the growth is 3,1%
199.2 118.7
427.4 401.1255.7
251.4
851.1 936.3
4Q08 4Q09 2008 2009
838.21,027.2
2,892.9
3,627.8
4Q08 4Q09 2008 2009
11
Revenues and Cost of Services
Net Revenue
(R$ Million)
Cost of Services Provided and Operating
Expenses (R$ Million)
454.9370.1
22.6%
25.4%
-18.6%*
4.6%*
1,278.51,337.4
* Cost of services is impacted by brand fees. Excluding
the additional paid to brand, the reduction is 21.4% and
the growth is 1.4%
248,9442,0
1.115,3
1.536,7
29,7%
43,0%
38,5%42,4%
4Q08 4Q09 2008 2009
Net Income Ner Margin
434.8
700.6
1,764.3
2,450.7
51.9%
68.2%
61.0% 67.6%
4Q08 4Q09 2008 2009
Adjusted EBITDA Adjusted EBITDA Margin
12
Adjusted EBITDA and Recurring Net Income
Adjusted EBITDA
(R$ Million)
Recurring Net Income
(R$ Million)
77.5%
37.7%38.9%
61.2%
IFRS X BRGAAP - Comparison
MAIN INDICATORS – COMPARATIVE QUARTER (R$ thousand)
BRGAAP IFRS BRGAAP IFRS BRGAAP IFRS
Account Net Income 439,110 439,110 248,963 248,963 76.4% 76.4%
Recurring Net Income 442,016 442,016 286,283 248,963 54.4% 77.5%
Adjusted EBITDA 698,218 700,610 474,826 434,752 47.0% 61.2%
BRGAAP IFRS BRGAAP IFRS BRGAAP IFRS
Account Net Income 1.533.794 1.533.794 1.393.843 1.342.071 10.0% 14.3%
Recurring Net Income 1.536.700 1.536.700 1.150.817 1.115.306 33.5% 37.8%
Adjusted EBITDA 2.441.096 2.450.665 1.803.051 1.764.345 35.4% 38.9%
2009 2008 2009 X 2008
Indicators
Indicators
4Q09 4Q08 4Q09 X 4Q08
13
14
2009 Expectations were reached
Indicators Reached 2009 Estimated
Financial Transaction Volume
- Debit and Credit Cards 21.9% 21% – 22%
Net MDR
- Credit Card 149 bps 149 bps
- Debit Card with AgroCard 81 bps 80 bps
- Debit Card excluding AgroCard 85 bps 85 bps
CAPEX R$ 215 million R$ 215 million
15
Prepared to the New Scenario
... RELIABILITY of our network:
• redundant network systems and high criteria on business monitoring,
resulting in an availability of 99.995%
• PCI DSS certification that, together with Lynx, allow for a higher security
level
• most modern POS basis in Brazil, with an average of only 2.3 years.;
... leadership position in DISTRIBUTION:
• more than 380 thousand new merchants;
• working closely to our net of partner banks;
... INNOVATION:
• launching unique products:
• improving client revenues;
• store traffic guarantee;
• customer loyalty;
... DIFFERENTIATED RELATIONSHIP to build customer loyalty:
• sales force is more than ever present in the day-to-day of the merchants;
• offering our broad portfolio of products: including prepayment of receivables.
