3 q09 results presentation
TRANSCRIPT
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This presentation may include forward-looking statements about future events or results according
to the regulations of Brazilian and international securities and exchange commissions. These
statements are based on certain assumptions and analyses by the Company that reflect its
experience, the economic environment, future market conditions and events expected by it, many
of which are beyond its control. Important factors that may lead to significant differences between
actual results and the statements of expectations about future events or results include the
company’s business strategy, economic conditions in Brazil and abroad, technology, financial
strategy, client business development, financial market conditions, uncertainty regarding the
results of its future operations, plans, objectives, expectations and intentions, among others. As a
result of these factors, the actual results of the Company may significantly differ from those
mentioned or implicit in the statement of expectations about future events or results.
The information and opinions contained in this presentation should not be understood as a
recommendation to potential investors and no investment decision should be based on the veracity,
currency or completeness of this information or these opinions. No advisors to the company or
parties related to them or their representatives will be responsible for any losses that may result
from the use or the contents of this presentation.
Disclaimer
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On October 1, the Brazilian Central
Bank published a notice stating that
it will soon announce the new rules
for the accreditation market.
Base growth continues quicker than
market growth
Trend of replacing private label cards
with hybrid cards
Private Label + Credit Market CardSystem
Average Annual Growth - 3 years 21.7% 30.7%
Growth - 12 months 14.3% 22.1%
Cards Market and CardSystem
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97 118 144 173 165 19168
7993
124 119133
2005 2006 2007 2008 3Q08 3Q09
Private Label Credit
9.012.1
16.620.1 19.0
23.2
2005 2006 2007 2008 3Q08 3Q09
Growth of the Cards Market(million, source: ABECS)
CSU Card Base Performance(million)
165197
237
297 284324
14.3%
22.1%
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Issue of more than 6.7 million new cards in the last 12 months
Card issues resumed pre-crisis levels
Flex Cards with increasing share of total card issues
Seasonal growth in card issue expected in the fourth quarter
CardSystem – Operational Data
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1.41.7 1.6
1.3 1.4
2.4
2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Issue of cards in CSU's base(million)
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Managed accounts 30% up year-on-year
Annual average growth of 26.9% in the last 24 months
100% organic growth in the period
Source: CSU
MarketSystem – Operational Data
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1.9 2.0 2.0 2.1 2.3 2.4 2.7 2.8 3.1
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
MarketSystem -Processed Accounts(million)
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Alphaview project, a new Contact Center concept;
The new unit will have a sixty-month productivity;
Alphaview will improve operators’ quality of life, improve
service standards and reduce operating costs.
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CSU.Contact / Credit&Risk
748 619 435 282 305 344 305
2,218 3,476 3,445
3,314 3,288 3,238 3,191
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
PA's Credit&Risk PA's CSU.Contact
2,996 3,496 3,582 3,593 3,596
3,880 4,095
PAs in operation at CSU.Contact and Credit&Risk
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Economies of scale in card processing operations
100% organic growth of the client portfolio
Development of higher added-value agreements improves gross margin
CardSystem / MarketSystem
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55.6
64.9
3Q08 3Q09
16.9
20.6
3Q08 3Q09
18.2
24.8
3Q08 3Q09
16.7%36.3% 21.6%
34.3%32.8%
41.4%35.3%
Gross Revenue(R$ million)
Gross Profit and Gross Margin(R$ million, %)
EBTIDA and EBTIDA Margin(R$ million, %)
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Stable revenue levels
Renegotiation of communication fees reduces the unit’s costs
Higher gross margin and EBITDA margin
CSU.Contact / Credit&Risk
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45.6
41.4
3Q08 3Q09
-0.2
0.8
3Q08 3Q09
0.5
3.0
3Q08 3Q09
-9.2%572.3%
2.0%
7.9%
1.1%
(0.5%)
Gross Revenue(R$ million)
Gross Profit and Gross Margin(R$ million, %)
EBTIDA and EBTIDA Margin(R$ million, %)
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Performance of Financial Indicators
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101.2104.9 107.3 108.6 106.2
3Q08 4Q08 1Q09 2Q09 3Q09
16.7 16.9
20.5 20.5 21.3
3Q08 4Q08 1Q09 2Q09 3Q09
17.7 17.4
20.6 20.421.6
3Q08 4Q08 1Q09 2Q09 3Q09
CSU Gross Revenue(R$ million)
CSU EBITDA(R$ million)
CSU EBITDA Margin(%)
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Results - Units
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16.9 16.7 18.4 18.7 20.5
(0.2) 0.2 2.0 1.9 0.7
3Q08 4Q08 1Q09 2Q09 3Q09
CardSystem / MarketSystem CSU.Contact / Credit&Risk
55.5961.31 62.39 62.27 64.86
45.57 43.57 44.92 46.3441.36
3Q08 4Q08 1Q09 2Q09 3Q09
CardSystem / MarketSystem CSU.Contact / Credit&Risk
Gross Revenue(R$ million)
EBITDA(R$ million)
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Higher share of electronic payment methods in revenue
Organic growth of the units fuels company growth of over 12%
The group’s operating margins improved thanks to: (i) result-oriented
management, (ii) new controls, (iii) new policies, (iv) scale gains
CSU (Consolidated)
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18.6
27.8
3Q08 3Q09
101.2
106.2
3Q08 3Q09
75.5
70.7
3Q08 3Q09
Cost of Services Rendered(R$ million, %)
16.7%49.2%
-6.3%
28.2%
19.8%
Gross Revenue(R$ million)
Gross Profit and Gross Margin(R$ million, %)
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Expenses with Alphaview, the increase in the workforce and the collective
bargaining agreement led to a 44.3% upturn in general and administrative
expenses in the quarter
The final provisions and restructuring expenses related to the Contact
Center City project were booked in the quarter
Year-to-date earnings per share of R$0.29*
* Excluding reserves
CSU (Consolidated)
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1.0
4.7
3Q08 3Q09
16.7
21.3
3Q08 3Q09
17.1
24.6
3Q08 3Q09
Operational Expenses
(R$ million)
EBTIDA and EBTIDA Margin(R$ million, %)
Net Result(R$ million, %)
44.3% 27.6%346.7%
20.4%
17.5%
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Debt:
Period cash flow enabled a reduction in
net debt from R$ 77.5 million to R$ 67.2
million;
Extension of the average debt term -
R$ 23 million renegotiated at the CDI
rate + 3.4%;
CSU has no dollar-indexed debt nor does
it make use of derivatives contracts. All
debt is in Brazilian reais and indexed to
the interbank (CDI) rate.
Debt and Capex
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70.860.3
49.8
25.9
4.0 4.6
6.5
0.1
17.9 22.8
15.9
39.1
4Q08 1Q09 2Q09 3Q09
W. Capital Overdraft Leasing
Debt Composition(R$ million, end of the period)
3Q09 3Q08 2Q09
Short Term Debt 35.7 49.7 46.4
Financing and Debt loan 24.2 35.1 36.5
Leasing 11.5 14.6 9.9
Long Term Debt 40.1 46.5 31.6
Financing and Debt loan 25.6 38.4 20.0
Leasing 14.5 8.1 11.6
Gross Debt 75.8 96.2 78.0
(-) Cash 8.6 1.1 0.5
Net Cash (Debt) 67.2 95.2 77.5
Debt - R$ million
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Debt:
The adjacent graph shows the
impact of the CDI variations in
recent months on the
Company's financial expenses
The decline in the CDI rate,
combined with reduced debt,
helped reduce financial
expenses
CAPEX:
Recurring investments in the
development and customization of the
Super VisionPlus software
Investments in the Alphaview project
Debt and Capex
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91 89 80 74
125 10277 63
8375
6366
4Q08 1Q09 2Q09 3Q09
Total Gross Debt - Closing Financial Cost - CDI
CDI - Period Monthly Average
Impact of Monetary Policy on Cost
of Debt(Basis: 1Q08 = 100)
3Q09 3Q08 Chg. % 2Q09 Chg. %
Systems 4.6 3.8 21.7% 4.6 -1.2%
Hardware 0.3 2.9 -90.9% 0.6 0.0%
Alphaview 6.3 - n.a 1.5 313.3%
Other 0.6 1.8 -66.0% 0.0 3155.5%
Capex 11.7 8.4 39.0% 6.8 72.8%
Capex - R$ million
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Maintenance of investments to ensure growth of all of the
Company’s units;
Consolidation of the recent changes in CSU’s sales and
relationship areas;
Strengthening of sales efforts;
Conclusion of CSU.Contact and Credit&Risk’s new
organizational structure, transfer of the workstations from the
old site to Alphaview;
Maintenance of cost and quality levels.
Key Strategies for 4Q09
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Questions and
answersDécio Burd
Telephones: (0xx11) 3030-3821
Email: [email protected]
Site: www.csu.com.br/ri
CSU CardSystem S/A
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