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Corporate PresentationDecember 2011
Contax and its Core Business
Contax: profile, clients and footprint
Markets trendsand strategy
Financial results
Contax: profile, clients and footprint
Business Process Outsourcing company leader in
Contact Center and Debt Collection in Brazil
Operations in customer service, debt collection,
telemarketing, retention, back-office, technology services
and trade marketing
Start-Up in 2000 and IPO in 2005
Presence in Brazil, Argentina, Colombia, Peru with
commercial activity in USA and Spain
115,000* employees , with 5,000 new employees/month
Net revenues of R$ 2,843.3 MM 3Q11 LTM
Market Cap of R$ 1.3 billion (as of Oct. 28th)
220 million contacts/month
139 corporate clients
Total of 52,277 workstations (“WS”) in Sept. 2011 (vs.
36,789 in Sept. 2010)
CONTAX AT A GLANCE
44 * As of September 2011
Start-Up
2000Start-up: migration
of Telemar’s
contact center
operations and
acquisition of its
first external clients
Core Business Expansion
2003Growth with a focus on
high volume clients
2004Spin off from Telemar,
paving the way for
Contax’s IPOS
2005First company in contact
center listed on Bovespa
Contax become the leading
Brazilian contact center
company with net revenues
in excess of R$ 1 bi and
with almost 50,000
employees
CRM BPO in Latin America
Consolidation of the
strategy of being the
only corporate service
company specialized
in the entire
relationship chain
between companies
and consumers,
consolidating multiple
contact channels
Service Offering Expansion
2009Expansion of services specialized
in BPO (Business Process
Outsourcing) of CRM (Customer
Relationship Management)
Creation of Todo! Technology
provider company: first step
towards the diversification of
products
2010Acquisition of Ability, one of
the largest trade marketing
companies in Brazil
2011Geographic Expansion:
Acquisition of Allus – one of the
largest Spanish-speaking contact
center in Latin America
Acquisition of Dedic GPTI: one of
the biggest contact center
companies in Brazil
Portugal Telecom becomes
shareholder
R$421 MM
R$655 MM
R$1,045 MM
R$2,161 MM
R$2,396 MM
R$3,270 MM*
Net Revenue
* Average market consensus (considering estimates from Credit Suisse, Bradesco and Banif)
MILESTONES
5
SHAREHOLDER STRUCTURE
100%
71.6% ON
34.0% ON + PN
Free Float
0.0% ON
4.3% ON + PN
Contax Participações
100%
6
Ability Contax Dedic GPTI
100%
Portugal Telecom
Brasil
CTX Participações S.A.
● LF Tel. S.A.: 34.96%
● Andrade Gutierrez Part.:
34.96%
● Portugal Telecom Brasil:
19.90%
● Fund. Atlântico de Seg.
Soc.: 10.18%
TOTAL: 100.0%
28.4% ON
61.7% ON + PN
Main Shareholders
(ON+PN)*
CSHG 16.3%
Skopos 16.2%
HSBC 8.7%
Eton Park 2.0%
Publicly traded company
*Minority shareholders with more than 5% of any class of shares (PN/ON)
Shareholder Structure as of 09/09/11
80%
Todo!Contax
Argentina
(filial)
Allus
100%100%
CORE BUSINESS BRAZIL - MAIN BUSINESS UNITS
7
Contax’s portfolio of products and services has evolved year after year since the startup of it operations in 2000
13%
●Telemarketing
●Debt Collection
% Net Revenues*
Services
●Customer Service
● Analyze end customer’s payment behavior, enriching the
databse, devising strategies, using sophisticated systems, such as
dialers and mail filters, and the multi-channel approach (phone
calls, letters, voice mail, text messages etc) seeking to increase
direct contact with debtors.
Description
● Contax places a set of solutions at the disposal of its contracting parties to assist, to understand and to entice the final customer, whatever the type of request
● Current Services offered: SAC, Back Office, Technical Support/Help Desk, Ombudsman’s Office, Web Call Center and Field Support
● An efficient solution for acquisition of new consumers and
making the customer base profitable, focusing on each
customer’s specific characteristics and its target market.
● The product offers are divided between:
» Active Telemarketing: pro-active contact
» Receptive Telemarketing: response to the demand generated by
advertising and other marketing actions.
» Blended Telemarketing: receptive salespeople assuming a
proactive contact posture as the number of calls decreases
63%
18%
* Trade marketing and other services accounted for 6% and 11% of net revenues in 2010 and 3Q11, respectively
10%
59%
20%
2010 3Q11
Services Main Models
● Per WS / Menu
● Speaking Time
● Per call
● Per client
● Per WS / Menu
● Target
● Proposal / Service Sold
● Per WS / Menu
● Performance
Fixed Variable Performance8
CORE BUSINESS BRAZIL – CONTRACTS
●Telemarketing
●Debt Collection
●Customer Service
9
OthersTelecom
● 4 of Brazil’s largest banks
● The largest credit card processing company
● One of the leading providers of personal loans
● The largest insurance company
● One of the largest retail companies
● Major telecom companies
● Two of the leading providers of pay TV
● The largest airline company
● The largest benefit card company
Among our 139 Clients…
CONTAX’SCLIENTS
Financials
Services and Health
Contax - Core business
CORE BUSINESS’ GROWTH
Net Revenue R$ million
Size of Domestic Market
2,040
6,116
20,917
CAGR 25%10,831
CAGR 12%
CAGR 14%
2000 2005 2010 2015E
Size of International Market
Net Revenue US$ million
30,323
39,300
51,800
66,200CAGR 5%
CAGR 6%
CAGR 5%
Source: IDC, Advisia, McKinsey,Tendências and Contax
Contact Center and Debt Collection
11
Source: IDC, Advisia,Tendências and Contax
¹ Gross Revenue
CURRENT CORE BUSINESS¹
PER CONTRACTING INDUSTRY
DOMESTIC MARKET2010: R$ 10.8 bi
CONTAX2010: R$ 2.6 bi
Financial
Others
Telecom
36%
7%
45%
Financial
Telecom
Utilities Others
1%
7%
37% 56%
Utilities 12%
12
DOMESTIC MARKET2010: R$ 10.8 bi
CURRENT CORE BUSINESS¹
PER SERVICE TYPES
CONTAX2010: R$ 2.6 bi
13
45%
31%
18%
7%Telemarketing/
Retention
Customer
Service
Debt Collection
Others
5%
64%
18%
13%
Others
Telemarketing/
Retention
Customer
Service
Debt
Collection
Source: IDC, Advisia,Tendências and Contax
¹ Gross Revenue
NET REVENUE (R$ MILLION)
EBITDA MARGIN(%) ROIC (%)
¹Tivit: Revenue of Contact Center and other BPO business ( excludes IT services). 2010 estimated data. ROIC is based on consolidated data.
²AeC: Consolidated data.
³CSU: Only the Contact Center business for Revenue and EBITDA margin. ROIC is based on consolidated data.
ROIC = NET INCOME / (SHAREHOLDER’S EQUITY + NET DEBT).
Source: Companies’ financial and operating statements / IDC. n. m. – not measured.
PLAYERS IN BRAZIL
14
Contax Atento Tivit¹ Teleperformance CSU³Dedic Algar
1,6021,807
463 513162 247 166 161308 402
224 273 129 175
19% 22% 18%17% 5%5% 2% 3% 2% 2%2% 3%3% 4%MARKET
SHARE
1,7752,161
2,398
11%2008 2009 2010
21% 19% 5% 3% 3% 1%
2,103
606584
5%
338 311
AeC²
257 160
1% 2% 2%
CSU³Contax Atento Teleperf.Dedic Algar
15.7
12.5
5.0
10.3
2.1
12.5
CSU³Contax Atento Tivit¹ Teleperf.Dedic Algar
55.7
32.5
17.2
-6.4
9.1
-2.5
11.7
12.4
31.1
12.8
9.4
12.6
5.3
-3.6
31.9
14.2
-1.1
12.7
-6.4
18.7
EBITDA MARGIN (%) ROIC (%)
NET REVENUE (US$ MM¹)
INTERNATIONAL PLAYERS
15
¹ 2010 average BRL
* Convergys and West: Only the Contact Center business for Revenue and EBITDA margin. ROIC based on consolidated data.
ROIC = NET INCOME / (SHAREHOLDER’S EQUITY + NET DEBT)
Source: Companies’ financial and operating statements.
Contax Convergys* TeleTechTeleperformance Atento West*
966 1.0831.363
12%
26%2.626 2.577
2.731
-2% 6%
1.955 1.9871.839
2% -7% -4%20%
1.914 1.8432.206
1.258 1.255 1.174
-0% -6%
2008 2009 2010
-17%-6%
1.4001.168 1.095
15.7
10.913.4
11.2 11.7
16.1
West*Contax Convergys* TeleTechTeleperf. Atento
48.7
-5.8
21.8
7.8 3.6
West*Contax Converg.* TeleTechTeleperf.
12.4 29.410.3 10.8 11.4
15.6
15.6
5.8
-4.4
22.2 21.1
Atento
2.5
16.0
Markets trendsand strategy
Contax as a global BPO company focusedon customer relations – CUSTOMERPERFORMANCE
ADDRESSABLE MARKET(R$ billion)
10.82.0
5.5
9.0
15.0
42.3
CORE
BUSINESS
Addresable IT
Services
Trade
MarketingBack -
Office
Voice-BPO
Latam
Including Contax’s new business pillars, the addressable market
comes toNew Markets
17
R$42.3 billion
Source: IDC, Advisia, McKinsey,Tendências and Contax
IT Services
Geographical
ExpansionTrade
MarketingInternet
Back-Office
● Customer services
in the point of sales● Core Business in LatAm
● Acquisition
● Customer Service
● Relationship Expansion
● Maintenance of the Client Base
● Debt Collection
● Service and support in social
networks / Web chats and
Web based customer services
● Expand offers of
administrative services
BPO and CRM
● Customized solutions
● Complete IT solutions for the CRM market
● Technological enabler of the new business fronts
SERVICE OFFERING EXPANSION
Integrating the multiple contact channels between our client and its customer
BPO of CRM (customer
relationship management)
Contact Center
and Debt
18
● Technology services – Todo!
CORE
BUSINESS
in progress
19
Acquisition
Acquisition
● POS – Trade Marketing – Ability
● Back-Office Solutions
CONTAX’S STRATEGIC PLANCRM BPO in Latin America
New
products
New
geography
● Customer service
● Debt Collection
● Telemarketing and
retention
Contax with a complete customer relationship
management solution in Latin America
● Acquisition (operation
in preferential
countries: Argentina,
Colombia, Peru)
Acquisition
Financial Results
NET REVENUE (in R$ MM)
GROWTH
Since 2001, Contax presented a historic
of growth above market average*,
becoming the market leader in 2005
21
Source: Contax and IDC
*Contact Center and Debt Collection CAGR (2001-2010): 18.2%
CAGR: 36.0%
2010
2,398
151
2001 2008 2009
1,7752,161
9M10 9M11
2,205
1,760
25%
EBITDA AND NET INCOME
22
EBITDA (R$ MM) and EBITDA Margin (%)
Net Income (R$ MM) and Net margin (%)
2007 2008 2009 2010
339
249190
297
9M10 9M11
162215
12.4%13.9%
15.7%
14.0% 12.2%
7.4%
2007 2008 2009 2010
132
9247
109
9M10 9M11
7
754.0%
5.5%6.1%
4.5% 4.2%
0.3%
CAPEX
CAPEX1 (R$ MM) and CAPEX/NET REVENUE (%)
23
133 168 159
2007 2008 2009
161
2010 9M10
107
9.8% 9.5% 7.4% 6.7% 6.1%
9M11
104
4.7%
86.3% 80.5% 92.3% 75.8% 79.1% 65.1%Growth
Revenue
13.7% 19.5% 7.7% 24.2% 20.9% 34.9%Others
¹ Does not include the acquisition of Grupo Allus in an amount of R$253.5 million (R$11.8 million in 3Q11 and R$241.7 million in 2Q11)
CONSOLIDATED DEBT
Total Debt Profile(After hedge)
Currency Interest
● Effective cost of debt in 3Q11: 85% of CDI
● Average debt mature 2 years
Consolidated Debt(R$ million)
218.6
387.0
898.2
-165.8-70.7
545.1
Dec 09 Dec 10 Sep 11
Gross Debt Net Debt (Net Cash)
24
Others
17% TJLP
46%
CDI
37%
Foreign
7%
BRL
93%
Esta apresentação contém determinadas projeções do mercado que não são resultados financeiros reportados, neminformação histórica. Estas projeções são sujeitas a riscos e incertezas, os resultados futuros reais podem diferirmaterialmente daqueles projetados.
Muitos destes riscos e incertezas relacionam-se aos fatores que estão além da capacidade da Contax em controlarprecisamente ou estimar, como condições de mercado futuro, flutuações de moeda corrente, o comportamento de outrosparticipantes do mercado, as ações de reguladores governamentais, a habilidade da companhia de continuar a obtero financiamento, mudanças na estrutura política e social em que a companhia opera ou em tendências ou condiçõeseconômicas, incluindo flutuações de inflação e confiança de consumidor, em uma base global, regional ou nacional.
Os leitores são advertidos a não confiarem, plenamente, nestas projeções. A Contax não tem nenhuma obrigaçãode publicar qualquer revisão a estas projeções que reflitam eventos ou circunstâncias após esta apresentação.
CONTACTSMarco Schroeder
+55 (21) 3131-0009
Bernardo Guttmann
+55 (21) 3131-0692
25
CFO and IRO
Investor Relation manager