1 q08 results presentation

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CSU CARDSYSTEM S.A.1Q08 Conference Call

April 25, 2008 [email protected]

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This presentation may include forward-looking statements of future events or results according to the regulations of the 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 the company, many of which are beyond the control of the Company. 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, Brazilian and international economic conditions, 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 shall have any responsibility for any losses that may result from the use or the contents of this presentation.

Disclaimer

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CardSystem’s Market

Source: Abecs, CSU

2005 2006 2007 2008

149 176 191 205

89102

12415056

7083

97

Cards Performance End of March (million)

Debit Private Label Credit

2005 2006 2007 2008

CardSystem Card Base Performance

Source: CSU

2005 2006 2007 2008

8.610.37

13,0

17.6

End of March (million)

2005 2006 2007 2008

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CardSystem achieved a record number of cards and closed the first quarter

with a card base of 17.6 million.

CSU’s cards unit has consistently outperformed the market in terms of growth.

CardSystem’s CAGR between the end of 1Q05 and 1Q08 was 27.7% against

the market’s 19.4%. The difference was even bigger last year: 35.4% versus

19.3%.

CardSystem – Operational Data

Private Label + Credit Market CardSystem

CAGR 05 to 08 19.4% 27,7%

CAGR 07 to 08 19.3% 35.4%

17.8%

20.6%

25.4%

35.4%

19.8%

18.6%20.3%

19.3%

2005 2006 2007 2008

Cards Performance Change (CSU x Market)

End of March

CSU CardSystem Market Source: Abecs, CSU

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CardSystem/MarketSystem

Operational Data

High-growth market;

Strategically important agreements signed at the end of 4Q07 and in 1Q08, with

the effects already seen in the revenues of 2008 (Carrefour, Porto Seguro and

OMNI);

Carrefour Visa project implemented in a record 45 days;

Agreements with huge potential at MarketSystem: Sicred and Porto Seguro.

Source: CSU

1Q07 2Q07 3Q07 4Q07 1Q08

13 14.25 15.62 16.6 17.6

Cards Managed by CardSystem

(million)

1.771.84

1.91.97

2.04

Accounts Managed by MarketSystem

(million)

Source: CSU1Q07 2Q07 3Q07 4Q07 1Q08

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TeleSystem/Credit&Risk

Continued focus on reducing operating costs and

improving productivity has stabilized the results;

Cancellation of unprofitable contracts;

Focus on differentiated products and services with higher

added value.

1Q07 2Q07 3Q07 4Q07 1Q08

3384 3283 30562553 2218

634 758 785780 748

Workstations in operation at TeleSystem and Credit&Risk(Quarterly Average)

WS's TeleSystem WS's CreditRisk

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CSU (Consolidated)

CSU’s revenues in 1Q08 were R$ 88.3million, which is 12.5% higher than the R$ 78.4million in the same period last year.

Cost of services rendered increase only 2.4%, thusimproving net income and gross marginsignificantly.

Gross profit rose 101.3%, from R$ 7.6 million in1Q07 to R$ 15.3 million in 1Q08.

18,1%

16,%

9,7%

78,.4

88.3

Gross Revenue (R$ ‘000)

1Q07 1Q08

65.21

66.79

Cost of Services Rendered (R$ ‘000)

1Q07 1Q08

7.6

15.3.

Gross Profit (R$ ‘000) and Gross Margin (%)

1Q07 1Q08

12.5% 2.4%

101.3%

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General and Administrative expenses fell by 19.0%, from R$ 15.8 million in 1Q07 to R$ 12.7 million in 1Q08.

EBITDA jumped 181.6%, from R$ 5.3 million in 1Q07 to R$ 15.0 million in 1Q08, thanks to the higher growth of revenue in comparison with costs and expenses.

Net Result improved significantly to R$ 1.7 million from a negative R$ 5.6 million.

14%

15.8

12.7

General and Administrative Expenses

(R$ million)

1Q07 1Q08

5.3

15.0

EBITDA (R$ ‘000) and EBITDA Margin (%)

1Q07 1Q08

-5.6

1.7

Net Result (R$ million)

1Q07 1Q08

-19.0%181.6%

CSU (Consolidated)

18.3%

7.3%

n.a.

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CardSystem/Marketsystem

Growth of 33.9% in the Gross Revenue of CardSystem/MarketSystem between 1Q07 and 1Q08, thanks to the increase in the number of cards in the base and the accounts managed;

Gross Profit rose by 80.7% whereas EBITDA rose by 77%;

The higher growth in Gross Profit and EBITDA in comparison with revenues shows the improvement in operational efficiency and economies of scale.

35.1

47.0

Gross Revenue (R$ ‘000)

1Q07 1Q08

8.8

15.9

Gross Profit (R$ million) and Gross Margin (%)

1Q07 1Q08

8.7

15.4

EBITDA (R$ million) and

EBITDA Margin (%)

1Q07 1Q08

33.9%

80.7%

77.0%

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TeleSystem and Credit&Risk

Gross Revenue fell by 4.85% between 1Q07 and 1Q08, caused by the about 11% reduction in revenues at TeleSystem due to the restructuring carried out in the last half of 2007 and a 21% increase in revenue from credit and collections (Credit&Risk).

Cost of services at the units dropped from R$ 41.5 million in 1Q07 to R$ 39.1 million in 1Q08, also due to the restructuring carried out at TeleSystem in 2H07.

3,8%43.3

41.2

1Q07 1Q08

41.5

39.1

1Q07 1Q08

-4.85%-5.78%

Gross Revenue - TeleSystem e Credit&Risk(R$ million)

Costs - TeleSystem e Credit&Risk

(R$ million)

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Despite the lower revenue in comparison with 1Q07, we improved profitability, both in terms of Gross Profit of R$ (0.6) million against R$ (1.2) million, and EBITDA of R$ (0.4) million against R$ (3.3) million. Once again, this is a result of the restructuring carried out in the Call Center unit.

Margin will gradually improve. The workstations that were idle during the restructuring held at TeleSystemin the 2H07 will gradually be used to offer higher value-added products that may either be different from or complementary to those offered by our competitors.

-1.2

-0.6

Gross Profit (R$ million) and Gross Margin (%)

1Q07 1Q08

-3.3

-0.4

EBITDA (R$ million) and EBITDA Margin (%)

1Q07 1Q08

TeleSystem and Credit&Risk

50.0%87.9%

12

7.3%

6.9%

14.0% 14.1%

18.2%

1Q07 2Q07 3Q07 4Q07 1Q08

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Historical Data

Gross Revenue (million)

EBITDA CSU (R$ million)

EBITDA Margin (R$ million)

78.4

87.4

90.9

86.2 88.4

1Q07 2Q07 3Q07 4Q07 1Q08

5.3 5.6

11.911.3

15.0

1Q07 2Q07 3Q07 4Q07 1Q08

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Results - Units

EBITDA (R$ million)

Gross Revenue (R$ million)

35.12 38.43 42.0 42.47

47.03 43.32

48.96

48.9 43.71

41.38

1Q07 2Q07 3Q07 4Q07 1Q08

CarSystem / MarketSystemTeleSystem / CreditSystem

8.67

10.38

13.70 13.61

15.42

(3.34)

(4.76)(1.83) (2.29)

(0.42)

1Q07 2Q07 3Q07 4Q07 1Q08

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Debt and Investments

CAPEX

Investments in the area of cards maintained

Suspension of investments in the Caixa project

Debt - R$ thousand

1Q08 1Q07 4Q07

Short Term Debt 55.8 31.8 57.9

Short Term 33.3 12.5 34.3

Leasing Short Term 22.5 19.3 23.6

Long Term Debt 58.6 48.0 53.5

Long Term 49.0 21.3 41.8

Leasing Long Term 9.7 26.6 11.7

Gross Debt 114.4 79.8 111.5

(-) Cash 1.8 2.0 2.4

Net Cash (Debt) 112.6 77.8 109.1

1Q08 1Q07 Chg. % 4Q07 Chg. %

Systems (SW and HW) 4.3 4.3 1.2% 5.5 -21.7%

Caixa Project 0.7 5.4 -87.5% 1.5 -53.1%

Other 0.6 0.3 87.9% 0.4 29.8%

Capex 5.6 10.0 -44.4% 7.4 -24.9%

Capex - R$ million

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Main Strategies

Growth of around 30%, with the focus on the CardSystem and MarketSystem

units;

Rigorous control of operational management and profitability at TeleSystem and

Credit&Risk;

Increase the profitability and margins of CSU as a whole.