Corporate Presentation June, 2012
Aug 20, 2015
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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BRAZIL | CARD INDUSTRY
3
Source: ABECS e IBGE* the Q1 numbers are estimated)
17.1%18.9%
20.7%22.5%
24.3%
26.9% 27.1%
2006 2007 2008 2009 2010 2011 1Q12*
Penetration Of Cards as Means of Payment in the Private Consumption Expenditure (PCE)
BRAZIL | MACROECONOMIC SCENARIO
4
45% 46% 43% 44%40% 41%
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
0
200
400
600
800
1.000
1.200
1.400
1.600
2007 2008 2009 2010 2011 Mar/12
Credit/GDPCredit
(R$million)
Credit Evolution
Individuals Legal Entities Credit/GDP
936
1,227
1,414
1,704
Source: BCB
2,030 2,070
4
5
6
7
8
9
10
11Unemployment (%)
Source: IBGE
0
2
4
6
8
10
12
14
16
18Retail Trade Sales (%)
Source: IBGE
4.0
6.1
5.1
-0.2
7.5
2.7 2.7
2006 2007 2008 2009 2010 2011 2012(E)
GDP ( %)
PIB: IBGE(E) Estiimates- Focus Report- BCB
BRAZIL | ECONOMIC SCHEME
Gross MDR
Net MDR Interchange Fee
The brand defines the interchange fee.
5
The acquirer negotiates the gross MDR with the merchant.
MERCHANTS
BRAZIL | TRANSACTION FLOW
MERCHANTSCARD HOLDERS CARD HOLDERS MERCHANTS
ISSUER ISSUER
Credit Transaction Debit Transaction
6
Brazil has a total areaof 8,514,876 km²
MAIN ENTRY BARRIER | BANKING DISTRIBUTION
NUMBER OFBRANCHES
NORTH 293 277 82 48 92 35 0 0 3
NORTHEAST 1,127 833 288 196 411 56 3 7 9
MIDWEST 459 344 293 95 193 105 1 6 6
SOUTHEAST 2,338 2,387 2,528 1,832 1,137 427 7 103 69
SOUTH 1,049 772 637 356 501 239 441 10 16
TOTAL 5,266 4,613 3,828 2,527 2,334 862 452 126 103
Banking distribution is the mainbarrier to new players
70% of the affiliations are donethrough banks
SOURCE: BRAZILIAN CENTRAL BANK , MARCH 2012
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1995
4 Visa acquirers
2009 2010
June 2009
Single Visa Acquirer
R$ 8.4 billion IPO
+
Multi-brand acquirer
CIELO | TIMELINE
8
28.6%
28.6%
42.4%
0.3%
Banco Bradesco Banco do Brasil
Free-float Treasury
655.096.224 common shares
9
CIELO | OWNERSHIP
Cielo Fidelidadeis the only loyaltyprogram developedexclusively to merchants
Scheme: accrual of pointsbased on the merchant’svolume with Cielo andredemption of points for morethan 20 thousand products
Cielo Fidelidadeis the largest B2Bloyalty program inLatin America
CIELO | LOYALTY PROGRAM
12
CIELO PREMIA IS THE MOST
AND BRINGS AN ADVANCED TECHNOLOGYCHANGING THE CULTURE OF CARRYING OUTPROMOTIONS AT THE POINT S OF SALES
FLEXIBLE AND THE EASIEST TO USE
PROMOTIONAL MARKETING TOOL
IN THE MARKET
CIELO INNOVATES ONE MORE TIME
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CIELO | ADDING VALUE TO MERCHANTS
SURPRISES
ENGAGES
SEGMENTS
MANAGES
The card owner with a differentiatedpayment experience
The card owner through multiplegifts and discounts
The promotion according to your needs (Bank/Card Brand/Card type/Purchasing option: Debit or Credit)
The promotion automaticallyreducing operational costs strongly
CIELO | PREMIA’S MAIN ADVANTAGES
14
IT GIVES THE CLIENT
ON A SPECIFIC DAY / TIMEA GIFT OR A DISCOUNT
ADVANTAGES TO
IT INCREASES THE RETURN
FREQUENCY ON A DAYWITH LOW MOVEMENT
CIELO CLIENT
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CIELO | FIXED DAY AND TIME
*** CONGRATULATIONS!***
DISCOUNT TO YOU
10% discount
At the end of the day
On Mondays
PRIZE BALANCE
--------------------------
EXPIRING DATE: 01/31/2011
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CIELO | FIXED DAY AND TIME
CIELO | INNOVATIVE PRODUCTS
17
Unprecedented payment solution
application in Brazil for iPhone, iPad and
iPod touch as well as Android system
and Blackberry
Devices used as POS terminal for mobile
payment with Visa, MasterCard,
American Express and Elo cards
INNOVATION – MOST RECENTLY
LAUNCHED PRODUCT
Crediário is a recently launched unique and
exclusive technology developed by Cielo that
allows the merchant to sell from 2 to 48
installments, accessing the credit approved
by the banks to the consumers and available
in their credit cards.
CREDIÁRIO: WHAT IS IT?
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INNOVATION – MOST RECENTLY
LAUNCHED PRODUCT
Cardholders of Visa from Banco
do Brasil and Bradesco – with
R$100 billion in credit available
to the product. In the coming months
others banks will join (HSBC and
Caixa Ecônomica Federal).
Merchants of Cielo who would like
to offer an additional payment
scheme without directly
financing the cardholder.
CREDIÁRIO: who can benefit?
19
INNOVATION – MOST RECENTLY
LAUNCHED PRODUCT
MERCHANT
• More sales volume – 20 million plus cardholders from BB
and Bradesco with pre-approved lines of credit;
• Better cash flow as funds are received in D+1;
• Increase in average ticket;
CARDHOLDER
• Pre-approved credit line from the bank;
• Attractive interest rates;
• Additional limit besides credit card’s limit;
• Simulation at the point of sale;
CIELO
• More sales volume;
• Merchant Discount Rate of credit in installments.
CREDIÁRIO: more advantages to participants
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CIELO | ORIZON AQUISITION
Founded in 2006
Ownership interest of 40.95%;
Interconnection between healthcare and dental operators and services
providers
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CIELO | M4U AQUISITION
Founded in 2000
innovation in the development of technological mobility platforms
largest mobile top up and mobile payment platforms in the country
developed several applications under the most diverse cell phone
standards for a wide range of clients in the financial and telecom
markets
Founders will continue to head the business
Deal
Announced August 2010
Total amount of R$ 50.1 million
R$ 25.05 million already paid and the other half will be payable
after 37 months from the closing date (as long as the contractual
targets are met)
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CIELO | Paggo Soluções JV
Combine Oi’s mobile payment experience with Cielo’s
coverage and experience with electronic payment networks, in
order to create a joint venture to offer acquiring and transaction
capture services using mobile devices
Creation of a new company controlled by both Oi and Cielo
Announced September 2010
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CIELO | BRASPAG AQUISITION
Deal announced May 2011
Total amount of R$ 40 million
Founded in 2005
Leader as a gateway for e-commerce in Brazil, with approximately
65% market share
Platform integrates online stores, financial institutions and
acquirers, and is responsible for capturing, routing and managing
payment transactions with cards, collection slips and online debit
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CIELO | BRASPAG POSITION
Card
Slip
Acquirers
Wallets
Gateways
BanksDebit
Source: Company, Broker reports, Cybersource25
CIELO | ADR
26
Cielo has a sponsored Level I ADRTicker: CIOXYADR Ratio (ADR:ORD): 1:1Depositary bank: Deutsche Bank Trust Company AmericasDepositary bank contacts:
ADR broker helpline:Tel: +1 212 250 9100 (New York)Tel: +44 207 547 6500 (London)
Email: [email protected] website: www.adr.db.com
Depositary bank’s local custodian: Banco Bradesco
Financial Indicators 1Q12 1Q11 1Q12 X 1Q11 4Q11 1Q12 X 4Q11
Financial Volume(R$ million)
88,081.8 70,203.7 25.5% 91,252.7 -3.5%
Transaction(million)
1,269.4 1,058.7 19.9% 1,301.8 -2.5%
Net Revenue*(R$ million)
1,399.5 1,082.1 29.3% 1,383.1 1.2%
Cost of Services(R$ million)
(399.1) (311.5) 28.1% (405.7) -1.6%
Operating Expenses(R$ million)
(129.9) (139.9) -7.1% (207.9) -37.5%
Unit Costs + Expensesex subsidiaries
(0.37) (0.39) -4.3% (0.44) -15.2%
Adjusted EBITDA(R$ million)
943.8 684.3 37.9% 833.2 13.3%
Net Income(R$ million)
566.6 424.6 33.4% 504.5 12.3%
Blended Net MDR (bps) 105 105 - 105 -
Credit Net MDR (bps) 119 122 (3) 119 -
Debit Net MDR (bps) 81 76 5 81 -
CIELO | FINANCIAL INDICATORS
27* Including prepayment of receivables present value adjusted
CIELO | OPERATING PERFORMANCE
28
1.1%
-3.5%
79,775
70,205
88,08225.5%
74,623
91,2531,269
1,058 1,0941,167
1,302
-2.5%
19.9%
11.7%
1.085
1.115
1.153
1.1991.212
1Q11 2Q11 3Q11 4Q11 1Q12
Cielo- Number of Active Merchants ( 1 transaction in the last 60 days)
162.933 197.541 50.368 56.034 56.786
98.742 118.315 29.407
35.219 31.296
1Q11 2Q11 3Q11 4Q11 1Q12
Cielo Financial Volume ( R$million)
Credit cards Debit cards
611 639 678 730 738
447 455 489572 531
1Q11 2Q11 3Q11 4Q11 1Q12
Cielo- Number of Transactions (million)
Credit Debit
CIELO | FAIR SHARE
29
Source : Public information, released by the companiesOthers = Redecard and Santander/GetNet
Financial Volume Breakdown (in R$)
Considering the 2 main participants , Cielo gained 0.7 p.p. quarter-on-
quarter
Considering the 3 main participants, Cielo gained 0.5 p.p. quarter-on-
quarter
57,2% 57,7% 57,9% 59,5% 60,2%
42,8% 42,3% 42,1% 40,5% 39,8%
1Q11 2Q11 3Q11 4Q11 1Q12
Cielo Redecard
56,4% 56,7% 56,7% 58,0% 58,5%
43,6% 43,3% 43,3% 42,0% 41,5%
1Q11 2Q11 3Q11 4Q11 1Q12
Cielo Others
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Source : Public information, released by the companies
Financial Volume Breakdown (in R$)
Considering the 2 main participants , Cielo gained 0.7 p.p. quarter-on-quarter
57,2% 57,7% 57,9% 59,5% 60,2%
42,8% 42,3% 42,1% 40,5% 39,8%
1Q11 2Q11 3Q11 4Q11 1Q12
Cielo Redecard
CIELO | FAIR SHARE
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6,1% 6,3% 6,6% 6,4% 7,0%
9,8% 11,0% 11,6% 11,7% 11,6%
22,5% 21,5% 20,4% 19,4% 21,1%
16,4% 16,6% 16,9% 18,7% 16,5%
45,2% 44,6% 44,6% 43,8% 43,8%
1Q11 2Q11 3Q11 4Q11 1Q12
Revenue Breakdown (%)
Credit cards Debit cards POS Rental Prepayment of Receivables Other revenues
CIELO | REVENUES BREAKDOWN
CIELO | REVENUES
32
POS 1Q11 2Q11 3Q11 4Q11 1Q12
AverageRental(R$/month)
69 65 65 67 71
Installed POS (thousand) 1.293 1.351 1.402 1.484 1.524
MDR 1Q11 2Q11 3Q11 4Q11 1Q12
Net MDR Debit
76 74 77 81 81
Net MDR Credit
122 117 118 119 119
26.2%
-2.9%
21.1%
9.7%
955.4927.8
735.1754.9
823.1
538,9 550,1 596,6669,0 673,7
196,2 204,8226,5
286,4 254,1
1Q11 2Q11 3Q11 4Q11 1Q12
Commissions Revenues (R$ million)
Credit Debit
268,4 265,1 272,3 296,1
342,9
1Q11 2Q11 3Q11 4Q11 1Q12
Equipment Rental (R$ million)
CIELO | PREPAYMENT OF RECEIVABLES
33
57.4%
-1.6%
120,8137,7
159,9
193,1 190,1
1Q11 2Q11 3Q11 4Q11 1Q12
Revenue of Prepayment of Receivables ex Adjustments (R$ million)
3.236,9 3.376,93.894,6
4.899,25.289,9
7,3% 7,2% 7,7%8,7% 9,3%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
18,0%
20,0%
-
1.000,0
2.000,0
3.000,0
4.000,0
5.000,0
6.000,0
1Q11 2Q11 3Q11 4Q11 1Q12
Prepayment of Receivables
Financial prepayment volume
% Prepayment over Credit Financial Volume
62,958,5
56,0 55,8 55,7
1Q11 2Q11 3Q11 4Q11 1Q12
Average Term (days)
CIELO | COSTS
34
Reduction of 2.1% of the unitcost excluding the subsidiariesand the additional brands fee
If the impact of depreciation is eliminated in the sameanalysis, the reduction wouldhave been 5.9%
Costs of services rendered
Depreciation and amortization
0.314 0.255 0.261
Unit per transaction
0.037 0.022
Reduction of 0.3% of the unitcost excluding the subsidiariesand the additional brands fee
If the impact of depreciation is eliminated in the sameanalysis, the reduction wouldhave been 4.0%
0.314 0.283 0.2840.037 +0.006
399.2
324.1
276.1
399.2370.1
359.9
17.4%
2.1%
0,3%
-2.8%
327,4
252,4 223,6
71,8 46,9
28,1 71,8
52,5
1Q12 Reported Costs related to subsidiaries
Additional brands fee 1Q12 Adjusted 1Q11 Adjusted
Costs Comparison 1Q12 X 1Q11 (R$ million)
327,4 288,1 307,7
71,8 46,9
7,6 71,8 62,4
1Q12 Reported Costs related to subsidiaries
Additional brands fee 1Q12 Adjusted 4Q11 Adjusted
Costs Comparison 1Q12 X 4Q11 (R$ million)
CIELO | EXPENSES
35
In both comparison(1Q11 x 1Q12 and4Q11 x 1Q12) themain impact for thereduction was due to marketing and salesexpenses.
207,9
129,9
0,3 (1.3) (5.6) (12.5)(58.8)
4Q11 Depreciation and
Amortization
Personnel Other Expenses General and Administratives
Marketing and Sales Expenses
1Q12
Operating Expenses Composition - 4Q11 to 1Q12 (R$ million)
139,9 129,9
6,7 3,6 0,6 (8,2)(12,6)
1Q11 Personnel Other Expenses Depreciation and
Amortization
General and Administratives
Marketing and Sales Expenses
1Q12
Operating Expenses Composition- 1Q11 to 1Q12 (R$ million)
CIELO | FINANCIAL PERFORMANCE
36
13.3%12.3%
Adjusted EBITDA (R$ million) Net Income (R$ million)
33.4%37.9%
684,3716,5 741,2
833,2943,8
63% 64%
61%60%
67%
45,00%
50,00%
55,00%
60,00%
65,00%
70,00%
75,00%
0,0
100,0
200,0
300,0
400,0
500,0
600,0
700,0
800,0
900,0
1.000,0
1Q11 2Q11 3Q11 4Q11 1Q12
Adjusted EBITDA Adjusted EBITDA Margin
424,7 423,6457,5
504,5
566,6
39%38% 38% 37%
41%
25,00%
30,00%
35,00%
40,00%
45,00%
50,00%
55,00%
60,00%
0,0
100,0
200,0
300,0
400,0
500,0
600,0
1Q11 2Q11 3Q11 4Q11 1Q12
Net Income Net Margin
CIELO | WHY INVEST?
Leader in a fast growing market
Strong balance sheet, high cash generation and low capex requirements
Minimum dividend payout of 50% of net profit*distributed twice a year
Focus on innovationand continuous growth
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