Copyright © Cielo | Todos os direitos reservados CORPORATE PRESENTATION August, 2016
Copyright © Cielo | Todos os direitos reservados
CORPORATE PRESENTATION
August, 2016
THE COMPANY MAKES FORWARD LOOKINGSTATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES
DISCLAIMER
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.
#1MERCHANT
ACQUIRER AND
PAYMENT
PROCESSOR IN
BRAZIL AND LATIN
AMERICA
OF GDP
CAPTURED
THROUGH
CIELO´S
NETWORK
MARKET CAP –
AMONG 10
LARGEST IN
BM&FBOVESPA
BRL 82 BILLION
9.5%
MARKET LEADER
*
*Closing date: 07/22/2016
Exchange: 1USD = 3.29 BRL (07/22/2016) 3
Copyright © Cielo | Todos os direitos reservados
262329
394487
601710
837
9641,065
2007 2008 2009 2010 2011 2012 2013 2014 2015
16.1%17.7%
19.1%20.8%
22.8%24.4%
26.2%27.2%
28.5%
2007 2008 2009 2010 2011 2012 2013 2014 2015
1,6291,857
2,0642,341
2,6372,908
3,2013,547
3,742
2007 2008 2009 2010 2011 2012 2013 2014 2015
SUBSTITUTION OF CASH AND CHECKS
* Excluding Private Labels
Cards Expenditure over PCE* (%)
PCE - Private Consumption Expenditure (R$ billion)
Card Expenditure (R$ billion)*
Source: IBGE,ABECS 4
* Excluding Private Labels
Financial Volume (R$ billion)
Financial Volume (R$ billion)
July
2014
30% stake in Stelo
Creation of Cateno
between Cielo and Banco do
Brasil
Launching ofCielo MobileChip & Pin
November
2014
December
2010
March
2012
May
2011September
2012
October
2013
January
2010
June
2015
STRATEGIC PLANNING
Cielo has been active to be well positioned to capture new avenues of growth
Launching the new e-commerce platform
Acquisitionof Braspag
Partnership with Dotz
Partnership withCyberSource
Acquisition of MeS
5
Partnership with Smiles
August
2015
Cielo holds a 91.44%
stake of M4U
November
2010
Launching ofCielo Mobile
April
2016
Launching of Cielo Lio
• Digital sales slip, sales statement
check by period, online assistance
CIELO LIO
6
Open platform tailoring sales experiences with apps and funcionalities to
manage the business
Main Features: • Commercial automation on its own
operational system (Cielo OS)
• Physical and digital world integration
(OmniChannel)
• Managing bars and restaurants
orders and checking account spliting
• Registration of a portfolio of products
and services
• Bar code reading for orders via an
integrated camera- promptness for
shopping
• Merchant’s storage management
• Cielo Store: Marketplace for apps
and tailoired for the merchant
Forecast to reach 50
thousand units up to the
end of 2016 and up to 1
million in the 5 coming
years
• Partnership with Linx, NCR and
VTEX
Business
Expansion
Data base of 1.7 million active points of sale more than 6 billion transaction a year
CIELO BIG DATA
CIELO BIG DATA RESPONDS:
How is retail performing?
What are the most accurate and updated figures of brazilian
retail considering its several sectors and regions?
Considering the main performance metrics, how is my sector
performing?
How are my peers performing?
Why my store located at a specific city/neighborhood is not
performing? Is it the manager or the location?
What is my customer purchase profile? Why am I losing
customers? What shall I do to bring them back?
Which microregion has the biggest revenue potential that I
have not explored yet? Which spot should I open my next
store?
BIG DATA PRODUCTS:
ICVA
BenchmarkCustomized
Promo
E-commerceSectorial
analysis
Shoppings On Demand
7
Source: CIELO
CIELO´S BROAD RETAIL INDEX (ICVA)NOMINAL REVENUE OF SALES GROWTH (YOY)
DIFFERENTIAL
Territorial coverageof 99% of the
country
Scope sized companies: from small retailers to
large retailers
Based onactual information
and not in sample surveys
Dynamic model, basedon the actual mix of
each sector in theeconomy
Over 20 economic sectors, including services (eg: airlines, restaurants and e-commerce)
Improveddisclosure
8
8,3% 7,9%
4,1%3,2%
3,9%
2,2%
2,6%
2,4%
5,6%
3,1%
3,9%
3,0%
5,2%6,9% 6,6% 4,6%
3,6%
3,5%
3,5%
2,1%
2,8%2,5% 3,1%
2,9%
4,7%5,0%
1,9%
0,1%
-2,8%
-3,4% -3,3%
-5,5%
-5,5%
-6,0%
-3,4%
-5,8%-5,2%
-6,1%
-3,1%
0,6%
-1,1%
-2,3% -3,0%-3,8%
-4,4%
-5,9%
-5,6%-6,2%
-5,8% -6,1%
-4,5% -3,3%
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16
Nominal ICVA
Nominal ICVA with Calendar Adjustment
Deflated* ICVA
Deflated ICVA with Calendar Adjustment*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA
AnnualEvolution(R$ billion)
2013 2014Credit
Debit
The financial volume does not include Merchant E-Solutions transactions, i.e., it comprises the financial volume of the domestic market only.
TRANSACTION FINANCIAL VOLUME
20122011 2015
9
Quarterly Evolution(R$ billion)
1Q162Q15 2Q16
163.9 202.1 245.0 279.6 312.6
98.7118.3
138.4169.1 205.0
517.6CAGR: 14.4% 548.2
448.7
320.4383.3
77.4 79.6 81.0
52.359.9 61.6
129.7142.6139.5
9,9% 2.2%
NUMBER OF TRANSACTIONS
AnnualEvolution(R$ million)
2013 2014
Credit
Debit
The number of transactions does not include Merchant E-Solutions transactions, i.e., it comprises the number of transactions of the domestic market only.
2011 2012 2015
10
1Q16
QuarterlyEvolution(million)
2Q162Q15
1.837 2.062 2.283 2.525 2.663
1.9642.240
2.6183.134
3.537
3,8014,302
4,902
5,6596,200
CAGR: 13.0%
659 677 697
836947 934
1,6311,495
9.1%
1,623
0,5%
OPERATIONAL INDICATORS
2Q15 1Q16 2Q16
Quarterly Evolution(Thousand)
* Points of Sales Merchants are those that have made at least a single transaction in the last 30 days .The year is measured based on the closing
POS Terminals Points of Sales Merchants (30 days)*
2010
Annual Evolution(Thousand)
2011 2012 2013 20152014
11
Wireless POS terminals
(GPRS)
Corresponds to 69% of Cielo’s
installed basis (as of 2Q16)
1.484
1.7271.831
2.0232.146
1.1561.282
1.4261.616
1,732
CAGR: 11.7%
CAGR 9.7%
2,071 2,082 2,070
1,674 1,705 1,700
-0.6%1.6%
-0.3%
0.0%
2Q15 1Q16 2Q16
AnnualEvolution(R$ million)
NET OPERATING REVENUE
QuarterlyEvolution(R$ million)
20112010 2013 201420122011 201512
4.208,75.385,3
6.734,27.725,6
11.122,3CAGR: 27.5%
2.795,83.047,9 3.069,0
9.8%0.7%
15.4
26.4
44.3
56.162.0
7,6% 10,8%
15,9%17,9%
19,4%
2Q15 1Q16 2Q16
PURCHASE OF RECEIVABLES VOLUME
13
QuarterlyEvolution(R$ billion)
%Purchased Volume from
Credit Installments
% Purchased receivables
over Total Credit Volume
2013 2015
13
20122011
AnnualEvolution(R$ billion)
2014
Total of Purchased Volume
CAGR: 41.6%
% Purchased receivables
over Total Credit Volume
14.416.0 16.5
18,5%20,1% 20,4%
15.0% 3.3%
PURCHASE OF RECEIVABLES ACCOUNTING RESULT
14
2Q15 1Q16 2Q16
QuarterlyEvolution(R$ million)
AnnualEvolution(R$ million)
Purchase of Receivables Result*
*Purchase of Receivables Result = gross revenue from prepayment - cost of funding with third
parties and Bank Tokyo Mitsubishi – present value adjustments expenses – PIS/COFINS taxes
2013 2015201420122011
22.3%-3.2%
535,3
768,1953,1
1.508,6
2.129,8CAGR: 41.2%
493,6
623,4603,6
EBITDA
QuarterlyEvolution(R$ million)
2Q15 1Q16 2Q16
2013 2014
AnnualEvolution(R$ million)
EBITDA MARGIN %EBITDA*2012 figures were only impacted by Merchant E-Solutions in 4Q12
2012*2011 2015
15
2.388,5
3.097,93.575,2
3.838,9
5.233,5
56,8% 57,5%53,1%
49,7% 47,1%
CAGR: 21.7%
1.355,8 1.407,61.349,0
50.5%43.5% 46.2%
-0,5%-4,2%
869,4
995,4 989,2
31,1%
32,7%32,2%
2Q15 1Q16 2Q16
QuarterlyEvolution(R$ million)
2013 2014
AnnualEvolution(R$ million)
NET MARGIN %NET INCOME* 2012 figures were only impacted by Merchant E-Solutions in 4Q12
2012*2011 2015
16
NET INCOME
-0,6%13.8%
1.817
2.3322.674
3.2203.511
43,2% 43,1%39,7% 41,7%
31,6%
CAGR: 17.9%
17
Guidance 2016
5.5% to 7.5% 7% to 9% 8.7%**
4% to 6% 6% to 8% 7.7%
~R$450mn ~R$400mn R$100.3mn
IndicatorsPrevious
Estimates 1H16
*considering credit and debit volume
** 1Q16 figures, since 2Q16 information has not been disclosed yet
Revised Estimates
INVESTMENT HIGHLIGHTS
Leader in a growing market
Strong balance sheet, high cash generation and low capex requirements
Minimum dividend payout of 30% of net profit*distributed twice a year
Focus on innovation, diversificationand continuous growth
* After constitution of legal reserve of 20% of the Company´s capital stock
18
ADR
Cielo has a sponsored Level I ADR
Ticker: CIOXY
ADR Ratio (ADR:ORD): 1:1
Depositary bank: Deutsche Bank Trust Company Americas
Depositary bank contacts:
ADR broker helpline:
Tel: +1 212 250 9100 (New York)
Tel: +44 207 547 6500 (London)
Email: [email protected]
ADR website: www.adr.db.com
Depositary bank’s local custodian: Banco Bradesco
* Since December 2013 no IOF charged
19
Copyright © Cielo | Todos os direitos reservados
APPENDIX
1995 2009 2016
June 2009
Single Visa Acquirer
R$ 8.4 billion IPO
+
Multi-brand acquirer
TIMELINE
4 Visa acquirers
21
2,264,012,551 Common Shares
CAPITAL OWNERSHIP
22*Tempo Serviços LTDA is a Bradesco subsidiary company which started
envisaging Ciel3 on its investment portfolio
b. 28.65%
a. 28.65%
a+b= 57.3%
Tempo
Serviços*
1.41%
Free Float:
41.02%
Treasury:
0.28%
BRAZIL | ECONOMIC SCHEME
Gross MDR
Net MDR Interchange Fee
The brand defines
the interchange fee.
The acquirer negotiates
the gross MDR with the
merchant.
MERCHANTS
Issuer
Card Holder
23
2,90
2,95 2,96 2,96
2,83
2,79 2,78 2,77
2,84
2,75
BRAZIL | MERCHANT DISCOUNT RATES
Source: Central Bank, Abecs24
%Credit Gross MDR%Debit Gross MDR
Market Credit and Debit Gross MDR Evolution (%)
1,581,59
1,601,61
1,56
1,581,59
1,56
1,58
1,51
4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15
PURCHASE OF RECEIVABLES INDICATORS
25
Purchases of Receivables 2Q16 2Q15 1Q16 2Q16 X 2Q15 2Q16 X 1Q16
% Purchased volume over Total Credit Volume 20.4% 18.5% 20.1% 1.9 p.p. 0.3 p.p.
Financial Volume of purchased receivables (R$ million) 16,517.8 14,360.3 15,991.4 15.0% 3.3%
Average Term (Calendar Days) 50.9 56.5 53.3 (5.6) (2.4)
Average Term (Business Days) 35.3 38.9 36.3 (3.6) (0.9)
Net Revenue of Purchased Receivables (R$ million) 678.3 561.7 684.9 20.8% -1.0%
Cost of Funding with Third Parties (R$ million) (43.2) (68.1) (30.2) -36.6% 43.0%
Taxes (PIS / COFINS) (R$ million) (31.5) - (31.3) 0.0% 0.7%
Purchases of Receivables Accountg Result (R$ million) 603.6 493.6 623.4 22.3% -3.2%
Managerial Exercise 2Q16 2Q15 1Q16 2Q16 X 2Q15 2Q16 X 1Q16
Net Revenue of Purchases of Receivables (R$ million) 678.3 561.7 684.9 20.8% -1.0%
Cost of Funding* (R$ million) (307.3) (282.3) (309.4) 8.9% -0.7%
Managerial Net Revenue (R$ million) 371.0 279.4 375.5 32.8% -1.2%
Taxes (PIS / COFINS) (R$ million) (31.5) - (31.3) - 0.7%
Net Revenue pro forma with Purchases of Receivables (R$ million) 339.5 279.4 344.2 21.5% -1.4%
*Assuming the cost of 104% of CDI in Financial Volume of Purchases
Industry Growth
yoy (%)
MARKET SHARE – TOP 4 ACQUIRERSCaptured volume [R$ Bi], market share [%]
26Source: Quartely earnings release (Cielo, Rede/Itaú, Santander and Banrisul); Cielo´s Analysis
9.9%
-0,1%
27.8%
36.0%
Volume
Growth
2Q16
yoy [%]
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Banrisul Santander Rede Cielo Agro Cielo
7
136(53.4%)
93(35.0%)
7(2.4%)
267
25(9.2%)
242233223
267252236
284
5(1.9%)
4(1.6%)
5(1.7%)
5(2.0%)
3(1.5%)
6(2.2%)
4(1.8%)
21(8.0%)
18(7.7%)
2
127(52.5%)
6
94(37.8%)
19(7.8%)
91(37.9%)
1
125(52.6%)120
(55.3%)
5
20(7.3%)
103(38.0%)
141(53.1%)
3
15(6.5%)
88(37.4%)
125(54.5%)
13(6.0%)
84(37.2%)
132(53.4%)
4
94(36.5%)
104(36.0%)
25(8.5%)
150(53.3%)
4
3
136(53.4%)
261
93(35.5%)
6(2.4%)
23(8.7%)
MARKET SHARE | MARKET VOLUME | TOP4
27
ECOMMERCE POSITION
Source: Company, Broker reports, Cybersource 28
Card
Slip
Acquirers
Gateways
Banks
Debit
Wallets/
Subacquirers
Copyright © Cielo | Todos os direitos reservados
CieloCapital
Investment of
R$ 8.1 billion
30% 70%
Pro forma net income*
R$ 615 million 2014
Association
BBContributed
management of
part of Arranjo
Ourocard*
*As per the due diligence
performed during the negotiations
CatenoValued at
R$ 11.6 billion
*Scope of Arranjo Ourocard Association: Purchase transactions from all credit and debit cards issued by Banco do Brasil
labeled by Visa, Mastercard, Elo and American Express brands, excluding the cards related to the prepaid business, payment
solutions provided to government entities and private label cards issued under current partnerships with retailers.
Banco do Brasil´s cards division (before the Association)
Responsibilities
Marketing
Credit concession and analysis
Relationship with the cardholder
Loyalty Program
Collection
Client´s activation
Payment account management
Security management and
control
Payment of fees to cards brands
and payment arrangements
Revenues
Fee related to the issuance of cards
Annuity
Fee related to pre-paid accounts
Fee related to the legal entity relationship
program
Revenues related to operations of
generating cards invoice installments
Arranjo Ourocard* interchange fee
As
so
cia
tio
n
CATENO VALUED AT R$11.6 BILLION
29
30
Accounting value 2Q16 2Q15 1Q16 2Q16x2Q15 2Q16x1Q16 Pro-forma 2015 (12 months)
Financial Volume 59.7 52.8 55.9 13.1% 6.7%
Credit Volume 29.3 28.7 28.8 1.9% 1.5%
Debit Volume 30.4 24.0 27.1 26.6% 12.2%
Net Revenue 609.4 571.7 593.0 6.6% 2.8% 2,368.5
Total Costs+Expenses (445.4) (404.5) (429.1) 10.1% 3.8%
Costs+Expenses ex-Amortization (349.0) (308.1) (332.7) 13.3% 4.9% (1,317.9)
Amortization* (96.4) (96.4) (96.4) - - (385.6)
Operating Income 164.0 167.1 163.9 -1.8% 0.1% 665.0
Financial Income 32.2 19.6 29.3 64.7% 10.1% 83.3
Income Tax/ CSLL (66.7) (63.5) (65.7) 5.1% 1.5% (254.4)
Net Income 129.6 123.2 127.5 5.2% 1.7% 493.8
Net Margin 21.3% 21.6% 21.5% -0.3 p.p. -0.2 p.p. 20.9%
EBITDA 260.4 263.3 260.3 -1.1% 0.0% 1,050.6
EBITDA Margin 42.7% 46.1% 43.9% -3.3 p.p. -1.2 p.p. 44.4%
* Amortization of R$11.6 billion intangible assets in 30 years
Copyright © Cielo | Todos os direitos reservados
31
NUMBERS 2Q16 (R$ million)
Copyright © Cielo | Todos os direitos reservados
32
CATENO 2Q16 (R$ Million)
* Amortization of R$11.6 billion intangible assets in 30 years
** Social Contribution
Copyright © Cielo | Todos os direitos reservados
33
ADJUSTED INCOME 2Q16 (R$ million)
Copyright © Cielo | Todos os direitos reservados
34
NUMBERS 2015 (R$ million)
Copyright © Cielo | Todos os direitos reservados
35
CATENO 2015 (R$ Million)
Copyright © Cielo | Todos os direitos reservados
36
ADJUSTED INCOME 2015 (R$ million)
37
Total Indebtedness (R$ billion)
1. Public Debentures: 3.22. Private Debentures: 3.53. Bonds: 2.84. Finame: 0.35. FINEP: 0.16. Loan Issuance: 1.1
Total: 10.8
Interest Coverage (EBIT/ Interest Expenses): 3.95x
Debt Ratio
LTM Net debt/Adjusted EBITDA ratio adjusted to result from purchases of receivables on June 30, 2016 was at 1.2x.
Net Debt Evolution (R$ billion)
DEBT AMORTIZATION SCHEDULE
38
* Private Debentures with Banco do Brasil. Amortization in 8 years but considering put/call in year 5.
**1.8 billion paid in April (1/3 of principal from the public debentures + interest)
(99.4% CDI)
(105.8% CDI)
(111% CDI)
(3.75%)
(6.90%)
1.7
1.3
**
(R$ billion)
CIEL3 OUTPERFORMING IBOV
Stock performance (IPO date* = 100)
*06/29/2009 39
50,00
75,00
100,00
125,00
150,00
175,00
200,00
225,00
250,00
275,00
300,00
325,00
350,00
375,00
400,00
425,00
450,00
475,00
500,00
22-Jul-09 22-Jul-10 22-Jul-11 22-Jul-12 22-Jul-13 22-Jul-14 22-Jul-15 22-Jul-16
CIEL3 IBOV
R$36.53
57.002
Copyright © Cielo | Todos os direitos reservados
RELATIONSwww.cielo.com.br/ri
E-mail: [email protected]
Phone: + 55 11 2596-8453
INVESTOR