4 q08 results presentation
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CSU CARDSYSTEM SA
investidorescsu@csu.com.br
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Disclaimer
This presentation may include forward-looking statements about future events or resultsaccording to the regulations of Brazilian and international securities and exchangecommissions. These statements are based on certain assumptions and analyses by theCompany that reflect its experience, the economic environment, future market conditions andevents expected by it, many of which are beyond its control. Important factors that may lead tosignificant differences between actual results and the statements of expectations about futureevents or results include the company’s business strategy, economic conditions in Brazil andabroad, technology, financial strategy, client business development, financial marketconditions, uncertainty regarding the results of its future operations, plans, objectives,expectations and intentions, among others. As a result of these factors, the actual results ofthe Company may significantly differ from those mentioned or implicit in the statement ofexpectations about future events or results.
The information and opinions contained in this presentation should not be understood as arecommendation to potential investors and no investment decision should be based on theveracity, currency or completeness of this information or these opinions. No advisors to thecompany or parties related to them or their representatives will be responsible for any lossesthat may result from the use or the contents of this presentation.
6.8 9.812.1
16.620.1
2004 2005 2006 2007 2008
Evolution of Card Base - CardSystem
End of December - Million
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Card Market and the CardSystem
Source: Abecs, CSU
Private Label + Credit Market CardSystem
3 Year Average Growth 21.6% 30.7%
2008 Growth (12 months) 18.3% 20.7%
The credit card market growth rate was
higher at the second semester, although
the challenging scenario;
CardSystem’s Private Label and Credit
card bases consistently outperformed
market growth;
CSU’s Growth last year was 20.7%,
compared to the market’s 18.3%. In the
other 3 years, Average Growth was
30.7% and 21.6%, respectively.
86 97 118 147 17353
6882
104124
2004 2005 2006 2007 2008
Growth of the Cards Market (ABECS)End of December -Million
Credit Private Label
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A total of 5.8 million cards were issued in the past 12 months;
Growth trend in card issues number every year;
New agreements performance showing the positive scenario forco-branded cards in 2008.
CardSystem – Operational Data
Source: CSU
1.0 1.1 1.41.7 1.6
4Q07 1Q08 2Q08 3Q08 4Q08
Issue of Cards in CSU's Base
(quarterly issue - million)
2.84.2 4.5 5.2 5.8
2004 2005 2006 2007 2008
Issue of Cards in CSU's Base
(yearly issue - million)
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MarketSystem – Operational Data
High-growth market;
Consistent growth in the number of managed accounts;
Recently launched loyalty programs continued to grow above the portfolio average.
Source: CSU
MarketSystem – Managed
Accounts (Million)
1.8 1.8 1.9 2.0 2.0 2.12.3 2.4
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4T08
6
2218
737 758 776 763 619 435 282
3,193 3,114 2,546 2,612 3,445 2,9913,476
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
PAs Credit&Risk PAs TeleSystem
3,930 3,872 3,322 3,375 4,0953,880
3,273
TeleSystem / Credit&Risk
Decree 6,523 made companies contracting call center services expand the scope of their agreements, consequently increasing the demand for these services;
TeleSystem was one of the first to offer clients all the adjustments required by the decree;
The reduction in the number of workstations and themaintenance of revenue show higher profitability perworkstation.
PAs in operation at TeleSystem and Credit&Risk
14.5
20.6
CSU
4Q07 4Q/08
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Gross revenue up by 40.3% at CardSystem / MarketSystem between 4Q07 and 4Q08, driven by the higher card volumes and managed accounts in CSU’s base;
Improved gross profit, gross margin and EBITDA due to economics of scale gains;
The fall in the EBITDA margin resulted from a tax credit in 4Q07. Excluding this credit, EBITDA margin would have increased to 29,6% in 4Q08 from 28.9% in 4Q07.
Gross Revenue (R$ Thousand) Gross Profit (R$ thousand) and
Gross Margin (%)
41.6%
CardSystem / MarketSystem
40.3%
36.5%
35,8%
43.7
61.3
CSU
4Q07 4Q081º Tri/08
4Q07 4Q08
EBITDA (R$ thousand) and
EBITDA Margin(%)
33.0%
29.6%
13.416.7
24.7%
42.5
43.6
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The units had significant improvement on its profitability, driven by the new operational structure on the call center;
In 2009, the company will maintain strict management at TeleSystem and Credit&Risk in order to optimize their operations and, consequently, improve the level of services and profitability.
Gross Profit (R$ million)
TeleSystem / Credit&Risk
EBITDA (R$ million)Gross Revenue (R$ Thousand)
2.6%
(1.7)
1.0
CSU
4Q07 4Q08
(2,3)
0.2
4Q07 4Q084Q07 4Q08
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Performance of Financial Indicators
Gross Revenue (million)
EBTIDA CSU (R$ million)
EBTIDA Margin (%)
86.20 88.4096.90
101.16 104.88
4Q07 1Q08 2Q08 3Q08 4Q08
16.9015.80
15.00
11.10
16.70
4Q07 1Q08 2Q08 3Q08 4Q08
13.90%
18.27%17.52% 17.40%
17.70%
4Q07 1Q08 2Q08 3Q08 4Q08
EBTIDA (R$ million)
Results - Units
Gross Revenue (R$ million)
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42.47
47.03
50.01
55.59 61.30
42.47 41.23
46.85 45.57
42.57
4Q07 1Q08 2Q08 3Q08 4Q08
CardSystem / MarketSystem TeleSystem / CreditSystem
16.91 16.7213.41 15.42 15.26
0.18(0.21)0.54(0.42)(2.29)
4Q07 1Q08 2Q08 3Q08 4Q08
CardSystem / MarketSystem TeleSystem / CreditSystem
86.2 104.9
CSU
4Q07 4Q08
Gross Profit and Gross Margin
(R$ million)
21.69%
CSU (Consolidated)
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Cost of Services Rendered (R$ million)
12.33%
22.3%
16.0%
Gross Revenue (R$ million)
69.0%
67.3
75.6
CSU
4Q07 4Q08
12.8
21.6
CSU4Q07 4Q08
CardSystem and MarketSystem’s growth led the company to grow almost 22%;
Cards issuing rate and new call center contracts contributed to the revenue increase;
Gross margin increase was driven by the economics of scale gains at CardSystem and strict cost management at TeleSystem.
11.3
16.9
1º Tri/084Q07 4Q08
- 9.7%
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Expenses with new contact center structure accounted approximately R$3.0 million in the quarter as restructuring expenses;
The new call center structure resulted in a significant expenses reduction. The general and administrative expenses drop 9.7% in the 4Q08.
The 51.9% growth in EBITDA is due to the Company’s growth and the higher margins.
General and Administrative Expenses
(R$ million)
EBITDA (R$ million) and EBITDA Margin (%) Net Result (R$ million)
CSU (Consolidated)
51.9%
17.4%
13.9%
16.0%
12.010.8
4Q07 4Q08
3.,954.,70
2º Tri/08
4Q07 4Q08
61.9%
CSU (consolidated) 2008
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14.1%
Gross Profit (R$ million) Gross Revenue (R$ million)
Net Result (R$ million)
n.a.
17.7%
10.7%
89.8%
EBITDA (R$ million) and EBTIDA Margin (%)
391.2
342.9
1
2007 2008
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Debt and Capex
Debt:
CSU reduced its net debt from R$ 95.2 million to R$ 94.9 million in 3 months;
The company tried to reduce financial expenses by avoiding rolling over its loans and leasing;
The company’s debt profile remains comfortable;
Cash generation and excellent working capital management are the key factors to reducing debt.
CSU neither has loans indexed to the dollar nor derivatives contracts. The company’s debt is in reais and indexed to the interbank (CDI) rate.
Debt - R$ million
4Q08 4Q07 3Q08
Short-term 62.5 57.9 49.7
Loans and Financing 49.7 34.3 35.1
Leasing 12.8 23.6 14.6
Long-term 34.0 53.6 46.6
Loans and Financing 25,4 41.8 38.4
Leasing 8.6 11,8 8,1
Gross Debt 96.5 111.5 96.2
(-) Cash and Cash Equivalents 1.6 2.4 1.1
Net Det (Cash) 94.9 109.1 95.2
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Debt and Capex
CAPEX:
Investments focused on CardSystem and MarketSystem;
Development and customization of Super Vision Plus;
Restructuring of Alphaville and Recife sites to absorb call center operations from the Santo André and Curitiba sites.
Debt:
The graph shows the impact of the interbank rate (CDI) variations in recent months on the Company's financial expenses.
Impact of Monetary Policy on Cost of Debt
Total Gross Debt- Closing FINANCIAL COST- - CDI
CDI (Monthly average in the period)
Capex - R$ milion
4Q08 4Q07 Chg 3Q08 Chg.
Systems (SW and HW) 5.4 5.5 -2.6% 6.6 -19.2%Caixa Project 0.1 1.5 -96.1% 0.1 -43.3%Others 0.7 0.4 78.0% 1.7 -58.4%
Capex 6.1 7.4 -17.2% 8.4 -27.4%
98114 114
134
96108 107 120
10390 86 85
1Q08 2Q08 3Q08 4Q08
CSU Institute
Provides job-oriented training.
CSU carries out the following Socio-Environmental
Responsibility projects :
Environmental Responsibility
Selective waste collection for the recycling project, whose sale proceeds are donated to
the CSU institute.
Centro Crescer Sorrindo (Grow-up Smiling Center)
Crèche in Belo Horizonte for children from low-income communities
Social Responsibility and Sustainability
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Key Strategies for 2009
Maintain investments to ensure growth of all of the Company’s units;
Finalize the new organizational structure of TeleSystem and
Credit&Risk;
Increase profitability and margins of CSU as a whole.
Questions and Answers
Décio Burd
Phone: (0xx11) 3030-3821
Email: investidorescsu@csu.com.br
Site: www.csu.com.br/ri
CSU CardSystem S/A
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