Download - 111103 divulgação de resultados 3 t11 ingles
3Q11
Earnings Release
November 4, 2011
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Disclaimer
• This notice may contain estimates for future events. These estimates merely reflect the expectations of
the Company’s management, and involve risks and uncertainties. The Company is not responsible for
investment operations or decisions taken based on information contained in this communication. These
estimates are subject to changes without prior notice.
• This material has been prepared by Multiplus S.A. (“Multiplus“ or the “Company”) includes certain
forward-looking statements that are based principally on Multiplus’ current expectations and on
projections of future events and financial trends that currently affect or might affect Multiplus’ business,
and are not guarantees of future performance. They are based on management’s expectations that
involve a number of business risks and uncertainties, any of each could cause actual financial condition
and results of operations to differ materially from those set out in Multiplus’ forward-looking statements.
Multiplus undertakes no obligation to publicly update or revise any forward looking statements.
• This material is published solely for informational purposes and is not to be construed as a solicitation or
an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should
not be treated as giving investment advice. It has no regard to the specific investment objectives,
financial situation or particular needs of any recipient. No representation or warranty, either express or
implied, is provided in relation to the accuracy, completeness or reliability of the information contained
herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment.
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3Q11 results
Operating highlights
Financial highlights
Item 3Q11 YoY QoY
Points issued 20.0 bln +38.5% +7.9%
Points redeemed 12.5 bln +171.7% +14.7%
Breakage rate 24.0% +140bps +70bps
Item 3Q11 YoY QoY
Gross Billings of points R$ 397.3 mln +32.4% +12.1%
Net Revenue R$ 321.5 mln +147.3% +12.8%
EBITDA R$ 78.1 mln
(margin of 24.3%) +64.5% -14.6%
Adjusted EBITDA R$ 82.3 mln
(margin of 22.2%) -7.0% +1.3%
Net Income R$ 51.3 mln
(margin of 16.0%) +15.3% -36.8%
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Currency Hedge
• Multiplus is exposed to
foreign exchange risk as
most of the agreements with
financial institutions are
denominated in USD.
• These partners represented
approximately 70% of
Multiplus’ gross billings in
3Q11.
• The Financial Risk
Policy determines coverage
limits and the list of eligible
financial instruments
5,4
11,2 11,2 11,9 12,1
15,2 15,2 15,0 13,8
2,5
5,8 5,8 6,0 6,3
9,0 9,0 9,0 8,5
-1,6 -0,7 -0,7
0,1 1,5
3,8 3,8 4,0 3,9
-6,1 -6,6 -6,6 -5,5
-3,1 -1,9 -1,8
-1,1 -0,5
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
R$1,65/USD R$1,75/USD R$1,85/USD R$1,95/USD
SENSITIVITY ANALYSIS
Impact on company’s cash flow (Notional: USD 609.0 mln)
R$ million
4Q11 2012 2013 Total
NOTIONAL 51.0 303.0 255.0 609.0
PUT* 1.75 1.80 1.88 1.83
CALL* 1.85 1.90 1.99 1.93
* average strike prices (BRL/USD)
Fundamentals Position in September 2011 (USD mln)
Intrinsic Value
recorded in Equity
and Time value in
Financial results.
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Hedge Accounting in 4 steps
Zero Cost Collar
(purchase of a put
option and the sale of a
call option) or other
instruments.
1 2 3
Balance Sheet
Financial
Results
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HEDGE
MULTIPLUS
POINTS
Hedge
Construction Mark-to-Market Hedge Expiration
Points
Redemption
Cash results of hedge
operations are
assigned to some
points sold in the same
period (based on first
out rule)
Points
Sale
Balance Sheet
Cash results of hedge
operations are
recorded in operating
results
Operating
Results
NON-CASH
EQUITY
EQUITY AND CASH
COMMENTS
RESULTS
Intrinsic Value
Time Value
IMPORTANT:
The Company does not have any CSA in place
and thus cannot be called for margin in any of its
derivative contracts whichever the scenario.
Item Main variables
Option value Intrinsic value + Time value
Intrinsic value Strike price and Current exchange rate
Time value Maturity, Volatility and Interest Rate Differential (BRL vs USD)
Business Model
Two-way flow:
exchange of
points, products
and services (buy
and sell) between
Multiplus and
coalition partners (Ex. air travel,
e-commerce and
gas station)
Multiplus
manages the
loyalty program of
the partner
(systems and
operations)
Partners buy
points from
Multiplus to award
its customers (Ex. banks, parking
and stores)
Multiplus
leverages the
database from its
network and
offers CRM
services
Partners Partners Partners
Partners
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Multiplus buys
points, products
or services from
partners to deliver
to its members (Ex. donation and
tickets)
Coalition Redemption Accrual
Partnerships network CRM Outsourcing
Status
Operational
Status
Planning
Status
Planning
how?
24%
3%
73%
Current
TAM Retail, Industry and Services Banks
Strategy: to diversify gross billings and redemptions
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Note: based on 3Q11
Long term target
98%
2%
Current
Air Tickets Others
Long term target
15 to 20%
15 to 20%
Costs of rewards
Gross billings of points
• Average unit price increase
• Average unit cost reduction
• Controlled breakage decline,
favoring member experience
and volume growth
Long term margin expansion
why?
to diversify gross billings
and redemptions
what?
• Expanding partnerships
network
• Increasing marketing actions
• Improving client experience
133 151
166 161 168
7 12 15 19 20
3Q10 4Q10 1Q11 2Q11 3Q11Total Coalition
Expanding partnerships network
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Groceries, entertainment, restaurants,
beauty, others.
Drugstore Group buying
Pension Plan Car Rental
NOTE: Some partnerships with bad performance were canceled in 2Q11.
Increasing non-airline redemptions
Expanding partnership network
#
+4.3% +26.3%
As % of total points redeemed
NOTE: it includes points issued before 2010 (TAM’s inventory)
0,8% 0,8% 0,9%
2,0%
3,2%
3Q10 4Q10 1Q11 2Q11 3Q11
New partnerships
Roadmap
Tickets Donation
Increasing marketing actions (1/2)
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New positioning
New brand
Mission
Connecting companies and people through a relationship
network in which everybody wins.
Vision
Together we can do much more.
Values
Simplicity
Agility
Reliability
Fun
Innovation
Increasing marketing actions (2/2)
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TV commercial On board videos
(collect points here)
Radio spots, etc
Expanding member base
In millions
7,6 8,0 8,3 8,6 8,9
3Q10 4Q10 1Q11 2Q11 3Q11
+3.7% +17.4%
R$ millions
Growing gross billings
300,0 325,2 339,9 354,6 397,3
3Q10 4Q10 1Q11 2Q11 3Q11
+12.1% 32.4%
Press media
Point-of-sale materials
Media investments Together is so much better. Together is Multiplus.
Improving client experience
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Accrual and balance checking at the point-of-sale
• spread the loyalty concept
• speed up the capillarity strategy penetrating new market segments
• increase sales in retail market
Standard rule: 1 Real ($) = 1 Multiplus point
Special rules allowed (such as minimum ticket) adding more value to the partner
Multiplus as one product of Redecard’s sales team
Call Center improvements
Educational mailings
Systems improvements
Point of Sale
New website coming soon Other actions