2 q10 results presentation
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2 q10 results presentation
- 2. Disclaimer This presentation may include forward-looking statements about future events or results according to the regulations of 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 it, many of which are beyond its control. 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, economic conditions in Brazil and abroad, 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 will be responsible for any losses that may result from the use or the contents of this presentation. 2
- 3. 2Q10 Highlights Gross Revenue of R$106.5 million. Reduction of 2.0% from 2Q09; Gross Profit of R$26.2 million. Increase of 3.1% from 2Q09; Net Income of R$6.2 million. Growth of 29.6% from the same period of 2009. Main Indicators (R$ thousand) 2Q10 2Q09 ∆% Gross Revenue 106,474 108,612 -2.0% CSU CardSystem 62,427 62,274 0.2% CSU.Contact 44,047 46,338 -4.9% Net Revenue 99,013 100,495 -1.5% Gross Income 26,211 25,434 3.1% Gross Margin 26.5% 25.3% 1.2 p.p. EBITDA 19,433 20,534 -5.4% Net Income (Loss) 6,184 4,772 29.6% 3
- 4. Operational Data – CardSystem Cards in CSU's Base MarketSystem - Processed Accounts (million) 16.4% (million) 25,1 21,6 3,1 17,7 2,8 4.1% 14,2 2,6 9,7 10,1 2,5 2,4 2Q05 2Q06 2Q07 2Q08 2Q09 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 CSU's card base ends 2Q10 with 25.1 Increase of 4.1% in the accounts million units; managed by MarketSystem in relation to the prior quarter; Increase of 4 p.p. in the share of Flex Cards in CSU's base in relation to June Expansion in card base driven by new last year; clients in the first quarter of the year; Issuance of over 1.1 million new cards Negative change by 8.8% in one year. during the quarter. 4
- 5. Operational Data – CSU.Contact Work Stations (thousand - Source: CSU) 4.520 4.506 4.225 4.002 3.972 3.934 3.494 3.268 3.248 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 No significant change in the number of workstations during the quarter; In view of the sales performance of CSU.Contact, the executive board decided to change the management of this area of the Company; The Company aims to resume growth in the number of workstations in order to dilute the unit's fixed costs. 5
- 6. Financial Information – CardSystem Gross Revenue Services Rendered Costs Gross Profit / Gross Margin (R$ million) (R$ million) (R$ million, %) 0.2% -3.2% 7.8% 62,4 23,3 62,3 35,7 21,7 34,5 41.3% 37.8% 2Q09 2Q10 2Q09 2Q10 2Q09 2Q10 EBITDA / EBITDA Margin (R$ million, %) Revenue remained stable due to the organic growth in the 5.6% base, which offset the move by one client to perform in- house their printing and billing operations; 19,7 18,6 The drop of 3.2% in costs is explained by the internalization of printing services and the renegotiation of fees with 34.0% suppliers of telecom services; 32.5% The stability in Revenue combined with the drop in Costs led 2Q09 2Q10 to growth of 7.8% in Gross Income. 6
- 7. Financial Information – CSU.Contact Gross Revenue Services Rendered Costs Gross Profit / Gross Margin (R$ million) (R$ million) (R$ million, %) -4.9% -2.8% -23.9% 46,3 39,4 3,8 38,3 2,9 44,0 8.8% 7.0% 2Q09 2Q10 2Q09 2Q10 2Q09 2Q10 EBITDA / EBITDA Margin (R$ million, %) Drop of 4.9% in Gross Revenue was due to the lower -112.7% volume of services at inbound call center services; 1,9 Reduction of 2.8% in Costs is explained by the lower labor costs due to the lower volume of services, the renegotiation of telecom contracts and the consolidation of call center sites; 4.4% (0,2) Decrease in EBITDA, reflecting the drop in Revenue 2Q09 without a proportional drop in Costs and Expenses. 2Q10 -0.6% 7
- 8. Consolidated Financial Information Gross Profit / Gross General and Administrative Net Income Margin Expenses (R$ million) (R$ million, %) (R$ million) 29.6% 3.1% 4.0% 6,2 25,4 26,2 4,8 13,6 14,1 26.5% 25.3% 2Q09 2Q10 2Q09 2Q10 2Q09 2Q10 EBITDA / EBITDA Margin Growth of 3.1% in Gross Income due to Cost reductions at (R$ million, %) the Company; - 5.4% 20,5 Increase of 4.0% in General and Administrative Expenses 19,4 basically reflects the reorganization of the administrative areas and the wage increase under the collective 20.4% 19.6% bargaining agreement; Growth in Net Income of 29.6% Income, due to the lower expenses due to nonrecurring impacts. 2Q09 2Q10 8
- 9. Debt Net-debt-to-current-EBITDA* ratio of approximately 40%; Reduction of 58.2% in Net Debit which closed the quarter at R$32.4 million; Lower Net Debt explained by the Company's higher cash balance; Long-term debt represents 61.4% of the gross amount, while short-term debt accounts for 38.6%. Debit - R$ thousand 2Q10 2Q09 ∆% Short Term Debit 23.4 46.4 -49.5% Financing and Debt Loan 13.6 36.5 -62.7% Leasing 9.8 9.9 -0.6% Long Term Debit 37.3 31.6 17.9% Financing and Debt Loan 20.3 20.0 1.4% Leasing 16.9 11.6 46.4% Gross Debt 60.7 78.0 -22.2% (-) Cash 28.3 0.5 5628.2% Net Cash (Debt) 32.4 77.5 -58.2% 9 *Current EBITDA being understood as a simple annualized version of 1H10 EBITDA
- 10. Capex Increase of 3.8% in capital expenditure from the same quarter in 2009, in line with the annual plan; Investment allocated mainly to systems (system customizations, development, authorization, etc.) and hardware (computer purchases and updates, no-breaks, DPC, peripherals and other equipment); Investment of R$0.5 million in customizations exclusively for the Acquirer segment. Capex 2Q10 2Q09 ∆% Systems 5.3 4.6 14.3% Hardware 1.4 0.6 126.8% Alphaview 0.2 1.5 -85.9% Other 0.1 0.0 591.6% Capex 7.0 6.8 3.8% 10
- 11. Main Strategies for 2010 Capture new clients in all CSU business units to leverage the company's growth; Consolidate CSU's entry into the processing for Acquirers segment; Resume growth at the CSU.Contact unit in order to dilute fixed costs at the Alphaview site; Continue investments in technology, especially in the Acquirer segment and to maintain software up-to-date and develop new products and services. CSU' Shares x Indicators (100 basis on December, 2008) 430 380 330 280 230 180 130 80 CSU Shares IBOVESPA 11
- 12. Questions & Answers Questions & Answers Décio Burd Phone: (55 11) 3030-3821 E-mail: ri@csu.com.br Site: www.csu.com.br/ir