1. Brazil 2012 BTG Pactual XIII CEO Conference
Institutional Presentation - CSU CardSystem S/A
2. CSU BUILDS ITS HISTORY BASED ON
FOUR BUSINESS DIVISIONS
Processing and Business Processes Solution provider Management and
Management of Management for and integrator of solutions provider
Electronic Means of merchant acquirers of actions and programs for Contact Center
Payment the international based on data-driven and BPO (Business
credit card brands direct and digital Process
The largest and marketing for Outsourcing)
most complete The 1st independent customer-engagement
independent vendor company to operate in
in Latin America the merchant
acquiring market
2
3. Electronic payment chain
Money Money
Request for Request for
Brands
Approval Approval
Issuers Approval Approval
(Banks and Retailers) Acquirers
Capture of
Electronic Money
Money
Card / Billing Transactions
Commercial Transactions
Cardholders Merchants
3
4. 2011 Summary
2011 closes with major achievements
Preparation/pavement of groundwork for our future, on several fronts
CSU has a broad technological arsenal
4
5. 2011 Summary
• Resumed growth in CSU CardSystem
• Two important and successful migrations (Tribanco and Sicredi)
• Proven organizational vitality
• Record volume of new cards in 2011: 8,8 million
• Existing alliances with banks/issuers to facilitate growth in retail
• Preparation of new technological frontiers
• Direct paycheck-deductible credit card
• Prepaid and Flex Prepaid cards
• Contactless solution
• CSU Acquirer goes operational
• Banrisul deployment
• The only tested platform that is independent
and fully active in the market
5
6. 2011 Summary
• CSU MarketSystem scope was expanded
• Organizational restructuring
• Development and improvement of product portfolio
• New solution for customer acquisition
• Launch of Fans Engagement solution
• Opportunities in soccer clubs segment
• Integration with credit cards
• Usage of web tools as part of the new products
• Online rewards catalog
• Online sales platform
• CSU Contact operation is improving
• Reengineer of the business
• Successful acquisition of new clients
• Termination of unprofitable contracts and operations
• Replacement by sustainable contracts
6
7. Macro guidelines for 2012
Diversify revenue streams
Expand revenues in areas with higher profitability
Launch new products, services and more efficient technologies
Implement products with higher value added
Enhance innovation capacity
Ensure strict management of costs/expenses and investments 7
8. CSU in 2012: priorities
• Focus at retail and middle market players
• Expansion of partnerships with finance institutions
• Mid-sized banks (public/private)
• Increase number of standard loyalty programs (retailers)
• Incorporation of web solutions applied to acquisition and
relationships programs
• Online rewards catalog integrated with social networks
• Expansion of the fans engagement business
• C 360º
• Focus on middle market for traditional products
• Application of technology to obtain more value-added
• Evolution from “labor intensive" to "technology intensive"
• Superior operational performance
• Achievement of full capacity in Alphaview
8
9. New products and technologies
in means of payments
PREPAID
PREPAID FLEX CARD
CARD
CONTACTLESS
CARD
RELATIONSHIP PROGRAM
INTEGRATED CARD
FREIGHT
CARD
PAYCHECK
DEDUCTIBLE
SUB CREDIT CARD
ACQUIRER
IT
OUTSOURCING
9
10. Detail of C360º: lower cost and higher agility to amplify results
New concept for management of coordinated sales / collections campaigns
Use of multiple and modern technologies, tools and media
Integration of different channels of contact
Results Analysis Strategic and Tactical Planning of the
Continuous Feedback Campaigns
Integrating of Driven Financial Planning per
Communication Channels C 360º Campaign
INTEGRATED
SALES AND
Customer Segmentation Management of Lead
Statistics Modeling COLLECTIONS Generation Suppliers
PLATFORM
Database Management (per Data Enrichment
customer / household) Quality Information
Geolocation Campaign Management
10
11. Continuous investments and healthy capital structure
Investments
(in R$ million)
• CSU consistently invests in its
16,7
technological platform a minimum of
8,6 16,0
10,3
6/7% of net revenues.
23,9 19,9
16,2 15,9
• New investments geared at improving
2008 2009 2010 9M11
technology, solutions portfolio and
CSU CardSystem CSUContact
growing the number of contact center
Net Debt and Net Debt/EBITDA workstations.
(in R$ million and ratio)
109,1
95,0
• 2011 investments were focused in
59,5 3,2x 55,5
47,1 increasing CSU s profitability
21,6 0,7x 23,8
1,5x 1,5x
0,4x 0,3x 0,7x
2005 2006 2007 2008 2009 2010 9M11
11
12. Recovery in growth and profitability
Net Revenues
(in R$ million)
102.0
101.1
96.0
• Revenue expansion quarter after
93.5
quarter in 2011
91.0
• Gradual improvement in EBITDA
3Q10 4Q10 1Q11 2Q11 3Q11
generation
Profitability Evolution
(in R$ million)
106.0 27.3
114.6
25.7
73.7 78.9 22.2
78.1 16.3
46.3 45.5 15.9
64.4 14.4
17.0 33.1
39.3 33.9 4,2
6.7 4.4 5.9
2006 2007 2008 2009 2010 1Q11 2Q11 3Q11
-11.1 -6.3
Gross Profit EBITDA Net profit 12
13. Management of Costs and Expenses
Total Costs SG&A Expenses
(R$ million and % of net revenue) (R$ million and % of net revenue)
75.5 74.8
102.0 102.0
71.3 101.1 101.1
65.9 66.1 15.5
14.5 14.5 14.6
96.0 96.0 12.4
15.9%
93.5 93.5
91.0 91.0
15.9% 15.2%
15.1% 13.2% 14.4%
76.3% 74.6%
15.1% 72.7%
15.9% 14.4%
73.3%
15.2% 15.1% 15.9% 14.4% 15.2%
13.2% 13.2%
68.7%
3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 *
Net Revenue Operating Expenses Net Revenue Operating Expenses
EBITDA x EBITDA Margin
(R$ thousand and % of net revenue)
20,582
17,304 16,341
15,941
14,400
21.4%
19.0% 15.8% 16.0%
15.4%
3Q10 4Q10 1Q11 2Q11 3Q11
* 3Q11 SG&A disconsiders the one time effect of R$ 0.7 million referring to employees dismissals within a cost reduction program. 13
14. Strong operating performance
Average Card base New Cards
(in million of units)
(in million of units)
24.3 25.3
22.6
20.1 20.9 20.6 8,805
16.4 17.0
4,728
4,010
3,931* 1,883
1,167 1,027
808**
2008 2009 2010 9M11 2010 1Q11 2Q11 3Q11 4Q11 2011
Registered Billed Cards * Migration Tribanco ** Migration Sicredi
Gross Revenue Gross Income and Gross Margin
(in R$ million) (in R$ million and % of net revenues)
27.2
59.9 25.0 24.6
54.5 55.6 55.3 23.2
49.8 21.1
49,2% 49,6% 45,7% 48,1% 45,6%
3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11
14
15. Positioned for profitable growth
• Investments in the organizational structure and
Number of Workstations
market repositioning accelerated growth in the
(in units) number of workstations
4,796
4,283 4,225 4,207
3,494 3,757 • Focus at growth in premium contracts in order to
gradually increase the profitability
• HR specialized professionals, goal of being the
best to attract, train and retain employees
2006 2007 2008 2009 2010 9M11
Gross Revenue
Gross Income and Gross Margin
(in R$ million)
(in R$ million and % of net revenues)
53,5 54,5
50,7 102.0 4.003
43,6 43,5 101.1
2.851
96.0
93.5
91.0 7,8%
1.107 1.081
7,0%
15.1% 15.9% 14.4% 15.2% 2,34% 2,16%
13.2%
3Q10 (117) 4Q10 1Q11 2Q11 3Q11
-0,3%
3Q10 4Q10 1Q11 2Q11 3Q11 15
16. CARD3 is traded at inexpensive levels as compared to
the market
Net revenue EBITDA
Gross Margin Net Margin
Company name (US$ million- Margin EV/EBITDA P/E
(%) (%)
12M) (%)
10756.3 69.0 20.1 -5.8 - -
2049.4 64.0 22.8 11.3 8.2 18.0
1776.7 - 26.6 11.7 9.2 20.2
Média do Segmento 4860.8 66.5 23.2 5.7 8.7 19.1
1533.3 13.6 8.7 1.5 7.6 32.8
Média do Segmento 1533.3 13.6 8.7 1.5 6.9 32.8
209.0 25.8 16.2 6.0 3.9 8.7
1. Current data: Last 12 months - Last balance sheet and income statement - reference date Feb 10, 2012
2. Methodology for calculating EBITDA standardized by Economática 16
17. High level of Corporate Governance
100% common shares and 42% free float
Novo Mercado (100% tag-along rights; no poison pills)
Majority of independent board members
Fiscal Council
3 members, with 1 appointed by minority shareholders
Solid investor relations culture
Investment by private equity funds since 1997
Well structured internal controls
Stock based compensation plan for executives
Active Sustainability Arm (CSU Institute)
17
19. BROAD SOLUTION
Internet Credit Analysis
Customer Service
Systems Data Processing
Development &
Maintenance
Operations Cards Embossing
Back Office Cards Issuance
Accounting Welcome Kits
Information System
Collection Fraud Prevention
Services
24-hour- Bills Remittance
Customer Care Follow-up Letters
19
20. FULL SERVICE SOLUTION
Merchants Technical Supply
Support Management
Information Mailing Electronic Transaction
to Merchants Capture Network
Internet Customer Back Office & Special
Service Interchange
Merchant s Call Fraud
Center / Help Desk Prevention
Accounting
Business Financial Clearing
Management
20
21. FLEXIBLE SOLUTION
RESOLUTION AND CONVERSION
COLLECTIONS
Among the market leaders in
terms of results of the
collections operation
TELESALES
Among the top 3 companies
for telesales operations
CUSTOMER CARE
Understanding the client's
business in order to
propose improvements in
processes 21
21
23. Additional Information
Mônica Hojaij Carvalho Molina
Carlos Montenegro
Thatiana Zago
Investor Relations
Tel: +55 (11) 2106-3821
E-mail: ri@csu.com.br
Web Site: www.csu.com.br/ri
This material is the property of CSU CardSystem S.A., and any partial or total reproduction without the Company’s written
approval is prohibited. All rights reserved. Opinions expressed in this document are subject to change without prior notice.
