earnings presentation 3q11
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November 10, 2011
Earnings Release 3Q11
Resultado
Negócios
Governança
Results
• Gross Revenue totaled R$ 109.8 million, a record amount, and exceeded 3Q10’s revenues by 6.0%
• Evolution of the growth indicators and profitability during the year: revenues, net profit and EBITDA, with a highlight being the 40.4% p.a. increase in gross profit at CSU Contact, with a net margin of 7.8% in 3Q11
Operations
• Number of cards processed reached 25.3 million, with an increase of 26.5% YoY
• A 21.3% p.a. rise in CSU Contact’s APs, ending the period with 4,207 workstations
• Launch of the Fans Engagement loyalty program and the Pre-paid Flex card
Governance
• Creation of Board of Directors’ Advisory Committees, focused on Strategy and Development, Marketing and Markets, and Finance and Risks
• Consistent execution of the CARD3 share buy-back programs
2
Quarter Highlights
Strategy: profitable growth
• Commercial focus aimed at diversification of the client base
• New issuers and current PL issuers
• Innovation: products and technologies
• Pre-paid Flex card
• Only platform in the market that is tested and in operation
• Search for new clients
• International partnerships
• Focused on the middle market
• Improved financial performance
• Broader scope of solutions
• Expansion of addressable markets
• Fans Engagement
• Incorporation of the Web universe in the solutions offered
3
CSU CardSyst
em52%
CSU Contact
48%
Gross Revenue(R$ million)
Business Units Gross Revenue Share(% of revenues - LTM)
Clear and consistent resumption of expansion
3Q10 4Q10 1Q11 2Q11 3Q11
103.6
97.8
100.5
109.0 109.8
• In the first nine months of 2011, gross revenues totaled R$ 319.3 million, up 1.4% over the same period of 2010
• Company proves its resiliency, with an increase in growth and profitability indicators during the course of the year: net revenue, gross profit and EBITDA
Main Indicators Evolution(R$ million)
* 2010’s numbers were adjusted to reflect the effects of full adoption of the accounting convergence effective for each quarter of 2010.
96.0
91.0 93.5
101.1 102.0
15.1% 15.9% 13.2% 14.4% 15.2%
3Q10 4Q10 1Q11 2Q11 3Q11
Net Revenue Operating Expenses
22.225.7 27.3
14.4 15.9
16.3
93.5
101.1 102.0
1Q11 2Q11 3Q11
Gross Prof it EBITDA Net Income
22.225.7 27.3
14.4 15.9
16.3
93.5
101.1 102.0
1Q11 2Q11 3Q11
Gross Prof it EBITDA Net Income
4
14.5 14.5
12.4
14.6 15.5
15.1%15.9%
13.2% 14.4%15.2%
SG&A Expenses(R$ million and % of net revenue)
Management of Costs and Expenses
3Q10 4Q10 1Q11 2Q11 3Q11
20,582
17,304
14,400 15,941 16,341
21.4%19.0%
15.4% 15.8% 16.0%
15.9%
Total Costs(R$ million and % of net revenue)
EBITDA x EBITDA Margin(R$ thousand and % of net revenue)
* 3Q11 SG&A disconsider the one time effect of R$ 0.7 million referring to employees dismissals within a cost reduction program.
65.9 66.1 71.3
75.5 74.8
68.7%
72.7%76.3% 74.6% 73.3%
96.0
91.0 93.5
101.1 102.0
15.1% 15.9% 13.2% 14.4% 15.2%
3Q10 4Q10 1Q11 2Q11 3Q11
Net Revenue Operating Expenses
96.0
91.0 93.5
101.1 102.0
15.1% 15.9% 13.2% 14.4% 15.2%
3Q10 4Q10 1Q11 2Q11 3Q11
Net Revenue Operating Expenses
*
5
The evolution can be measured month after month
• In 12 months, CSU presented strong organic growth, of 22% in revenues and 30% in EBITDA, comparing the months of September
• The business unit CSU CardSystem improved revenues and gross profit by 12% p.a.;
• CSU Contact, besides contributing to a significant revenue diversification for the Company, expanded its profitability, generating positive EBITDA in the month.
6
Sep-11 Sep-10 ∆%
CSUNet Revenues 33,716 27,646 22.0%Gross Profit 9,753 7,408 31.7%EBITDA 6,616 5,080 30.2%CSU CardSystemNet Revenues 17,000 15,114 12.5%Gross Profit 7,859 7,025 11.9%EBITDA 6,269 5,936 5.6%CSU ContactNet Revenues 16,716 12,531 33.4%Gross Profit 1,894 383 394.5%EBITDA 347 (856) n.a.
YoY: -7.7%
QoQ: -5,4%YoY: -14,6%
QoQ: -0.4%
3T10 4T10 1T11 2T11 3T11
27,218 24,969
21,058 24,579 23,242
49.2% 49.6%45.7%
48.1%45.6%
3T10 4T10 1T11 2T11 3T11
59,948 54,251
49,778 55,560 55,332
3Q10 4Q10 1Q11 2Q11 3Q11
17.1 17.0 17.3
22.0 22.620.0 20.6
24.1 23.625.3
Billed cards Registered Cards
YoY 26.8%
Gross Revenue(R$ thousand)
Gross Profit and Gross Margin(R$ thousand and % net revenue)
Performance
• 26.8% increase in the number of cards registered, with organic growth and migration of Sicredi cards (808,000)
• Reduction of revenues and gross profit due to the alteration of the card mix, with a greater share from PL
Billed and Registered Cards(in millions – end of period)
7
Performance
• 4,207 workstations, up 21.3% over 3Q10;
• Reduction in number of workstations in RJ; low profitability operation not compatible with the Company’s objectives
• Current positioning seeks to win over premium segments of the market, for example, with increasing participation as a BPO services provider
Number of Workstations(units)
3Q10 4Q10 1Q11 2Q11 3Q11
400 556 426 442 295
3,468 3,757 3,918
4,433 4,207
Training Total
Workstations per Type of Service
21.3%
Cus-tomer Care
56.3%
Tele-market-
ing 21.1%
Collec-tion
9.3%
Infra-structure 12.6%
BPO 0.7%
Dec/10
Cus-tomer Care 49.3%
Tele-market-
ing 16.2%
Collec-tion
8.4%
Infra-structure
8.2%
BPO 13.8%
Sep/11
8
YoY: 24.9% YoY: 40.4%
QoQ: 1.9%
Performance
QoQ: 270%
Gross Revenue(R$ thousand)
Gross Profit and Gross Margin(R$ thousand and % Net revenue)
3Q10 4Q10 1Q11 2Q11 3Q11
2,851
(117)
1,107 1,081
4,003
7.0%
-0.3%
2.3% 2.2%
7.8%
3Q10 4Q10 1Q11 2Q11 3Q11
43,616 43,533
50,723 53,454 54,479
• Revenue growth prioritizes contracting of workstations with adequate pricing focused at profitability expansion
• Gross margin of 7.8% in 3Q11 signals correct execution of strategy
• Company continues to seek additional opportunities for productivity gains
* 2010’s numbers were adjusted to reflect the effects of full adoption of the accounting convergence effective for each quarter of 2010. 9
Investments
Capex - R$ million 3Q11 3Q10 ∆% 2Q11 ∆%
CSU CardSystem 5.0 4.3 16.7% 5.5 -9.8%
CSU Contact 2.8 2.2 27.1% 8.4 -67.2%
Capex 7.8 6.5 20.2% 13.9 -44.3%
• Capex during the quarter rose 20.1% in comparison with same quarter of 2010:
• R$ 5.0 million for the CSU CardSystem business unit, used consistently to create new products and services and software development to receive new clients
• R$ 2.7 million invested by CSU Contact, a decline of 67.2% compared to the previous quarter, due to concentration of new implementations in 2Q11
10
Innovation with synergy between the business divisions
FANSENGAGEMENT
End-to-end solutions in the delivery of strategic and financial planning through execution of promotions, delivery of awards and measurement of the results
End-to-end solutions in the client’s life-cycle
11
New generation of loyalty programs:• accumulation & redemptions;• wide range of benefits & privileges;• discounts and exemptions for tickets; and • differentiated credit cards program as an integrating element.
Pre-paid card converts to a credit card automatically :• credit analysis based on individual behavior;• strong sales appeal, with lower CAC;• good profitability and scale for the issuer;• solution for private label or branded card
FLEX CARD
Solution for cultural barriers of paying tariffs for the pre-paid cardsAccess to non-traditional segments : teaching institutions, drugstores, football clubs and fan clubs.
PRE-PAID
CREDIT CARD
12
Pioneerism overcomes cultural barriers
Awards 2011
National Tele-services PrizeCategory: RetailCase History: Operation Carrefour Customer Service
ABT Garrido Prize. Category: Third-Party Operations (Active)Case History: NET Telemarketing
. Category: Third-Party Operations (Receptive)Case History: Operation TVA
Marketing Best PrizeHistory: CSU Acquirer
CSU GroupAbrasca Prize for Best Annual ReportFinalist
13
Mônica Hojaij Carvalho MolinaCarlos Montenegro
Thatiana Zago
This material is the property of CSU CardSystem SA. Total or partial reproduction without the written approval of the Company is prohibited. All rights reserved. The opinions expressed in this document may change at any time without notice.
Further Information
Investor RelationsPhone: (+55-11) 2106-3821
E-mail: ri@csu.com.brSite: www.csu.com.br/ir
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