20150701 cielo august

Copyright © Cielo | Todos os direitos reservados

CORPORATE PRESENTATION

August, 2015

THE COMPANY MAKES FORWARD LOOKINGSTATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES

DISCLAIMER

These statements are based on the beliefs and assumptions of our management as well as on information currently available to us. Forward-looking statements

include information regarding our current intent, beliefs or expectations, in addition to those of the members of the Board of Directors and Executive Officers of the

Company.

Forward-looking statements also include information regarding our possible or assumed future operating results, as well as statements preceded or followed by, or

that include, the words ''believes”, ''may”, ''will”, ''continues”, ''expects”, ''anticipates”, ''intends”, ''plans”, ''estimates”, or similar expressions.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions, for they relate to future events, thus depending on

circumstances that may or may not occur. Our future results and the creation of value to shareholder s may differ significantly from those expressed in or suggested by these

forward-looking statements. Many factors determining these results and values are beyond Cielo’s ability to control or predict.

#1MERCHANT

ACQUIRER AND

PAYMENT

PROCESSOR IN

BRAZIL AND LATIN

AMERICA

OF GDP

CAPTURED

THROUGH

CIELO´S

NETWORK

MARKET CAP –

AMONG 10

LARGEST IN

BM&FBOVESPA

BRL 83 BILLION

9.4%

CIELO | LEADING MERCHANT ACQUIRER

*

*Closing date: 07/24/2015

Exchange: 1USD = 3.33 BRL (07/24/2015) 3


CIELO | SUBSTITUTION OF CASH AND CHECKS

* Excluding Private Labels

Cards Expenditure over PCE* (%)

PCE - Private Consumption Expenditure (R$ billion)

Card Expenditure (R$ billion)*

Source: IBGE,ABECS 4

* Excluding Private Labels

16.1%17.7%

19.1%20.8%

22.8%24.4%

26.2%27.9%

26.5%27.4%

2007 2008 2009 2010 2011 2012 2013 2014 1Q14 1Q15

1,6291,857

2,0642,341

2,6372,908

3,2013,450

830 888

2007 2008 2009 2010 2011 2012 2013 2014 1Q14 1Q15

262329

394487

601

710

837

964

219 243

2007 2008 2009 2010 2011 2012 2013 2014 1Q14 1Q15

CIELOPROMO

Cielo’s offering is the most comprehensive available including some unique products

• Loyalty program developed exclusively to merchants

• Largest B2B in Latin America

• Accrual of points based on merchant’s volume with Cielo

• Most flexible and the

easiest to use promotional

marketing tool in the

market

• Can be offered to

merchants, brands and

issuers

CIELO| PRODUCTS

CIELO FIDELIDADE

5


CIELO | NEW TECHNOLOGIES

Wireless POS terminals

(GPRS)

• Corresponds to 65% of

Cielo’s installed basis (as

of 2Q15)

• Strong demand from our

merchants

NFC (Near Field

Communication)

• More than 1.6 million

terminals installed with such

technology

Mobile Chip & Pin

• Perfect for professionals and merchants

that require convenience and mobility

• Data protected to ensure the integrity of

transactions

• Sales Receipt may be sent by email to

the cardholder

Cielo invests in new technologies for capturing devices to our merchants

6

30% stake in Stelo

Creation of Cateno

between Cielo and Banco do

Brasil

Launching ofCielo MobileChip & Pin

November2014

November

2010March

2012

August2010

May2011

September

2012

October

2012January2010

June2014

June2015

CIELO| STRATEGIC PLANNING

Cielo has been active to be well positioned to capture new avenues of growth

Launching the new e-commerce platform

Acquisitionof M4U

Acquisitionof Braspag

Launching ofCielo Mobile

Partnership withCyberSource

Acquisition of MeS

7

MoU to createa JV betweenCielo and Linx

July2014

Partnership with Smiles

Business

Expansion

Data base of 1.6 million active points of sale more than 5 billion transaction a year

CIELO BIG DATA

CIELO BIG DATA RESPONDS:

How is retail performing?

What are the most accurate and updated figures of brazilian

retail considering its several sectors and regions?

Considering the main performance metrics, how is my sector

performing?

How are my peers performing?

Why my store located at a specific city/neighborhood is not

performing? Is it the manager or the location?

What is my customer purchase profile? Why am I losing

customers? What shall I do to bring them back?

Which microregion has the biggest revenue potential that I

have not explored yet? Which spot should I open my next

store?

BIG DATA PRODUCTS:

ICVA

BenchmarkCustomized

Promo

E-commerceSectorial

analysis

Shoppings On Demand

8

Source: CIELO

CIELO´S BROAD RETAIL INDEX (ICVA)NOMINAL REVENUE OF SALES GROWTH (YOY)

DIFFERENTIAL

Territorial coverageof 99% of the

country

Scope sized companies: from small retailers to

large retailers

Based onactual information

and not in sample surveys

Dynamic model, basedon the actual mix

of each sector in the economy

Over 20 economic sectors, including services (eg: airlines, restaurants and e-commerce)

Improveddisclosure

9

12.5%

8.1%

9.6%

10.2%

10.1% 10.1%10.5%

8.0%

8.9%

4.5%

9.0%

7.1%

6.5%

8.3%

12.0% 10.9%

9.8%

10.8%

9.5%

8.4% 8.6%8.1% 8.2% 7.3%

7.2%

5.9%

6.9%

6.9%5.5%

0.5%

3.5% 3.7%3.4%

3.7%4.3%

1.8%2.1%

-2.4%

3.3%

1.1%

0.4%

1.9%

5.1%

3.1%

3.7%4.3%

2.9%2.1%

2.6%

1.8%1.5% 0.2%

1.6%

0.0%0.7%

0.6%

May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15

Nominal ICVA

Adjusted Nominal ICVA

Deflated ICVA*

Adjusted Deflated ICVA

*IPCA Deflation according to the sector set by ICVA

163,941202,084

244,960279,617

312,62498,742

118,315138,368

169,131

204,986

517,610CAGR: 18.5%

AnnualEvolution(R$ million)

2012 2013

448,748

320,399

Credit

Debit

The financial volume does not include Merchant E-Solutions transactions, i.e., it comprises the financial volume of the domestic market only.

CIELO| TRANSACTION FINANCIAL VOLUME

20112010

383,329

262,683

2014

10

75,979 75,484 77,434

49,359 51,055 52,264

Quarterly Evolution(R$ million)

125,338129,698126,539

1Q15

2.5%

2Q14 2Q15

3.5%

CIELO| NUMBER OF TRANSACTIONS


2012 2013

Credit

Debit

The number of transactions does not include Merchant E-Solutions transactions, i.e., it comprises the number of transactions of the domestic market only.

2010 2011

1,601 1,837 2,062 2,283 2,525

1,7161,964

2,2402,618

3,134

3,317

3,8014,302

4,902

5,659

2014

CAGR: 14.3%

11

625 610 659

734 815 836

1,4951,359

10.0%

1Q15

1,425

4.9%

QuarterlyEvolution(million)

2Q152Q14

CIELO| OPERATIONAL INDICATORS

2Q14 1Q15 2Q15

Quarterly Evolution(Thousand)

* Points of Sales Merchants are those that have made at least a single transaction in the last 30 days .The year is measured based on the closing

POS Terminals Points of Sales Merchants (30 days)*

2010

1,2771,484

1,7271,831

2,023

1,069 1,1561,282

1,4261,619

Annual Evolution(Thousand)

2010 2011 2012

CAGR: 10.9%

CAGR 12.2%

20142013

12

1,8922,020 2,071

1,4731,637 1,674

2.5%13.6%

2.3%

9.5%

1,840.7

2,351.8

2,795.8

2Q14 1Q15 2Q15


CIELO| NET OPERATING REVENUE

NET OPERATING REVENUE

QuarterlyEvolution(R$ million)

51.9%

20112010

18.9%

3,992.5 4,208.7

5,385.3

6,734.2

7,725.6

CAGR: 17.9%

2012 201320112010 2014

13

9,279(68.4%)

9,789(66.2%)

10,038(69.9%)

4,287(31.6%)

4,998(33.8%)

4,323(30.1%)

17.9%19.6%

18.5%

2Q14 1Q15 2Q15

CIELO| PREPAYMENT OF RECEIVABLES VOLUME5.9% -2.9%

14


13,56614,787 14,360

%Pre-paid Volume from

Credit Installments

% Prepayment over Total

Credit Volume

%Pre-paid Volume from

Regular Credit

10,34015,407

26,409

44,286

56,062

6.3%7.6%

10.8%

15.9%17.9%

2012 201414

20112010


2013

CAGR: 52.6%

Total Pre-paid Volume

CIELO| PREPAYMENT OF RECEIVABLES RESULT

15

343.8

535.3

768.1

953.1

1,508.6

351.6

462.9493.6

2Q14 1Q15 2Q15



Prepayment of Receivables Result (R$ million)

2012 2014201320112010

40.4%6.6%

CAGR: 44.7%

CIELO| PREPAYMENT OF RECEIVABLES INDICATORS

16

Prepayment of Receivables 2Q15 2Q14 1Q15 2Q15 X 2Q14

2Q15 X 1Q15

*Assuming the cost of 104% of CDI in Financial Volume of Prepayment

% Prepayment over Total Credit Volume 18.5% 17.9% 19.6% 0.6 p.p -1.1 p.p

Financial Volume of Prepayment (R$ million) 14,360.3 13,565.8 14,787.0 5.9% -2.9%

% Pre-paid volume from regular credit 30.1% 31.6% 33.8% -1.5 p.p -3.7 p.p

% Pre-paid volume from credit in installments 69.9% 68.4% 66.2% 1.5 p.p 3.7 p.p

Average Term (Calendar Days) 56.45 56.9 57.34 -0.4 -0.8

Average Term (Business Days) 39.0 39.5 38.7 -0.5 0.3

Gross Revenue of Prepayment of Receivables (R$ million) 593.3 439.1 536.9 35.1% 10.5%

Present Value Adjustment Expenses (R$ million) (31.6) (16.1) (12.8) 96.3% 146.9%

Cost of Funding with Third Parties (R$ million) (68.1) (71.4) (61.2) -4.6% 11.3%

Prepayment of Receivables Result (R$ million) 493.6 351.6 462.9 40.4% 6.6%

Managerial AnalysisGross Revenue of Prepayment of Receivables (R$ million) 593.3 439.1 536.9 35.1% 10.5%

Cost of Funding* (R$ million) (282.3) (221.0) (271.8) 27.8% 3.9%

Managerial Net Revenue (R$ million) 311.0 218.1 265.1 42.6% 17.3%

2,564 2,388

3,0973,575

3,838

64.2%

56.8% 57.5% 53.1%

49.7%

CIELO| EBITDA


2Q14 1Q15 2Q15

2012* 2013


EBITDA MARGIN %EBITDA

CAGR: 10.6%

*2012 figures were only impacted by Merchant E-Solutions in 4Q12

20112010 2014

17

955.5

1,186.6

1,355.8

51.9%50.5%

48.5%

14.3%41.9%

2Q14 1Q15 2Q15


1,831 1,817

2,3322,674

3,220

2012* 2013

45.9% 43.2% 43.1%39.7% 41.7%


NET MARGIN %NET INCOME* 2012 figures were only impacted by Merchant E-Solutions in 4Q12

CAGR: 15.2%

20112010 2014

18

CIELO| NET INCOME

796.8

911.8 869.4

9.1%

43.3%38.8%

31.1%

-4.6%

CIELO | INVESTMENT HIGHLIGHTS

Leader in a growing market

Strong balance sheet, high cash generation and low capex requirements

Minimum dividend payout of 30% of net profit*distributed twice a year

Focus on innovation, diversificationand continuous growth

* After constitution of legal reserve of 20% of the Company´s capital stock

19

CIELO | ADR

Cielo has a sponsored Level I ADR

Ticker: CIOXY

ADR Ratio (ADR:ORD): 1:1

Depositary bank: Deutsche Bank Trust Company Americas

Depositary bank contacts:

ADR broker helpline:

Tel: +1 212 250 9100 (New York)

Tel: +44 207 547 6500 (London)

Email: [email protected]

ADR website: www.adr.db.com

Depositary bank’s local custodian: Banco Bradesco

* Since December 2013 no IOF charged

20

mailto:[email protected]

http://www.adr.db.com/


APPENDIX

1995 2009 2015

June 2009

Single Visa Acquirer

R$ 8.4 billion IPO

+

Multi-brand acquirer

CIELO | TIMELINE

4 Visa acquirers

22

http://www.cetelem.com.br

http://www.cetelem.com.br

http://www.policard.com.br

http://www.policard.com.br

http://www.cabal.com.br

http://www.cabal.com.br

1,886,677,126 Common SharesCIELO | CAPITAL OWNERSHIP

23*Tempo Serviços LTDA is a Bradesco subsidiary company which started

envisaging Ciel3 on its investment portfolio

b. 28.65%

a. 28.65%

a+b= 57.3%

Tempo

Serviços*

1.41%

Free Float:

40.95%

Treasury:

0.35%

BRAZIL | ECONOMIC SCHEME

Gross MDR

Net MDR Interchange Fee

The brand defines

the interchange fee.

The acquirer negotiates

the gross MDR with the

merchant.

MERCHANTS

Issuer

Card Holder

24

2.90

2.952.98 2.98

2.84

2.79 2.78 2.77

2.84

BRAZIL | MERCHANT DISCOUNT RATES

Source: Central Bank 25

1.581.59

1.601.61

1.57

1.591.59

1.57

1.59

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

%Credit Gross MDR%Debit Gross MDR

Market Credit and Debit Gross MDR Evolution (%)

BRAZIL | MARKET SHARE – TOP 4 ACQUIRERSCaptured volume [R$ Bi], market share [%]

26Source: Quartely earnings release (Cielo, Rede/Itaú, Santander and Banrisul); Cielo´s Analysis

1Q15

240

10.9%

4(1.8%)

18(7.7%)

91(37.9%)

127(52.6%)

4Q14

271

13.0%

5(1.7%)

20(7.3%)

103(38.0%)

144(53.1%)

3Q14

236

14.0%

4(1.6%)

15(6.5%)

88(37.4%)

129(54.5%)

2Q14

227

16.3%

3(1.5%)

13(6.0%)

84(37.2%)

125(55.3%)

1Q14

217

18.9%

3(1.4%)

12(5.7%)

82(37.7%)

120(55.2%)

4Q13

240

20.2%

3(1.4%)

14(5.7%)

92(38.1%)

132(54.8%)

3Q13

207

19.7%

3(1.3%)

11(5.2%)

81(38.9%)

113(54.6%)

2Q13

195

18.3%

2(1.2%)

10(5.0%)

76(39.2%)

106(54.6%)

1Q13

182

17.0%

2(1.2%)

9(4.7%)

74(40.6%)

98(53.6%)

5.8%

11.5%

47.8%

44.4%

1Q15

yoy [%]

Cielo Rede Santander Banrisul Industry Growth

CIELO | eCommerce POSITION

Source: Company, Broker reports, Cybersource 27

Card

Slip

Acquirers

Gateways

Banks

Debit

Wallets/

Subacquirers


CieloCapital

Investment of

R$ 8.1 billion

30% 70%

Pro forma net income*

R$ 615 million 2014

Association

BBContributed

management of

part of Arranjo

Ourocard*

*As per the due diligence

performed during the negotiations

CatenoValued at

R$ 11.6 billion

*Scope of Arranjo Ourocard Association: Purchase transactions from all credit and debit cards issued by Banco do Brasil

labeled by Visa, Mastercard, Elo and American Express brands, excluding the cards related to the prepaid business, payment

solutions provided to government entities and private label cards issued under current partnerships with retailers.

Banco do Brasil´s cards division (before the Association)

Responsibilities

Marketing

Credit concession and analysis

Relationship with the cardholder

Loyalty Program

Collection

Client´s activation

Payment account management

Security management and

control

Payment of fees to cards brands

and payment arrangements

Revenues

Fee related to the issuance of cards

Annuity

Fee related to pre-paid accounts

Fee related to the legal entity relationship

program

Revenues related to operations of

generating cards invoice installments

Arranjo Ourocard* interchange fee

Potential additional revenues

As

so

cia

tio

n

CATENO VALUED AT R$11.6 BILLION

28


29

Numbers (R$ million)

4) Cielo Brazil

2Q15 2Q14 1Q15 2Q15 X

2Q14

2Q15 X

1Q15

Net Revenue 1,710.9 1,535.0 1,697.9 11.5% 0.8%

Cost+Expenses (767.4) (694.4) (740.5) 10.5% 3.6%

Cost+Expenses

per transaction

R$0.51 R$0.51 R$0.52 0.0% -1.9%

Cielo Net

Income

943.6 796.4 946.2 18.5% -0.3%

5) Other Subsidiaries

2Q15 2Q14 1Q15 2Q15 X

2Q14

2Q15 X

1Q15

Net Revenue 513.2 305.7 446.5 67.9% 14.9%

Cost+Expenses (494.1) (294.6) (427.5) 67.7% 15.6%

Cielo Net

Income

13.0 0.4 9.0 3,150.0% 44.4%

3) Cateno

2Q15 1Q15 2Q15 X 1Q15

Net Revenue 571.7 207.3 175.7%

Cost+Expenses (308.1) (121.6) 153.3%

Amortization (96.4) (32.1) 200.3%

Net Contribution (87.2) (43.5)* 100.7%

1) Cielo Consolidated

2Q15 2Q14 1Q15 2Q15 X 2Q14 2Q15 X 1Q15

Net Revenue 2,795.8 1,840.7 2,351.8 51.9% 18.9%

Cost+Expenses (1,666.0) (989.0) (1,321.6) 68.5% 26.1%

Cielo Net Income 869.4 796.8 911.8 9.1% -4.6%

2) Cielo ex Cateno and Fin. Exp.

2Q15 2Q14 1Q15 2Q15 X

2Q14

2Q15 X

1Q15

Net Revenue 2,224.1 1,840.7 2,144.4 20.8% 3.7%

Cost+Expenses (1,261.5) (989.0) (1,168.0) 27.6% 8.0%

Cielo Net Income 956.6 796.8 955.2 20.1% 0.1%

(*) In Cateno´s 2Q2015 results were added extraordinary cost + expenses with consultants, lawyers and banks related to association process with Banco do Brasil, in the amount of R$ 10MM, net of tax effect.


30

Cateno 2Q15 (R$ Million)

Cateno

* Amortization of R$11.6 billion intangible assets in 30 years

** Social Contribution

Business

Result

Accounting

Value

“Cash Basis”

(ex Cateno amortization)

Net Revenue 571.7 571.7 Net Revenue 571.7

Costs + Expenses (308.1) (308.1) Costs + Expenses (308.1)

Amortization * - (96.4) Amortization * -

Operating Income 263.6 167.1 Operating Income 263.6

Financial Income 19.6 19.6 Financial Income 19.6

Income Tax\ CSLL** (96.3) (63.5) Income Tax\ CSLL** (63.5)

Net Income 186.9 123.2 Net Income 219.7

Share Cielo – 70% 86.3 Share Cielo – 70% 153.8

Financial Expenses(173.5)

Financial Expenses (173.5)

(post taxes) (post taxes)

Net contribution (87.2) Net contribution – Cash Basis (19.7)

Accretive

from 2S16

Accretive

from 2S17


31

Adjusted Income 2Q15 (R$ million)

“Cash Basis” (ex Cateno amortization)

Net Revenue 571.7

Cost+Expenses (308.1)

Net Contribution - “cash

basis” (19.7)

1) Cielo Consolidated

2Q15 2Q14 1Q15 2Q15 X 2Q14 2Q15 X 1Q15

Net Revenue 2,795.8 1,840.7 2,351.8 51.9% 18.9%

Cost+Expenses (1,666.0) (989.0) (1,321.6) 68.5% 26.1%

Cielo Net Income 869.4 796.8 911,8 9.1% -4.6%

2) Cielo ex Cateno and Fin. Exp.

2Q15 2Q14 1Q15 2Q15 X 2Q14

2Q15 X 1Q15

Net Revenue 2,224.1 1,840.7 2,144.4 20.8% 3.7%

Cost+Expenses (1,261.5) (989.0) (1,168.0) 27.6% 8.0%

Cielo Net Income 956.6 796.8 955.2 20.1% 0.1%

Net Income Adjustment composition (R$ million)

Cielo’s Net Income excluding Cateno and financial expenses 956.6

Cateno’s Net Contribution - “cash basis” (19.7)

Cielo’s Adjusted Net Income 936.9

CIELO | DEBT EVOLUTION

32

Total Indebtedness (R$ billion)

*Including Pre-payment with Issuing

Banks

1. Public Debentures: 4.72. Private Debentures: 3.53. Bonds: 2.74. Finame: 0.45. FINEP: 0.16. Loan Issuance: 0.6

Total: 12.0

7. Funding with issuing banks: 2.2

Total including funding with issuing banks: 14.2

Debt’s Avg nominal interest rate: 12.11% per year

Interest Coverage (EBIT/ Interest Expenses): 6.81x

0.2 0.1

2.7

3.5

1.51.5

1.5

0.0

1.0

2016 2017 2018 2019 2020 2021 2022

CIELO | DEBT AMORTIZATION SCHEDULE

33

“Ten-Year Bonds”

Private Debentures*

FINAME PSI (BNDES)

Principal Amortization Schedule* (R$ billion)

Public Debentures

* Private Debentures with Banco do Brasil. Amortization in 8 years but considering put/call in year 5.

Issuance of Loan (Bank of Tokyo-Mitsubishi UFJ)

3.5

2.7

1.51.6

2.7

CIELO | CIEL3 OUTPERFORMING IBOV

Stock performance (IPO date* = 100)

*06/29/2009 34

50.00

75.00

100.00

125.00

150.00

175.00

200.00

225.00

250.00

275.00

300.00

325.00

350.00

375.00

400.00

425.00

450.00

475.00

500.00

23-Jul-09 23-Jul-10 23-Jul-11 23-Jul-12 23-Jul-13 23-Jul-14 23-Jul-15

CIEL3 IBOV

R$44.0

49,806


RELATIONSwww.cielo.com.br/ri

E-mail: [email protected]

Phone: + 55 11 2596-8458

INVESTOR

20150701 cielo august

Investor Relations

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