20160810 cielo august

Copyright © Cielo | Todos os direitos reservados

CORPORATE PRESENTATION

August, 2016

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 82 BILLION

9.5%

MARKET LEADER

*

*Closing date: 07/22/2016

Exchange: 1USD = 3.29 BRL (07/22/2016) 3


262329

394487

601710

837

9641,065

2007 2008 2009 2010 2011 2012 2013 2014 2015

16.1%17.7%

19.1%20.8%

22.8%24.4%

26.2%27.2%

28.5%

2007 2008 2009 2010 2011 2012 2013 2014 2015

1,6291,857

2,0642,341

2,6372,908

3,2013,547

3,742

2007 2008 2009 2010 2011 2012 2013 2014 2015

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

Financial Volume (R$ billion)

Financial Volume (R$ billion)

July

2014

30% stake in Stelo

Creation of Cateno

between Cielo and Banco do

Brasil

Launching ofCielo MobileChip & Pin

November

2014

December

2010

March

2012

May

2011September

2012

October

2013

January

2010

June

2015

STRATEGIC PLANNING

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

Launching the new e-commerce platform

Acquisitionof Braspag

Partnership with Dotz

Partnership withCyberSource

Acquisition of MeS

5

Partnership with Smiles

August

2015

Cielo holds a 91.44%

stake of M4U

November

2010

Launching ofCielo Mobile

April

2016

Launching of Cielo Lio

• Digital sales slip, sales statement

check by period, online assistance

CIELO LIO

6

Open platform tailoring sales experiences with apps and funcionalities to

manage the business

Main Features: • Commercial automation on its own

operational system (Cielo OS)

• Physical and digital world integration

(OmniChannel)

• Managing bars and restaurants

orders and checking account spliting

• Registration of a portfolio of products

and services

• Bar code reading for orders via an

integrated camera- promptness for

shopping

• Merchant’s storage management

• Cielo Store: Marketplace for apps

and tailoired for the merchant

Forecast to reach 50

thousand units up to the

end of 2016 and up to 1

million in the 5 coming

years

• Partnership with Linx, NCR and

VTEX

Business

Expansion

Data base of 1.7 million active points of sale more than 6 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

7

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 theeconomy

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

Improveddisclosure

8

8,3% 7,9%

4,1%3,2%

3,9%

2,2%

2,6%

2,4%

5,6%

3,1%

3,9%

3,0%

5,2%6,9% 6,6% 4,6%

3,6%

3,5%

3,5%

2,1%

2,8%2,5% 3,1%

2,9%

4,7%5,0%

1,9%

0,1%

-2,8%

-3,4% -3,3%

-5,5%

-5,5%

-6,0%

-3,4%

-5,8%-5,2%

-6,1%

-3,1%

0,6%

-1,1%

-2,3% -3,0%-3,8%

-4,4%

-5,9%

-5,6%-6,2%

-5,8% -6,1%

-4,5% -3,3%

Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

Nominal ICVA

Nominal ICVA with Calendar Adjustment

Deflated* ICVA

Deflated ICVA with Calendar Adjustment*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA

AnnualEvolution(R$ billion)

2013 2014Credit

Debit

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

TRANSACTION FINANCIAL VOLUME

20122011 2015

9

Quarterly Evolution(R$ billion)

1Q162Q15 2Q16

163.9 202.1 245.0 279.6 312.6

98.7118.3

138.4169.1 205.0

517.6CAGR: 14.4% 548.2

448.7

320.4383.3

77.4 79.6 81.0

52.359.9 61.6

129.7142.6139.5

9,9% 2.2%

NUMBER OF TRANSACTIONS

AnnualEvolution(R$ million)

2013 2014

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.

2011 2012 2015

10

1Q16

QuarterlyEvolution(million)

2Q162Q15

1.837 2.062 2.283 2.525 2.663

1.9642.240

2.6183.134

3.537

3,8014,302

4,902

5,6596,200

CAGR: 13.0%

659 677 697

836947 934

1,6311,495

9.1%

1,623

0,5%

OPERATIONAL INDICATORS

2Q15 1Q16 2Q16

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

Annual Evolution(Thousand)

2011 2012 2013 20152014

11

Wireless POS terminals

(GPRS)

Corresponds to 69% of Cielo’s

installed basis (as of 2Q16)

1.484

1.7271.831

2.0232.146

1.1561.282

1.4261.616

1,732

CAGR: 11.7%

CAGR 9.7%

2,071 2,082 2,070

1,674 1,705 1,700

-0.6%1.6%

-0.3%

0.0%

2Q15 1Q16 2Q16


NET OPERATING REVENUE

QuarterlyEvolution(R$ million)

20112010 2013 201420122011 201512

4.208,75.385,3

6.734,27.725,6

11.122,3CAGR: 27.5%

2.795,83.047,9 3.069,0

9.8%0.7%

15.4

26.4

44.3

56.162.0

7,6% 10,8%

15,9%17,9%

19,4%

2Q15 1Q16 2Q16

PURCHASE OF RECEIVABLES VOLUME

13

QuarterlyEvolution(R$ billion)

%Purchased Volume from

Credit Installments

% Purchased receivables

over Total Credit Volume

2013 2015

13

20122011

AnnualEvolution(R$ billion)

2014

Total of Purchased Volume

CAGR: 41.6%

% Purchased receivables

over Total Credit Volume

14.416.0 16.5

18,5%20,1% 20,4%

15.0% 3.3%

PURCHASE OF RECEIVABLES ACCOUNTING RESULT

14

2Q15 1Q16 2Q16



Purchase of Receivables Result*

*Purchase of Receivables Result = gross revenue from prepayment - cost of funding with third

parties and Bank Tokyo Mitsubishi – present value adjustments expenses – PIS/COFINS taxes

2013 2015201420122011

22.3%-3.2%

535,3

768,1953,1

1.508,6

2.129,8CAGR: 41.2%

493,6

623,4603,6

EBITDA


2Q15 1Q16 2Q16

2013 2014


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

2012*2011 2015

15

2.388,5

3.097,93.575,2

3.838,9

5.233,5

56,8% 57,5%53,1%

49,7% 47,1%

CAGR: 21.7%

1.355,8 1.407,61.349,0

50.5%43.5% 46.2%

-0,5%-4,2%

869,4

995,4 989,2

31,1%

32,7%32,2%

2Q15 1Q16 2Q16


2013 2014


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

2012*2011 2015

16

NET INCOME

-0,6%13.8%

1.817

2.3322.674

3.2203.511

43,2% 43,1%39,7% 41,7%

31,6%

CAGR: 17.9%

17

Guidance 2016

5.5% to 7.5% 7% to 9% 8.7%**

4% to 6% 6% to 8% 7.7%

~R$450mn ~R$400mn R$100.3mn

IndicatorsPrevious

Estimates 1H16

*considering credit and debit volume

** 1Q16 figures, since 2Q16 information has not been disclosed yet

Revised Estimates

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

18

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

19

mailto:[email protected]

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


APPENDIX

1995 2009 2016

June 2009

Single Visa Acquirer

R$ 8.4 billion IPO

+

Multi-brand acquirer

TIMELINE

4 Visa acquirers

21

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

2,264,012,551 Common Shares

CAPITAL OWNERSHIP

22*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:

41.02%

Treasury:

0.28%

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

23

2,90

2,95 2,96 2,96

2,83

2,79 2,78 2,77

2,84

2,75

BRAZIL | MERCHANT DISCOUNT RATES

Source: Central Bank, Abecs24

%Credit Gross MDR%Debit Gross MDR

Market Credit and Debit Gross MDR Evolution (%)

1,581,59

1,601,61

1,56

1,581,59

1,56

1,58

1,51

4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15

PURCHASE OF RECEIVABLES INDICATORS

25

Purchases of Receivables 2Q16 2Q15 1Q16 2Q16 X 2Q15 2Q16 X 1Q16

% Purchased volume over Total Credit Volume 20.4% 18.5% 20.1% 1.9 p.p. 0.3 p.p.

Financial Volume of purchased receivables (R$ million) 16,517.8 14,360.3 15,991.4 15.0% 3.3%

Average Term (Calendar Days) 50.9 56.5 53.3 (5.6) (2.4)

Average Term (Business Days) 35.3 38.9 36.3 (3.6) (0.9)

Net Revenue of Purchased Receivables (R$ million) 678.3 561.7 684.9 20.8% -1.0%

Cost of Funding with Third Parties (R$ million) (43.2) (68.1) (30.2) -36.6% 43.0%

Taxes (PIS / COFINS) (R$ million) (31.5) - (31.3) 0.0% 0.7%

Purchases of Receivables Accountg Result (R$ million) 603.6 493.6 623.4 22.3% -3.2%

Managerial Exercise 2Q16 2Q15 1Q16 2Q16 X 2Q15 2Q16 X 1Q16

Net Revenue of Purchases of Receivables (R$ million) 678.3 561.7 684.9 20.8% -1.0%

Cost of Funding* (R$ million) (307.3) (282.3) (309.4) 8.9% -0.7%

Managerial Net Revenue (R$ million) 371.0 279.4 375.5 32.8% -1.2%

Taxes (PIS / COFINS) (R$ million) (31.5) - (31.3) - 0.7%

Net Revenue pro forma with Purchases of Receivables (R$ million) 339.5 279.4 344.2 21.5% -1.4%

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

Industry Growth

yoy (%)

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

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

9.9%

-0,1%

27.8%

36.0%

Volume

Growth

2Q16

yoy [%]

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Banrisul Santander Rede Cielo Agro Cielo

7

136(53.4%)

93(35.0%)

7(2.4%)

267

25(9.2%)

242233223

267252236

284

5(1.9%)

4(1.6%)

5(1.7%)

5(2.0%)

3(1.5%)

6(2.2%)

4(1.8%)

21(8.0%)

18(7.7%)

2

127(52.5%)

6

94(37.8%)

19(7.8%)

91(37.9%)

1

125(52.6%)120

(55.3%)

5

20(7.3%)

103(38.0%)

141(53.1%)

3

15(6.5%)

88(37.4%)

125(54.5%)

13(6.0%)

84(37.2%)

132(53.4%)

4

94(36.5%)

104(36.0%)

25(8.5%)

150(53.3%)

4

3

136(53.4%)

261

93(35.5%)

6(2.4%)

23(8.7%)

MARKET SHARE | MARKET VOLUME | TOP4

27

ECOMMERCE POSITION

Source: Company, Broker reports, Cybersource 28

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

As

so

cia

tio

n

CATENO VALUED AT R$11.6 BILLION

29

30

Accounting value 2Q16 2Q15 1Q16 2Q16x2Q15 2Q16x1Q16 Pro-forma 2015 (12 months)

Financial Volume 59.7 52.8 55.9 13.1% 6.7%

Credit Volume 29.3 28.7 28.8 1.9% 1.5%

Debit Volume 30.4 24.0 27.1 26.6% 12.2%

Net Revenue 609.4 571.7 593.0 6.6% 2.8% 2,368.5

Total Costs+Expenses (445.4) (404.5) (429.1) 10.1% 3.8%

Costs+Expenses ex-Amortization (349.0) (308.1) (332.7) 13.3% 4.9% (1,317.9)

Amortization* (96.4) (96.4) (96.4) - - (385.6)

Operating Income 164.0 167.1 163.9 -1.8% 0.1% 665.0

Financial Income 32.2 19.6 29.3 64.7% 10.1% 83.3

Income Tax/ CSLL (66.7) (63.5) (65.7) 5.1% 1.5% (254.4)

Net Income 129.6 123.2 127.5 5.2% 1.7% 493.8

Net Margin 21.3% 21.6% 21.5% -0.3 p.p. -0.2 p.p. 20.9%

EBITDA 260.4 263.3 260.3 -1.1% 0.0% 1,050.6

EBITDA Margin 42.7% 46.1% 43.9% -3.3 p.p. -1.2 p.p. 44.4%

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


31

NUMBERS 2Q16 (R$ million)


32

CATENO 2Q16 (R$ Million)

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

** Social Contribution


33

ADJUSTED INCOME 2Q16 (R$ million)


34

NUMBERS 2015 (R$ million)


35

CATENO 2015 (R$ Million)


36

ADJUSTED INCOME 2015 (R$ million)

37

Total Indebtedness (R$ billion)

1. Public Debentures: 3.22. Private Debentures: 3.53. Bonds: 2.84. Finame: 0.35. FINEP: 0.16. Loan Issuance: 1.1

Total: 10.8

Interest Coverage (EBIT/ Interest Expenses): 3.95x

Debt Ratio

LTM Net debt/Adjusted EBITDA ratio adjusted to result from purchases of receivables on June 30, 2016 was at 1.2x.

Net Debt Evolution (R$ billion)

DEBT AMORTIZATION SCHEDULE

38

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

**1.8 billion paid in April (1/3 of principal from the public debentures + interest)

(99.4% CDI)

(105.8% CDI)

(111% CDI)

(3.75%)

(6.90%)

1.7

1.3

**

(R$ billion)

CIEL3 OUTPERFORMING IBOV

Stock performance (IPO date* = 100)

*06/29/2009 39

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

22-Jul-09 22-Jul-10 22-Jul-11 22-Jul-12 22-Jul-13 22-Jul-14 22-Jul-15 22-Jul-16

CIEL3 IBOV

R$36.53

57.002


RELATIONSwww.cielo.com.br/ri

E-mail: [email protected]

Phone: + 55 11 2596-8453

INVESTOR

20160810 cielo august

Business

Transcript of 20160810 cielo august