2. Disclaimer
This presentation may include forward-looking statements of future events or
results according to the regulations of the 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 expected events by the company, many
of which are beyond the control of the Company. Important factors that may lead
to significant differences between the actual results and the statements of
expectations about future events or results include the company’s business
strategy, Brazilian and International economic conditions, technology, financial
strategy, financial market conditions, uncertainty regarding the results of its future
operations, plans, objectives, expectations and intentions, among others.
Considering these factors, the actual results of the company may be significantly
different from those shown 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 is to be based on the veracity, current events or completeness of this
information or these opinions. No advisors to the company or parties related to
them or their representatives should have any responsibility for any losses that
may result from the use or contents of this presentation.
2
3. Credit Card Market and
New Card Base CardSystem
800
thousands
746
600
400 481 468
468
401 339
200 293
0
Jan Feb Mar Apr May Jun Jul
CardSystem´s card base average growth was 37.6% in
2Q07 over the 2Q06, from 10.1 million to 13.9 million,
higher variations than those in market;
Brazilian Market´s Cards Evolution
At the end of the period - in million
In July, 2007, CSU reached the mark of more than 745
thousand issued cards;
390
348
Growth in Losango and Nossa Caixa Card Base. In May 292 83
2007, Nossa Caixa achieved the volume of 1.5 million 70
56 116
issued Credit Cards; 102
87
In August, the Brazilian Credit Card market should have a 149 176 191
revenue of R$ 15.4 billion (21.4% higher than in 2Q06).
jun-05 jun-06 jun-07
Debt Private Label Credit
Source: ABECS and other market sources
3
4. THE CAIXA PROJECT
The platform for processing was delivered to Caixa's operating environment
in June;
The company is studying with Caixa the additional investments required;
A plan will be devised for testing the customization and functionalities. Only
after this phase is complete, will testing start for card base migration.
4
5. TeleSystem and Credit&Risk /
MarketSystem
TeleSystem and Credit&Risk
At the end of the 2Q07, 3.930 workstations (PAs) were in
operation;
Improved efficiency in the 2Q07, freeing 909 work stations for new
negotiations;
Improvements in TeleSystem operational results due to cost reductions
and efficiency gains in June;
Renewal of CSU’s certification for its Quality Management System – ISO
9001:00 in June 2007.
MarketSystem
Average of 1.8 million relationship program accounts showing continuous growth
in June.
5
7. CardSystem
Gross Revenue (R$ million) Gross Profit (R$ million) and EBITDA (R$ million) and EBITDA
Gross Margin (%) Margin (%)
+16.9% +11.7%
+ 9.2% + 57.3%
-10.4% + 26.8%
10.9 10.9
33.6 30.1 33.6 10.0 10.6
28.8 9.5 9.5
7.0 7.5
40.9% 30.7% 27.0% 30.7%
38.6% 35.3% 25.1% 35.3%
2Q06* 2Q07 1Q07 2Q07 2Q06 * 2Q07 1Q07 2Q07 2Q06* 2Q07 1Q07 2Q07
Strong revenue growth compared to 1Q07 (+11.7%) and 2Q06 (+16,9%) due to card base
growth in the period;
Gross Profit and EBITDA growth outpaced that of Gross Revenue in 1Q07, showing
operating efficiency. When compared to 2Q06, costs rose 26% and the card base 37%.
7
8. TeleSystem and Credit&Risk
Gross Revenue (R$ million)
Gross Profit (R$ million) and EBITDA (R$ million) and Gross
- 7.1% + 13.0% Gross Margin (%) Margin (%)
52.7 3.3
49.0 49.0
43.3
- 367.4%
6.6%
- 42.5%
1.8
- 123.8% 3.6%
2Q06* 2Q07 1Q07 2Q07 2.9% 10.5% - 8.3% 10.5%
- 5.7% - 5.7%
- 179.7%
(1.2) (3.3)
(4.8) (4.8)
2Q06* 2Q07 1Q07 2Q07
(2.6) (2.6)
2Q06 * 2Q07 1Q07 2Q07
TeleSystem´s commercial performance still unsatisfactory;
Credit&Risk growth in Net Revenue was 15.4% when compared to 2Q06;
Seasonal effect impacted operating revenue, which rose 10.2% when compared to 2Q06 in
TeleSystem and 22.9% in Credit&Risk;
TeleSystem´s operation still in the process of recovering profitability, reducing costs and
expanding its client base to use its full installed capacity.
8
9. MarketSystem
Gross Profit (R$ million) Gross Profit (R$ million) and EBITDA (R$ million) and EBITDA
Gross Margin (%) Margin (%)
- 44.7%
8.7
- 4.1% - 33.9% - 17.9% - 25.9%
2.3 - 38.9%
1.8 1.4
4.8 5.0 4.8 1.5 1.5 1.2
0.9 0.9
27.0% 32.3% 38.1% 32.3% 17,1% 18,9% 24,6% 18,9%
2Q06* 2Q07 1Q07 2Q07 2Q06 * 2Q07 1Q07 2Q07 2Q06* 2Q07 1Q07 2Q07
The end of a contract in 3Q06 was still affecting revenue performance in 2Q07;
In comparison with 1Q07, reduction in revenue performance was basically due to the
lower volume of rewards delivered.
9
11. CSU (Consolidated)
General and Administrative EBITDA (R$ million) and EBITDA Net Result (R$ million)
Expenses (R$ million) Margin (%)
-3.1 %
-59.4 % (44)
16.247 13.812
-0.4 %
15.742 15.808 15.742
5.4 %
5.614 5.327 5.614
(4.286) (4.286)
16,5% 6,9% 7,3% 6,9%
24.9 %
(5.708)
2Q06 * 2Q07 1Q07 2Q07 2Q06* 2Q07 1Q07 2Q07 2Q06 * 2Q07 1Q07 * 2Q07
Operating expenses in 2Q07 were smaller than 2Q06 and 1Q07. The highlight was the
significant reduction in net financial expenses indicating an improved management
performance;
EBITDA reached R$ 5.6 million during 2Q07, equivalent to 6.9% of net revenue;
Net Result: 24.9% net loss reduction in comparison with 1Q07. 11
12. Indebtedness and Capex
Indebtedness - R$ thousand
2Q07 2Q06 1Q07
Short Term 47.2 58.8 33.5 Indebtness
Debt 23.1 36.4 12.5
Leasing 24.1 22.4 21.0
Long Term 37.6 60.5 43.6 The indebtedness growth in 2Q07
Debt 21.4 30.6 21.3 compared with 1Q07 due to CAPEX
Leasing 16.2 29.9 22.3
of R$16.3 million.
Gross Debt 84.7 119.3 77.1
(-) Cash 1.1 85.6 9.8 CAPEX (R$ million)
Net Cash (Debt) 83.7 33.7 67.3
1.4 %
26.5 % 16.3
16.3
16.1
1.6 0.9 12.9 0.9
CAPEX 2.7 1.4
7.4 7.4
5.4
CSU investments in CAPEX were allocated 11.8
8.0 8.0
to Caixa´s Project (R$ 7.4 million) and in 6.1
projects aimed at maintaining and
2Q06 2Q07 1Q07 2Q07
expanding CardSystem operation.
Sistems (SW e HW) Caixa Project Other
12
13. Recent Developments
and Outlook
Tendency of replacing checkbook with credit card transactions to remain as we
move forward;
Strong cost/expense reduction and investment program, impacting future
results (including 2H07);
In addition to strong client card base growth, there is a high expectation of new
contracts in 2H07 to CardSystem;
Décio Burd (ex-CardSystem CFO) takes over at TeleSystem and Credit&Risk to
focus on cost reductions and workstation optimization;
To align its accounting practices with the norm being applied
in more than a hundred countries and which is becoming the
international standard (IFRS), CSU changed its standard for
classifying Leasing.
13
