2014 11 05 investor presentation (en)

1. Investor Presentation
November 2014

2. 2
High corporate governance standards
Novo Mercado (New Market)
1
100% tag along rights
2
Ordinary share only
3
30% of independent board members
4
Special Committee:
5

3. The custumers accumulate points buying products from our partners & flying with TAM and ONE WORD airline com- panies. They can convert the points in their loyalty programmes to Multiplus
The points are acumulated in the credit card. They can then choose to transfer the points to Multiplus or other loyalty programmes
The points can be redeemed for many products or services at coalition partners
The points are redeemed for an airline tickets More than 15 million airline tickets were redeemed during the last five years
Multiplus Business Model / Transaction Flow

4. First mover
We are pioneers in this industry in Brazil and we already have a strong partnership network, highlighting LATAM Airlines, all local banks and the joint venture with our international peer, AIMIA Group.
2
3
Track record Multiplus has already 5 years of proven focus on shareholders return with high dividend payouts. Moreover, we are continuously improving our governance structure following the best market practices.
Early stages Brazilian loyalty industry has very low penetration and presents solid growth drivers
1
4
Solid strategy Our business sustainability is based on network diversification, member engagement and value delivery to partners
Four main reasons to be confident in Multiplus case

5. Brazilian loyalty industry is still in early stages
53.9%
25.3%
24.2%
20.9%
20.5%
14.4%
7.3%
6.3%
6.1%
4.8%
2.4%
Penetration of loyalty programs in total population (%)
Sources: loyalty programs websites and each country statistic data bureau (Updated in Jan/2014)
High growth potential
Average (ex-Multiplus): 18%
5

6. Multiple long term growth drivers
Credit Card usage Expected double digit growth for next 3 years Only 35% of customers understands that they have enrolled in a bank loyalty program (vs. 31% in 2011)
Consumption Possible high single digit growth for next 3 years Loyalty culture still in the early stages
Air transportation Latin America is the second fastest growing region in RPK Average trips per capita is only 0.5 in Brazil vs more than 3.0 in mature markets
Wealth distribution A/B classes expected to reach 15% in 2014 (vs 7% in 2003) Multiplus network focus on A, B and C+
6

7. THREE SOURCES OF PROFIT
Sources of profit: coalition
# of months
~10
0
24
3
2
points selling
redemption
unit revenue less unit cost spread
1
CASH IN
CASH OUT
~10 months float interest income
point expiration breakage
7

8. First mover We are pioneers in this industry in Brazil and we already have a strong partnership network, highlighting LATAM Airlines, all local banks and the joint venture with our international peer, AIMIA Group.
2
3
Track record Multiplus has already 5 years of proven focus on shareholders return with high dividend payouts. Moreover, we are continuously improving our governance structure following the best market practices.
Early stages Brazilian loyalty industry has very low penetration and presents solid growth drivers
1
4
Solid strategy
Our business sustainability is based on network diversification, member engagement and value delivery to partners
Four main reasons to be confident in Multiplus case

9. 9
1993 Creation of TAM Fidelidade
2009 Spin-off from TAM Fidelidade
Feb/2010 Multiplus’ IPO
Oct/2011 Multiplus presents its new brand
Dec/2011 Multiplus becomes one of TOP 100 most liquid stocks in Bovespa
Aug/2010
New headquarters
and IT loyalty platform
Mar/2012 Multiplus reaches 200 partners
Apr/2012 Multiplus reaches 10 mn members
May/2013 launched the new‖ campaign on several media vehicles
Jun/2013 Non-air redemptions reached 8% for the first time in a quarter
Oct/2013 Improved corporate governance structure
Created from TAM Fidelidade, Multiplus has already five years of track record
Mar/2014 Multiplus mobile app for IOS and Android
Sept/2014
Multiplus launches
"Points + Money“ and Multiplus Challenge (gamification)

10. 9.4
10.9
12.2
11.9
12.9
13.3
2011
2012
2013
3Q13
2Q14
3Q14
10
Consistent network growth
Partners
13.3mn members can gather points from several programs in one single account
465 partners gain a powerful support acquiring and retaining clients
Members (mn)
190
369
472
466
477
465
2011
2012
2013
3Q13
2Q14
3Q14
Note: based 3Q14

11. Member base growth and profile
15%
56%
29%
14%
24%
Source: Social Policies Center of FGV-Rio
24%
61%

12. ´
Coalition
TAM
Coalition represents more than 80% of points accumulated

13. 13
Strategic long-term agreement with TAM Airlines
15 years agreement automatically renewable for additional 5-year periods
Exclusive relationship
Points per seat vary according to flight fare with 100% availability, improving Multiplus competitive advantage
up to 360 days before flight date
fee exemptions, lowered points requirement, complimentary upgrades and up to 100% bonus points
High recognition to premium clients
High flexibility
Superior frequent flyer program
lower earn-to-burn ratios redemptions via TAM, LAN and their airline partners
Wide redemption window

14. Pricing model methodology with TAM Airlines
Unit cost (R$)
Jun/2013
~Oct/2014
Cap
Floor
Previous model
Setup period
New pricing model
•Multiplus pays discounted market price per seat
•5% cap and floor protect margin and guarantee business sustainability
•Data gathering of fares available at redemption moment
•Discount measurement
•Unit cost set according to a combination of TAM’s marginal cost and revenue displacement
•Short term fluctuations due to TAM’s promotional activity
Average
Air tickets market price
Discounted market price
Long haul and South America flights priced in USD
12 months data gathering
Multiplus` implicit discount
ILLUSTRATIVE
14

16. 16

17. Strong partnership network
Accrual partners
Coalition partners
Redemption partners
17

18. Non-air redemptions
12% of the total redemption in 3Q14
•More affordable redemption options
•More competitive portfolio of products and services
•Improved members´ experience
•Additional liquidity
•Better profitability
% of total redemption
2010 2011 2012 2013 2014
0.4%
2.1%
5.4%
9.2%
18

19. Innovative partnership

23. 23

24. •
•
•
•
•
•

25. 25
More than 80% of the costumers prefer to shop in Loyalty Programs
Source: Research made by Technology Advice, in EUA
82.4%
17.6%
Don’t consider relevant
Adding value to partners: sales increase

26. 26
Solid relationship with banks
bonus points per each new credit card activated
Targeted redemption offers
1
Activation
bonus points according to the volume of points transferred
segmented offers to engage an specific member group
2
Spending
3
Targeting

27. First mover We are pioneers in this industry in Brazil and we already have a strong partnership network, highlighting LATAM Airlines, all local banks and the joint venture with our international peer, AIMIA Group.
2
3
Track record Multiplus has already 5 years of proven focus on shareholders return with high dividend payouts. Moreover, we are continuously improving our governance structure following the best market practices.
Early stages Brazilian loyalty industry has very low penetration and presents solid growth drivers
1
4
Solid strategy Our business sustainability is based on network diversification, member engagement and value delivery to partners
Four main reasons to be confident in Multiplus case

28. 1,119
1,525
1,871
2,009
1,529
1,560
536
472
550
2010
2011
2012
2013
9M13
9M14
3Q13
2Q14
3Q14
28
Gross Billings (BRL mn)
Points issued (bn)
53.2
76.3
85.2
85.3
65.2
65.4
22.6
20.1
23.2
2010
2011
2012
2013
9M13
9M14
3Q13
2Q14
3Q14
Sales growth: consistent track record
*Includes bonus points

29. 29
Net Revenue (BRL mm)
Net income (BRL mm)
Financial Results
470
1,247
1,476
1,651
1,243
1,343
471
417
485
2010
2011
2012
2013
9M13
9M14
3Q13
2Q14
3Q14
118.4
274.2
224.3
232.1
166.3
241.4
62.2
80.1
86.7
2010
2011
2012
2013
9M13
9M14
3Q13
2Q14
3Q14
41.6%
32.5%
25.8%
25.7%
Gross margin
Net margin
25.2%
22.0%
15.2%
14.1%
13.4%
13.2%
25.6%
29.3%
23.8%
31.2%
29.1%
18.2%
18.4%
19.2%

30. 30
Diversification goals
88%
12%
Current
Air Tickets
Others
20%
5%
75%
Current
TAM
Retail, Industry and Services
Banks
Note: LTM based on 3Q14
Long term target
Long term target
10 to 15%
20 to 25%
Points redeemed
Points sold
Increased retail share will help to sustain margins and improve members engagement
Non-air redemptions growth supports unit cost control and member experience improvement

31. 31
Breakage rate (%)
22.6%
24.1%
21.0%
18.5%
17.7%
17.9%
17.7%
2010
2011
2012
2013
3Q13
2Q14
3Q14
Non-air redemptions (%)
Breakage rate: gradual decline as expected while non-air redemptions becomes robust
0.4%
2.1%
5.4%
9.2%
9.2%
10.2%
13.9%
10.7%
12.2%
2010
2011
2012
2013
9M13
9M14
3Q13
2Q14
3Q14

32. 32
Cash generation and shareholders’ return
FCF* (BRL mn)
589.0
460.6
418.1
452.6
379.9
263.0
135.9
71.9
91.4
2010
2011
2012
2013
9M13
9M14
3Q13
2Q14
3Q14
*Excluding Dividends, Interest on Capital and variations of Prepaid Expenses and Capital (2012 and 2013 are adjusted with R$ 71.3 of anticipated settlement in Accounts Payable)

33. First mover We are pioneers in this industry in Brazil and we already have a strong partnership network, highlighting LATAM Airlines, all local banks and the joint venture with our international peer, AIMIA Group.
2
3
Track record Multiplus has already 5 years of proven focus on shareholders return with high dividend payouts. Moreover, we are continuously improving our governance structure following the best market practices.
Early stages Brazilian loyalty industry has very low penetration and presents solid growth drivers
1
4
Solid strategy Our business sustainability is based on network diversification, member engagement and value delivery to partners
Four main reasons to be confident in Multiplus case

34. Clear prioritization of segments
Network diversification
Anticipate members behaviour (CRM, analysis of customer profiles)
Better experience and more members´ engagement
Focus on adding value to comercial partners
Redemptions diversification, leading to higher margins
Solid strategy in force

35. 35
Disclaimer
This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks and uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice. This material has been prepared by Multiplus S.A. (“Multiplus“ or the “Company”) includes certain forward- looking statements that are based principally on Multiplus’ current expectations and on projections of future events and financial trends that currently affect or might affect Multiplus’ business, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of each could cause actual financial condition and results of operations to differ materially from those set out in Multiplus’ forward-looking statements. Multiplus undertakes no obligation to publicly update or revise any forward looking statements. This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment.

36. Appendix

37. 37
Income statement (1/2)

38. 38
Income statement (2/2)

39. 39
Balance sheet: assets

40. 40
Balance sheet: liabilities and shareholders' equity

41. Thank you! Contact IR Team +55 11 5105-1847 invest@pontosmultiplus.com.br www.pontosmultiplus.com.br/ir