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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
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
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
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
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
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
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
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)
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
Member base growth and profile
15%
56%
29%
14%
24%
Source: Social Policies Center of FGV-Rio
24%
61%
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
Pricing model methodology with TAM Airlines U
nit
co
st (
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
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
% o
f t
ota
l red
emp
tio
n
2010 2011 2012 2013 2014
0.4%
2.1%
5.4%
9.2%
18
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
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
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
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
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
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
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
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)
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
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
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.
Thank you! Contact IR Team +55 11 5105-1847 [email protected] www.pontosmultiplus.com.br/ir