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3Q07 ResultsConference Call
November 14th, 2007
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DisclaimerThis 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.
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Business MarketCardSystem/MarketSystem
131 166 184 198
94 112 1375164
7689
82
2004 2005 2006 2007
Debit Private Label Credit
264324
372 424
Expansion - Business Market x CSU
3.7%
12.9%
9.9%
4.2%3.4% 3.8%
9.5%
9.2%6.1%7.4%
3Q06 4Q06 1Q07 2Q07 3Q07
BUSINESS MARKET
CSU
Card Trends (Business Market)September, 30th - in million
4
According to the increase of new cards, CSU ended the quarter with 15.6 million cards in base;In the last 12 months the business market evolved 20.2%. While,CSU 36.8%.
6,3 7,0
10,111,4
15,6
2003 2004 2005 2006 2007
CardSystem/MarketSystem – Operational data
CAGR (CSU) of 31%CAGR (Market) of 19%
2004 to 2007
CSU – Registered Cards
at the end of September (Million)
5
New cards volume raised from 4.5 million in 2006 to 5.9 million in 2007 (+31.1%).We celebrated and implemented a strategic cards contract with Carrefour;Omni Financial project implementation;Contract with an important retail financial company to be implemented by 4Q07; We won the public tenders held by the banks Nossa Caixa and Banrisul;HSBC/Losango continue their growing trends;In the Marketing and Loyalty Programs, CSU has been growing continuously;
CSU Cardsystem – New cards entry
(Thousands)
4Q06 1Q07 2Q07 3Q07 4Q07
1.3061.033
1.417
1.8601.640
4Q06 1Q07 2Q07 3Q07 4Q07
1.70
1.77
1.841.90
1.96
CSU Marketsystem – Managed accounts
(Million)
CardSystem/Marketsystem – Operational Data
6
CAIXA PROJECTPlatform’s Development activities finalized in 2Q07
Caixa and CSU are running on preparatory activities to implement a test plan
Expectation of project implementation and card base migration during 1H08
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TeleSystem/Credit&Risk TeleSystem and Credit&Risk
Financial turnaround reached in the period;
Slightly reduction in the number of Work Stations in operation in September ’07;
Discontinuation of unprofitable contracts;
The units maintain the portfolio diversification strategy, with focus on smaller operations with greater stability;
Breakeven reached through substantial operational cost reduction and gains in productivity of approximately R$2 million per month as showed below
August September October
0.61.5
2.0
thousands
R$ million (accumulated value)
3,930 3,872
2Q07 3Q07
8
CSU – Financial Trend
* Forecast
Gross Revenue (R$ million)
92.8
81.4
78.4
87.4
90.992.7
3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 *
EBTIDA (R$ million)15.3
11.9
5.65.45.1
12.9
3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 *
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Units – Financial Trend
* Forecast
Gross Revenue (R$ million)
47.648.949.0
43.345.7
53.0
39.8 35.8
35.1
38.4
42.0
45.1
3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 *
Tele/Credit
Card/Market
EBTIDA (R$ million)
14.313.7
10.48.79.3
11.6
1.3
(4.2)(3.3)
(4.8)
(1.8)1.0
3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 *
Card/Market
Tele/Credit
CSU (Consolidated)
10
90,86692,777 90,86687,394
3Q06 3Q07 2Q07 3Q07
Cost of Services Rendered (R$ thousand)Gross Revenue
(R$ thousand)-2.8 %-3.8 %
-2.1 %+4.0 %
15,2779,808
15,27713,924
Gross Profit (R$ thousand) and Gross Margin (%)
55.8 %9.7 %
69,32671,31269,32672,040
3Q06 3Q07 2Q07 3Q07
3Q06* 3Q07 2Q07 3Q07
4Q07*
92,744
+2.1 %
* Forecast according to “guidance” of 11/12/07
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CSU (Consolidated)
Operating expenses with slightly reduction in the 3Q07, despite restructuring expenses of R$1.1 million;Net Income: Significant expansion in the 3Q07, growth expectation in 4Q07.
* * Excludes IPO Expenses
* Forecast according to guidance of 11/12/07
(255)(247) (247)
(4.286)5.614
11.86511.86512.888
3Q06** 3Q07 2Q07 3Q07
15.74215.61713.666
15.617
3Q06 3Q07 2Q07 3Q07
94.2%
Net Results (R$ thousand)Operational Expenses
Expenses (R$ thousands)
-7.9 %
111.3 %
14.3 %-0.8 %
15%
14% 14%6.9%
3Q06 3Q07 2Q07 3Q07
3.0 %
4T07*
17.8%
15.245
28.5 %
1.294
4T07*
na
EBITDA (R$ million) and EBITDA Margin (%)
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CardSystem/Marketsystem
Revenue growth of Cardsystem/Marketsystem;Increase of gross margin in relation to 3Q06 and 2Q07;Gross profit and EBITDA show substantial growth in relation to previous quarters;
41.939.8
41.938.4
3Q06 3Q07 2Q07 3Q07
11.6 13.710.4
13.7
+9.2%+5.5%
12.0
15.2
12.4
15.2
34.9%38.8% 38.8%33%
+ 22%+ 25.9%
29.2% 35.1%
+ 32%17.9%
35.1%31.8%
3Q06 3Q07 2Q07 3Q07 3Q06 3Q07 2Q07 3Q07
Gross Revenue
(R$ million)
Gross Profit (R$ million) and
Gross Margin (%)EBITDA (R$ million) and EBITDA
Margin (%)
13
TeleSystem and Credit&Risk
Gross profit maintained the same level as 2Q07;Cost reduction plan resulted on positive impact reaching breakeven in gross profit. See monthly trade:
1.3
(1.8)(4.7)
(1.8)
1.9
0.1
(2.6)
0.1
Gross Revenue
(R$ million)
EBITDA (R$ million) and EBITDA Margin (%)
Gross Profit (R$ million) and
Gross Margin (%)
-5.7%
3.8%- 93.5%
na 61.5%
- 244.7%
-4% - 10.5%
2.6%
-4%
48.948.948.952.9
- 0.1%- 7.7%
3Q06 3Q07 2Q07 3Q07 3Q06 3Q07 2Q07 3Q07 3Q06 3Q07 2Q07 3Q07
0.3% 0.3%
Jul 07
(1.1)
Aug 07 Sep 07
0.6 0.5
Gross Profit 3Q07 R$ million
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Indebtedness and Investments
CAPEXReduction of investments in Caixa’soperating platform;Investments in cards area to support accelerated growth.
IndebtednessIncrease of R$19 million in total debt for investments on cards area;Improved indebtedness profile for short to long term
Debt - R$ thousand3Q07 3Q06 2Q07
Short Term 48.9 42.1 40.8Debt 24.0 17.2 23.1Leasing 24.9 24.9 17.7
Long Term 59.1 50.9 45.9Debt 42.2 23.9 21.4Leasing 16.9 27.0 24.5
Gross Debt 108.1 93.0 86.7
(-) Cash 3.5 42.5 1.1Net Cash (Debt) 104.6 50.6 85.6
CAPEX (R$MM)
7.1 10.36.8
10.3
4.03.8 7.4 3.8
0
4
8
12
16
20
3Q06 3Q07 2Q07 3Q07
Sistems (SW e HW) Caixa Project Others
11.214.5 15.1
14.5
15
Perspectives and Recent FactsNew card projects under study by different clients, increasing the potential of new business opportunities;
Cost and operating expenses reduction plan to be consolidated in the 4Q07;
Telesystem/Credit&Risk financially-focused management program promoting significant improvements;
Positive perspective for growth in revenues and profitability. Anticipated through the Company’s 4Q07 guidance:
Quarter Information – CSU (R$ million)1Q07 2Q07 3Q07 4Q07 *
Gross Revenue 78.4 87.4 90.9 92.7
EBITDA 5.3 5.6 11.9 15.2
Net Profit (5.7) (4.3) (0.2) 1.3 * Forecast