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					Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                    1
Agenda

1. MARKET POTENTIAL
                          • Economic Overview
2. COMPANY HISTORY        • XXX Market

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                2
Economic Overview – Latin America

             Latin America Nominal GDP                                        Latin America Nominal GDP
                           (US$ billion)                                                            (US$ billion)
                            1980-1990                                                                1990-2001

    Real GDP                                                           Real GDP
     CAGR                                                               CAGR                                       2,062 2,072           2,033
                                                                                                                                                 1,981
   1980 – 1990                                                        1991 – 2001                          1,888                 1,841
      0.9%                                                              +3.0%                      1,738

                                                                                           1,494
                                                                                   1,312
                                                                           1,190
                                                                   1,083
                                                           1,024
                                                     869
       806                                     773
 703         728                         690
                   619   638 633   650




 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990            1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001



        The earliest of the “new policies” implemented in Latin America began twenty years ago...the
               difference between „then‟ and „now‟ is striking…and the process is continuing
 Source: WEFA, Cepal
                                                                                                                                                         3
  Economic Overview – Latin America


                          Latin American Average Fiscal Deficits and Inflation
                                       (% of GDP - CPI Change)

                           1980-1990                                                       1991-2001
                                                  461%
                                                                           222%      219%
                                                                    154%
                              124%   119%                         140%
                                          107%
                95% 106%          87%
             65%                                                                            42%
      54%                                                                                      23%
45%                                                                                                     14% 8%
                                                    75%                                                             7% 8%        6%
             8.1% 7.2%                         7.2% 7.2%
      7.2%
                         4.9% 5.8%
                                   6.3% 6.0%                                                                   2.9% 3.3%
3.9%                                                       4.2%               1.9% 1.6%                                    2.3% 2.0%
                                                                                          1.3%          1.4%
                                                                                                 0.7%
                                                                  0.0% 0.2%
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990             1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001


        The decline in the rate of inflation - from hyperinflation to manageable inflation - across Latin
       America provided an important impetus to the development of international investment interest
                               in Latin American businesses and equity markets

Source: WEFA                                                                                                                           4
      Economic Overview – Latin America


                                           Expected Mid Term Economic
                                                    Growth(a)

         Latin America                          Europe                 Asia & Australia                 USA


                           4.6%                                                                      4.5%
                    4.4%

                                                                                                            3.8%
                                                                           3.6%
                                                                                  3.4% 3.4%   3.4%
             3.2%                                                                                                  3.2%
                                             2.7% 2.6%
                                                       2.5%
                                                                    2.0%
                                      1.6%



      0.4%


      2002 2003 2004 2005             2002 2003 2004 2005           2002 2003 2004 2005       2002 2003 2004 2005



(a)   DRI WEFA, Economist Intelligent Unit, World Bank, IMF World
      Economic Outlook Data Base
                                                                                                                          5
                                                                                                                             MARKET POTENTIAL
Economic Overview – XXX                                                                       During the first half of the
                                                                                                90’s the Government
                                                                                              implemented controls to
                                                Nominal GDP(a)                               monetary and fiscal policies
                                                      (US$ billions)                          which paved the way for
                                                                                                 economic recovery
                             Controlled                                       Asian Crisis and
                          Monetary & Fiscal                                   Natural Hazards
                              Policies

   Real GDP CAGR
     (1993-2001)
        5.6%                                              59.0%
                                              56.0%                    57.0%
                                   54.0%                                             52.0%        54.0%        54.0%

                       45.0%

         35.0%




          1993         1994         1995      1996         1997        1998           1999        2000          2001


      XXX recommenced its economic growth during the last decade, interrupted only in the
       1998-2000 period due to the Asian and Russian financial crisis and natural hazards
                                          like El Niño
Source: WEFA, estimates based on comparable
                                                                                                                              6
        Latin American countries
                                                                                                                MARKET POTENTIAL
    Economic Overview – XXX


          XXX Annual Inflation(a)                                Net Foreign Direct Investment
                                                                         as % of GDP(b)
     24.1%
                                                                          (1998-2001)

                                                                                           Average annual foreign
                                                                                            direct investments in
                                                                                           XXX from 1994 to 2001
                                                                     3.6%
                                                                                            was almost $2 billion
                                                                                3.0%
              11.2% 11.5%
                                                                                         2.5%
                             8.6%
                                     7.3%

                                            3.5%   3.7%                                             0.7%
                                                          1.3%

      1994     1995   1996   1997    1998   1999   2000   2001      Top 10      Peru   Developing     US
                                                                   Recipients          Countries


              XXX‟s economic recovery has been accompanied by decreased inflation and
             controlled government spending, which has attracted substantial foreign direct
                                            investment...
(a) Source: WEFA
                                                                                                                 7
(b) OECD, World Bank, IMF and WEFA
                                                                                                            MARKET POTENTIAL
    Economic Overview – XXX

         Summary Statistics (2001)
         Population:     26 million
         Nominal GDP:    US$54 Billion        XXX’s Expected GDP Growth and Inflation
         GDP/Capita:     US$2,073
         Inflation:      1.3%

                                                                              5.4%                 14.2%
                                                                      5.3%                5.3%
                                                              4.9%
                                                      4.2%
                                              3.6%                                                 3.5%

                                                      3.4%    3.0%    2.9%                2.9%
                                                                              2.7%
                                              1.5%




                                              2002E   2003E   2004E   2005E   2006E       2007E    Latin
                                                                                                  America
                                                                                                  Average
                                                               GDP Growth     Inflation           2002-07




       The Government‟s current emphasis on macroeconomic stability, combined with the
       1990‟s economic structural reforms, has set the stage for renewed economic growth
Source: WEFA, estimates based on comparable
                                                                                                             8
        Latin American countries
                                                                                                                MARKET POTENTIAL
    Economic Overview – XXX

         XXX’s Expected Nominal GDP                             Expected Real Per-capita Disposable
                  Per-capita                                              Income Growth
Nominal Per-Capita GDP
  CAGR (2002-2007)
                              (US$)                                                 (%)
         3.61%
                                                                                               Average annual foreign
                                                       $2,555                                   direct investments in
                                              $2,466                                           XXX from 1994 to 2001
                                    $2,363
                          $2,264                                                                was almost $2 billion
     $2,140    $2,174


                                                                                                    3.4%




                                                                                            1.0%
                                                                            0.6%    0.7%
                                                                    0.0%

      2002E     2003E      2004E     2005E    2006E    2007E        2003E   2004E   2005E   2006E   2007E


 XXX‟s economic recovery has been accompanied by decreased inflation and controlled
   government spending, which has attracted substantial foreign direct investment...
Source: WEFA, estimates based on comparable
                                                                                                                 9
Agenda

1. MARKET POTENTIAL
                            • Economic Overview
2. COMPANY HISTORY          • XXX Market

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                  10
                                                             MARKET POTENTIAL
XXX Market Potential



Three methodologies have been used to estimate market size


    Comparable country XXX market size

    XXXvian demographic analysis

    Third Party Studies




                                                             11
                                                                                                                        MARKET POTENTIAL
    XXX Market Potential

                                                 GDP per Capita, 2001(a)
                                                         (US$)    Higher Income Countries


                                                                                                            $7,245
              Lower Income Countries                                                              $6,031
                                                                                        $5,585
                                                                             $5,166
                                                                   $4,312
                                                         $2,984
                                     $2,052     $2,073
             $1,251      $1,354


             Paraguay    Ecuador     Colombia    Peru     Brazil    Chile   Venezuela   Uruguay   Mexico    Argentina


     XXX underdeveloped XXX                     XXX XXX per Adult, 2001(b)
                                                                                                             $53.0
     sector is evidenced by the                                (US$)                     $49.0
      higher XXXs per adult in
    countries with less per capita
               income                                               $29.0

               $11.0                                     $15.0
                          $8.0                                                                     $11.0
                                       $7.0                                   $6.0
                                                 $2.0

             Paraguay    Ecuador     Colombia    Peru     Brazil    Chile   Venezuela   Uruguay    Mexico   Argentina

(a) Source: WEFA 3Q, 2002
                                                                                                                        12
(b) Global XXXting & Gaming Consultants
    XXX Market Potential – Lower Income Countries



         Gross XXX Sales by Country(a)                          Total Adult Population(a)
                   (in millions of US$)                                 (in millions)
                                                 $202.0                                        $29.4
                                                            $17.0
                                   $69.0                                           $8.3
         $34.0        $36.0                                           $3.4


         Peru        Paraguay      Ecuador       Colombia   Peru     Paraguay     Ecuador   Colombia




         Average XXX XX per Adult, 2001                      Estimate of XXX’s XXX Market
                                (US$)                                  Potential
                                                                             (US$)
       Average
         $8.6                                     $11.0
                      $7.0          $8.0                       Minimum Potential in 10 years
                                                                      $145 million
         $2.0
                                                                    Growth from Today
                                                                      16% per Year
          Peru       Colombia      Ecuador       Paraguay



(a) Source: WEFA 3Q, 2002 and Global XXXting &
                                                                                                       13
    Gaming Consultants
    XXX Market Potential – Higher Income Countries

        Gross XXX Sales by Country(a)                                       Total Adult Population(a)
                    (in millions of US$)                                                 (in millions)
                                         $1,760                                                          $120.1



                                                                                            $67.4
                               $742

                                                     $327           $17.0     $16.7                               $11.3
       $34        $107


       Peru      Venezuela     Mexico     Brazil     Chile          Peru     Venezuela      Mexico       Brazil   Chile

     Average XXX XXX per Adult, 2001(b)                               Estimate of XXX’s XXX Market
                             (US$)
                                                                                Potential
                                                    $29.0
                                                                                          (US$)
       Average
        $15.2                             $15.0
                                $11.0                                       Minimum Potential in 10 years
                     $6.0
                                                                                   $259 million
          $2.0
                                                                                 Growth from Today
                                                                                   22% per Year
          Peru     Venezuela    Mexico    Brazil     Chile


(a) Source: WEFA 3Q, 2002 and Global XXXting & Gaming Consultants
(b) Excludes Uruguay and Argentina from Average                                                                           14
                                                                                                      MARKET POTENTIAL
XXX Market Potential

                           Economically Active Population in Urban Areas

          Distribution                   By Socio Economic Level (SEL)
   (thousands of people)            A          B      C1      C2         D            Total
   Under 24 years old               96        792    1,298   1,330     3,162            6,678
   From 25-49 years old             71        555     703     720      1,145            3,194
   From 50-65 years old             96        514     595     610      1,036            2,851
   Above 66 years old               20        119     108     111       109               467
   Total                           284       1,980   2,704   2,771     5,452           13,191
   Total Above 24 years old        187       1,188   1,406   1,441     2,290            6,512


                                 Adjustments to Reach Potential Market
                                     (Based on Market Research 2001)
   Economically Active Population in Urban Areas Above 24 Years Old                      6,512
   Subtration of SEL with Lower Purchasing Power (C2 and D)                             (3,731)
   Sub - Total (Target Market)                                                           2,781
   Subtraction of People from Target Market who do not XXX (43%)                        (1,196)
   Size of Estimated Potential Market                                                    1,585
   Total Number of XXX per year                                                             52
   Number of Tickets per Person per XXX                                               1-2
   Total Market Value Range                                                    $ 82,429 - $ 164,858




                                                                                                      15
                                                                                                                                MARKET POTENTIAL
    XXX Market Potential


                                               Summary of Market Size Estimate
                                                                     (millions of US$)




               Comparable
                                                 $145                            $259
                Countries




                                                                                                   Average Market Size
              Demographic
                Analysis
                                         $82                  $165                               $150 million to $250 million




                           (a)
       Independent Studies                                             $250              $300



                             0       50        100      150      200       250      300         350   400




(a) Public statements by XXX companies
                                                                                                                                16
Agenda

1. MARKET POTENTIAL

2. COMPANY OVERVIEW

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                    17
Agenda

1. MARKET POTENTIAL

2. COMPANY OVERVIEW
                            •   History
3. MARKETING
                            •   Product Line
                            •   Organization
4. OPERATIONS               •   Core Processes

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                 18
                                                                                    COMPANY HISTORY
History


      XXXX, founded by XXX in 1994, has become the undisputed leader in the
       gaming industry in XXX


        •   Today, XXXX controls over 95% of the XXXvian XXX market with its
            best selling brands XXX, XXX and XXX


        •   XXXX’s network of over 1,400 exclusive points of sales (“POS”) covers
            over 80% of the country’s most populated areas and distributes the
            Company’s XXX XXX products


        •   POS are strategically located in highest-traffic venues




                                                                                19
                                                                                    COMPANY HISTORY
History


      In its eight years of operations, XXXX has invested over $126 million in
       building a solid brand name and market position
        •   XXX over $84 million in XXXs
        •   Invested $20 million in advertising
        •   Invested $22 million in infrastructure
      XXXX has contributed over $13 million to the XXX of XXX and XXX,
       resources that have funded important welfare & charity activities in their
       jurisdiction
      The company employs 99 people directly and an additional 700 under its
       distribution contracts
      In 2000, XXX was XXX the International XXX XXX XXX as the “XXX” of
       the year, in recognition to the brand’s value and trajectory




                                                                                    20
                                                                     COMPANY HISTORY
History

                1995                        December 2002

500 POS                         1,400 POS

Starting XXX S/.100,000         Starting XXX S/. 2,000,000

                                3 electronic XXX games
1 XX game
                                8 instant lottery

No live transmission of draw    Live transmission of draw

                                Customized advertisement by target
Mass advertisement
                                segments

Sales from Monday to Saturday   Additional sales on Sunday

Scarce POS material             Abundant POS material

Simple stands                   Modern POS stands

Sales of US$18 million a year   Sales of US$27 million a year


                                                                     21
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY
                            •   History
3. MARKETING
                            •   Product Line
                            •   Organization
4. OPERATIONS               •   Core Processes

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                 22
                                                                                                COMPANY HISTORY
Business Lines



Electronic XXX                                  XXX XXX

   Umbrella Brand: XXX                            Umbrella Brand: XXXXXX

     • First electronic XXX in XXX                   • “Scratch-and-XXX” XXX
     • Absolute leader in the XXX market             • Launched in May 1998 and re-launched
                                                       in Nov. 2000 with the support of
     • Offers the highest XXXs in the country          SCIXXXs XXXX

     • Offers XXX XXXs                               • Frequency of XXXs on average every
                                                       3.5 XXXs
     • Mass communication of XXXs and
       XXXs                                          • Offers XXX XXXs only
     • Mass distribution through one of the          • Distribution through XXX’s traditional
       largest sales forces in the country             channel and direct institutional sales




                                                                                                23
                                                                             COMPANY HISTORY
Electronic XXX Products


SUNDAY XXX                                XXX statistics 2002:
      Traditional XXX XXX                       Average XXX XXX offered:
                                                    S/. 3.7 million
      Weekly Sunday XXX at 11:00 p.m.           XXX XXXs XXX:
                                                   S/. 19.8 million
      6 XXXs of 45
                                                 Total XXXs XXX:
      Starting XXX at S/.1,000,000                 S/. 28.0 million
      No cap on maximum XXX
      Estimated weekly XXX increase is
       XXX
      6 XXXs required to XXX first XXX
      XXX XXXs for 5 and 4 XXXs
      Additional XXX at 2 and 3 XXXs
       (free XXX)
      XXX Price is S/.3.00


                                                                             24
                                                                         COMPANY HISTORY
Electronic XXX Products


XXX                                         XXX statistics 2002:
      Offered with at least two Sunday            Average XXX index:
       XXX XXXs in a single XXX XXX                   1.7 XXXs per XXX

      At no additional cost to Sunday             Total XXX XXXs:12
       XXX XXX
      Simultaneous XXXing with XXX                Total XXXs XXX:
                                                      S/. 424 thousand
      XXXing of one additional XXX to
       find a XXX with 6 XXXs of the
       Sunday XXX
      US$10,000 XXX offered to XXXs of
       6 XXXs with the seventh XXX
      XXX or XXXs receive their 5 XXX
       XXX and the XXX XXX
      This addition to the XXX XXX has
       allowed an increase in the XXX per
       XXX index; the result has been a
       higher XXX of XXX that place at
       least two XXXs

                                                                         25
                                                                            COMPANY HISTORY
Electronic XXX Products


XXX                                         XXX statistics 2002:
    Promotional modality of the Sunday
     XXX                                           Total “XXX” XXXs: 325
    XXX of additional XXXs one by one,
     until obtaining at least one 6-XXX            Total XXXs XXX:
     XXX. Under this modality, XXXs                   S/. 2.4 million
     have received XXXs between S/.
     100,000 and S/. 500,000
    Promotion re-launched in
     December 2002 with a variation: 4
     additional XXXs are XXX
     simultaneously in the event of no 6-
     XXX XXX. All XXX that complete 6
     XXXs from the 10 XXXn XXXs,
     XXX a S/. 100,000 XXX
    The re-launched promotion has
     received highly positive feedback;
     has created the perception of
     increased XXX XXXs



                                                                            26
                                                                             COMPANY HISTORY
Electronic XXX Products


XXX                                       XXX statistics 2002:
      Traditional XXX XXX                       Average XXX XXX offered:
                                                    S/. 370 thousand
      Weekly Thursday XXX at 10.00
       p.m.                                      XXX XXXs XXX:
      6 XXXs of 40                                S/. 3.3 million.

      Starting XXX of S/.200,000                Total XXXs XXX:
      Estimated weekly XXX increase of             S/. 4.7 million
       S/.50,000
      6 XXXs required to XXX first XXX
      XXX XXXs for 5 and 4 XXXs
      Additional XXX at 2 and 3 XXXs
       (free XXX)
      XXX price of S/.2.00
      Forced XXX XXX every 5 weeks;
       XXXs receive 50% of XXX


                                                                             27
                                                                           COMPANY HISTORY
Electronic XXX Products



XXX-XXX                                       XXX statistics 2002:

      XXX XXX offered to all XXXs with              Average XXX index:
       at least two XXX XXXs                            1.8 XXXs per XXX

                                                     XXX XXXs: 114
      XXXs will be XXXn until one or
       more XXXs are found                           Total XXXs XXX:
                                                        S/. 914 thousand
      US$ 5,000 XXX XXX among all
       XXX that XXX 6 XXXs with
       additional XXXs XX after the initial
       XX XXXs

      This modality XXX XXX XX two or
       more XXXs in a single XXX




                                                                           28
                                                                           COMPANY HISTORY
Electronic XXX Products


JUEGA 3                                      XXX statistics 2002:
      XX with a XXX with XXX containing            Straight XXXs: 495
       ten XXXs
                                                    Straight XXXs XXX:
      XXX must XXX three XXXs, each                    S/. 272 thousand
       one, in each column
      XXX XXX, with no need of choosing            Total XXXs XXX:
       a XXX option:                                   S/. 700 thousand
          • XXX: 3 XXXs in order
          • XXXX: 2 XXXs in the last XX
          • XXX: One XXX in the XX
      The XXX can choose the amount of
       XXX: S/.2.00, S/.5.00, S/.10.00 or
       S/. 20.00
      It is also possible to XXX a XXX of
       XXXs




                                                                           29
                                                                    COMPANY HISTORY
XXX XXX Products



XXX-XXXs “Scratch and XXX”              XXX statistics 2002:
                                               XXX XXXs: 23
      “XXXX” modality                         Total XXXs XXX:
                                                  S/. 4.3 million
      XXXX XXXs

      On average, 1 of 3.3 XXXs XXXX
       XXXX

      Immediate XXX XXX of XXXs

      Constant renewal of XXX XXX to
       retain consumer interest

      Price: S/1.00




                                                                    30
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY
                            •   History
3. MARKETING
                            •   Product Line
                            •   Organization
4. OPERATIONS               •   Core Processes

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                 31
                                                                                                                                                 COMPANY HISTORY
 Organization
                                                                    GENERAL
                                                                    MANAGER
                                                                      (1)


                    OPERATIONS                                 COMMERCIAL                                    FINANCE & ADM.
                     MANAGER                                    MANAGER                                         MANAGER
                        (1)                                       (0)                                             (1)

             ASSISTANT                                   SECRETARY                                      LAWYER
             SECRETARY                                      (1)                                           (1)
                (2)




LOGISTICS     SYSTEMS       TECHNICAL       SYSTEMS        SALES         MARKETING        TREASURY     BUDGETING &     GENERAL       GENERAL
 LEADER        LEADER        SUPPORT        SUPPORT        LEADER         LEADER           ANALYST     PURCHASING     ACCOUNTING     SERVICES
   (1)           (1)         LEADER        SUPERVISOR        (1)            (1)              (1)        ANALYST          (1)           (0)
                               (1)            (1)                                                         (1)


 LOGISTICS      SENIOR       SUPERVISOR       SUPPORT        SALES            MARKETING    ASSISTANT     ASSISTANT       ASSISTANT   RECEPTIONISTS
 ASSISTANT    ANALYST DBA       (1)             (1)        SUPERVISOR         ASSISTANT       (6)           (1)         ACCOUNTING       (3)
    (6)           (1)                                         (2)                (3)                                        (1)

   DRIVER       SYSTEMS     RECEPTIONIST     ASSISTANT       SALES                                                       ASSISTANT    MESSENGER
    (1)        OPERATION        (3)             (2)        ASSISTANT                                                        (3)          (2)
                  (8)                                         (2)

 WAREHOUSE     COMPUTER       ENGINEERS                                                                                                JANITOR
   CLERK        ANALYST         ( 17 )                                                                                                   (1)
    (1)           (5)

                ANALYST       ASSISTANT
                  (2)            (5)


                                 DRIVER
                                  (5)
                                                           Total Employees: 99


                                                                                                                                                 32
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY
                            •   History
3. MARKETING
                            •   Product Line
                            •   Organization
4. OPERATIONS               •   Core Processes

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                 33
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS
                            • Core Operation Processes
5. DISTRIBUTION
                            • Operations Divisions
                            • Objectives 2003
6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                         34
                                                                               OPERATIONS
Business Process



                                                                 $

                                                                           $

    Points                                                            XXX
                     Supplying    Sales           Scrutiny
    Of Sale                                                          Payment




              Technical          Administrative          Commercial
               Support             Support                 Support




                                                                               35
                                                                                                                   OPERATIONS
     Business Process



                                                                                             $

                                                                                                         $

                 Points                                                                           XXX
                                  Supplying          Sales              Scrutiny
                 Of Sale                                                                         Payment




Points of Sale             Supplying                 Sales                Scrutiny                 XXX Payment
    Territory                 Consumption             XXX opening          Information              Upload of
     analysis                   planning                                       Generation                XXXs archive
                                                        XXX sales
    Distribution              Securities and                                XXX                      Point of sale
     contracts                  supplies shipping       XXX                                             price payment
                                                                              XXXs
    XXX                       Securities and           collection and        calculation              XXX payment
     configuration              supplies                 control
                                Distribution                                  XXXs archive             XXXing of
    Point of sale                                      Annulations           generation                XXXs events
     installation              Asset distribution       conciliation
                                and control                                   XXXs list
    Point of Sale                                      Sales
     closing                   Consumption              conciliation
                                analysis
                                                                                                                   36
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS
                            • Core Operation Processes
5. DISTRIBUTION
                            • Operations Divisions
                            • Objectives 2003
6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                         37
                                                OPERATIONS
Technical Support



                        Mission
              “To provide highest standard
            services while optimizing the use
                      of resources”


                         Vision
            “People who provide services of
                     excellence”



                                                38
                                                                                      OPERATIONS
Technical Support


            Organizational Structure                               Key Divisions



                               XXX                                 Information Systems
                    Operations and Information
                        Systems Manager

                                                                   Technical Center
       XXXX
    Secretary –
    Receptionist
   Service Center
                                                                   Logistics

                                                                   Call Center
     XXXX                                              XXXX
                              XXXX
Technical Service                                   Information
                        Logistics Manager
    Manager                                      Systems Manager




                                                                                      39
                                                                                            OPERATIONS
 Information Systems



Division Highlights
   Expertise in managing accelerated processing requirements – capacity to process up to
    2,000,000 XXXs. Ability to process, validate and authenticate 1,200,000 in less than
    three hours

   In-house software developed specifically to serve XXXX’s information systems specific
    needs – all software, with the exception of the XXX management software have been
    manufactured in-house

   Accelerated closing process and scrutiny has allowed for extended sales period (up to
    3:00 pm on Sundays) on highest-traffic locations which represent 80% of sales

   High process reliability and data integrity

   Sophisticated cross-checking process




                                                                                            40
                                                   OPERATIONS
Information Systems


                      Division Structure

                                XXX
                        Information Systems
                              Manager



                      XXX
                 Technology Head



                                        XXX
                      XXX
                                      Support
                  XXX Operation
                                     Engineering


                      XXX                XXX
                    Systems            Systems
                  Development         Production




                                                   41
                                                                                OPERATIONS
Information Systems



Division Activities

1. Development
       •   Attend the company’s information needs through the creation of new
           software program products or maintenance/upgrade of existing ones

2. XXX Operation
       •   P.O.S. setup

       •   XXX process and data integrity

       •   Operation XXX central software

       •   Creation of XXXs file



                                                                                42
                                                            OPERATIONS
Information Systems



Division Activities

3. Systems production
       •   Manage production systems environment
       •   Database administrator
       •   Control quality of software changes


4. Engineering support
       •   Network administration and security
       •   Internal customer support
       •   Assess new technology options for the business
       •   Telecommunications support

                                                            43
                                                                                             OPERATIONS
Information Systems


Data Integrity Check
       “The outmost and most critical task undertaken before the XXX is to guarantee that
        every single XXX XXX placed by the customer is effectively included in the XXX.
        After the XXX, integrity means to guarantee an error free XXXs file”
Parameters checked:
       Sales opening and closing information per POS
       XXX of XXXs per POS
       Internal XXXX of every XXX XXX for every POS
       Last internal XXX XXX XXX of previous XXX versus first internal XXX XXX XXX of
        current XXX
       XXX of XXXs recorded by report files versus gross total XXXs recorded in
        transaction files
       Format integrity of every single transaction recorded
       Data base readiness and performance


                                                                                             44
                                                                                    OPERATIONS
Technical Service



Division Highlights

   Nationwide coverage of POS network

   Reduced maintenance costs per XXX by over 30% - from $496 (price of
    outsourcing) to an average over the last three years of $337 per annum

         •   Cost reductions based on replacement of individual parts instead the
             full units

         •   Many parts are currently manufactured by local providers reducing
             costs even further

   Reduced response time to client service requirements from 4 hours to 1.5
    hours in XXX and from 48 hours to less than 30 minutes in the interior of the
    country (and 5 hours for remote POS locations)



                                                                                    45
                                                                    OPERATIONS
Technical Service



                           Division Structure

                                  XXX
                             Technical Center
                                Manager



               Technical               Technical
                             Drivers                   XXX
                  Rep                     Rep
                             FIELD                 Coordinator of
                 FIELD                   SHOP
                              (5)                    Province
                  (4)                     (9)



                                                   Service Rep
                                                   PROVINCE
                                                       (9)




                                                                    46
                                                                     OPERATIONS
Technical Service



Division Activities

   Corrective Maintenance

        •   Nationwide solutions to hardware and software problems

   Preventive Maintenance

        •   Continuous nationwide field maintenance

   Parts Recovery

   Call Center Management




                                                                     47
                                                                                                                                           DISTRIBUTION
Technical Service – Repair Requests

                                                    Repair Requests 2002
                                                             (XXX of repairs)

      3,509




                   1,706                                                                                                  1,647
                                                                                 1,268

                                    805                                                                                              782
                                                                 623
                                                    479                                           431
                                                                                                            179
                                                 se




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          Over 11,400 repairs were managed by the Company’s Technical Center in 2002

                                                                                                                                           48
                                                                                      OPERATIONS
Logistics



Division Highlights

   Efficient XXX repair facility – dramatic cost reductions through specialization
    and focus on repairing individual parts


   Short response time:

     •   Retrieval of damaged XXX

     •   Supply POS locations

   Secure distribution and accounting systems for XXXXXX XXX XXX XXXs




                                                                                      49
                                                           OPERATIONS
Logistics


                   Division Structure

                                 XXXX
                           Logistics Manager



            Logistics Analyst          Warehouse Clerk
                   (1)                      (2)



            Logistics Dispatch           Logistics Field
                Assistant                  Assistant
                    (1)                       (2)



                  Driver                       Janitor
                   (1)                          (1)




                                                           50
                                                                            OPERATIONS
Logistics



Division Activities

   Provide in a timely and controlled manner the necessary means for the
    normal operation of the business

   Supplies and securities purchase and safekeeping

   Analysis of POS inventory level and supply needs

   Planning and dispatch of main supplies to POS

   Diskettes supply and formatting




                                                                            51
                                                                                          OPERATIONS
Call Center



Division Highlights

      National toll-free number to facilitate contact with POS network

      7 days a week attention to POS

      Clear administrative processes and systems that enable the reception,
       control & follow-up and closing of client requests

      Software developed in-house and customized needs of XXXX




           The Call Center can be a powerful platform to strengthen direct contact with
                                        end-customers


                                                                                          52
                                                                              OPERATIONS
Call Center



Division Activities

      Direct service lines to POS on a nationwide level

      First-level help for problem solving

      Redirection of problems to appropriate attention centers

      Tracking and closing of problems

      Management of repair reports, supply request and XXX XXX information




                                                                              53
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS
                            • Core Operation Processes
5. DISTRIBUTION
                            • Operations Divisions
                            • Objectives 2003
6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                                         55
                                                                                 OPERATIONS
Technical Support



Objectives 2003
      Strengthen direct contact with end-customers through use of call-center
       facility
      Define centralized processes to respond to end-customer requests
      Continue developing multi-channel strategy (on-line, mobile phone,
       internet)
      Pursue bulk distribution channel (3,000+ additional POS) for XXX XXX
      ISO certification for XXX processes
      XXXX network security certification
      Optimize POS XXX maintenance further – develop supplier and know-how
       to repair motherboards, hard drives and other core parts
      Implement Business Intelligence tools


                                                                                 56
1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                    57
                                                                                 DISTRIBUTION
Distribution


      1,400 POS XXXs across XXX, covering 80% of the country’s population

      Distribution agreements with all major retailers including XXX and XXX

      Best locations available – trusted revenue generators for POS locations

      8 years selecting the most trustworthy POS locations, minimizing churn
       and risk of XXX

      Sophisticated processes for XXX XXX and XXXX

      Close ties with outsourced distribution companies




                                                                                 58
                                                                                                     DISTRIBUTION
Distribution Process

                          XXXX                                  Distribution Partners
   Outline geographic coverage strategy              Manage assigned territory
   Define distribution channels                      Selection and administration of POS locations
   Select distribution partners                      Cash Collection
   Provide support to POS Locations:                 Data Collection
         POS support
         POS module support
         Supplies
         POS Advertising
         Merchandising
   Define type and mode of operation
         Promoter vs self-service
         Full time promoter vs part-time promoter
   Define operation parameters
   Opening hours (days per week, hours per day)




                                                                                                     59
                                                                                      DISTRIBUTION
Distribution Outsourcing Partnerships

                              XXX                                XXX

     Contract   Signed February 29, 2000           Signed February 29, 2000
     Term       Expires March 01, 2004             Expires March 01, 2004
     Coverage   Territory:                         Territory:
                - 38 XXX Districts                 - 04 XXX Districts
                - 11 Cities                        - 59 Cities

                POS:                               POS:
                - 967                              - 431

                Sales Force:                       Sales Force:
                - 258      Full time sales girls   - 117      Full time sales girls
                - 170      Part time sales girls   - 24       Part time sales girls
                - 38       Supervisors             - 26       Supervisors
     Other      Accounts for 65% of XXX gross      Accounts for 35% of XXX gross
                sales                              sales




                                                                                      60
                                                                                                                              DISTRIBUTION
 POS Location


                                                  Type of POS
                                      (% of total POS locations and % of sales)
30.3%
                                                                                                  Quatity %         Sales %

      24.2%

39.9%

                                                                                                                      15.1%




              3.9%     4.6%
                  3.2%                       3.8% 3.0%
                                      2.4%             2.3%
                               1.4%                           0.8% 0.8% 0.6% 0.4% 0.9% 0.8% 0.6% 0.6% 0.4%15.8%


        6.5% 6.3% 5.7%
                         4.3% 3.4% 3.4% 3.3%
                                             2.9% 1.7%
                                                       1.3% 1.2% 1.1% 0.8% 0.7% 0.5% 0.4% 0.4% 0.4%
  X


        X


              X


                    X


                          X


                                X


                                      X


                                            X


                                                  X


                                                        X


                                                              X


                                                                    X


                                                                          X


                                                                                X


                                                                                      X


                                                                                            X


                                                                                                  X


                                                                                                        X


                                                                                                                X

                                                                                                                        er
XX


      XX


            XX


                  XX


                        XX


                              XX


                                    XX


                                          XX


                                                XX


                                                      XX


                                                            XX


                                                                  XX


                                                                        XX


                                                                              XX


                                                                                    XX


                                                                                          XX


                                                                                                XX


                                                                                                      XX


                                                                                                              XX


                                                                                                                      th
                                                                                                                     O
                                                                                                                              61
                                                                              DISTRIBUTION
POS Selection and Management:
Core Processes


      New POS Location         POS Performance              Closing of POS
         Origination               Control                    Locations




     POS location            Sales level control         Asset retrieval
      background check        XXX collection control
                                                           System and
                              Systematic monitoring
     POS XXX                                               network update
      installation             of incident levels at
                               POS (collection and
                               operating hours)
     POS XXX
      initialization and      Supervision of POS
      data upload              standards (promo
                               material and technical
     Training                 conditions)
                              XXXXXX management
                               control


                                                                              62
                                                                                                                DISTRIBUTION
    POS Location Age

                                                 POS Location Age(a)
                                                     (% of Total Locations)



                                                            34.0%
                                                                                                 30.0%



                                                                               17.8%


                  9.7%                  8.6%




               7 to 8 years           5 to 6 years         3 to 4 years       1 to 2 years   Less than 1 year




(a) Based on Transdata-managed POS locations
                                                                                                                63
                                                                                                                                          DISTRIBUTION
    POS Locations Turnover


                                POS Location Turnover per Month in 2002
                                                           (% of Total POS)
     9.1%                   8.9%
                 7.2%                 6.8%                                                                              6.2%
                                                   5.4%      5.3%      5.4%       6.0%          6.4%       5.7%
                                                                                                                                   2.8%
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                                                   Reasons for Turnover
                                                     (% of Average Turnover)
                                                      5.4%
                                                      0.5%
                                                      0.6%
                                                                                   Total
                                                                                   Travel
                                                          3.9%                     Voluntary Closing
                                                                                   Selling of Location
                                                                                   POS Abandonment
                                                                                   Money Taking
                                             Reason for Abandonement
                                                                                                                                          64
                                                                                  DISTRIBUTION
POS Location Loss Management


              XXXX Losses from Misappropriation
                          (US$ thousands)




                      $74.2                     Losses in 2002 only represented
      $69.5                                           0.16% of Revenue
              $60.3



                               $26.7               $27.2      $28.8
                                        $15.6



       1996   1997    1998     1999     2000        2001       2002




                                                                                  65
                                                                        DISTRIBUTION
Logistics


      XXX collection, management, sales reporting and reconciliation


      XXX collection, processing and reporting


      XXX XXX


      Provisioning - Product promotion, supplies


      Support services: Help desk services and technical support


      Equipment management



                                                                        66
                                                                                   DISTRIBUTION
Logistics – XXX Collection Core Process



                              Valuables Deposit
      Valuables collection   and Record-keeping             Revenue Analysis
                               and Conciliation



      Collections done         Agreements with            Revenue data
       twice weekly              banks for quick             consistency
                                 deposit process             analysis
      Transportation
       process                  Cross-check of             Sales report
                                 revenue and deposits
      Security                                             Revenue budget
                                Weekly conciliation
       considerations                                        per POS and
                                                             geographic area for
                                Communication with
                                                             XXX cycle
                                 XXXX

                                Largest division of
                                 distribution company


                                                                                   67
                                                                               DISTRIBUTION
Logistics – XXX Collection Core Processes



      Closing of XXX          Concentration of             XXX Conciliation
           Cycle                  XXXs                        Post-XXX




     Closing of XXX         Associates hierarchy        Storage of XXX
      cycle at each POS       sustentation                 results and sales
                                                           information
     Retrieval of           Validation of annulled
      XXXting data on         XXXs                        Sales analysis –
      diskettes                                            comps
                             Inconsistencies
     Retrieval of            management                  Approvals of XXX
      annulled XXX                                         grants
      XXXs                   XXX concentration
                              and XXX validation          Load XXXs data on
                                                           POS network



                                                                               68
                                                           DISTRIBUTION
XXX XXX – Core Processes



                                          XXX XXX
           Product Distribution
                                         Book-keeping




              Request                  Book rotation
               management
                                        Book retrieval
              Dispatch
                                        Book dispatch
              Activation
                                        Book activation
              Cross-checks
                                        System updates
              Book life follow-up




                                                           69
                                                 DISTRIBUTION
Logistics - Support Services


      Reporting

        •   Daily sales quotas

        •   Daily sale results:

      On-field XXX XXX stock

      Help Desk support for the operation of
       XXX XXXs

      Support and supervision of procedure
       execution in case of contingency

      Assistance to zone managers in relation
       to XXX sales report



                                                 70
                                                                                                           DISTRIBUTION
    Human Resources - Promoters

                                                 Promoter Rotation(a)
                                                   (% of Total Promotors)


             Average rotation in 2002 was 11% per month
                                                                                           42.2%


                                                30.8%


                                                                      19.3%


                     7.7%



                  3 to 6 years                 1 to 2 years      6 months to 1 year   Less than 6 months




(a) Based on Transdata-managed POS locations
                                                                                                           71
                                                                                DISTRIBUTION
Distribution Challenges


      Execution of partial sale closings to maintain integrity of XXXs

      Logical POS visit routes

      Permanent update of associates data bases

      Associates and strategic points (Banks, Police delegation etc)
       geographic location and identification

      Constant diskette renewal and reposition for total coverage in case of
       contingency

      Technical contingency team, trained in on-the-field necessities
       response

      Statistical data administration of important dates and/or holidays
       involving the normal operation of sales field (risk of XXX losses)


                                                                                72
Distribution Challenges


      Unforeseen location closing

      Sudden Resignations – Region Managers – Promoters

      XXX XXX Theft

      Assaults to POS

      Energy Blackouts on the Field and on the Transmission center (office)

      Absence of Sales Personnel to the Field

      Dedicated Data Communication Line Fall

      Storage Devices Errors

      Electronic and XXX Systematic Fraud




                                                                               73
                                                                      OPERATIONS
Infrastructure – POS Network


      Currently stands at 1,400 XXXs nationwide

        •   High concentration in XXX (72% of POS locations)

        •   Presence in 65 cities major cities

        •   Cover of over 80% of the country’s most populated areas

      Potential to grow to 2,000 - 2,500 XXXs

        •   Large retailers have begun expanding outside XXX

        •   On-line vs Off-line growth criteria




                                                                      74
POS Network - Potential for Growth




                                                                                       DISTRIBUTION
New POS Growth Opportunities

      XXX, can support additional growth of 435 POS, representing a 43%
       growth in XXX, achieving 1,430 POS

      In the Provinces, 175 POS can be installed at new sites increasing the
       total provinces installed base to 570 POS. This includes installation of new
       POS in XXX, XXX and XXX, achieving a 100% coverage of the
       Departments

      With a total of 600 POS growth nationwide we would achieve a total
       installed base of 2,000 POS

      Additional growth potential may be assessed after 2,000 POS are
       operational




                                                                                      75
                                                                                                                 DISTRIBUTION
 Infrastructure – POS Network

                                          New POS Rollout 2003-2004
                                                (XXX of POS Per Location)



                                                                                    Total New POS XXXs
23
                                                                                            600

     18
                   16
                             13
              12                           12
                        11
                                  9   9
                                                 8
                                                                      7
                                                                 5                   5
                                                     4   4                      4
                                                             3                                       3
                                                                            2                            2
                                                                                         1       1           1
                                                                                             0
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX


              XXX would increase it POS XXXs by 435 units

                                                                                                                 76
                                                                                                OPERATIONS
Infrastructure – POS Network


Off-line Considerations                         On-line Considerations

       Low cost / no promoter                         Requires high-traffic points of sales

       Lower volume of transactions                   Landmark locations

       Works in lower traffic point of sales          Communications costs
        locations
                                                       Optimal to install in A, B & C
       Optimal to remain in A, B, C
                                                       Revenue from additional
       Remote locations                                transactions (?)

       Cellular coverage quality                      Sophisticated chains of retailers

    Target: 1,000 Off-line POS                      Target: 1,000 On-line POS




                                                                                                77
                                                                                                                               DISTRIBUTION
Infrastructure – POS Network

                              POS Network Composition 2003-2004
                                            (XXX of POS Per Location)
     80

           70
     20                                                                                   Total POS XXXs
           20
                                                                                                2,000

                45   45
                           40     40
                                       35
                20   20    30     10        31                                                         Online Terminals
                                                 30
     60                                               25                                               Offline Terminals
                                       15   10
           50                                    15   5    18   18
                                                                     15   15   15
                                                           5    5                   10   10   10
                25   25                                              5     5   5
                                  30   20   21                                       3             5
                                                 15   20   13   13                        4   4        4    3   3
                           10                                        10   10   10                  3                 2     1
                                                                                     7   6     6       2




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         XXX can easily sustain 800 online XXXs and 630 offline
          XXXs to complete a network of 2,000 POS across XXX
                                                                                                                               78
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

7. REGULATION AND COMPETITION

8. FINANCIAL PERFORMANCE ANALYSIS

4. INFRASTRUCTURE

                                    79
                                                                          INFRASTRUCTURE
Infrastructure – Central Servers & Communications
Equipment


  Software   Version   Developer    Software   Version   Developer
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX
    XXX       XXX        XXX          XXX       XXX        XXX



                                                                     80
                                                                                       INFRASTRUCTURE
    Infrastructure – Central Servers & Communications
    Equipment
                           Communications Process

• Physical Communication
• Sales and Collection
  Process                  Distribution
• Data Collection and       Company       512 Kbps
  Control                     (XXX)                                512 Kbps

                                                                  XXXX
                                                     XXX
   1,400+ POS                                                  Headquarters

                           Distribution                    •   Database Servers
                                          218 Kbps
                            Company
• Physical Communication                                   •   Security Servers
                              (XXX)
• Sales and Collection                                     •   Intranet Servers
  Process                                                  •   Communication
• Data Collection and                                          Servers
  Control



                                                                                  81
                                                        INFRASTRUCTURE
Infrastructure – Communications Process


      Internal mobile telephony




      Internet access for XXX collection




      Dedicated phone line for XXX transmission




                                                   82
Infrastructure – Central Servers & Communications




                                                                    INFRASTRUCTURE
Equipment


Adaptations to manage On-Line network
    Hardware
       • Two additional application servers
       • Upgrade current database server
       • Add communication equipment (Modems, UPS, etc)
       • Two firewall servers
    Software
       • Online XXX management software
       • Additional Oracle licenses for cluster servers
       • Operating software for servers
       • Additional firewall software
    Infrastructure
       • Additional XXX to install backup servers (security)
       • Additional network monitoring center

                                                               83
                                                                                      INFRASTRUCTURE
Infrastructure – POS XXXs


      High resilience to physical demands

        •   Durability: Over 90% of XXX POS are located outside establishments
            disXXX remarkable resistance to wear down

      Programmability of new products and services

        •   All POS XXXs are PC based, and can therefore be reprogrammed or
            modified with ease
            Reparability and expandability

        •   POS XXXs have parts that are widely available and can be repaired
            quickly

        •   POS XXXs are expandable and compatible with a large XXX of
            devices



                                                                                 84
                                                     INFRASTRUCTURE
Infrastructure – POS XXX



Software



      Operating System: XXX DOS 7.0



      XXX Application: XXX XXX (XXX Systems)




                                                85
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATORY FRAMEWORK

8. FINANCIAL PERFORMANCE ANALYSIS

                                    86
                                           MARKETING
Marketing – Core Values



               Solid financial standing


               Credibility


               XXXs


               Image




                                           87
                                                                                                                      MARKETING
    Brand Positioning Success – Top of Mind Recognition


                                                             Recognition(a)
                                             (Do you know the following XXXs?)



        98.4%           94.3%           94.0%           88.8%
                                                                     84.0%        81.9%
                                                                                             71.4%

                                                                                                          52.0%




         Tinka         Machines          Bingo           Casino     Traditional   Kabala   Horse Races   Rapitinkas
                                                                     Loteries




(a) Source: ICOM 2001 Survey in XXX, XXX; Sample size: 800
                                                                                                                      88
                                                                                                      MARKETING
    Brand Positioning Success – Top of Mind Recognition


                                                             Top of Mind(a)
                                           (Mention names you know/remember)


        98.4%
                        94.3%           94.0%           88.8%
                                                                     84.0%    81.9%
                                                                                      71.4%

                                                                                              52.0%




          XXX             XXX             XXX                XXX      XXX      XXX    XXX      XXX




(a) Source: ICOM 2001 Survey in XXX, XXX; Sample size: 800
                                                                                                      89
                                                                    MARKETING
Brand Positioning Success - Penetration


         XXXs in Which You Have Participated at Least Once
                                 (%)


  46.4
         42.8




                 23.3     21.6         20.6
                                              18.4
                                                     10.5    10.4



  XXX    XXX      XXX      XXX         XXX    XXX    XXX     XXX




                                                                    90
                                           MARKETING
Brand Positioning Success – Market Share




               Other
                2%




                            Tinka
                             98%




                                           91
                                                                                   MARKETING
Marketing Objectives


      Assign advertising investment to spaces frequented by the target group as
       a way to increase the effectiveness and profitability of the investment


      Maintain a target group reach level of at least 70% with high frequency


      Innovate and improve messages and commercials used in the media


      Motivate the public to increase their average amount spend, by the
       highlighting the possibility to XXX


      Strongly emphasize the value of the XXX




                                                                                   92
                                                                               MARKETING
Marketing Strategy


      Different messages by media and target group

      Concentration in communicating XXX and XXX’s fifth week forced XXX

      High concentration on the last three days before the XXX

      Promotions on special dates

      Use of promotional tails for the XXX

      Live XXX transmission

      Results transmission on high credibility stations

      XXXs are given in public ceremonies with a XXX music group and
       fireworks in the district in which the XXX XXX was sold, with massive
       public assistance


                                                                               93
                                                                                          MARKETING
Marketing Channels


    Mass Media Presence
    Long term relationships with preferential rates and costs per rating point.
       • Television channels:
            – Channel 2: transmits both advertisement and live XXXs. Strategic partner.
            – Channel 5: sponsors important sports and news packages.
       • Press (results and XXX information)
            – El Comercio: leader in the country
            – La República: best coverage nationwide
       • Radios: several musical, news and romantic stations
    External Presence
       • Public XXX payouts
       • Beach events, parades and other events presence
    POS Advertising
       • Flyers, posters and other POP material

  The company has been using the services of advertising firm “Leo Burnett” since
                                   June 2001

                                                                                          94
                                                                     MARKETING
Marketing Channels – Mass Media


      Media and External Presence Institutional spots
      New XXX Launching spots
      Colorful and high impact XXX spots
      4X3 Promotion spots. (three XXXs for the price of two)
      Sports Sponsoring
      Radios : News mentions and jingles
      Press notes in the main newspapers in the country
      XXXs Campaign (TV, radio, press)
      Transmission of the XXX payment on television news programs
      XXX results and XXX announcements in newspapers




                                                                     95
                                                                                    MARKETING
Marketing Channels – External Presence


      Participation in events like the XXX


      The XXX is XXX in the district in the point of sale where the XXX was sold


      XXXs are given to the retailer and the sales clerk too


      Electronic Advertising signs


      Diffusion of charity work


      Beach events




                                                                                    96
                                                                       MARKETING
Customer Profile – Electronic XXX



Primary Group:
      Men over 35 years old, from social economic levels A,B and C1
      Optimist. Chief of family, works
      Intelligent, responsible and demanding
      Buys every single week
      Buys one XXX for both XXX and XXX
      Chooses XXXs based on special dates
      Buys at a fixed location and sales attendant who brings XXX
      Heavy buying concentration the last day before the XXX
      Tendency to look for statistical information




                                                                       97
                                                                             MARKETING
Customer Profile – Electronic XXX



Secondary Group:

      Men and women over 25 years old, from the B and C social economic
       levels


      Buys impulsively, when the XXX is high or when there is a promotion


      Picks XXXs by XXX


      Does not look for more information




                                                                             98
                                                                                         MARKETING
Customer Profile - XXX

Primary Group:
      Frequent XXX: Young people (18-25 years old) of social economic levels A, B and
       C
      And women above 46 years old from social economic levels B and C, that also
       enjoy XXX XXXs and bingo
      An important amount of XXXs XXX indicate they do so because their children are
       attracted and ask them to buy it
      Buys by impulse, emotional
      Is highly influenced by TV advertisement
      Wants to XXX “at least something” not necessarily the biggest XXX
      Looks for multiple XXX options
      Looks for a brand he can trust and that guarantees to pay XXXs
      Likes to hear about other XXXs
      The average amount of XXXs purchased by XXX is 2.3, 50% higher than the
       electronic XXX
      The basket of XXXs include what all potential XXX like: sports, XXXs, gambling,
       XXXs., XXXs, etc.

                                                                                         99
                                                                                MARKETING
Brand Positioning


      Latest qualitative researches (July 2002) show that the XXX brand is
       perceived as the market leader
      XXX is also perceived as product that communicates a XXX identity that
       creates a strong emotional bond
      It is perceived as a motivating XXX, meaning “emotion of XXX and
       sharing”, illusion of XXX, economic safety
Critical Success Factors
      Brand credibility
      Adequate distribution
      Uninterrupted attention in the points of sale
      On time payment of XXXs offered
      Constant renewal of XXXs




                                                                                100
                                                                                     MARKETING
     Brand Positioning – Study(a)



    During 2002 XXXX decided to perform a study to evaluate the image
    and positioning of its electronic XXX XXX and related products
    Sample Distribution
          Constant XXX (Men and women) over 35 years of age, belonging to the SEL
           A/B/C

          Occasional XXX (Men and women) between 25 and 35 years of age,
           belonging to the SEL A/B/C

          Deserters XXX (men and women) between 40 and 55 years of age, belonging
           to the SEL A/B

          Deserters of XXX (men and women) between 40 and 55 years of age,
           belonging to the SEL A/B



(a) Focus groups size (6 – 10) people. The sample distibution was
                                                                                     101
    men and women
                                                                                                          MARKETING
   Brand Positioning – Study

                       Mental Map of Positive Aspects – Constant XXX

                   Automatic XXX
                                                         3x2 Alternatives



Illusion
                                                                                   The host is cheerful
                                                                                      and dynamic
                                      Promotions                                     The host is well
                                                                                        accepted
                                                               XXX
    Little investment to                                                            Presence of Notary
       will big money         XXX             XXX                                      strengthens
                                                                                       authenticity
                                                                                  The XXX mechanics is
                                                                                       transparent
                               POS Modules         Promoters




   Easy to            Have become       Have increased        Amiable treatment   Emotional Link / XXX
   locate             more modern          in XXX                 of clients           artifacts




                                                                                                          102
                                                                                                                            MARKETING
Brand Positioning – Study
                       Mental Map of Negative Aspects – Constant XXX
                                                      Are not being
                                                      rewarded, feel
                                                        excluded
                                                                                                                  Loyal
                                                                                                                custome
    Les                                                                                                          r is not
                           Takes time          Only one              XXX                Secondary XXXs            being
probabilitie                 to XXX              XXX              increases              not attractive
 s to XXX                                                                                                       rewarde
                                                                    slowly                   Sporadic                d
                                                                                            promotions
                     Amount of XXXs has
                         increased                        XXX
Disco                                                              Promotion                                     Do not
                  Scheduled late night       Matrix                                    Lack informative
mfort                                                                                      material             transmit
                   Suspicion about live                                                                          a good
                      transmission         XXX             XXX          Modules          Badly located          image of
 Lack
                     ¿Why are XXXs                                                    Lack of uniformity          XXX
   of
                      eliminated?                   Promoters
inform
 ation


               The company do not         Lack of uniform,      Treatment is not        Wear little        Do not work
               provide the optimal          and training          personalized     attractive uniforms     during lunch
                conditions to work                                                                           brakes


                                                                        Do not transmit a
                                                                       good image of XXX

                                                                                                                          103
                                                                             MARKETING
Brand Positioning – Study



¿If they were managers?

– Constant XXX How can XXX achieve more success:

      Improvement in promoters work conditions and training

      Reward loyal customers through special XXXs: vehicles, among others

      Additional XXXs to stimulate sales

      Larger amount of promotions in different dates

      More frequent XXX payment

      More brand advertising




                                                                             104
                                                                                 MARKETING
Brand Positioning – Study
    Mental Map of Positive Aspects – Occasional / Deserter XXX


                              3x2 is interesting




                                Promotions




                                    XXX


                                                   Colors
                    XXX




     Accumulated XXX is a                          Identifiable, get attention
     stimulator to purchase




                                                                                 105
                                                                                                                                    MARKETING
Brand Positioning – Study
         Mental Map of Negative Aspects – Occasional / Deserter XXX
                                User is
                                 not
                               rewarde
                                  d

                                                                                                                       Lack of
                                                                                                                     information
               Little attractive          Promotions not        Amount of XXXs
                                                                                            Controversial             generates
                     XXXd                    frequent            has increased
                                                                                                host                  doubts on
                                                                                                                      credibility
                                                                                            Late schedule

                         Take time to                                                          Not live
                                             Promotions           Matrix
 Credibility                XXX
                                                                                           XXX annulations
   doubt                                                                       XXX
                           Only one                                                          Unbalanced
                             XXX              XXX                  XXX                         XXXs
                                                                                           Notary does not
                            Lack of                                                           support
                          innovation                POS Modules    Promoters

Appearance not
   esthetic
                            Do not work in       Attention is     Do not have            Denote             Lack       Wear old
                               optimal           not uniform      personalized         tiredness          presence     uniforms
                             conditions                            treatment


    Bad image
     of XXX                                                                Bad image
                                                                            of XXX

                                                                                                                                  106
                                                                               MARKETING
Brand Positioning – Study



¿If they were managers?
– Occasional / Deserter XXX How can XXX achieve more success :
      Increasing promotions: XXX goes to your home and gives you groceries,
       fixes your kitchen, etc
      Raffling appliances and other XXXs with old XXXs
      Swapping with old XXXs
      Explain in detail the XXX process and why are they XXXs that are not
       included
      Innovating
      Donating money to “Beneficencias” for humanitarian work
      Providing XXXter training, and improving uniforms
      Advertising more
      Having more that one XXX per XXX


                                                                               107
                                                                                     MARKETING
Brand Positioning – Study



Diagnostic
      XXX tends to be perceived as the first electronic XXX, leader in the
       market. It offers guarantee, security and trust given its presence in the
       market for many years
      It’s a brand that appeals to the national values; it communicates the “XXX”
       concept. Therefore a strong emotional bond exists among its followers
      It is perceived as a motivational XXX that means "the emotion of to XXX
       and to share with the dear", "the illusion to XXX and to buy what one
       wants", "tranquility and economic" security
      The constant player claims he should be rewarded for his fidelity.
      The occasional player (mostly gravitating) also requests rewards through
       XXX secondary XXXs / promotions; and also needs more information to
       clarify its doubts regarding the credibility of the XXX and XXX



                                                                                     108
                                                                               MARKETING
Brand Positioning – Study



Diagnostic
      In general terms we observed that XXX has no enemies, only people
       claiming innovation. As a consequence the image should be “refreshed”
       for several angles. Despite the fact that people have perceived
       improvements made during the last few years, one should consider:

        •   Improve the appearance of promoters (motivate them because they
            are key pieces of the sales process) y modules

        •   Innovate to “seduce” constant, occasional and deserter XXX

        •   Communicate and strengthen the “happiness” message through POS
            and TV commercial

      The probable entrance of American XXX can be appealing for XXX and
       can even lead to purchase, but not to the total abandonment of XXX.
       Therefore is advisable to opt for the national values, “lo XXXano”


                                                                               109
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATION AND COMPETITION
                                • Regulation
8. FINANCIAL PERFORMANCE ANALYSIS Competition
                                •

                                                110
General XXX Law (D.L. 21921)


      Defines XXX activities

      Establishes the Family Welfare National Institute (INABIF) as the ruling
       institution

      Provides for nationwide licenses (unrestricted XXX)

      Legislates XXX management and administration

        •   Authorizes government welfare institutions to operate lotteries directly
            or by joint venture agreements with private groups

        •   Establishes the rules for XXX payments and distribution of unclaimed
            XXXs

        •   Establishes the Contingency Fund



                                                                                       111
  Taxes Applicable to XXX Activities


                            XXX Tax                              XXXX Tax

Source         Levied on all XXX activity. Payable   Levied on all income generated by
               by XXX                                sale or provision of XXX
Taxable Base   XXX value, both XXX and XXXX          Total monthly income received less
                                                     XXX paid out
                                                     Total income defined as gross sales
                                                     less commissions paid to
                                                     distributors
Rate           10%                                   10% for XXXX
                                                     12% for XXXX
                                                     5% for XXXX
Collector      Province municipality                 SUNAT (local “IRS”)




                                                                                           112
XXXX Licenses


     XXXX has had a longstanding relationship with both the XXXX and the
      XXX

     XXXX has had a history of honoring all contractual commitments

     All terms and conditions on the existing licenses have been agreed to by
      consensus

     Through the licenses, XXXX is a major contributor to these entities’ yearly
      income:

       •   XXX Joint Venture contributes 90% of XXXX income

       •   XXX Joint Venture contributes 10% of XXXX de XXX




                                                                                    113
New XXX Law (pending approval)


      Contemplates Tighter Regulation of XXX Operators

      Establishes new minimum requirements to qualify as a XXX operator,
       including:

        •   Operating experience in XXX or abroad

        •   Bond of US$700,000

        •   Shareholders equity of US$1 million

      Limits the capacity of XXXX operators to install Video-XXX equipment

      Approved at the Production and XXXX and passed to the XXXX. Currently
       being discussed at the XXXX




                                                                               114
New XXX Law (pending approval)


      Contemplates More Transparency in License Issuance Process


      Further regulates the process of license issuance by the XXX


      Establish that the issuance of any new XXX license must follow a
       procedure that includes a public bid for the operating license


      Does not limit XXX of licenses


      All qualified XXX operators, including XXXX, may bid for new operating
       licenses




                                                                                115
Other Relevant New Regulation


      XXXs and XXXX Law 27153 (June 18, 1999) and Law 27796 (July 24,
       2002), is the legal frame for existing XXXs and XXXX operations

        •   Establishes that all XXXs and XXXs must be located and operated in
            5-star hotels throughout the country (Law 27796)

        •   Establishes a 3 to 5 year timeframe for all existing XXXs and XXXs to
            comply to new legislation (Law 27796)

      Law 27796 will reduce competition from the informal XXX/XXX sector

      D.S. N° 009-2002-MINCETUR dated November 11, 1992, regulates in
       detail the XXXs and XXXs Laws




                                                                                    116
Agenda

1. MARKET POTENTIAL

2. COMPANY HISTORY

3. MARKETING

4. OPERATIONS

5. DISTRIBUTION

6. COMPETITION

7. REGULATION AND COMPETITION
                                • Regulation
8. FINANCIAL PERFORMANCE ANALYSIS Competition
                                •

                                                117
                                                                           2 - Competition
Competition - Reasons for Failure


      Inability to establish a brand name that people trust to deliver XXXs to
       XXXs in a fair and XXXd manner

      Inability to secure valuable and exclusive points of sale

      Inability to efficiently manage the distribution and collection process

      Inability to correctly target market segments

      Inability to achieve size of XXXs to compete with XXXX…XXX’s lowest
       XXX is $300,000 and has reached as much as $2,300,000

      Inability to achieve revenue scale to support business profitability



    Given the quality of their POS locations, the Company estimates that a new
  competitor would require a minimum of 3,000 XXXs (POS) to equal XXXX‟s XXX
                                        sales
                                                                                       118
Competition - Current




                                                                                  COMPETITION
      In August 2002, XXX launched a new XXX XXX XXX called XXX

        •   Management by a group of Italian XXX operators with experience in
            operating similar XXX in Milan, Italy

        •   Signed contract with the XXX XXXX Association

        •   After 15 weeks of sales, XXX counts with only 150 POS in XXX and
            have achieved 1,192 XXXs. The end of the local championship, sales
            fell by more than 50%

        •   New XXX called XXX has been launched, based on the guessing the
            amount of goals to be obtained in 4 matches

      Other XXX have announced their intention to enter the market - no new
       operations have been launched to date



                                                                                 119

				
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