ABERTURA DE CAPITAL NA BOVESPA E MARGEM LíQUIDA RECORDE MARCAM O

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ABERTURA DE CAPITAL NA BOVESPA E MARGEM LíQUIDA RECORDE MARCAM O Powered By Docstoc
					    Destaques do Ano


                         CIELO NET INCOME OF R$423.6 MILLION IN 2Q11 AND
                                  NET INCOME MARGIN AT 37.8%
Barueri, July 26, 2011 - Cielo S.A. (BM&FBOVESPA: CIEL3/OTC: CIOXY) announces today its results for the second
quarter of 2011. The Company’s consolidated financial statements are presented in accordance with the International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in accordance
with the accounting practices adopted in Brazil.


2Q11 HIGHLIGHTS


 Transaction financial volume totaled R$74.6 billion, up 21.2% year-on-year and 6.3% quarter-on-
  quarter;

   Net Operating revenue + prepayment of receivables, net, of R$1.119 billion, up 6.7% compared with
    2Q10 and up 3.4% as compared with 1Q11;

 Adjusted EBITDA of R$716.5 million, down 2.6% year-on-year but up 4.7% quarter-on-quarter;

 Adjusted EBITDA margin at 64.0%, down 6.1 p.p. year-on-year but up 0.8 p.p. quarter-on-quarter;

 Cielo Net income totaled R$423.6 million, down 7.5% year-on-year and 0.3% quarter-on-quarter;

   Cielo Net income margin at 37.8%, down 5.8 p.p. year-on-year and 1.4 p.p. quarter-on-quarter;

 Beginning of the shares trading under ticker code CIOXY in OTCQX;

 Expansion of the mobile payment solution for devices with Android;

 Cielo moves forward in e-commerce with acquisition of Braspag;

 Cielo elected the best Brazilian company in the Specialized Services category by Exame Magazine;
  elected one of the 10 best companies to start a carrer, by Você S/A magazine; ranked among the 20
  most valuable brands by BrandAnalytics in partnership with IstoÉ Dinheiro magazine ,WPP group, and
  Interbrand, renowned multinational consulting.
    Highlights (R$ million)                      2Q11               2Q10         1Q11           2Q11 X 2Q10       2Q11 X 1Q11
    Credit and Debit Cards
    Financial transaction volume (R$ million)     74,622.6          61,567.4      70,203.7              21.2%             6.3%
    Number of transactions (million)               1,094.2             965.1       1,058.7              13.4%             3.4%
    Net MDR( bps)                                         101              120            105             (19)               (4)

    Credit Cards
    Financial transaction volume (R$ million)      46,820.9         38,901.9      44,318.3              20.4%             5.6%
    Number of transactions (million)                 639.1             563.7        611.3               13.4%             4.5%
    Net MDR( bps)                                         117              145            122             (28)               (5)
    Debit Cards
    Financial transaction volume (R$ million)     27,801.7          22,665.5      25,885.4              22.7%             7.4%
    Number of transactions (million)                 455.1             401.4        447.4               13.4%             1.7%
    Net MDR (bps)                                         74               79             76                (5)              (2)

    Net Operating Revenue                           1,119.3          1,048.9       1,082.1               6.7%             3.4%
    Cielo Net Income                                    423.6          457.7            424.7           -7.5%            -0.3%
    % Cielo Net Margin                               37.8%             43.6%        39.2%            (5,8) p.p       (1,4) p.p.
    Adjusted EBITDA                                     716.5          735.3            684.3           -2.6%             4.7%
    % Adjusted EBITDA Margin                         64.0%             70.1%        63.2%           (6,1) p.p.        0,8 p.p.




                                                    2Q11 RESULTS

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MACROECONOMIC SCENARIO

Macroeconomic measures taken during the first half of 2011 meant to slow down the economic activity, thus
approximating inflation to the Central Bank’s target level. For this sake, the basic interest rate had a increase
(reaching 12.50%), cuts were made in the public budget and new macroeconomic measures were included.

Despite this scenario the Brazilian economy remains strong, with a 0.6% increase on retailing sales in May
over April. This performance is sustained by the continuous increase of the Brazilian’s earnings, with the
average real income at R$1,566.70. Another factor that contributes to the retailing performance is the high
occupation level of the population, with unemployment at just 6.2% in June 2011.

Credit is also one of the cornerstones that sustain the high level of economic activity. Its performance
remained solid with a 20.8% growth in May over the same period in the previous year, having the credit/GDP
relation reached 46.9%. Currently, credit has been increasing even with higher costs of loans. The average
interest rate for individuals reached 45.3% in May, up 5 percentage points year-on-year.




EVENTS IN 2Q11

          OTCQX- our American Depositary Receipts (ADR) are now traded on OTCQX International
           Premier, the highest segment in the over-the-counter market in the U.S. With the OTCQX trading
           platform, we started offering to investors transparent trading, higher quality information and easy
           access by regulated brokers in the U.S. The Company’s financial information and real-time
           quotes are available in www.otcqx.com and www.otcmarkets.com.


          Braspag – Founded in 2005, is known for innovation and the development of online payment
           solutions and is the leading company in payment processing for e-commerce in Brazil, with a
           market share of approximately 65% in its segment. Operating as a gateway, Braspag‘s platform
           integrates online stores, financial institutions and acquirers, and is responsible for capturing,
           routing and managing payment transactions with cards, collection slips and online debit. In
           addition, Braspag consolidates the accounts receivable process of Brazil‘s leading online stores,
           offering the most comprehensive range of services in the segment of online transaction
           processing.
           This acquisition strengthens Cielo’s leadership in the online payment segment in Brazil through a
           significant presence in yet another link of the e-commerce value chain.

          Android – launching of the first application in the Brazilian market that transforms Android
           smartphones and tablets into Cielo POS terminals for Visa, MasterCard, American Express, Elo
           and Aura transactions. With the new app, Cielo consolidates its leadership in the mobile payment
           segment, being the only acquirer in Brazil to offer the technology for the main Android
           smartphones. The application was developed by M4U, a Cielo subsidiary specializing in the
           development of technological platforms for mobile payment.




                                                   2Q11 RESULTS

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    Destaques do Ano


2Q11 OPERATING PERFORMANCE


Transaction Financial Volume
In 2Q11, Cielo captured 1.094 billion transactions, up 13.4% over 2Q10 and 3.4% over 1Q11. Transaction
financial volume totaled R$74.6 billion, up 21.2% when compared with the R$61.6 billion in the same period
of 2010, and up 6.3% in relation to 1Q11.

Specifically with credit cards, transaction financial volume totaled R$46.8 billion in 2Q11, up 20.4% year-on-
year and 5.6% quarter-on-quarter. The average ticket of credit transactions was R$73.26 in 2Q11, 6.2% and
1.0% higher than the average ticket in 2Q10 and 1Q11, respectively.

With debit cards, transaction financial volume totaled R$27.8 billion in 2Q11, up 22.7% compared with the
same period of the previous year and 7.4% over the previous quarter. The average ticket of debit
transactions was R$61.09 in 2Q11, up 8.2% over the average ticket of 2Q10 transactions and up 5.6% over
the average ticket of 1Q11 transactions.


                                             Transaction Financial Volume ( R$ million)
                                                                  21.2%

                                                                    74,080                               74,623
                                                                                          70,203
                                                 67,257
                            61,567
                                                                   29,163                                27,802
                                                                                          25,885
                                                25,701
                             22,665




                                                                   44,917                 44,318         46,821
                             38,902             41,556




                             2Q10                3Q10              4Q10                   1Q11            2Q11

                                                          Credit cards      Debit cards




Cielo now discloses financial volume information according to the managerial criteria that considers all credit
for purchases paid in installments at the time of purchase.

Managerial Transaction Volume (R$ million)                    2Q11                  2Q10           1Q11           2Q11 X 2Q10    2Q11 X 1Q11
Credit (R$ million)                                             47,980.0              39,637.8       43,092.6            21.0%          11.3%
Number of Credit Transactions (million)                            447.2                 394.2          404.7            13.4%          10.5%
Debit (R$ million)                                              27,801.7              22,665.5       25,887.4            22.7%           7.4%
Number of Debit Transactions (million)                             455.1                 401.4          447.4            13.4%           1.7%
Total Financial Volume (R$ million)                             75,781.7              62,303.3       68,980.0            21.6%           9.9%
Total Number of Transactions (million)                             902.3                 795.6          852.1            13.4%           5.9%




                                                              2Q11 RESULTS

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Geographic Coverage and Affiliated Merchants
With nationwide presence, at the end of the quarter Cielo had affiliated merchants in 5,497 of 5,565 Brazilian
cities, representing a geographic coverage of 98,8%, as compared with 98,5% in 1Q11.

Active merchants totaled 1,115 million at the end of 2Q11, down 3.2% year-on-year and up 2.8% quarter-on-
quarter. Active merchants are those which made at least a single transaction in the last 60 days.

 AFFILIATED MERCHANTS                                               2Q11                    2Q10           1Q11    2Q11 X 2Q10         2Q11 X 1Q11
 Active Merchants in 60 days ('000)                                 1,115                   1,153          1,085          -3.2%                2.8%




2Q11 FINANCIAL PERFORMANCE


Gross Operating Revenue + Net Prepayment of Receivables Revenue

Cielo’s main sources of revenue are derived from the capture, transmission, processing and settlement of
transactions carried out with credit and debit cards, as well as the rentals of POS terminals and prepayment
of receivables to its merchants. The graph below shows the relative importance of each of these sources:


                                                          Revenue- Activity(%)




          48.4%                        48.2%                           46.5%                        45.2%                      44.6%




                                                                       17.7%                        16.4%                      16.6%
          15.4%                        16.2%


                                                                                                    22.5%                      21.5%
          26.2%                        23.4%                           21.7%

                                                                       8.6%                         9.8%                       11.0%
          6.8%                         8.4%
          3.1%                                                         5.5%                         6.1%                       6.3%
                                       3.8%
          2Q10                         3Q10                            4Q10                         1Q11                       2Q11

           Other revenues             Prepayment of Receivables                POS Rental           Debit cards         Credit cards




In 2Q11, net operating revenue plus net revenue from prepayment of receivables totaled R$1.119 billion, up
6.7% year-on-year and 3.4% quarter-on-quarter.




                                                                   2Q11 RESULTS

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     Commission revenue from credit and debit transactions totaled R$754.9 million in 2Q11, up 1.8%
      compared with the same period of 2010. This R$ 13.6 million increase was a consequence of the
      21.2% growth in the transaction volume, partially offset by the reduction in the gross merchant
      discount rate, payment of incentives and the product mix (higher debit growth vs. credit).

      When compared with 1Q11, total commissions revenue increased R$19.8 million, or 2.7%, mostly
      due to the increased financial volume at 6.3%, partially offset by the reduction in the gross merchant
      discount rate, the payment of incentives and the product mix (higher debit growth vs. credit).

     Revenue from credit transactions totaled R$550.1 million in 2Q11, down 2.2% over 2Q10’s R$562.3
      million. This R$ 12.2 million decrease is due to the reduced gross merchant discount rate, payment
      of incentives and the product mix (higher regular credit growth vs. credit in installments), partially
      offset by the increased transaction volume at 20.4%.

      Credit revenues were up 2.1% over 1Q11.The increase of R$11.2 million was due to the 5.6%
      increase in financial volume, partially offset by the reduced gross merchant discount rate, increased
      product mix (higher credit in installments vs. regular credit) and payment of incentives.

     Revenue from debit transactions rose 14.4% compared with the same period of 2010, reaching
      R$204.8 million. This R$25.8 million increase is due to the 22.7% increased financial volume,
      partially offset by the product mix (Agro growth vs. debit), the reduced gross merchant discount rate,
      and the impact of incentives and interchange.

      Debit revenues increased 4.4% when compared with 1Q11. This R$8.7 million increase was a
      consequence of the 7.4% of financial volume, partially offset by a worse product mix (Agro vs. debit)
      due to the seasonality of the Agro product.

     POS rental revenues totaled R$265.1 million, down 12.8% over the same period of 2010.
      The number of installed POS equipment was down 1.5% year-on-year. At the same time, average
      rental fees were down 11.5%.

N° POS (thousand)                                 2Q11          2Q10          1Q11      2Q11 X 2Q10    2Q11 X 1Q11
# Installed POS                                   1,351         1,372         1,293            -1.5%           4.5%
Average Rental (R$/Installed POS)                 65.4          73.9          69.2            -11.5%          -5.6%
Equipment Rental Revenue ( R$ million)            265.1         304.1         268.4           -12.8%          -1.2%



      POS rentals fell 1.2% quarter-on-quarter due to the reduction in rental prices for some merchants as
      part of the retention program implemented as of July 1, 2010, partially offset by the a 4.5% growth in
      the installed equipment base and by the increase of the number of WiFi/GPRS equipment in the
      base, with higher rental.

     Other Revenues totaled R$77.7 million, a 114.3% year-on-year increase. This R$41.4 million
      increase is mostly due to the consolidation of the R$31.5 million in revenue from subsidiary M4U,
      acquired in 3Q10.




                                               2Q11 RESULTS

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         Destaques do Ano


                Quarter-on-quarter, Other Revenues were up 7.3%, chiefly due to the increase in revenues of
                Orizon and M4U subsidiaries and revenues from Value Added Network (VAN) services provided to
                several private label brands, and our services to American Express brand.




   Prepayment of Receivables
   The financial volume of prepaid transactions was R$3.3 billion in 2Q11 in the eighth consecutive quarter of
   growth, representing 7.2% of our total credit volume. Excluding adjustments to present value, revenues
   totaled R$137.7 million in the quarter, up 41.8% as compared with 2Q10 and 13.9% as compared with 1Q11.

Prepayment of Receivables                              2Q09      3Q09        4Q09       1Q10      2Q10      3Q10       4Q10       1Q11      2Q11
% Prepayment over Credit Financial Volume                 4.6%      4.7%         5.3%      5.8%      6.3%       6.4%       6.7%      7.3%      7.2%
Financial Volume of Prepayment (R$ Million)            1,466.5   1,604.7      2,009.4   2,193.3   2,460.4    2,669.7    3,016.7   3,236.9   3,376.9
Average Term (days)                                       48.5      54.5         61.6      66.1      69.7       72.0       66.1      62.9      58.5
Prepayment Revenue Excluding Adjustment (R$ Million)     46.3      49.7         65.5      73.3      97.1      113.3      119.4      120.8    137.7




   Net revenues from prepayment of receivables in 2Q11 were R$136.1 million, up 72.7% over 2Q10 and
   16.2% over 1Q11.

   The average ticket of these operations was R$2.5 thousand in 2Q11, remaining stable over 2Q10, and
   R$3.0 thousand in 1Q11.



   Cost of Services Provided
   The cost of services provided increased 33.0% or R$84.9 million to R$342.4 million in 2Q11, compared to
   R$257.5 million in the same period of 2010. This increase was chiefly due to:

              Increase of R$32.8 million due to the increased brand fees, partially due to the higher fees resulting
               from both Visa’s new price structure and the new MasterCard volume (R$25.5 million), as well as the
               increased volume (R$7.3 million);

              Increase of R$25.5 million derived from costs related to subsidiaries M4U and Orizon;

              Increase of R$21.3 million due to the increased number of transactions captured;

              Increase of R$12.0 million from depreciation of POS terminals, explained by the increased total of
               facilities and the change in the equipment mix with more wireless terminals, which are more
               expensive;

              Reduction of R$6.7 million due to the reduced expenses on projects related to the multi-brand
               scenario in 2Q10, and partly due to efficiency gains chiefly for processing and logistics services.



   The unit cost per transaction in 2Q11 was R$0.313, 17.3% higher than in 2Q10, when it was R$0.267.




                                                                           2Q11 RESULTS

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      The Company’s cost per transaction (excluding subsidiaries) in 2Q11 was R$0.276, 9.8% higher than in
      2Q10. Considering the fee structure equivalent to 2Q10, the same indicator would have increased 0.6% to
      R$0.253 per transaction.

      Quarter-on-quarter, the cost of services was R$30.9 million, up 9.9% This increase was basically composed
      of:


               R$7.1 million growth due to the increase in brand fees, chiefly due to the increase in MasterCard
                volume, which currently has the highest rate when compared to other brands (R$5.0 million) and to
                the increased volume (R$2.1 million);

               R$6.6 million increase chiefly due to logistic costs from increased POS equipment expenses;

               R$6.4 million increase derived from the costs of subsidiaries M4U, Orizon and Cielopar;

               Increase of R$5.7 million due to the increased captured volume (in number of transactions);

               Increase of R$5.2 million from depreciation of POS terminals, explained by the change in the
                equipment mix with more wireless terminals, which are more expensive;

      The unit cost per transaction in 2Q11 was 6.4% higher than in 1Q11, when it was R$0.294. The Company’s
      unit cost excluding subsidiaries would have increased 5.3%.

Costs and Expenses                                                        2Q11        2Q10        1Q11      2Q11 X 2Q10   2Q11 X 1Q11
Number of Transactions (million)                                         1,094.2      965.1      1,058.7      13.4%          3.4%
Cost of Services (R$ million)                                           (342,387)   (257,458)   (311,493)     33.0%          9.9%
Unit Costs (R$ million/transaction)                                      (0.313)     (0.267)     (0.294)      17.3%          6.4%
Operating Expenses (R$ million)                                         (119,170)   (102,574)   (139,919)     16.2%         -14.8%
Unit Expenses (R$/transaction)                                           (0.109)     (0.106)     (0.132)       2.5%         -17.6%
Costs + Expenses (R$ million)                                           (461,557)   (360,032)   (451,412)     28.2%          2.2%
Unit Costs + Expenses (R$/transaction)                                   (0.422)     (0.373)     (0.426)      13.1%          -1.1%




      Operating Expenses
      Operating expenses increased R$16.6 million or 16.2% to R$119.2 million in the quarter ended on June 30
      2011, compared to R$102.6 million year-on-year. When compared to 1Q11, there was a reduction of 14.8%
      or R$20.8 million.

      Personnel expenses increased 29.9% over 2Q10 to R$49.1 million, mostly due to the 38.5% increase in
      staff to 1,610 employees by the end of 2Q11, and to the 6.0% wages adjustments defined by the trade union
      in August 2010. Quarter-on-quarter, personnel expenses were up 10.7%.

      General and administrative expenses were up 69.1% year-on-year to R$45.3 million, mainly due to
      improvements focused on the commercial division like, for example, increased use of independent sales
      organizations for distribution, as well as the fact that the numbers of 2Q10 were impacted due to the
      provision made for some projects that materialized at lower amount than the expected for the period. As
      compared with 1Q11, general and administrative expenses were down 6.4%.




                                                         2Q11 RESULTS

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Marketing expenses decreased 40.1% over 2Q10 to R$21.5 million, due to the reduction of some
institutional campaigns and customers’ loyalty actions. As compared with 1Q11, marketing expenses were
down 40.2%.

Other net operating revenues (expenses) increased 64.5% year-on-year to an expense of R$2.1 million in
2Q11, as compared with an expense of R$1.3 million in 2Q10. Quarter-on-quarter, this line showed a 78.8%
decrease.



Adjusted EBITDA

The Company’s management uses EBITDA as a measurement to display its performance.

Adjusted EBITDA reached R$716.5 million in 2Q11, down 2.6% year-on-year but up 4.7% quarter-on-
quarter. Adjusted EBITDA corresponds to net income before income tax and social contribution, depreciation
and amortization and financial income/expenses, except net gains on advances of receivables operations.
The participation of non-controlling shareholders is added to the net profit.

EBITDA is not an accounting measurement used in the accounting practices adopted in Brazil. It does not
represent the cash flow for the presented periods and it should not be considered as an alternative to net
income, an operating performance measure or as an alternative to operating cash flow or as a measurement
of liquidity.

 Adjusted EBITDA (R$ million)                  2Q11           2Q10        1Q11     2Q11 X 2Q10 2Q11 X 1Q11
 Cielo´s Net Income                                 423.6         457.7      424.7        -7.5%       -0.3%
Holdings of minority shareholders                     1.4           0.0        0.6             -    127.8%
Financial Income                                  (118.8)        (77.1)    (119.0)        54.1%       -0.1%
Income Tax and Social Contribution                 215.5          229.4     207.3         -6.1%        3.9%
Depreciation and amortization                       58.8           46.4      53.6         26.7%        9.7%
EBITDA                                              580.4         656.5      567.2       -11.6%        2.3%
% EBITDA Margin                                    59.0%        67.7%       58.8%     -8.7. p.p.   0.2. p.p.
Prepayment of Receivables, net                     136.1           78.8     117.1         72.8%       16.2%
Adjusted EBITDA                                     716.5         735.3      684.3        -2.6%        4.7%
% Adjusted EBITDA Margin                           64.0%        70.1%       63.2%      -6.1.p.p.   0.8. p.p.




The financial result, excluding prepayment of merchant receivables transactions, raised 899.2%, or R$15.6
million to an expense of R$17.3 million in 2Q11. This decrease was mainly caused by the prepayment of
interchange interest consequence of the prepayment of receivables operations done with the banks during
2Q11. Quarter-on-quarter, the financial result decreased 1,027.0%.

Net Income

Net income totaled R$423.6 million in 2Q11, down 7.5% year-on-year and 0.3% quarter-on-quarter.




                                               2Q11 RESULTS

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Cash Flow

In 2Q11, operating activities generated cash in the amount of R$120.4 million, as compared with R$100.8
million in 2Q10. This increase in operations is chiefly due to the R$271.4 million increase in the line of trade
accounts receivable, in turn partially due to the R$211.1 million decrease in accounts payable to merchants.

Investments totaled R$106.3 million in 2Q11, mainly due to the R$49.3 million expenditure with POS
acquisition and Braspag’s acquisition at R$40.0 million.

Funds allocated to financing totaled an amount of R$1.1 million from exercised stock options.




                                               Cash Flow (R$ million)




                                    120.4              106.3


                                                                             1.1



                  237.8                                                                         253.1




            Initial Balance 2Q11   Operating          Investing       Dividends/Financing   End Balance 2Q11




                                                       2Q11 RESULTS

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   Destaques do Ano


CAPITAL MARKET


Ownership Structure

Cielo S.A. stock debuted on the BM&Fbovespa’s Novo Mercado on June 29, 2009, initially under the ticker
symbol VNET3 and, due to the Company’s name change, since December 18, 2009 under CIEL3. Cielo’s
stock is currently included on the Bovespa Index (Ibovespa), the Brazil Index (IBrX), the Brazil 50 Index
(IBrX-50), the Differentiated Corporate Governance Index (IGC) the Differentiated Tag Along Rights Index
(ITAG), the Financial Index (IFNC), the Carbon Efficiency Index (ICO2), the Valor BM&FBovespa Index
(IVBX-2), the Mid-Large Cap Index (MLCX), the Corporate Governance Trade Index (IGCT), the
BM&FBovespa Extended Brazil (IBrA) and the Dividends Index (IDIV).

The Annual and Extraordinary General Meeting held on April 29, 2011 approved the Company’s capital stock
increase in the amount of R$163,834,773.86 (one hundred sixty-three million, eight hundred thirty-four
thousand, seven hundred seventy-three reais and eighty-six centavos) with the issue of 272,956,760 new
common shares with no par value attributed free of charge to shareholders as bonus shares in the proportion
of 1 (one) new share for each 5 (five) shares held at the close of the April 29, 2011 trading day.

After the capital increase via bonus shares, the Company’s capital stock is R$263,834,773.86 (two hundred
sixty-three million, eight hundred thirty-four thousand, seven hundred seventy-three reais and eighty-six
centavos), divided into 1,637,740,560.

The Company’s stock split was held on May 30 2011, in the proportion of 3 (three) shares for 1 (one) share.
After the capital increase via bonus shares, the Company’s capital stock is R$263,834,773.86 (two hundred
sixty-three million, eight hundred thirty-four thousand, seven hundred seventy-three reais and eighty-six
centavos), divided into 545,913,520 common shares:


       Shareholder´s Structure                               ON                       %
       Controlling Shareholder´s                           312,789,348                57.3%
        Banco Bradesco                                     156,394,655                28.6%
        Banco do Brasil                                    156,394,694                28.6%
       Free-Float                                          231,357,706                 42.4%
       Treasury                                                1,766,466                0.3%
       Total Shares                                        545,913,520                100.0%




Stock Performance

As the Ibovespa depreciated 9.91% in 2Q11, Cielo’s stock appreciated 9.09%. On June 30, 2011, CIEL3
shares were quoted at R$39.00/share, bringing the Company's market cap to R$21.3 billion.




                                                2Q11 RESULTS

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                      Destaques do Ano

                                                                                Shares Performance

                                         120
                                         115
                                                                                                                                       9.09%
                                         110
                                         105
                                         100
                                          95
                                                                                                                                     -9.91%
                                          90
                                          85
                                          80
                                           4/1/2011           4/21/2011          5/11/2011             5/31/2011           6/20/2011
                               Source Bloomberg                         CIEL3                                 IBOV




              The average trading volume from April to June of 2011 totaled 1.3 million shares, with an average daily trade
              volume of R$49.2 million, representing 0.5% of the free float. Since IPO, the average volume has been 2.0
              million shares with an average daily trade volume of R$72.2 million or 0.8% of the free float.



                          Average Daily Trade Volume-CIEL3                                                           Average Daily Volume-CIEL3
                                    (R$ million)                                                                              (million)

                    200
                    160
                    120                                                                                                                    Average Daily
                                                      Average Daily
                     80                               R$49.2 million                                                                       1.3million
                     40
                      0
                      4/1/11   4/21/11    5/11/11   5/31/11   6/20/11                                4/1/11    4/21/11     5/11/11   5/31/11   6/20/11


Source: Bloomberg                                                                       Source: Bloomberg




              Level 1 ADR Program

              On February 22, 2010, Cielo announced the launch of its Level 1 American Depositary Receipts (ADR)
              Program. The ADRs are traded on the over-the-counter (OTC) market under the ticker symbol CIOXY and
              each ADR represents a Company-issued common share. Deutsche Bank Trust Company Americas is the
              depository institution for those securities.
              As of June 30, 2011, the Company had registered 7,532,883 ADRS issued on the American market and
              27,361 cancellations, with an average daily trading volume of 46.2 thousand ADRs at an average price of
              US$26.32/ADR.

              The ADR program maintained its parity with the bonus shares and subsequent reverse stock split approved
              at the A/EGM held on April 29, 2011.




                                                                                   2Q11 RESULTS

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           From the beginning of June, our ADRs are traded on OTCQX International Premier, the highest segment in
           the over-the-counter market in the US. With the OTCQX trading platform, we now offer investors a
           transparent negotiation, superior quality information and easy access through regulated brokers in the United
           States. The Company’s financial and real-time quotes are available at www.otcqx.com www.otcmarkets.com.


                                    Average Daily-CIOXY                                                                                  CIOXY (US$/ADR)
  700                                   (thousand)                                                      36.6                                                        High: 31.29
  600
                                                                                                        31.6
  500                                                                                                                                                           Average: 26.32
                                                                                                        26.6
  400
                                                                                                        21.6
  300
                                                                                                        16.6
  200
                                                                         Average Daily 46.2
  100
                                                                         thousand ADRs                  11.6
                                                                                                                                                 Low: 20.61
     0                                                                                                   6.6
         3/8    4/20   2/6   7/15   8/26   10/10   11/19         1/4   2/16   3/31   5/13   6/27             3/8    4/20    2/6   7/15   8/26   10/10 11/19   1/4      2/16   3/31   5/13   6/27
Source: Bloomberg                                                                                       Source: Bloomberg



           Corporate Governance

           The Company has adopted a responsible, transparent, ethical stance in managing its businesses and seeks
           to improve its corporate governance standards according to best market practices in order to preserve
           shareholders' rights through equal, clear and open treatment.

           Cielo has a Board of Directors comprised of 10 members (two independent ones) and a Fiscal Council with
           three members. Besides these corporate bodies, advisory committees were established to make
           recommendations on business strategy, including long-term strategies, Company performance, and
           oversight and monitoring of the adopted measures.Currently, besides the Audit Committee, which is
           provided for in the bylaws, the following advisory committees have been instated: Finance, Personnel and
           Corporative Governance.

           The Company has Information Disclosure and Trading polices, as well as a Code of Ethics, which
           establishes standards of conduct in relationships with all stakeholders: employees, customers, suppliers,
           investors, regulatory bodies, society and governments.

           On April 29, 2011, Cielo held its Annual and Extraordinary General Meeting, which accepted electronic
           powers-of-attorney through the Assembleias Online platform (http://www.assembleiasonline.com.br, also
           accessible at http://www.cielo.com.br/ri).

                                                                              CIEL3 - 06/30/2011
                                                   Total Shares ('000)                                         545,913.52
                                                   Closing Price (R$/Ação)                                           39.00
                                                   Mkt. Cap (R$'000)                                      21,290,627.28
                                                   Free-float ('000)                                           231,624.92
                                                   Free-float (R$ '000)                                    9,033,371.76
                                                   ADTV(1) (R$'000)                                              72,214.1
                                                           (1)
                                                   ADTV          / Free-float                                        0.80%
                                                   (1) ADTV =Average Daily Trading Volume between 06/29/2009 and
                                                   06/30/2011




                                                                                              2Q11 RESULTS

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INCOME STATEMENT QUARTERLY COMPARISION (R$ THOUSAND) - IFRS (Unaudited)

                                                           2Q11              2Q10           1Q11         2Q11 X 2Q10      2Q11 X 1Q11
 Commissions Revenue                                         754,879         741,295          735,055            1.8%             2.7%
   Credit                                                    550,057         562,269          538,901            -2.2%            2.1%
   Debit                                                     204,822         179,026          196,153           14.4%             4.4%
 Equipment Rental                                            265,092         304,101          268,391           -12.8%           -1.2%
 Other                                                        77,674          36,250           72,381          114.3%             7.3%
 GROSS REVENUE                                             1,097,645      1,081,646         1,075,826             1.5%            2.0%
 ISS                                                         (10,998)         (9,635)          (9,469)          14.1%            16.1%
 PIS/COFINS                                                 (103,510)      (101,921)         (101,352)           1.6%             2.1%
 TAXES ON SERVICES                                          (114,508)      (111,556)         (110,821)           2.6%             3.3%
 NET FINANCIAL REVENUE (*)                                   136,128          78,835          117,112           72.7%            16.2%
 NET FINANCIAL + OPERATING REVENUE                         1,119,265      1,048,925         1,082,117             6.7%            3.4%

 Cost of services Rendered                                  (284,701)      (211,760)         (258,961)          34.4%             9.9%
 Depreciation and Amortization                               (57,686)        (45,698)         (52,532)          26.2%             9.8%
 TOTAL COST OF SERVICES                                     (342,387)      (257,458)         (311,493)          33.0%             9.9%
 Personnel                                                   (49,120)        (37,813)         (44,391)          29.9%            10.7%
 General and Administratives                                 (45,281)        (26,781)         (48,381)          69.1%            -6.4%
 Depreciation and Amortization                                (1,097)           (722)          (1,069)          52.0%             2.6%
 Marketing                                                   (21,543)        (35,964)         (36,019)          -40.1%          -40.2%
 Other Operating ( Expenses) Income, Net                      (2,129)         (1,294)         (10,058)          64.5%           -78.8%
 OPERATING( EXPENSES) INCOME                                (119,170)      (102,574)         (139,919)          16.2%           -14.8%
 Adjusted EBITDA                                             716,492         735,313          684,307            -2.6%            4.7%
 Financial Income                                              7,094           7,070           10,144            0.3%           -30.1%
 Financial Expenses                                          (25,429)         (8,938)          (9,227)         184.5%          175.6%
 Prepayment, Net                                               1,049            138                947         660.1%            10.7%
 FINANCIAL INCOME( EXPENSES)                                 (17,286)         (1,730)           1,865          899.2%         -1027.0%
 OPERATING INCOME                                            640,423         687,163          632,570            -6.8%            1.2%
 INCOME TAX AND SOCIAL CONTRIBUTION                         (215,478)      (229,444)         (207,299)           -6.1%            3.9%
 NET INCOME                                                  424,945         457,719          425,271            -7.2%           -0.1%
 Atributted to:
 Holdings of controlling shareholders                        423,578         457,719          424,655            -7.5%           -0.3%
 Holdings of minority shareholders                             1,368                -              616               -               -
 NET INCOME                                                  424,945         457,719          425,271            -7.2%           -0.1%




(*) Prepayment of Receivables: net financial income derived from prepayment of receivables to merchants are presented as part of operations only for
comparison purposes with other Companies in the industry.




                                                                  2Q11 RESULTS

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BALANCE SHEET (R$ THOUSAND) - IFRS (Unaudited)


ASSETS                                                    06.30.2011       06.30.2010        03.31.2011


CURRENT ASSETS
Cash and cash equivalents                                      253,050          211,041           237,837
  Trade accounts receivable                                  2,336,697        1,670,467         2,269,889
  Deferred income tax and social contribution                          -                 -                -
  Prepaid and recoverable taxes                                   3,534           5,358             2,472
Other receivables                                                28,329          15,234            23,210
Receivables- securitization abroad                                     -        129,908             1,409
Prepaid Interest- securitizaiton abroad                                -          2,039               471
  Prepaid expenses                                                7,909           6,912             6,832
Total current assets                                         2,629,519        2,040,959         2,542,120

NONCURRENT ASSETS
Long- term assets:
  Receivables- securitization abroad                                                                      -
  Deferred income tax and social contribution                  284,436          228,880           272,198
  Escrow deposits                                              550,502          522,394           519,005
Other receivables                                                  727            1,095             1,171
Investments:
Other investments                                                      -                12                -
  Property, plant and equipment                                357,216          326,742           360,415
  Intangible Assets
  Goodwill                                                       86,931          57,701            49,555
  Clients Portfolio                                                    -                 -                -
Others intangibles                                             128,475                   -        123,055
  Total noncurrent assets                                    1,408,287        1,136,824         1,325,399
TOTAL ASSETS                                                 4,037,806        3,177,783         3,867,519


LIABILITIES ANS SHAREHOLDER´S EQUITY                      06.30.2011       06.30.2010        03.31.2011


CURRENT LIABILITIES
Payables to merchants                                        1,559,742          878,716         1,925,023
  Trade accounts payable                                       230,296          125,415           204,036
  Taxes payable                                                211,487          266,654           146,175
  Payables to joint ventures                                           -                 -                -
  Payables - securitization abroad                                     -        129,908             1,385
  Interest received in advance- securitization abroad                  -          2,039               471
Dividends payable                                                      -                 -          1,497
  Other payables                                                 81,206          60,943            92,920
Total current liabilities                                    2,082,731        1,463,675         2,371,507

NONCURRENT ASSETS
Payables- securitization abroad                                        -                 -                -
Reserve for contingencies                                      586,171          563,041           554,911
Deferred income tax and social contribution                       5,165                  -          5,786
Other payables                                                   34,279           3,992            33,725
Total Noncurrent Assets                                        625,615          567,033           594,422

SHAREHOLDER´S EQUITY
Capital                                                        263,836          100,000           100,000
Capital reserve                                                  89,871          77,535            86,845
Retained earnings                                            1,029,165          163,836           769,423
Treasury shares                                                (67,571)         (72,229)          (68,667)
Attributed to holdings of controlling shareholders           1,315,301          877,933           887,601
Holdings of Minority Shareholders                                14,159                  -         13,989
Total shareholder´s equity                                   1,329,460        1,147,075           901,590


TOTAL LIABILITIES AND SHAREHOLDER´S EQUITY                   4,037,806        3,177,783         3,867,519




                                                        2Q11 RESULTS

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CASH FLOW – QUARTER (R$ THOUSAND) – IFRS (Unaudited)

                                                                                             2Q11          2Q10        1Q11
CASH FLOWS FROM OPERATING ACTIVITIES

Income before Income tax and social contribution                                             640,423       687,163      632,570
Adjustments to reconcile income before income tax and social contribution to
net cash provided by operating activities
Depreciation and amortization                                                                 58,782        46,436       53,602
Net book value of property, plant and equipment and intangible assets writtenoff or sold       3,841         1,617        3,144
Allowance for losses on intangible assets, net                                                 2,224           226            (1)
Other investments written-off                                                                  (7,018)         202             -
Share options granted                                                                          3,026         2,615        3,313
Loss from equipment rental                                                                    (17,231)       3,977        7,018
Reserve for contingencies                                                                     59,125        30,860       31,581
Discount of receivables to present value                                                       5,272        23,988        3,716
Shareholder´s equity equivalence                                                                      -           -            -

(Increase) decrease in operating assets
Trade accounts receivable                                                                     (67,054)     (338,430)     (59,009)
Subsidiaries receivable                                                                               -           -            -
Prepaid and recoverable taxes                                                                       (99)     (1,423)        238
Other receivables( current and noncurrent)                                                     (2,536)      36,019       44,345
Escrow deposits                                                                               (31,194)      (32,654)     (30,104)
Prepaid expenses                                                                               (1,080)       6,616        (1,978)

Increase( decrease) in operating liabilities:
 Payables to merchants                                                                       (372,613)     (161,512)    749,565
 Trade accounts payable                                                                       23,564        (34,306)     18,339
 Taxes payable                                                                                   604           136        (9,647)
Payables to subsidiaries                                                                              -           -            -
 Other payables( current and noncurrent)                                                      (12,363)      (23,817)     (44,441)
 Deferred income tax and social contribution                                                          -           -            -
 Reserve for contingencies( current and noncurrent)                                                   -        (135)           -
 Dividends Paid                                                                                (1,497)            -       1,497
Cash provided by operations                                                                  284,176       247,578     1,403,748
Interest received                                                                                547         2,912        1,049
Interest paid                                                                                    (547)       (2,912)      (1,049)
Income tax and social contribution paid                                                      (163,742)     (146,745)    (477,192)
Net cash provided by ( used in) operating activities                                         120,434       100,833      926,556


CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of interest in joint venture                                                              -           -      (47,000)
Acquisition of subsidiaries through the joint venture, net of acquired cash                   (40,000)            -       (2,000)
Additions to property, plant and equipment and intangible assets                              (66,316)      (58,247)     (52,216)
Net cash provided by( used in) investing activities                                          (106,316)      (58,247)    (101,216)


CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid                                                                                       1            -     (838,262)
Holdings of minority shareholders                                                                     -           -            -
Exercised stock options                                                                        1,096         (3,001)        156
Net cash used in financing activities                                                          1,097         (3,001)    (838,106)


(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                              15,215        39,585       (12,766)


CASH AND CASH EQUIVALENTS
Closing balance                                                                              253,050       211,041      237,837
Opening balance                                                                              237,837       171,456      250,603


DECREASE ( INCREASE) IN CASH AND CASH EQUIVALENTS                                             15,213        39,585       (12,766)



                                                                              2Q11 RESULTS

                                                                                  15

				
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