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1Q11 EARNINGS PRESENTATIONMay 5, 2011
DISCLAIMER
The Company makes forward looking statements that are subject to risks anduncertainties. These statements are based on the beliefs and assumptions of our management as wellas on information currently available to us. Forward-looking statements include information regarding ourcurrent intent, beliefs or expectations, in addition to those of the members of the Board of Directors andExecutive Officers of the Company.
Forward-looking statements also include information regarding our possible or assumed future operatingresults, as well as statements preceded or followed by, or that include, the words ''believes”, ''may”,''will”, ''continues”, ''expects”, ''anticipates”, ''intends”, ''plans”, ''estimates”, or similarexpressions.
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties andassumptions, for they relate to future events, thus depending on circumstances that may or may notoccur. Our future results and the creation of value to shareholder s may differ significantly from thoseexpressed in or suggested by these forward-looking statements. Many factors determining theseresults and values are beyond Cielo’s ability to control or predict.
2
HIGHLIGHTS
Transaction financial volume totaled R$ 70.2 billion, +19.5%
Operating revenue + net prepayment of receivables totaled R$ 1.082 billion,
+6.1%
Net income margin at 39.3%, +0.6 p.p.Adjusted EBITDA margin at 63.2%, +0.8 p.p.
Partnerships to capture brands Mais!, Bônus CBA, Cabal Vale, Verocheque, Banescard, Sodexo and Sapore
1Q11 X 1Q10
1Q11 X 4Q10
Adjusted EBITDA totaled R$ 684.3 million, -4.1%Net income totaled R$ 424.7 million, -3.5%
Credit volume totaled R$ 44.3 billion, +18.0%Debit volume totaled R$ 25.9 billion, +22.0%
Capital stock increase through 20% stock dividend followed by 3-to-1 reverse stock split approved at GSM
held on 4/293
Other
MACROECONOMIC SCENARIO | BRAZIL
5.7
3.24.0
6.15.1
-0.2
7.5
4.0
2004 2005 2006 2007 2008 2009 2010 2011(E)
GDP (%)
Source: IBGE(E) Estimate. Focus Report (Central Bank)
8.2
0
2
4
6
8
10
12
14
16
18Retail Trade Sales (%)
Source: IBGE
5
6
7
8
9
10
11
12Unemployment (%)
Source: IBGE
4
44% 45% 46% 43% 44% 40% 41%56%
55%54%
57%56%
60% 59%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
0
200
400
600
800
1,000
1,200
1,400
1,600
2005 2006 2007 2008 2009 2010 mar/11
Credit/GDPCredit (R$
million)Credit Evolution
Individuals Legal Entities Credit/GDP
607733
936
1,227
1,414
1,704
Source: BCB
1,752
FinancialIndicators
1Q11 1Q101Q11 X 1Q10
4Q10 1Q11 X 4Q10
Financial Volume (R$ million)
70,203.7 58,771.1 19.5% 74,079.9 -5.2%
Transactions (million)
1,058.7 927.6 14.1% 1,108.3 -4.5%
Net Revenue (R$ million)
1,082.1 1,020.1 6.1% 1,147.9 -5.7%
Cost of Services(R$ million)
(311.5) (251.7) 23.8% (354.6) -12.2%
Cost of Services ex Subsidiaries and
additional fees (R$ million)*
(255.0) (244.4) 4.3% (299.1) -14.8%
Operating Expenses (R$ million)
(139.9) (99.2) 41.0% (130.4) 7.3%
Adjusted EBITDA (R$ million)
684.3 713.6 -4.1% 715.9 -4,4%
Net Income (R$ million)
424.7 440.2 -3.5% 443.3 -4.2%
Blended Net MDR (bps) 105 125 (20) 110 (5)
Credit Net MDR (bps) 122 148 (26) 132 (10)
Debit Net MDR (bps) 76 84 (8) 77 (1)
CIELO | FINANCIAL INDICATORS
5
CIELO | OPERATING PERFORMANCE
6
1,142 1,4031,720 2,003
2,323
540 611
836987
1,2321,424
1,716
388 447
2006 2007 2008 2009 2010 1Q10 1Q11
Cielo - Number of Transactions (million)
Credit Debit
CAGR: 19.5%
14.1%
1,9782,389
2,952
3,427
928 1,058
4,039
71,197 87,966 110,897
134,792 162,933
37,558 44.318
39,552 48,534
64,655
79,166
98,742
21,213 25,885
2006 2007 2008 2009 2010 1Q10 1Q11
Cielo - Financial Volume (R$ million)
Credit cards Debit cards
110,749
136,500
175,552
213,958
58,77170,203
CAGR: 24.0%
19.5%
261,675
679
824
996
1,133 1,140 1,129 1,085
2006 2007 2008 2009 2010 1Q10 1Q11
Cielo - Number of Active Merchants (thousand)
Active Merchants ( transactions in the last 60 days)
CIELO | REVENUE
7
3.3% 4.6% 3.9% 3.4% 3.9% 3.0% 6.1%4.5% 7.5% 5.9%9.8%
27.6% 27.8% 27.9% 26.4% 24.3% 26.1%22.5%
14.7% 15.0% 16.0% 15.8% 16.3% 15.7% 16.4%
54.4% 52.6% 51.6% 49.9% 48.1% 49.3% 45.2%
2006 2007 2008 2009 2010 1Q10 1Q11
Revenue - Activity (%)
Other revenues Prepayment of Receivables POS Rental Debit cards Credit cards
1,945.1
2,402.2
2,892.9
3,627.8
4,354.4
1,020.1 1,082.1
2006 2007 2008 2009 2010 1Q10 1Q11
Net Revenue (R$ million)
6.1%
CAGR 22.3%
1,175.91,409.3
1,666.92,012.0
2,317.8
556.2 538.9
317.1401.3
517.9
637.9
785.4
177.2 196.2
2006 2007 2008 2009 2010 1Q10 1Q11
Commissions Revenue (R$ million)
Credit Debit
596.0
745.9
903.1
1,067.1 1,169.9
294.3 268.4
2006 2007 2008 2009 2010 1Q10 1Q11
Equipment Rental Revenue (R$ million)
-8.9%
CAGR: 18.4% CAGR 20.1%
10.7%
- -3.1%
1,493.01,810.7
2,184.8
2,649.9
3,103.3
767.6 815.8
CIELO | PREPAYMENT OF RECEIVABLES
8
73.3
97.1
113.3119.4 120.8
1Q10 2Q10 3Q10 4Q10 1Q11
Revenue of Prepayment of Receivables ex Adjustments (R$ million)
64.8%
2,193.3
2,460.42,669.6
3,016.73,236.9
5.8% 6.3%6.4%
6.7%7.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
1Q10 2Q10 3Q10 4Q10 1Q11
Prepayment of Receivables
Financial prepayment volume
% Prepayment over Credit Financial Volume
66.169.7 72.0
66.162.9
1Q10 2Q10 3Q10 4Q10 1Q11
Average Term (days)
CIELO | COSTS AND EXPENSES
4,3%
Unit Cost 1Q11 1Q10 4Q10 1Q11x1Q10 1Q11x4Q10
Reported Unit Cost (0.294) (0.271) (0.320) 8.4% -8.1%
Unit Cost Ex- Subsidiaries (Orizon and M4U) (0.262) (0.263) (0.291) -0.6% -10.1%
Unit Cost Ex- Subsidiaries and Additional Brand Fee* (0.241) (0.263) (0.270) -8.6% -10.8%
*Considering 1Q10 as comparison
9
690.2771.0
851.1936.3
1,180.8
251.7 311.5
2006 2007 2008 2009 2010 1Q10 1Q11
Total Costs of Services (R$ million)
CAGR 14.4%
351.5 353.9
427.4401.1
441.0
99.2
139.9
2006 2007 2008 2009 2010 1Q10 1Q11
Operating Expenses (R$ million)CAGR 5.8%
41.0%
311.5 255.0 244.4
34.2 22.4
1Q11 Reported Costs related to subsidiaries
(Orizon and M4U)
Additional brands fee
1Q11 Adjusted 1Q10 Adjusted
Costs (R$ million)
23.8%
CIELO | FINANCIAL PERFORMANCE
10
1,038.8
1,409.5
1,764.3
2,450.7
2,924.3
53%
59%
61%
68%67%
50.00%
55.00%
60.00%
65.00%
70.00%
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
2006 2007 2008 2009 2010
Adjusted EBITDA
713.6 684.3
70%
63%
45.00%
50.00%
55.00%
60.00%
65.00%
70.00%
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
1Q10 1Q11
Adjusted EBITDA Margin
Adjusted EBITDA (R$ million) Net Income (R$ million)
440.2 425.3
43%
39%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
55.00%
60.00%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
1T10 1T11
Net Income Margin
657.9
883.9
1,115.3
1,536.7
1,829.3
34%37%
39%
42%42%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
55.00%
60.00%
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
2006 2007 2008 2009 2010
Net Income
Cielo´s dividend policy assures, based on the corporate bylaws, the distribution of a minimum annual dividend of 50% of net income twice a year, at the end of March and September, for the second half of the previous year and the first half of the current year.
CIELO | DIVIDENDS
11
787.7 837.2
90% 90%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1H10 2H10 2010
% PayoutR$ billion
Total Earnings Distributed
1,624.9
0.58 0.61
1.19
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1H10 2H10 2010
Total Earnings Distributed (R$/share)
CIELO | GROWTH POTENTIAL
Extend card usage of the traditional POS equipment to emerging technologies -e.g. Visa Mobile Pay and joint venture with Oi
Emerging Payment Transactions:
Increase the penetration, activation and usage of cards at the point-of-sale - e.g. Debit Activation, B2B transactions, etc
Traditional Card Transactions:
Alternative Transaction Services:
Cielo will continue to create new products and drive merchant acceptance by fostering card usage and non-payment transactions
Healthcare Transportation Loyalty
eCommerce Mobile Payments
Credit Debit Prepaid Commercial
1
2
3
Leverage processing infrastructure and customer base to process other types of transactions - e.g. Orizon
12
1
2
3
1Q11 EARNINGS PRESENTATIONMay 5, 2011