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Meeting with InvestorsMeeting with Investors
DecemberDecember 20062006
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Disclaimer
This presentation may include forward-looking statements of future events or results according to the regulations of the Brazilian and International securities and exchange commissions. These statements are based on certain assumptions and analyses by the Company that reflect its experience, the economic environment, future market conditions and expected events by the company, many of which are beyond the control of the Company. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the company’s business strategy, Brazilian and International economic conditions, technology, financial strategy, financial market conditions, uncertainty regarding the results of its future operations, plans, objectives, expectations and intentions, among others. Considering these factors, the actual results of the company may be significantly different from those shown or implicit in the statement of expectations about future events or results.
The information and opinions contained in this presentation should not be understood as a recommendation to potential investors and no investment decision is to be based on the veracity, current events or completeness of this information or these opinions. No advisors to the company or parties related to them or their representatives should have any responsibility for any losses that may result from the use or contents of this presentation.
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Company Overview
Company Profile
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Leading Technology Services Provider In Brazil
CardSystem33%
TeleSystem45%
Credit&Risk15%
MarketSystem7%
Revenue in 2005**
R$ 357 mm
CardSystem67%
TeleSystem18%
Credit&Risk4%
MarketSystem11%
Gross Profit in 2005**
R$ 71 mm
** Reflects MarketSystem's Pro-forma results
The largest independent administrator of credit cards
11.3 million cards*
117 million processed transactions
44% of market share
Largest independent call center in Brazil 2,837 Workstations
Leading collection services provider 594 Collection Workstation
Leading loyalty programsmanagement
4.0 million managed accounts
* Does not include the cards from Caixa Econômica Federal Contract
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CSU Is The Backbone Of The Credit Card Business Of Its Clients
� Authorization
� Card Issuance� Billing� Customer Support/ Call Center
� Credit analysis and processing
� Collection� Processing� Operational Control
� Data exchange� Fraud Prevention
� Purchase� Withdrawal
CREDIT CARD BRAND
ISSUERSACQUIRER – NETWORK
COMMERCIAL ESTABLISHMENT
Other
CARDHOLDER
CSU Provides its Clients a Fully Outsourced Solution to Card Administration
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Our Excellence In Credit Card Administration Fostered Other Leading Business Units
System development/ Implementation
Card Issuance
Transaction Process
Full Service
Credit and
Collection analysis
CustomerSupport
Loyalty Programs
� New business opportunities/ cross-selling
� Lower costs from scale gains
� High switching cost
Fraud Prevention
Operational Control
Diversification brought us:
Interchange
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Timeline
1992 1994 1996 1997 1999 2000 2001 2004 2005 2006
Implementation of card
embossing, credit analysis, product safety and collection procedures
IPO
Establishment ofCardSystem Ltda. -first independent credit cards
administrator in Brazil
CSU is the first company to work with the 3 major credit card labels
CardSystembecomes a Corporation
Change of name to CSUCardSystem
1998
CSU develops the electronic Voucher using the Smartcard
technology
3 new Business Units are created: CSUTeleSystem, CSU Credit&Risk and
MarketSystem Ltda.
CSU receives the ISO 9001 Certification
CSU expands and starts operation in 7 sites located in important cities
MarketSystem Ltda. is incorporated to CSU, becoming a new business unit: CSU MarketSystem
... ... ...
CardSystem becomes the largest
independent credit cards administrator in
Latin America
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Initial Public Offering
Offering Structure
� Registered in Brazil and United States, with international sales efforts under Reg S and rule
144A
� Listed in Bovespa´s Novo Mercado (Symbol CARD3)
Offering Size
� Total offering’s volume reached R$ 341 million with the issuance of 18.9 million common shares
(price of R$ 18.00 per share)
� Primary offering amounted to R$ 100 million (5.5 million per share)
� Secondary offering amounted to R$ 241 million (13.3 million per share)
Demand
� The book of orders exceeded the offer by 8 times
� Demand split in foreign (65%) and local investors (35%)
� About 70 investors were contacted during international road shows (USA and Europe)
Free Float39%
Controlling
Group61%
Shareholder CompositionShareholder Composition
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Company Overview
Our Businesses
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Attractive Industry Fundamentals ToCredit Cards…
23.628.0
35.341.5
47.552.5
68.0
1999 2000 2001 2002 2003 2004 2005
CAGR
18%
CAGR
18%
Number of Credit Cards - BrazilNumber of Credit Cards - Brazil
Million
Most Used Credit Instruments in BrazilMost Used Credit Instruments in Brazil
75.0
Sept/06
3%
3%
8%
15%
15%
16%
21%
37%
59%
Payroll Deductible
Real State Loans
Personal Loans
Overdraft Facility
C.C. Payment in Equal
Installments
C.C. Minimum Payment
Invoice
C.C. Interest Bearing
Purchases
Payment Book
C.C Interest Free
Purchases
Source: Abecs and O Globo
Credit Cards per ‘000 Inhabitants*Credit Cards per ‘000 Inhabitants*
1,990Japan
1,257USA
1,200United Kingdom
835Singapore
264Brazil
In 2003
Credit
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Call Center Services Revenue - GlobalCall Center Services Revenue - Global
… And the Call Center Industry Showing Consistent Growth Potential
Call Center Services Revenue - BrazilCall Center Services Revenue - Brazil
13% 13% 13% 12% 10%Annual growth
51.458.1
65.774.3
83.592.0
2005 2006 2007 2008 2009 2010
4.04.6
5.36.1
6.97.7
2005 2006 2007 2008 2009 2010
In US$ bi
15% 15% 15% 13% 12%Annual growth
In R$ million
Fonte: IDC
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Leading Competitive Position AmongIndependent Players
2005 data
Market Share: Credit Card Processing Segment *
Market Share: Credit Card Processing Segment *
Market Share:Largest Call Center Operators
Market Share:Largest Call Center Operators
Independents
* Notes:- CSU’s Market Share considers credit cards from Caixa - Orbitall: 100% owned by Itaú- Fidelity (51%): 49% owned by ABN Real and Bradesco
16%
and
44%
Sources: Cardnews and IDC
In Outsourcing
Orbitall
27%
Fidelity
20%
EDS
9%
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Caixa Econômica Federal Project
� The largest contract in industry (3 million credit cards)
� Strong growth potential
� Beginning of monthly revenue starting on Feb/07
� Initial period of rendering services does not change (2 years)
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Recent Achievements and Products Launched
• Carrefour / Visa
• Panamericano
• HSBC / Losango
• Terra
• Bradesco / Finasa
• Banco IBI
• Nossa Caixa
• Telemar
CardSystem TeleSystem and Credit&Risk
MarketSystem
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CSU – Strong and Diversified Clients Portfolio
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Financial Information
Operational and Financial Information
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Strong Growth Track Record
41,627
23,16225,347
2003 2004 2005
5,238 5,7877,421
2,1492,290
2,638
2003 2004 2005
Credit Cards Private Label
3,308
991
2,096
2003 2004 2005
Cards base*
(‘000)
11%
7,3878,077
10,059
Workstations* Billing contacts**
(‘000)
CAGR 17% CAGR 83% CAGR 28%
19%
* Monthly average ** Active and receptive* Annual average
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4,8%
Operational Performance by Business Units
CardSystem - CardsCardSystem - Cards
20.8%*4,8%-4.0%
TeleSystem and Credit&Risk –Workstations Under Operation
TeleSystem and Credit&Risk –Workstations Under Operation
Average of the periodIn thousand
MarketSystem – Loyalty AccountsMarketSystem – Loyalty Accounts
4,8%60.8%
* Adjusted by the credit cards data base’s cleaning
10,067
11,349
9M05 9M06
3,575 3,431
9M05 9M06
2,505
4,029
9M05 (Pro Forma) 9M06
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Consolidated Financial Performance
Net RevenuesNet Revenues Gross Profit Gross Profit
30.637.0
42.3
55.3
63.7
2001 2002 2003 2004 2005
60.3
46.3
34.2
22.917.0
2001 2002 2003 2004 2005
96.7
134.4
177.9
229.4
313.6
2001 2002 2003 2004 2005
EBITDAEBITDA
R$ MM
R$ MM
6.6 6.5
10.2
12.9
16.1
2001 2002 2003 2004 2005
Net ProfitNet Profit
R$ MM
R$ MM
CAGR 37%
CAGR 34%CAGR 20%
CAGR 25%
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Business Units’ Gross Revenue Evolution
MarketSystem*MarketSystem*
22.6
14.9
2003 2004 2005
23.7
R$ MM
* Pro-forma
CAGR 26%
91.2
118.0
97.6
2003 2004 2005
CardSystemCardSystem
R$MMCAGR 14%
TeleSystemTeleSystem
66.4
107.3
163.3
2003 2004 2005
R$MMCAGR 57%
Credit & RiskCredit & Risk
32.3
41.1
51.8
2003 2004 2005
R$MMCAGR 27%
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227.4253.5
9M05 9M06
42.5 45.0
9M05 9M06*
4,8%
Consolidated Financial Performance
Net RevenueNet Revenue Gross ProfitGross Profit
11.5%
43.9
35.0
9M05 9M06
10.1
-3.3
9M05 9M06*
4,8%-20.3%
EBITDAEBITDA Net ProfitNet Profit
4,8%6.0%R$ MM
R$ MM R$ MM
R$ MM
* Adjusted by the IPO’s expenses
229M05 9M06
** MarketSystem 2005 pro-forma
Financial Performance of the Business Units
CardSystemCardSystem TeleSystemTeleSystem
R$ MM R$ MM
Credit & RiskCredit & Risk MarketSystem**MarketSystem**
R$ MM R$ MM
* Adjusted by the IPO’s expenses
37.3
0.81.7(2.0)
30.0
(3.7)
Gross Revenue Gross Profit EBITDA*
11.9 3.4
122.1
11.2
122.0
(2.7)
Gross Revenue Gross Profit EBITDA*
17.0
2.9
25.7
7.25.25.6
Gross Revenue Gross Profit EBITDA*
84.0
29.834.1 38.431.0
95.3
Gross Revenue Gross Profit EBITDA*
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Gross Debt Gross Debt / EBITDA
Cash and Debt Position
R$ MMR$ MM
* Bank debt + leasing
2005
103.2
1.7x
93.0
9M06
0.7
20.5
42.5
2003 2004 2005 Sept./06
1.4
1.5x
Cash at the end of the periodCash at the end of the period Gross Debt* / EBITDA last 12 monthsGross Debt* / EBITDA last 12 months
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Capex and Dividends
Capital ExpendituresCapital Expenditures Dividend Payout*Dividend Payout*
R$ MM R$ MM
43.6
15.610.912.59.8
2001 2002 2003 2004 2005
% Net Profit
* Includes Interest on Shareholder´s Equity
9M06
20.7
11.4
4.0
11.8
3.2
5.6
2001 2002 2003 2004 2005
85% 49% 116% 31% 71%
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R$ MM
200520042003
4046
4856
4957
64
7668
8393 92 90 90
1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T
Gross Revenue Evolution
2006
93
3T
2002
2934
38 39
1T 2T 3T 4T
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Financial Information
Value Creation Agenda
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Strategy
Implementation Strategy
OBJECTIVE
Focus on our
Business Model:- Independence
- Diversification
- Technology
- Specialization
Develop New
Business
Opportunities
Efficient
Management
of our Operations
Expand our
activities
rapidly
MAINTAIN AND EXPAND OUR LEADERSHIP AS AN INDEPENDENT COMPANY IN THE BRAZILIAN
MARKET OF CREDIT CARDS ADMINISTRATION, CALL CENTER, CREDIT PROCESSING,
COLLECTION AND LOYALTY PROGRAM SERVICES
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Growth Opportunities
OrganicMarket Growth
Cross-SellingOpportunities
Entrance inNew Markets
AcquiringNew Clients& Outsourcing
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� CardSystem• Implementation of Caixa Project– Feb/07• Focus on Co-Branded Private Label Cards• Leverage in business based on our competitive advantages
� TeleSystem and Credit&Risk• New Management in charge of the Units• Strengthening of structure, commercial processes and financial management• Strong emphasis on commercial efforts
� MarketSystem• Focus on gaining clients of the financial, telecommunication and retail industries
Main Strategic Actions - 2007
� CSU Corporate• Complete the commercial achievements and strategies of 2005 and 2006 • Expansion of volumes – growth of the businesses already conquered• Enlargement of profitability by cost management and scale gains• Entrance in new business segments and new markets
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High Level of Corporate Governance
100% common shares
Bovespa´s Novo Mercado (100% Tag Along)
Free float of 39% voting shares
Active Board of Directors, with diversified and complementary experiences and presence in the business management:
� Independent members: Mailson F. da Nóbrega e Rubens Barbosa
Solid relationship track record with minority shareholders� Private Equity funds investment in 1997
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High Level of Corporate Governance
Dedicated Investor Relations Team
Development of a Stock Option program for the executives� Alignment of interests between administration and shareholders
Controlling Committee held by an Independent Member of the Board of Directors
Code of Ethics / Disclosure and Stock Trading Policies
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Social Responsibility
� 10,051 employees (Sep/06)
� CSU Institute
� CSU University
� Incentive to social and educative programs along with Abrinq and other Institutions
� Encouragement to voluntary work
� First Trainee Program launched in 2006/2007
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Conclusion: Attractive Investment Opportunity
Attractive Industry Growth Fundamentals
Market Leadership
Superior Corporate Governance
Strong Growth Prospects
Premium Diverse Client Portfolio with Excellent
Relationship Track Record
Impressive Growth In All Financial Metrics
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www.www.csucsu.com..com.brbr