CORPORATE PRESENTATION

CORPORATE
PRESENTATION
January 13
Investor Relations
Contax : profile,
clients and footprint
Contax and its Core
Business
Financial Results
Attachment
Contax : profile,
clients and footprint
CONTAX GROUP
Main services: Customer Service, Debt Collection,
Telemarketing, Retention, Trade Marketing,
Technology and Back Office
Operations in 4 countries: Brazil, Colombia,
Argentina and Peru
Latin American leader in customer relationship
services
Net Revenue of R$2,722 million in the 9M12
(R$3.1 billion in 2011)
107,143* employees
250 million contacts per month
105 units (Sites, branches and training sites)
Start-up in 2000; Bovespa listing in 2005
4
*As of September 2012
GROUP COMPANIES AND SERVICE LINES
Broad Services Portfolio and Geographic Expansion
Contax and
Allus
Contact Center
and Collection
● Debt Collection
● Customer Service
● Telemarketing
● Back Office
5
Todo!
Technology
● Software Production
● Complete IT solutions for the
CRM market
● IT Management
● Partnerships in resale of
solutions/integrator
Ability
Trade Marketing
● Promotion and sale of
products and services at
points of purchase
● Communication
● Training
OPERATIONAL OVERVIEW
Employees and workstations
Employee per company
(%,thousand)
(thousand)
4% 2%
116.6
78.2
74.5
53.7
32.2
34.8
107.1
86.4
61.4
28.0
11%
38.7
50.6
3Q12
83%
2007
2008
2009
2010
2011
3Q12
Contact Center Brazil: 89.3
Employees
Workstations
Allus: 12.0
Ability: 3.7
IT: 2.1
6
CONTAX’S
CLIENTS
● 4 of Brazil’s largest banks
● The largest credit card processing
company
● One of the leading providers of
personal loans
● The largest insurance company
● One of the largest retail companies
● Major telecom companies
● Two of the leading providers of pay TV
● The largest airline company
● The largest benefit card company
Financials
Services and Health
Among our 214 Clients…
Telecom
7
Others
EQUITY STRUCTURE
CTX Participações S.A.
● LF Tel: 34.96%
● AG Part.: 34.96%
● Portugal Telecom: 19.90%
● Fund. Atlântico: 10.18%
Portugal Telecom
Main (ON+PN)*
Free Float
TOTAL: 100.0%
0.0% ON
4.3% ON + PN
71.6% ON
34.0% ON + PN
Skopos
16.2%
Others
23.8%
100%
Contax
Ability
80%
Todo!
100%
Dedic GPTI
Listed company
8
21.7%
28.4% ON
61.7% ON + PN
Contax Participações
100%
CSHG
100%
Allus
Stocks
Number
(MM)
ADTV
(R$thou
sand)
CTAX3
25.0
104
CTAX4
39.7
1,867
Total
64.7
1,971
*Minority shareholders with more than 5% in any class of shares (PN/ON)
** We didn`t consider treasuary shares
ADTV last 6 months (until December, 31, 2012)
BRIEF BACKGROUND
Evolution
Operations in the whole client relationship chain, started as a Contact
Center company
2003
R$421MM*
28 thousand
employees
2005
R$1,045MM*
50 thousand
employees
START-UP
9
OPERATIONAL
EFFICIENCY
• Expansion of
Contact Center
• Acquisition of new
clients
• Evolution of
productivity and
quality
2000 - 2003
*Net Revenue
NEW BUSINESSES
MARKET
LEADERSHIP
• Migration of Telemar
operations
• Knowledge of operations
and stability
2008
R$1,775MM*
75 thousand
employees
2003 - 2005
2011
R$3,112*
117 thousand
employees
• Leader in the
Brazilian Contact
Center market
• Listing on Bovespa
• Productivity and
consistent
delivery
2005 - 2008
• LATAM Market
Leader: operation in
the whole
relationship chain;
Contact Center, Back
office, Point of
Purchase and
Technology
• Operations in 4
countries
• Differentiated
services
From 2009 onwards
STRATEGIC RATIONALE
CRM BPO in Latin America
Develop the
Current Core
Business (Local
Voice BPO)
• Differentiated
services
1
EBITDA
CONTAX
R$ MM
• Operational
excellence
2
Acquire Voice
BPO in Brazil
• Acquisition of
Dedic GPTI
3
297
Enter into
Process BPO
•Technology
•Trade marketing
•Back Office
FIRM VALUE
4
R$1.5 BN1
Provide Call Center
service outside
Brazil
• Latin America
• Acquisition of Allus
1 – Based on December 31, 2009; 2 – 2010 Ebitda
10
Source: Bloomberg.
4.8X
MULTIPLE
CONTAX
STRATEGY CHANGED CONTAX’S PROFILE
From a local leader in contact center to global BPO company operating in the
entire CRM services chain
2009*
REVENUE
EBITDA
TOP CLIENT
REVENUE
11
STRATEGIC
RATIONALE
2012*
Total: R$1.6 Billion
Call Center Brazil: 100%
Other Businesses: 0%
• Diversification
• Internationalization
Total: R$2.7 Billion
Call Center Brazil: 78%
Other Businesses**: 22%
Total: R$218 Million
Call Center Brazil: 100%
Other Businesses: 0%
• Differentiation
• New business with
higher margins
Total: R$274 Million
Call Center Brazil: 66%
Other Businesses: 34%
51%
*First 9 months of each year considered
** Call Center LATAM: 14%; Trade Marketing: 5%; IT: 3%
• Minimize risks
• Commercial efforts
39%
POTENTIAL MARKET
(R$ billion)
Contax as a global BPO corporation
focused on client relationship – CUSTOMER
PERFORMANCE
With the new business ventures
at Contax, the potential market
reaches
New Ventures
15.0
R$44.7 billion
9.0
44.7
7.0
11.7
CORE
BUSINESS
12
2.0
Potential IT
service
Trade
Marketing
(Point of
Net Revenue. Data from December 2011. Purchase)
Back Office
Latam
Voice-BPO
Contax and its Core
Business
BRAZIL CONTACT CENTER
Brazilian Contact Center Market: R$12bn1: annual growth of 9%
Services
Market (R$ bn)
and % Contax
5.3
30%
Customer
Service
2.1
33%
Telemarketing
3.7
8%
● Debt
Collection
14
Source: IDC, Advisia,Tendências e Contax
¹ Net Revenue
Strategy and Approach
● Differentiation: Design, implementation and operation of
customer service solutions
● Evolution of contract model and value chain (from WS to
per client)
● Multi-channel customer service (telephone, chat, social
media and email)
● Focus on performance gains (management model,
commission policies, etc)
● Contact service intelligence (mining, best time to call,
sales force segmentation, etc)
● Evolve across the complete cycle of credit and collection:
low/high layer, unsecured and secured debt collection
● Contact intelligence
● Vehicles and real estate credit as opportunity areas
CORE BUSINESS’ GROWTH
Contact Center and Debt Collection
2000
2005
2011
2014E
CAGR 5%
Size of International
Market
Net Revenue
CAGR 6%
59,900
CAGR 5%
51,800
US$ million
39,300
30,323
CAGR 10%
Size of Domestic
Market
Net Revenue
11,766
CAGR 25%
R$ million
6,116
2,040
15
Source: IDC, Advisia, McKinsey,Tendências and Contax
15,643
CAGR 12%
CURRENT CORE BUSINESS¹
PER CONTRACTING INDUSTRY
DOMESTIC MARKET
2011: R$ 12.9 bi
CONTAX
2011: R$ 3.0 bi
Others
Others
Utilities
10%
Utilities
Telecom
6%
1%
13%
Telecom
51%
52%
33%
34%
Financial
Financial
Source: IDC, Advisia,Tendências and Contax
16
¹ Gross Revenue of Contact Center Brazil
PLAYERS IN BRAZIL
NET REVENUE(R$ MM)
30%
11%
2,161
2009
3,112
2,398
1,807
MARKET
SHARE3
2011
2,103 2,245
513 584
Contax
22% 21% 30%
2010
Atento
18% 19% 22%
650
Tivit¹
5% 5% 5%
426
247 311
273 338 416
161 160 193
Teleperformance
3% 3% 6%
Algar
3% 3% 3%
CSU2
2% 1% 2%
EBITDA MARGIN(%)
20.2 17.0
15.7
12.5 12.8
12.4
8.1
11.9
10.9
10.8
5.0
12.5 12.6
8.5
5.3
2.1
-3.6
Contax
17
Atento
Tivit¹
Teleperformance
Algar
CSU2
-5.5
¹Tivit: Revenue of Contact Center and other BPO business ( excludes IT services). 2010 and 2011 estimated data. EBITDA Margin is based on consolidated data.
2CSU: Only the Contact Center business for Revenue and EBITDA margin.
3Market Share based on the number of worstations
Source: Companies’ financial and operating statements / IDC. n. m. – not measured.
INTERNATIONAL PLAYERS
NET REVENUE(US$ MM¹)
6%
26%
1,083
2,577 2,731
36%
1,363
8%
2,955
-7%
1,987
1,859
4%
1,839 1,919
20%
1,843
14%
2,206
2,505
2009
-6%
-3%
2010
2011
-6%
8%
1,255 1,174 1,138 1,168 1,095 1,179
Contax
Teleperformance
Convergys*
West*
Atento
TeleTech
EBITDA MARGIN(%)
15.7
16.1 15.6 16.8
12.4
8.1
Contax
18
11.2 10.3 11.7
10.9 10.8 11.3
Teleperformance
Convergys*
11.7 11.4
Atento
¹ Average BRL of the year
* Convergys and West: Only the Contact Center business for Revenue and EBITDA margin.
Source: Companies’ financial and operating statements.
8.9
West*
13.4 11.8
11.7
TeleTech
Financial Results
NET REVENUE
NET REVENUE
(in R$ MM)
CAGR: 35%
3,112
2,161
23%
2,722
2,398
2,205
1,775
151
2001
2008
2009
2010
2011
9M11
Since 2001, Contax presented a historic
of growth above market average*,
becoming the market leader in 2005
Source: Contax and IDC
20
*Contact Center and Debt Collection CAGR (2001-2010): 18.2%
9M12
EBITDA and EBITDA Margin
EBITDA (R$ Million) and EBITDA Margin(%)
13.5%
9.8%
Wage readjustments above
2011 levels
2
Productivity gains and
adjustments to the size of
our physical and personnel
structure
3
Strong growth in new
businesses, especially in
Allus and IT operations
4
Payroll tax benefit, non
recurrence of some costs
for the acquisition of
companies during 2011 and
optimization in our physical
structure
8.7%
7.9%
7.2%
1
125
63
3Q11
89
4Q11
71
77
1Q12
2Q12
Margins Breakdown
3Q12
(in p.p)
3.3
1.9
7.2 %
3Q11
21
1.6 1
2.7
4
13.5 %
3
2
Net
Productivity
New
Readjustments
Businesses
Others
3Q12
Net Income
Net Income (R$ MM)
132
109
92
47
21
2007
2008
2009
2010
2011
31
8
9M11
9M12
Increase YoY: higher EBITDA (R$ 111.6 million) and fall in provisions for discontinued
operations in Buenos Aires (R$ 10.7 million), partially offset by rise in net financial
expenses (R$ 38.3 million), increase in depreciation (R$ 38.9 million) and an increase
in Income Tax and Social Contribution (R$ 14.7 million).
22
DIVIDENDS
7.7
5.9
5.2
7.4
1.5
90
100
100
2010
2011
50
13
2007
2008
2009
Amount- R$ Million
Payout
28%
54%
68%
Dividend Yield - %
92%
478%
Contax carried out 5 buyback programs since 2005, investing R$200 million
23
CAPEX
CAPEX1 (R$ Million)
168
133
Breakdown (%)
15%
178
159
161
107 100
49%
9M12
36%
2007 2008
2009
2010
2011
9M11 9M12
Revenue`s Growth
Reposition
Technology
Operational Capex totaled R$ 47.6 million in 3Q12. Up by 88.9% from 2Q12
Capex/Net Revenue reaches 5.2% in 3Q12 (vs. 2.8% in 2Q12)
Investment in Technology reaches 49% of the total in 2012.
24
¹ Does not include the acquisition of Grupo Allus in an amount of R$253.5 million (R$11.8 million in 3Q11 and R$241.7 million in 2Q11)
CONSOLIDATED DEBT
Net Debt
Gross Debt Amortization
(R$ Million)
(R$ Million)
1,106.7
1,009.7
898.2
449.0
120.0
733.0
545.1
657.8
193.1
329.0
203.4
151.8
181.6
118.0
96.9
120.0
161.9
73.1
3Q11
Gross Debt
2Q12
3Q12
Net Debt
Cash
2012
2013
2014
2015
Cash for payment of Promissory Note in October
Average debt maturity was expanded to 4.1 years with new loans
The average debt cost in 3Q12 was 8.9% per year
Foreign currency debt accounted for approximately 4.5% of the total
25
2016
2017
2018
Attachment
CORE BUSINESS BRAZIL – CONTRACTS
Services
27
Fixed
Main Models
● Customer
Service
● Per WS
● Speaking Time
● Per call
● Per client
● Telemarketing
● Per WS
● Target
● Proposal / Service Sold
● Debt
Collection
● Per WS
● Performance
Variable
Performance
ENTRY INTO LATIN AMERICA
GEOGRAPHIC EXPANSION OF THE CORE BUSINESS
● Access to new markets
● Opportunities with current clients
expanding in Latin America, having
Brazil as their base
● Cultural and geographic proximity
● Base for expanding into U.S. and
Spanish consumer markets
● Scattered markets with low valueadded solutions
● Locations: Colombia, Peru and
Argentina
● Potential market estimated at
R$15 billion
● Near shore commercial operation in
the Latin American market: Mexico and
Chile
28
Todo! TECHNOLOGY SOLUTIONS
The company
● One of the 10 largest IT companies in
Brazil
● 50 clients
● Complete technology solutions based
on 4 business pillars
Software
Solutions
Partnerships
(Sales Channels)
Management of IT
Environments
CRM Innovation and
Intelligence
Differentials that TODO!
brings to CONTAX
● Potential market of R$2bn in Brazil
● The ‘Intelligence in CRM’ pillar makes
Contax the only company providing
complete technology solutions capable of
transforming the customer relationship
environment
29
Full SIP Voice
Platform
Channel
Integration:
Social
Networks, Chat,
Email, Voice,
URA
Intelligent
Front End
Self-Service
Platforms
URA and WEB
ABILITY TRADE MARKETING
Provides integrated solutions that enable clients to position their brands on sales
channels
Interacts with business areas in a way to boost opportunities while
ensuring quality and resource optimization.
Trade Marketing
Sale and promotion
of products and
services at point of
purchase
30
Direct Sales
Direct sales at small
and mid-sized
companies and end
consumers
Training
Training of sales and
consumer service
teams
Communication
Incentives and
relationship with
sales channels and
events
CONTACTS
Marco Schroeder
CFO and IRO
+55 (21) 3131-0009
Bernardo Guttmann
Investor Relations Manager
+55 (21) 3131-0692
[email protected]
www.contax.com.br/ir
This report contains market projections that do not amount to actual financial results nor past information. These are
subject to risks and uncertainty, and actual results may differ from projections.
Many of these risks and uncertainties are related to factors beyond Contax control such as future market conditions,
currency swings, the behavior of market participants, government regulating agencies, the company’s capability to
maintain funding, political and social changes or economic changes, including inflation and consumer confidence swings
globally, regionally or nationwide.
Readers are warned not to fully trust these projections. Contax has no obligation whatsoever to revise these projections
after this presentation is finalized.
.