BIEN-ÊTRE ET PERFORMANCE INVESTOR DAY ACCOR SERVICES BRAZIL
Accor Services Brazil: 2008 Key Figures ������!��������������� "��������# $ ��%���& ������ ������� ������� ������������������ ��������� ��������� ��������� ������������ ����� ��������� 2
BIEN-ÊTRE ET PERFORMANCE Focus on Brazil
Brazil: Socio-economic factors � 8.5 million km 2 (5 th global ranking) � 190 million inhabitants (5 th global ranking ) � 2007 GDP : € 760Bn (11 th global ranking) � Constant Innovation : � 100% electronic elections � more than 90% of pensions paid by cards Key Figures � Global blue chips : 2006 2007 2008 2009 GDP growth 3.7% 5.4% 5.1% 3.5% Inflation 3.1% 4;5% 6.2% 5.0% 2ème plus grande mine du monde Interest rate 13.3% 11.3% 14.7% 13.5% 4ème constructeur 1èr sur l’extraction d’avions commerciaux de pétrole Unemployment rate 10.0% 9.3% 8.3% 8.4% en eaux profondes 1er brasserie en volume
Brazil: Socio-economic factors Population Profile � Multiracial and Multicultural � Unique language � Young (29% between 15/29 year-old) and dynamic � Optimist: future oriented � Ready for changes � Important social contrasts Lots of changes � Increased purchasing power � Less poverty � Job creation over 1,4 Million in H1 2008
TR/TA Market Evolution in Brazil � Solid foundations o The “PAT Law” is a state program since 1976 o Market size: around 80% of the economically active population still to develop � A dynamic market o SMB expansion o Technological innovation � Paper � Card � Mobile � ... o Growth of regional players 11
Ticket restaurant /Food voucher Market Brazilian Population 184 M inhabitants Economically Active Population 93 MM (50,5%) Penetrated** TR/TA Formal Market 10.1 MM - 15M end users (10.9%) Unemployment Informal rate* Market* Potential Formal Market 6.9 MM 49.7 MM (7.4%) (53.4%) 26.3 MM (28.3%) Source: (*) IBGE - PNAD 2007 (**) PAT – MTE 2008 : % over economically active population 12
BIEN-ÊTRE ET PERFORMANCE From Paper to Cards: Successful Migration
Brazil: the pioneer country in electronic card migration 1st SMART card in Brazil 1976 1987 1990 1992 1993 1994 (pioneer) PAT Creation (pioneer) Eletronic Version (pioneer) (pioneer) 1998 2006 2007 2003 2004 SGC Pioneer in internalizing Electronic Version Electronic Version the electronic card Recycled paper version (pioneer) (pioneer) Express Channel authorization and (pioneer) (pioneer) processing 1st Electronic Card for 1st Web distribution the PAT Market channel for SMB AmLat Authorization Platform for electronic cards 3
Accor Services Brazil: From Paper to Electronic Card TR/TA/TC/TT Issued Volume ( Million) € 82% 2.500 2.000 1.500 55% 1.000 500 - 2003 2004 2005 2006 2007 2008e Paper Card 5
Accor Services Brazil: Technological Impact on EBITDAR for TA 2002 2007 € Millions Paper Electronic 100% 100% Issued Volume Revenues 4.94% 5.52 1.50% 0.80% Production Direction 0.24% 0.25% Commercial & Mkt. 1.00% 0.88% Finance 0.13% 0.17% IT 0.25% 0.32% Other costs 3.63% 3.07% Ebitdar 26.6% 44.6% (% from Revenue) +18 points improvement in Ebitdar Margin 8
WATTS Platform to be shared throughout Latin America: some marginal improvement to come � Worldwide card competency center located in Latin America (Brazil) � Possibility to use the same parameters through WATTS : � Product : structure (on/offline), password (yes/no/flex); Brazil � Operation : activation / blockage rules; � Pricing : card price and variable fees; Venezuela � Acceptance: transactions and cancellation limits, time to purge, affiliate contract mgmt. Mexico � Migration Plan 2008/2010 � Brazil: 2.5 million cards Chile � Hispanic America: 1.5 million cards 4
BIEN-ÊTRE ET PERFORMANCE Competitive landscape in Brazil
A highly competitive market 2000’s 70’s 90’s 80’s
A new major entrant in 2002: Visa Vale � Key figures (2008) � Issued Volume: €1.5 billion � 30.000 Clients � 10;000 points of sales (bank branches) � 90% outsourced operations � Very aggressive initial commercial activity � Strong financial counter-offer � Starting Point: 500.000 users Accor Services outperforming Visa Vale since 2007 € 22 MM 12 MM € 2003 2004 2005 2006 2008 2007 (Jan-Aug) 10m € 21m € Yearly net balance in Issue 41m € Volume between 65 m (4.8% Issue Volume) Ticket and Visa Vale € Source: Governmental bidding/ Newspapers / Accor Services Brazil 9
Consolidation of a fragmented market 2005 2008 2005 2008 1º º 38% 1 38% 1º 1 º 38% 38% 2º º 21% 2 21% 2º 2 º 34% 34% 3º º 19% 3 19% 36% 3º 3 º 20% 20% 4º º 15% 4 15% Others 8% Others 7% 7% • 3 players represent 92% of market share • 4 players represent 93% of • Ticket maintains its leadership market share • More than 60 regional players • 40 regional players with 7% of represent 8% of the market share market share Source: Labor Ministry / Governmental bidding/ Newspapers / Accor Services Brazil 10
BIEN-ÊTRE ET PERFORMANCE Accor Services in Brazil
Accor Services Brazil: Strong Potential Market for all Families of Products EXPENSE MGMT BENEFITS REWARDS & LOYALTY TRANSACTIONAL (Rewarding) CONSULTANCY (Incentives & Loyalty) 13
Accor Services Brazil: Strong Potential Market for all Families of Products EXPENSE MGMT BENEFITS REWARDS & LOYALTY 2008 Market Size: €6.2 Billion TRANSACTIONAL Annual Growth: 10% LEADER (Rewarding) 2008 2008 (Rewarding) Market Size: €1.4 Billion Market Size: €2.3 Billions Annual Growth: 15% Annual Growth: 10% 2008 NEW POSITIONING LEADER CONSULTANCY Market Size: €0.5 Billion Annual Growth: 12% (Incentives & Loyalty) (Incentives & Loyalty) COMPLEMENTARY OFFER 14
BIEN-ÊTRE ET PERFORMANCE Conclusion
Key Learnings for Accor Services � The basis of success stands in our commercial force � Quality of our sales team � Confidence of our customers and affiliated network � Alternative distribution channels � The quality of our people makes the difference � Talents retention policy � Accor was elected 11 times one of the Best Companies to Work for ( Great Place to Work Institute) � Strategic Mgmt: Balanced Score Card � The constant concern of innovation positions us always one step ahead � Management, Technology and Product Our leading position forces us to remain the best 16
Conclusion on the Brazilian Market � Largest market in the world � ~ €7,5 Billion of business volume � ~ 15 M end users � > 60 competitors � Annual growth: 10% ~ 12% � High growth potential market � Organic growth � External growth � Innovation � New technologies � New products � New services 15
BIEN-ÊTRE ET PERFORMANCE MERCI BEAUCOUP MERCI BEAUCOUP THANK YOU THANK YOU MUITO OBRIGADO MUITO OBRIGADO
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