Pagseguro Digital Ltd. · NYSE:PAGS
Pagseguro Digital — Investor Day (November 2021)
95 slides from Pagseguro Digital's investor day presentation, Nov 19, 2021
Slide 1: PAGS Day 2021
PAGS Day 2021 Luis Frias Founder and Chairman Ricardo Dutra Chief Executive Officer Marden Neubert Chief Technology Officer Q&A Strategy and Technology Session 1 | 50 minutes Session 2 | 30 minutes Alexandre Magnani Chief Operating Officer Q&A Payments Session 3 | 40 minutes Marlei Silva Head of Dig
Slide 2: Luis Frias Founder and Chairman
LUIS FRIAS FOUNDER AND CHAIRMAN
Slide 3: Luis Frias Founder and Chairman
Luis Frias Founder and Chairman Education • Bachelor’s Degree: Economics from USP Professional Background
Slide 4: The road so far
The road so far R$ 660 billion Acquiring TPV 2015 to 2021e R$ 6.2 billion AuC + Deposits Sep-21 R$ 1.6 billion Total Credit Portfolio Sep-21 2.2 million PagBank Active Clients Sep-21 7.7 million Active Merchants Sep-21 12x more profits Net Income Non-GAAP | LTM vs. 2016
Slide 5: A whole new world ahead of us
A whole new world ahead of us… Number of Internet Users¹ #5 number of individuals using internet¹ #2 daily time spent using internet² 99% Brazilian population have access to 4G coverage³ 95% Brazilian population have access to internet via cell phone4 1. Source: Mary Meeker | “Internet Trends 2019”,
Slide 6: Creates a unique opportunity
…creates a unique opportunity… Brazilian Total Credit Portfolio¹ 2021 71% concentrated in 5 largest banks 1. Source: Brazilian Central Bank and companies’ public information. Incumbent Legacies 1st preserving the status quo and their existing profits 2nd IT platforms (built 20 to 30 years ago)not in
Slide 7: To build up the next banking experience now
…to build up the next banking experience now PAGS Competitive Advantages Tech-DNA + Digital born Mobile First Complete banking platform + Payments Most profitable payment company Incumbent legacy UOL’s 90% reach among Brz internet audience 7,000 computer engineers at UOL Group
Slide 8: PAGS is the most profitable company
PAGS is the most profitable company Payments 1H21 1H21 Net Income / TPV1 Financial Services Opex per client² The highest profitability PagBank ARPU is 4x smaller than Digital Banks’ and 25x smaller than Incumbents Banks’ ARPU 1. Non-GAAP Net Income / Acquiring TPV. Based on companies’ public informa
Slide 9: PAGS: 35% of Nu's clients and 57% of Nu's OpEx per client
PAGS: 35% of Nu’s clients and 57% Nu’s OpEx per client
Slide 10: Non-GAAP Financial Measures; Forward-Looking Statements
Non-GAAP Financial Measures; Forward-Looking Statements This presentation includes certain non-GAAP measures. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. These non-GAAP measures are provided to enhance investors' overall underst
Slide 11: Ricardo Dutra Chief Executive Officer
Ricardo Dutra Chief Executive Officer
Slide 12: Ricardo Dutra Chief Executive Officer
Ricardo Dutra Chief Executive Officer Education • Master’s Degree: Full-time MBA from Darden | University of Virginia • Executive Education: FGV-SP • Bachelor’s Degree: Electrical/Industrial Engineering from FEI Professional Background
Slide 13: Seasoned and highly motivated Management team
Seasoned and highly motivated Management team Ricardo Dutra Chief Executive Officer Alexandre Magnani Chief Operating Officer Marden Neubert Chief Technology Officer Artur Schunck Chief Financial Officer Marlei Silva Head of Digital Account Fábio Herszkowicz Head of Financial Services Rogério Goular
Slide 14: Brazilian Payments Timeline
Brazilian Payments Timeline 1950 1990 2006 2010 2013 2018 2019 2020 • Dinners Club launched as a Shopping Card • The “Real Plan” supports growth and new kinds of credit cards were launched (vouchers, among others) • VisaNet and Redecard founded • PAGS founded • End of the exclusivity agreement betwe
Slide 15: Moving upmarket is easier than the opposite
Moving upmarket is easier than the opposite PAGS’ winning strategy ENTERPRISES SMB LONGTAIL Local player aware of the opps/risks First mover and >90% online audience coverage (UOL) drives scalability lowering CAC Mobile first experience:no bureaucracy Robust infrastructure to serve longtail extended
Slide 16: Reaching +40% profit market share of the industry
…reaching +40% profit market share of the industry Non-GAAP Net Income 9M21 R$ milion (%) PagSeguro 1091.0 41% Cielo 753.5 28% Rede 374.6 14% Getnet 282.0 11% Stone 169.6 6% Brz Acquiring 2670.6 100%10% of TPV market share 20% of Revenue Pool +40% of Profit Pool 1. Non-GAAP Net Income 9m21 / Acquiri
Slide 17: Healthy returns encourage to keep investing
Healthy returns encourages to keep investing… ARPU¹ Merchants with PagBank / Merchants without Payback² 6.3 1.3 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 04 quarters ROI² 4x to 7x Varying according to cohorts after 11 quarters 1. ARPU: Longtail clients only; 2. As of 2018 and 2019; 7
Slide 18: PagBank is a key driver to diversify revenues and profits
PagBank is a key driver to diversify revenues + profits… PAYMENTS + BANKING PAYMENTS SOFTWARES CARDS BANKING LOANS INVESTMENTS MARKETPLACE INSURANCE PARTNERSHIPS 8
Slide 19: A unique opportunity ahead of us
…and there is a unique opportunity ahead of us… 22X bigger than Acquiring 0.1% of Revenue Pool 9
Slide 20: Payments is a relevant entry-point
…while payments is a relevant entry-point Payments are a “gateway” to a broader and powerful financial services offerings such as cards, lending, investments, insurance, marketplace, and partnerships PIX PAYMENTS CROSS BORDER TRANSACTIONS CARDS BILL PAYMENTS MOBILE TOP UPS PARTNERSHIPS LENDING CREDI
Slide 21: PAGS is the most profitable company
PAGS is the most profitable company Payments 1H21 Net Income Yield¹ 0.63% 0.10% 0.08% 0.03% Market Share 9.7% 16% 28% 24% 10% The highest profitability Financial Services Average Revenue per User (ARPU)² 25x 4x R$83 R$342 R$2.053 PagBank Inter and Nubank Bradesco, Itaú, and Santander PagBank ARPU is
Slide 22: Non-GAAP Financial Measures; Forward-Looking Statements
Non-GAAP Financial Measures; Forward-Looking Statements This presentation includes certain non-GAAP measures. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. These non-GAAP measures are provided to enhance investors' overall underst
Slide 23: Marden Neubert Chief Technology Officer
MARDEN NEUBERT CHIEF TECHNOLOGY OFFICER
Slide 24: Marden Neubert Chief Technology Officer
Profile photo of Marden Neubert Marden Neubert Chief Technology Officer Education • Executive Education: Columbia, Berkeley and Stanford • Master’s Degree: Computing Science from UFMG • Bachelor’s Degree: Computing Science from UFMG Professional Background Deutsche Bank simplifica plataforma de dese
Slide 25: How PAGS leverages its tech capabilities
HOW PAGS LEVERAGES ITS TECH CAPABILITIES Scalability Security Build or buy decisions Hiring and developing talent Imagem Imagem Imagem Agile Mindset Imagem Data Engineering Imagem 3 Technology as a competitive advantage
Slide 26: Staying ahead of a business in accelerated expansion
STAYING AHEAD OF A BUSINESS IN ACCELERATED EXPANSION How can we stay ahead in a business with exponential growth? Usual response: Cloud Computing ...but c loud can be very costly, even with properly designed applications ... How can we be scalable and cost - effective at the same time? Our answer is
Slide 27: Exponential growth led to billions of transactions
5 Jan - 06 Oct - 21 Oct - 17 142 months Aug - 18 +10 months Feb - 21 +4 months May - 21 +3 months Aug - 21 +3 months Oct - 21 +2 months Exponential growth led to billions of transactions Period to reach 1 billion transactions¹ Jan - 2006 to Oct - 2021 1. Source: Internal data .
Slide 28: A responsibility of the whole organization
A RESPONSIBILITY OF THE WHOLE ORGANIZATION Imagem • Security is a responsibility of the whole organization • Product development embraces security from the beginning • All tests are automated , including security tests • Security by design 6 Security as a prime directive
Slide 29: Secure and seamless, made for Brazil's reality
SECURE AND SEAMLESS, MADE FOR BRAZIL’S REALITY • Risk & Compliance: specialists in the business side of security • Know Your Customer (KYC): responsibility of R&C • Tech comes in to make the whole KYC process smoother • Our digital onboarding works on low - end smartphones and makes manual processes
Slide 30: With proper governance, they can coexist
WITH PROPER GOVERNANCE, THEY CAN COEXIST • Security when applied to data means all information is protected from unauthorized access • Security by design protects data from external threats • Information can be more accessible and more secure • Data Governance: best of both worlds , with automation
Slide 31: Data platform architecture
Imagem DATABASES MICROSERVICES APPS SAAS APP EXTERNAL SERVICES DATA COLLECTOR (EVENTS STREAMING) BROKER RAW DATA TRUSTED DATA FEATURE STORE ACCESS CONTROL LINEAGE CATALOG SERVICE LAYER DATA SHARING DATA VISUALIZATION Imagem Imagem Imagem Imagem Imagem DATA ANALYSIS Imagem ML DEVELOP. Imagem DATA GOV
Slide 32: Autonomy, frequent releases, adaptability
AUTONOMY, FREQUENT RELEASES, ADAPTABILITY Imagem 2 PRODUCT BACKLOG SPRINT BACKLOG SPRINT NEW PRODUCT OR NEW FEATURE DAILY MEETING • PAGS uses agile methods since 2008 • Lean and Kanban concepts are applied to the whole product lifecycle • Teams have autonomy to make decision over their products • Fr
Slide 33: More secure, cost-effective and user-friendly systems
MORE SECURE , COST - EFFECTIVE AND USER - FRIENDLY SYSTEMS OUR APPROACH Keep control over the user experience QUICK AND CHEAP VS. SCALABLE AND EFFICIENT RESULT All licensed or acquired solutions are tested for security and scalability Move quickly into new opportunities and test them cheaply Over ti
Slide 34: Hiring and developing talent
• All strategy depends on being efficient in hiring and developing tech talent • Attraction : PAGS is a reference in tech in Brazil • Development : we leverage core aspects of our culture Imagem Imagem 1 1. F reedom to make decisions and accountability 2. C onstant learning and improvement 3. C olla
Slide 35: Non-GAAP Financial Measures
This presentation includes certain non - GAAP measures . We present non - GAAP measures when we believe that the additional information is useful and meaningful to investors . These non - GAAP measures are provided to enhance investors' overall understanding of our current financial performance and
Slide 36: Alexandre Magnani Chief Operating Officer
ALEXANDRE MAGNANI CHIEF OPERATING OFFICER
Slide 37: Alexandre Magnani Chief Operating Officer
Alexandre Magnani's email & phone | PagSeguro Digital's Director, Comercial E Marketing contact info Alexandre Magnani Chief Operating Officer Education • Master’s Degree: Business Administration from FGV • Bachelor’s Degree: Business Administration from FGV Professional Background Maste
Slide 38: How can we keep growing profitably in a more competitive market?
How can we keep growing profitably in a more competitive market? Conta PJ grátis, sem burocracia e 100% digital The challenge 3
Slide 39: Consistent growth in the next years supported by economy recovery
Consistent growth in the next 2 years supported by economy recovery 2016 2017 2018 2019 2020 2021E 2022E 2023E 1 2 1 4 1 6 1 8 2 0 2 5 2 9 3 5 Credit Debit Pre paid 28% 30% 33% 38% 43% 45% 47% 50% 55% 56% 57% 59% 57% 59% 61% 62% 2016 2017 2018 2019 Brazil USA UK Australia 43% 47% 53% 60% 2020 2021E
Slide 40: We have the right strengths to win the best share
DISTRIBUTION CHANNELS PAYMENT METHODS AND SOLUTIONS VALUE ADDED SERVICES COMPLETE ECOSYSTEM Imagem Unmatched virtual and physical reach Imagem Imagem Imagem Imagem Imagem Cash In Cash Out Diverse Revenue Sources Imagem Imagem Imagem Post_251_Imagem_em_destaque.png unnamed.png 5 …and we have the righ
Slide 41: Best channels to target the most profitable segments
Captura de Tela 2021-11-11 às 17.57.20.png 6 The best channels to target with efficiency the most profitable segments in the payments space from our core longtail… High traffic, simple, self - service and efficient digital channel • >20 million visits in our online store (boosted from UOL traffic)
Slide 42: Strong execution focused on SMBs segment
• +300 Hubs strategic placed across the country • Highly - skilled and motivated salesforce • Sales with instant delivery and activation of POS device • Intelligent/automated sales routes through app on Pag P hone (Business phone, receive payments from POS sales, automated routes app) Captura de Tel
Slide 43: Expert sales and integration teams for enterprise business
Imagem Imagem Imagem 8 …and expert sales/integration teams to address enterprise business and tech integrated partners Specialized sales force developing new business models • 118% Acquiring TPV growth (9M21 vs 9M20) • +200 tech partners apps integrated through our smart devices and APIs • Payments
Slide 44: Complete set of solutions and payments methods
9 Complete set of solutions and payments methods Largest product portfolio with 4 POS device suppliers PagPhone: celular, máquina de cartão e banco juntos | Loja PagSeguro Máquina de Cartão com Wifi sem aluguel | Loja PagSeguro A picture containing text, indoor Description automatically generated Sh
Slide 45: Online Merchants' Solutions
Online Merchants ’ Solutions Imagem Imagem Imagem Imagem Imagem Imagem Imagem Imagem Imagem QR Code PagSeguro Boleto Digital In App Yamí Online Split Payments Link of Payments Non card present transaction Envio Fácil Logistics Check Out Fast and Safe Transactions Cross Border Payments Pede Fácil Foo
Slide 46: Beyond payments, helping businesses grow through value-added services
• +1M merchants using Pagvendas to manage their businesses • ClubePag : Fully integrated Loyalty Program • Discounts , Cash Back, Push notification • +200 Tech partners apps integrated in our smart devices • In - app reconciliation • Dashboards • Business Insights • ~20% TPV using our reconciliation
Slide 47: PagBank enriches our ecosystem
Merchants without PagBank Merchants with PagBank ARPU¹ 100 475 CHURN 100 78 NPS 100 136 12 PagBank enrich our ecosystem, offering financial services to increase revenues and merchants’ loyalty 1. Date: Sep - 21. Considering longtail customers only. >75% of Longtail merchants use PagBank
Slide 48: Non-GAAP Financial Measures
This presentation includes certain non - GAAP measures . We present non - GAAP measures when we believe that the additional information is useful and meaningful to investors . These non - GAAP measures are provided to enhance investors' overall understanding of our current financial performance and
Slide 49: Marlei Silva Head of Digital Account
MARLEI SILVA HEAD OF DIGITAL ACCOUNT
Slide 50: Marlei Silva Head of Digital Account
Mercado Livre Logo - PNG e Vetor - Download de Logo Marlei Silva (mssilva) - Profile | Pinterest Marlei Silva Head of Digital Account Education • Master’s Degree: Business Administration from the Wharton Business School • Postgraduate Degree: Finance from IBMEC • Bachelor’s Degree: Economics from FE
Slide 51: Full banking platform for PagSeguro's client base and more
Acquiring | Receivables (Settlement or TPV) Pre p aid Cards | ATM Withdraw Individual Entrepreneurs (micromerchants) v Sending v Receiving 3 Full banking platform FOR PAGSEGURO’S CLIENT BASE AND MORE ...
Slide 52: Full banking platform for PagSeguro's client base and more
Consumers Acquiring | Receivables | Wire Transfers | Salaries | Government Programs ( Coronavoucher ) | Boletos ’ top - up Pre p aid Cards | Wire Transfers | PIX | P2P | Massive Transfers Suppliers | Payroll | ATM Withdraw | Cards | Loans | Insurance | Bill Payments | Tax Collections | Cellphone top
Slide 53: Full banking platform for PagSeguro's client base and more
Consumers SMEs NEW Acquiring | Receivables | Wire Transfers | Salaries | Government Programs (Coronavoucher) | Boletos TED (Wire Transfer) | PIX | P2P | Massive Transfers Suppliers | Payroll | ATM Withdraw | Cards | Loans | Insurance | Bill Payments | Tax Collections | Cellphone top - up | Services
Slide 54: Banking clients using PagBank more than ever
5%15% 3.7 4.9 6.7 7.9 9.1 11.2 1Q20 Merchants Consumers 2Q20 3Q20 4Q20 1Q21 2Q21 4 6 % 5 4 % 12.2 3Q21 226% ~50% of customers consider PagBank as their main bank account 2 PagBank Share of Pix Transactions of 9.3% Active customers use on average 2.8 different products per month 4 6 Banking clients u
Slide 55: Relationship way beyond regular banking
Marketplace Mobility Instore discounts Food Music Gas Cellphone top - up Streaming Paid TV top - up Gaming & Internet Imagem share.jpg Among others 1366_2000.jpg Playstation-Wallpaper-19-1920x1080.jpg xbox-logo-1159774-1.jpeg 16194009735703.jpg Among others 300510.jpeg channels4_profile.jpg Captura
Slide 56: Exploring high traffic and engagement
7 95M logins in 3 Q21 : 1x login per workday for every PagBank client 1.3 M customers receiving cashback monthly R$ 58.8 B in PagBan k TPV¹ in 3Q21 : 2. 6 x higher than 3Q20 Imagem Imagem Imagem 8 Exploring high traffic and engagement… 1. Includes prepaid card top ups, cash cards spending, credit ca
Slide 57: Constant product development targeting customer needs
Imagem Imagem THROUGH CONSTANT PRODUCT DEVELOPMENT TARGETING CUSTOMER NEEDS • Bill payments • QR code payments • P2P payments • Instant payments • Credit card • Cash card • App onboarding • Payroll portability • Conta Rendeira (Savings Account) • Cashbacks • Mobile top up • Services top up • Tax Col
Slide 58: Non-GAAP Financial Measures
This presentation includes certain non - GAAP measures . We present non - GAAP measures when we believe that the additional information is useful and meaningful to investors . These non - GAAP measures are provided to enhance investors' overall understanding of our current financial performance and
Slide 59: Fábio Herszkowicz Head of Financial Services
FÁBIO HERSZKOWICZ HEAD OF FINANCIAL SERVICES
Slide 60: Fábio Herszkowicz Head of Financial Services
PDF Free Download Fábio Herszkowicz Head of Financial Services Education • Executive Education: Wharton Business School, Swiss Finance Institute and Ashridge • Bachelor’s Degree: Business Administration Professional Background Rede Logo - PNG e Vetor - Download de Logo C&A Logo PNG Transparent (
Slide 61: Leading acquiring company serving the longtail market
78% of total credit volumes for consumers 63% of total credit volumes for companies 2 Leading acquiring company serving the longtail market 55% of PagBank consumers are under 34 years old vs . 30% in banks Only 4 . 2% of PAGS portfolio is concentrated in the Top 100 customers Top 5 banks 1 concentra
Slide 62: Launching a complete ecosystem in 2 years
A variety of services comprising transactional , credit offerings , and insurance products that reaffirm our mission to promote financial inclusion Credit Non - Credit PagInvest 4 …launching a complete ecosystem in 2 years…
Slide 63: To serve merchants and consumers
MERCHANT CONSUMER WORKING CAPITAL LOAN Working Capital Loans , SMBs Loans SUPPLY CHAIN FINANCE Supply Chain Finance REVOLVING CREDIT LINE Overdraft CARDS Credit Card, Multiple Card, Prepaid Card, Cash Card INVESTMENTS CDs, Brz Treasury Bonds , Investment Funds , Home Broker INSURANCE Health, Life, H
Slide 64: PagBank app is client-oriented
CARDS PREPAID / CASH CARDS LOANS INVESTMENTS INSURANCE Imagem Imagem Imagem Imagem Imagem Imagem 6 PagBank app is client - oriented… We believe in customer experience and mobile - first experience Customer Feedback: Our App is rated among the best apps reviewed!
Slide 65: Credit leveraging cross-sell into our customer base
CREDIT LEVERAGING CROSS - SELL INTO OUR CUSTOMER BASE Working Capital Current disbursements over TPV <1% Credit Cards Current penetration in our account base <5% (Peers level around 65%) Seeking growth in additional credit products Payroll Loans, Supply Chain Finance, Multiple Card (credit + debit )
Slide 66: Fostering engagement and higher ARPU
84% of loans clients would “ certainly recommend ” the product to others 1 Great user interface and proximity: 92% of clients do not have doubts about the MDR increase collection method Imagem What would you do if you needed a new loan? Users reviews regarding lending product 2 : “It was a great exp
Slide 67: Cash cards engage customers in account usage
Cash cards engage customers in account usage PagBank efforts to grow are paying off : • Quarterly TPV more than tripled since beginning of 2020 • Expanded the active clients base by almost 4 times in the same period TPV Indexed to 100 Active Clients Indexed to 100 3 . 4x 3 . 6x 100% 255% 337% 1Q20 3
Slide 68: Investments increase AUC + deposits
Strong growth y/y and long - term opportunity : PAG S’ customers are much younger than those of the traditional banks COMPLETE DIGITAL INVESTMENT PLATFORM: INVESTMENT FUNDS FIXED INCOME BRZ TREASURY BONDS EQUITIES (HOME BROKER) Imagem A U C + Deposits R$ billion Active Clients¹ # thousand Investors
Slide 69: Insurance offerings complement our ecosystem
PAGBANK ACTS AS A NAMED INSURED: THE PRODUCT OFFERING, AND THE DIGITAL POLICY CAN BE EASILY ACCESSED ON A MOBILE DEVICE THROUGH THE PAGBANK APP Imagem MOBILE PURCHASE BEST UX Customers can access the exclusive insurance marketplace inside the PagBank App Customers contract products through a payment
Slide 70: Non-GAAP Financial Measures
This presentation includes certain non - GAAP measures . We present non - GAAP measures when we believe that the additional information is useful and meaningful to investors . These non - GAAP measures are provided to enhance investors' overall understanding of our current financial performance and
Slide 71: Eric Oliveira Head of Investor Relations
Imagem 4 ERIC OLIVEIRA HEAD OF INVESTOR RELATIONS
Slide 72: Eric Oliveira Head of Investor Relations
Eric Oliveira Head of Investor Relations Education • Master’s Degree: Advanced Program in Finance from INSPER • Bachelor’s Degree: Economics from UNICAMP Professional Background S&P Global Logo Download Vector Programa B3 de formação continuada em mercado de capitais para jornalistas e formadore
Slide 73: Born to create shared value to all
PAGS was f o unded in 2006 15 years PagBank Clients 1 12.2 milli o n l isted as a public company at NYSE 4 years M erchants 2 7.7 million Imagem simplifying to INCLUDE + including to DEMOCRATIZE is the # of micro - merchants that became formalized after subscribing to our services >38% is the # of n
Slide 74: But we can do more
#1 ESG internal diagnosis w ith internal stakeholders and data #1 materiality analysis c onducted by an external partner based on 2019 and 2020 data #1 GHG inventory 43% of women on the Board of Directors (certified by Women on Board) Demographics and i nternal diversity survey WOB.png Signing of th
Slide 75: To comply with the highest standards
2021 Report to be released in 2022 #1 ESG report complied with GRI standards 2019, 2020 and 2021 data on global standard platform #1 GHG emissions reported on a global standard Conducted by an external partner based on 2019 and 2020 data Reducing GHG emissions , becoming carbon neutral company GRI.p
Slide 76: Creating shared value to all stakeholders
Imagem To develop an ESG framework Hiring an ESG Manager In order to advise the Board of Directors Establish a Sustainability Com m it tee To be approved by the Board of Directors and the Sustainability Committee Development of a Sustainability/ESG Strategic Plan 6 …creating shared value to all stak
Slide 77: Non-GAAP Financial Measures
This presentation includes certain non - GAAP measures . We present non - GAAP measures when we believe that the additional information is useful and meaningful to investors . These non - GAAP measures are provided to enhance investors' overall understanding of our current financial performance and
Slide 78: Rogerio Goulart Chief Risk Officer
ROGERIO GOULART CHIEF RISK OFFICER
Slide 79: Rogerio Goulart Chief Risk Officer
Rogerio Goulart Chief Risk Officer Education • Master of Science Degree: Financial Engineering from USP • Bachelor’s Degree: Civil Engineering from USP Professional Background banco inter logo-banco safra-logo - Banco Original Logo - Logo Itaú Logo Rogerio Goulart Chief Risk Officer Education • Mast
Slide 80: Building up a sustainable credit model
Building up a sustainable credit model Credit Product tied to debtor’s need Certify the merchant’s know - how No postpone a merchant’s bankruptcy with a loan Credit card receivables as a tool for collection STATEMENTS 3
Slide 81: Solid pillars lead to healthy asset quality
Solid pillars lead to healthy asset quality MASSIVE DATA TEAM OF EXPERTS FLEXIBLE PLATFORM Imagem Imagem Imagem Geo - processed socio - economic data Financial system behavior Credit bureaus Cash flow conduct Result oriented Knowledge Use of right tools Modular structure Fast setup Simple implementa
Slide 82: NPL90 trending down
CREDIT CARDS¹ WORK ING CAPITAL LOAN¹ 2019 3Q21 - 59% 2019 3Q21 - 37% 5 NPL90 trending down to mid - to - high single digit 1. NPL90 Lagged: Non - performing loans rate regardless the effects of the increase of the portfolio amount.
Slide 83: Developing our competitive advantages
Developing our competitive advantages • Seasoned Team • Close relationship with customers • Credit process based on debtors’ quality • Self - sufficient credit process analysis • PAGS’ credit offer is the client’s first choice 6 …
Slide 84: It's a job that never ends
…it’s a job that never ends Icon Description automatically generated GOALS Increase share of credit products in PAGS’ revenues and profits Credit platform consolidation Risk - return pricing process Credit collection models’ continuous improvement Expand credit products to our customers 7
Slide 85: Non-GAAP Financial Measures; Forward-Looking Statements
Non - GAAP Financial Measures; Forward - Looking Statements This presentation includes certain non - GAAP measures . We present non - GAAP measures when we believe that the additional information is useful and meaningful to investors . These non - GAAP measures are provided to enhance investors' ove
Slide 86: Artur Schunck Chief Financial Officer
ARTUR SCHUNCK CHIEF FINANCIAL OFFICER
Slide 87: Artur Schunck Chief Financial Officer
Artur Schunck Artur Schunck Chief Financial Officer Education • Master’s Degree: Business Administration from FGV • Bachelor’s Degree: Business Administration from PUC - RS Professional Background Walmart Logo -
Slide 88: Brazil development opportunity
BRAZIL DEVELOPMENT OPPORTUNITY GROWTH FUTURE ECONOMY HUGE INNOVATION AGRICULTURE CREATIVITY SAMBA DIVERSITY PAGS
Slide 89: Brazilian macroeconomic expectations
Brazilian macroeconomic expectations Higher inflation with mixed impacts on TPV and revenue BRL devaluation vs. USD might impact CAPEX Financial Interest Expenses will continue under pressure High unemployment might support more individual entrepreneurs GDP growth recovery slower than expected 2022
Slide 90: Outstanding performance in the last years
Outstanding performance in the last 5 years TPV NET REVENUE NET INCOME¹ R$ billion R$ billion R$ billion 390.1 9.3 6.8 1.5 231.3 1.5 1.4 5.7 1.1 4.3 135.0 2.5 76.1 0.5 1.1 38.5 0.1 2016 2017 2018 2019 2020 2021LTM 2016 2017 2018 2019 2020 2021 LTM 2016 2017 2018 2019 2020 2021LTM ACTIVE MERCHANTS PA
Slide 91: PagSeguro will continue to drive higher volumes
PagSeguro will continue to drive higher volumes… BRZ ACQUIRING TPV TRENDS¹ R$ billion Market share grew from 3.5% to 9.7% since the IPO PAGS TPV has been growing almost twice vs. Brz market Expecting strong TPV growth, above the industry 1. Internal projections.
Slide 92: Upselling and cross-selling PagBank products
…while upselling and cross-selling PagBank products BRAZILIAN BANKING PRODUCTS REVENUE POOL¹ 2021 R$614B Opportunity R$39B R$514B R$21B R$25B R$15B + +++ Payments Credit Investments Insurance Banking Services Acquiring Acquiring + Banking 1. ABECS (Brazilian Cards Association); Central Bank of Brazi
Slide 93: PagBank volumes indicate lots of room to grow
PagBank volumes indicates lots of room to grow… AVERAGE REVENUE PER USER¹ 30% Revenue Share for 4Q24 PagBank Adjusted EBITDA Breakeven R$2.053 Estimated for 4Q22 R$342 R$83 PagBank Inter and Nubank Bradesco, Itaú, and Santander 1. ARPU: LTM Revenue / (Active client last 5 quarters average). Source:
Slide 94: PAGS long-term view
PAGS long-term view Best balance between growth and profitability
Slide 95: Non-GAAP Financial Measures; Forward-Looking Statements
Non-GAAP Financial Measures; Forward-Looking Statements This presentation includes certain non-GAAP measures. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. These non-GAAP measures are provided to enhance investors' overall underst