Cielo (CIEL3) investor relations material

Executive summary

• Q2 2024 marked a pivotal period with operational stabilization, early recovery, and the results of transformation and investment programs, including Próxima Cielo, which drove agility, innovation, and customer focus.

• Total Payment Volume (TPV) reached BRL 199 billion in 2Q24, up 1.6% year-over-year, resuming growth.

• Recurring net income for 2Q24 was BRL 386 million, with EBT up 6.4% sequentially, though net income was down 20.7% year-over-year due to lower EBITDA.

• Financial results improved, reflecting optimized asset/liability management and a lower Selic rate.

• Early signs of stabilization and productivity gains were seen in the SMB segment, with increased pre-payment product penetration and higher revenue yield.

Financial highlights

• Net operating revenue for 2Q24 was BRL 2,479.1 million, down 6.2% year-over-year, while net revenue in another report was BRL 1,971 million, up 7.9% year-over-year.

• Recurring EBITDA was BRL 727 million, down 49.2% year-over-year, and recurring net income was BRL 386 million.

• Prepayment volume decreased by BRL 2.4 billion (28%) year-over-year, but the spread increased by 3 percentage points, resulting in a 16% revenue decrease but a 26% increase in managerial results.

• Expenses and costs grew below inflation, with normalized costs in Cielo Brazil down 8.4% year-over-year.

• Financial result improved to BRL 86.3 million, up BRL 135.6 million from 2Q23.

Outlook and guidance

• Management expects continued productivity gains from the expanded sales force and operational improvements, with a positive outlook for the SMB segment.

• The market is projected to grow 8–10%, with industry growth driven more by new features than by pricing.

• The company is preparing to launch D0 (same-day receipt) solutions, focusing on risk management and fraud prevention.

• Strategy emphasizes customer-centricity, operational efficiency, and innovation in payments and value-added services.