Cielo - 17.9% Increase in Financial Volume and Net Income of R$797 Million in 2Q14

BARUERI, Brazil, July 29, 2014

2Q14 HIGHLIGHTS

• Transaction financial volume totaled R$125.3 billion, up 17.9% year-on-year, or R$19.1 billion; and increase of 4.8% compared to 1Q14, or R$5.8 billion;
• Net Operating Revenue of R$1.8 billion, up 13.6% or R$221.0 million year-on-year and increase of 1.3% or R$23.0 million quarter-on-quarter;
• Net revenue from Prepayment of Receivables* totaled R$218.1 million, up 52.4% or R$75.5 million year-on-year and 14.2% or R$27.1 million quarter-on-quarter;
•  Prepayment of Receivables reached 17.9%, over the financial volume of credit, up 1.8 p.p. year-on-year and down 0.8 p.p. quarter-on-quarter;
• EBITDA of R$955.5 million, up 9.3% or R$81.6 million year-on-year and reduction of 4.6% or R$45.9 million quarter-on-quarter;
•  EBITDA margin at 51.9%, down 2.0 p.p. year-on-year and 3.2 p.p. quarter-on-quarter;
• Cielo's net income totaled R$796.8 million, up 25.9% or R$163.7 million year-on-year and down 0.7% or R$5.9 million quarter-on-quarter;
• Cielo's net income margin at 43.3%, up 4.2 p.p. year-on-year and down 0.9 p.p. quarter-on-quarter;
• Cielo and Linx sign a Memorandum of Understanding aimed at setting up a joint venture for the creation and development of an integrated and unique solution (IPOS), which includes commercial automation, management software and electronic payments platform for the Brazilian small retail market.
• Cielo and Smiles sign for a commercial agreement to expand loyalty program in retail;
• By 8th consecutive time Cielo reaches 1st place in the Services category in the ranking from "Maiores e Melhores da Revista Exame" (Biggest and Best from Exame Magazine);
• 2nd place among the Most Innovative Companies in Brazil in the ranking from INFO Exame magazine;
• 16th place in the ranking of Most Valuable Brands in Brazil, prepared by Istoe Dinheiro magazine in a partnership with BrandAnalytics/Milward Brown. Among the 10 brands that have valued the most in 2013;
• Cielo is considered one of the 100 most prestigious brands in Brazil according to the Epoca Negocios magazine;
• Chosen, by 4^th consecutive time, among the Best Companies to Start a Career in the Voce S/A magazine guide - Awarded by 4th consecutive time;
• Cielo accompliches 2nd place in the ranking of "The 100 Best in Brazil according to the IGC," of Corporate Governance Index, published by the America Economia magazine.

*Net funding costs revenue (see explanation in management analysis of Prepayment of Receivables Revenue)

Click on the link below to open the earnings release:

http://cielo.riweb.com.br/ShowResultado.aspx?IdResultado=uywJ5In/QWSq7FW4bsvWyQ==&linguagem=en

2Q14 Earnings Conference Call
July 30, 2014

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