Cielo S.A.

Thank you very much for participating today. And before we go to Q&A, I would like to start this conversation with some highlights of our earnings and sharing all these improvements that we have had in the quarter related to our operations.

I'll also comment about other developments and strategies from Cielo. Our net income reach R$112 million in the quarter, that's 111% higher year-over-year, and that's an 18% increase to Q-over-Q.

Cielo had been showing a very consistent story of recovery in its results. It is the fourth consecutive quarter of growth in net income on a year-over-year basis.

The recovery in our earnings is based on the operational performance with revenues growing and expenses under control. This quarter, we showed a growth of 7% in net revenue as compared to the previous quarter.

The main highlight was the solution in which the merchants receive all the proceeds from their credit cards transactions in up to two days. And which was a major focus of our team in the last quarter, we understand that there is a big opportunity for us to go deeper in the penetration of this product and we will continue distributing as a priority.

is profitable and is also important to help SMB manage their cash flows. Our stance on costs was discipline is here to stay and once again showed a decline – we have presented once again a decline in our normalized expenses.

In addition to the financial performance, I would like to share some important achievements that we have had in this quarter in terms of operations and strategy. It is important to remember that at our last meeting, I said that one of our main goals at Cielo is to be a company that is a benchmark in terms of quality of service.

Over the past three months we had made important achievements and developments in terms of moving closer to this goal. We had an important case related to the Heroes project.

The Heroes are professionals who go to customers to install equipment and provide other services fast and personalized assistance. The Heroes were being tested in six cities, and in August we started operating in the Heroes model in 153 cities, which represent most of Cielo's demand for service.

Our satisfaction metrics are expected to improve in the coming months with the Heroes, but we have other measures that have already shown some results in the third quarter. We made advances in commercial productivity, logistics, and service.

Our sales team which was reinforced at the beginning of the year has been gaining traction in recent months. Metrics such as activation rate, new affiliations and the volume of new customers showed evolution.

In logistics we further improved the speed of equipment delivery. Operational improvements are already a reality, but ambition – our ambition here is much higher.

As new steps we have additional initiatives in logistics, customer service, technology platform, billing and pricing. In addition to the commercial model, we have also accelerating our journey to cloud.

These are initiatives that we will be complete by the end of 2022, when we will have flawless services, more integrated operation and increasing use of analytics in many areas of the business, mainly in our commercial activity. Before this deadline, we will have intermediate deliveries, which will allow us to capture value along the journey and be accountable in our next earring results.

As I mentioned, our ambition is very high in terms of quality of service and customer satisfaction. This agenda is aligned with earnings recovery, rate of commercial productivity and lower churn will be stationed for essential for Cielo to resume customer base growth and regain market share.

Again, I thank you for your attention and we will now move to our QA session. Thank you.

Hi. Hello everyone.

Thanks for the opportunity to ask questions. My question is on the TPV growth that we saw in the quarter.

It looked quite strong. Wanted to get your sense if you think this is kind of an underlying trend or there was something that drove the growth in TPV, and I think, I guess I see it in credit cards and debit cards with pretty robust growth in the SMB and long-term?

Jason, I think we had a bit of a chop question here. I understood your question on TPV.

Did you have any other question other than that?

No, I'm just asking for some color there. You got the question on TPV that would be great?

Perfect. Thank you for the question.

Filipe Oliveira here, he will answer. Thank you.

Hi Jason. We had a couple of effects here.

So first we had the entire market recovering from the crises that we had with COVID. So we already see a recovery in terms of economic activity and specifically in the retail section sector here in Brazil, so that's one.

Second Cielo has also been quite well in terms of funding growth in both in SMBs and micro-merchants and in large accounts. So we see that as a structural trend going forward, but Cielo is doing pretty well in terms of its own volumes.

And we don't see any downturn in terms of market volumes overall. So we see this as a trend.

That's going to continue in the next quarters.

Thank you very much.

Thank you, Jason.

Hi, good afternoon. Thank you for the call.

Also a couple of questions, one, I guess on the competitive environment, maybe following up a little bit on Jason's question on TPV growth. Is it just kind of a recovery, the industry volumes are expected to grow over 20% for the industry this year and next year, I think as well.

Is it just the industry recovering sort of some pre-COVID low or COVID low that should say? And you're kind of benefiting from that or are you getting any market share.

I mean, the stability in the take rate indicates maybe some competitive pressures may have subsided a bit, I guess, help us think about the competitive environment and how that's evolving? And then my second question on, you mentioned good performance on expenses, margins – do you think margins are now stabilizing?

Is this a recurring level of margin that we can expect going forward? How should we think about margins from here?

Tito, thank you for your question. So, solving your competitive environment; Cielo, I believe has been the market player that has been the most vocal about how competitive our environment has been over the past two years.

Right? So, we see a continuation of this competition.

And for Cielo, we haven't started to regain market share in SMB yet, that is our objective with the change that we made in our commercial model early this year. Right?

So, we changed the function of our sales professionals. We had teams of .

Now we have consultants with both functions, with the reduced geographical coverage, reduced number of clients per portfolio, and we are now after we hired those professionals in January of this year, train them, we are now continuing to give them tools, even more training, better digital channels, better client service on the call center in order to support their activity. It is our expectation to have this new sales model, this new commercial model be responsible for having Cielo resume market share gains.

When we look at share overall at TPV overall, we can never forget the dynamics of our large accounts. They are still responsible for roughly 60% of our TPV.

We have made a good negotiation effort to have more profitability, to eliminate eventual negative margins that we've had with some clients in this segment, and this caused last up of some of the TPV from those accounts, right? So with that overall over the best quarters as a result of that, we saw market share contraction.

As we have been explained to me, the market that made my point in the first comment is we failed to resume market share growth as a result of the work of our new commercial team. In terms of margins, the competitive pressure is a pressure on margins.

What we have been showing to the market is that yes, we face those pressures as well. Cielo has a price that is compatible to what we see in the markets.

But one upsetting item that we have in terms of pricing is that we have extended our ultimate prepayment product. We have been showing strong increases in that.

We are now at 41% penetration of and other prepayments alternative schooling in our SMBs portfolio. That is an important metric for us.

If we look back over one-year ago, we were at close to 20% in this metric and we are now above 40%, right? So I don't see the competitive pressure reducing in the short-term.

I don't think we can talk about stability, but we can see that Cielo with a new sales team with better service and with the ability to distribute other products has been presenting a somewhat stable revenue yield.

Great. Thank you, Gustavo.

It's helpful.

Thank you everyone for the participation. We'll see you on the next call.

In the meantime, our Investor Relations team is always available to you. Thank you very much.

Bye-Bye