Itautec S.A.

In 2010, Itautec promoted an extensive and consistent operational, strategic and management restructurization process, producing a financially more solid company better prepared to compete and be successful in the market segments in which it operates: commercial automation solutions, banking automation solutions, personal computing solutions, corporate computing solutions and technological services.

It was especially successful in terms of its working capital management, which resulted in operating cash generation of R$311.6 million, leading the company to a cash balance position of R$264.9 million and negative net debt of R$55.6 million, a value higher than its gross indebtedness with financial institutions.

The operational cash generation for 2010 was due to the improved asset management process instituted during the year, resulting in the more effective management of the operational cash cycle, and from the sale of the Tallard Technologies subsidiaries.

The net revenue obtained for the year increased 18.7% compared to 2009, granted that the automation solution sales (banking and commercial) grew over 60% during the period due to the increased number of ATMs and the specific actions designed to expand the customer base in the financial sector and in the area of commerce. On the other hand, the performance of personal computer sales through the retail chain fell short of expectations.

The weak sales performance in direct consumer retail, associated with the investments made to strengthen the company's operating capacity, as well as the extraordinary adjustments necessary to adjust the company to the new accounting standards established through the adoption of the International Financial Reporting Standards (IFRS) and the new requirements for internal controls and for the accounting management explain this drop in profitability.

The consolidated operational result for the year was R$13.5 million and Ebitda, R$34.2 million, a sum 41.2% lower compared to 2009. In the accumulated result for the year, the consolidated net profit was R$11.5 million, representing an average return on net equity (ROE) of 2.2%.

Itautec fulfilled its strategic planning for 2010 with investments of approximately R$94.6 million, including R$69.2 million in research and development and R$25.4 million in operating fixed assets, of which R$12 million were directed at the Information Technology (IT) area.

In 2010, Itautec completed a series of structural corrections that it has already implemented, thereby creating a more optimistic expectation. Furthermore, it adopted several different initiatives to increase its portfolio of products – especially in the computing segment – with new lines extending to the automations segment, with ATMs equipped with biometry solutions.

Itautec currently has a renewed organizational structure, one involving the integration of market executives with proven experience in addition to those who were already at the company. The company also invested in improving its people management process and developed a meritocracy-based salary system, which will help contribute toward the constant development of employees and improvement of organizational quality.

"The companies' top management remains in permanent contact as part of a process to strengthen the Itaúsa Conglomerate. At Itautec, the year 2010 was marked by an intense restructurization process that provided the bases for the construction of a financially more solid company better prepared to compete and be successful in every segment in which it operates. Itautec develops products and solutions that add value for customers and contribute toward the country's technological and social-environmental development."

Mário Anseloni

CEO of Itautec