Results Presentation TIM Participações S.A.

Transcription

1 Results Presentation TIM Participações S.A. 1

2 Agenda Q1 in Few Community Expansion Keeping the Innovation Path Infrastructure & TIM Fiber Update Financials Highlights Outlook and Priorities 2

3 Consistent Growth: Keeping the Pace % Reported Revenues Services Ebitda 4,468 3, ,015 3, ,169 1, Ebit Pro-forma* Revenues Ebitda 4,468 3, ,169 1, * Includes Revenues and EBITDA of AES Q Growth driven by mobile business: Consistency in customer base and revenues expansion Data acceleration Increased pressure on Voice services (FMS) MTR cut started on March impact of -R$43 mln/ month revenues; -R$22 mln/month Ebitda Speed-up of Network Roll-out: Capex +83% YoY in Q1 (2G capacity, 3G roll-out) 3G upgraded to 42 Mbps starting from SP TIM Fiber/TIM integration: ~1,000 antennas connected with fiber n SP/Rio (FTTS) >1,000 Household connected (TIM Fiber) Soft launch confirmed for Q2 3

4 Drivers of Revenue Growth: Community Expansion and Internet for All Customer Base Revenues Mln clients, Base EoP Gross Adds Net Adds % +72% Δ% YoY Mln R$, Fixed+Mobile Net Service Revenues 3,463 3, % 4,015 4,468 Post-paid Pre-paid % % % Total Net Revenues +19.1% Gross Adds 1Q YoY Tot. +17% 1Q YoY Net Adds Tot. +72% Gross Rev. Mobile only Voice Out(local) Q YoY +16% Q YoY +14% Pre +17% Pre +74% Long Distance Voice In -2% +21% +16% +8% Post Voice -6% Post Voice +33% VAS +32% +56% Post Web +64% Post Web +125% TOTAL +14% +19% 4

5 Mobile Internet: the New Wave Revenues Reshape Smartphone/webphone penetration Mobile Serv. Gross Rev, R$ Mln <14% Data reached R$1 billion revenues Data exceeding Long Distance Revenues VAS +400bps in 1 year >18% % smartphones/total CB (lines), % smarphones/handsets sales 26.6% 19.5% 15.4% 12.6% 31.1% LD Data 4, , , , , ,000 Mar'11 Jun'11 Sep'11 Dec'11 Mar'12 % sold 46% 52% 69% 68% 77% VoiceOut&Others 2,417 2,532 2,656 2,889 2,751 3G - Coverage YoY Incoming , Q11 3Q11 4Q11 % urban population coverage 55.8% 56.9% 57.5% 66.6% 67.1% Total DATA LD +13.7% +32.3% +21.0% +18.4% +33.5% +38.7% +20.0% +47.6% +41.5% +20.7% +49.2% +34.4% +18.9% +56.1% +16.3% # cities Voice OUT&Other Incoming +14.6% +14.9% +13.7% +13.9% +13.8% -2.4% +4.7% +5.6% +10.5% +8.0% 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 5

6 Pressure on Voice (FMS) and Acceleration of Mobile Internet (Business Transformation) Received Business Erosion Gross Revenue Mix Price Competition (eg. Local and LD) MTR impact asimmetric for mobile only operators R$43 mln/month revenues R$22 mln/month margin (itx costs 66% regulated vs 34% not SMS, M-F, itx) In LD Local 19% 15% 52% 66% 18% 14% 50% 68% TIM Claro 25 cents/call (equal to ~5cent/minute) cents/call -15/35% Incoming voice MOU in fast erosion Organic (-18% YoY) as of FMS VAS 14% 18% Vivo 5 cents/min Price aligned Fixed- Mobile Mobile- Mobile Billion Minutes Received 2.2 flat 2.2 Volumes Out 17.5 Price Out Forcing FMS TIM Approach to Competitive Arena % % % % % 2Q11 3Q11 4Q11 monthly unique users 10.3 Mobile Internet

7 Agenda Q1 in Few Community Expansion Keeping the Innovation Path Infrastructure & TIM Fiber Update Financials Outlook and Priorities 7

8 Customer Base Evolution Mln lines Δ YoY March % Pos Pre % +25% +28% Net Adds Post-paid (000) Net Adds Pre-paid (000) SAC (R$) 4Q09 1Q10 2Q10 3Q10 4Q10 2Q11 3Q11 4Q11 Δ YoY March % 1,354 1,103 1,716 2,242 3,838 1,598 2,359 3,053 4,219 2,786 1, % YoY % Consistent CB expansion on Post-paid and Pre-paid Continuous Efficiency Improvements in Go2Market (in a more subsidized context) 8

9 Market Share Growth Peers copying TIM s offers 000 Net 1,103 Prepaid CB +74% 1, % 2,786 Mobile Market Share 30.1% 30.2% 30.1% 29.7% 29.5% 29.5% 29.5% 29.5% 29.8% 26.0% 26.5% 26.8% 25.4% 25.3% 25.5% 25.4% 25.4% 25.6% Vivo 7,603 8, % 24.0% 24.5% 25.1% 25.1% 25.5% 25.3% 24.9% 24.6% Claro Gross 4, % +17% 20.4% 20.1% 19.5% 19.4% 19.7% 19.1% 18.8% 18.8% 18.5% Oi 1Q10 1Q10 2Q10 3Q10 4Q10 2Q11 3Q11 4Q11 Customer Base ΔYoY 1 st in YoY CB growth for 7 Quarters Vivo TIM Claro Oi 18% 20% 18% 17% 15% 14% 16% 19% 20% 17% 17% 19% 24% 25% 25% 26% 26% 27% 15% 16% 15% 16% 17% 18% 18% 17% 15% 15% 10% 7% 9% 13% 12% 15% 16% 12% 9

10 Postpaid growth: a sustainable business model Postpaid Customer Base Bad Debt Mln lines % Gross Revenues CB % YoY Bad Debt/ 2.00% 1.83% Gross Rev. 1.34% 1.04% 0.77% 1.08% 0.95% 0.92% 0.86% SAC/ ARPU T10 2T10 3T10 4T10 1T11 2T11 3T11 4T11 1T12 1Q10 2Q10 3Q10 4Q10 2Q11 3Q11 4Q11 ANATEL s SMP 11 KPI Handset Revenues and Capitalized Subsidy Complaints over 1,000 Bills R$ Mln Handset Gross Revenues Capitalized Subsidy Q10 2Q10 3Q10 4Q10 2Q11 3Q11 4Q11 10

11 Agenda Q1 in Few Community Expansion Keeping the Innovation Path Infrastructure & TIM Fiber Update Financials Outlook and Priorities 11

12 Infinity The Largest Mobile Community in Brazil Infinity Voice 56 mln users Leveraging on Mln lines Infinity at 97% of prepaid base Bln minutes +27% Voice out Local LD M-F local LD M-F 25 cents 25 cents Per call 50 cents community 1Q 09 1Q 10 1Q 11 1Q 12 SMS #SMS, Bln On-net/off-net 10x On-net 50 cents per day Off-net Infinity Web Modem 2x Revenues Unlimited navigation for R$1.99/day speed reduction after 80Mb Pay when you use Daily unique users, Mln 1.2 Internet for all 2.8 Unique users/day 50 cents per day Speed up to 1Mbps 2.5x Revenues 12

13 Liberty Continuous Offering Innovation 1 Voice More off-net calls bundled Post-Paid Subs Mln lines Data % +39% 9.6 Voice +21% Liberty R$ 49 Liberty Q 11 1Q 12 2 SMS Unlimited messages 4 Unlimited on/offnet Pay when you use R$ 9.90/ month 3 Handset browsing Voice: unlimited incoming and 50 minutes outgoing to TIM numbers and local calls Data: unlimited data per day (speed reduction after 3Mb) Unlimited browsing Pay when you use R$ 29.90/ month Promotional Pricing (per day, per service): Américas R$ Europa/África R$ Ásia/Oceania R$

14 Liberty Controle Entering in a New Market Segment Liberty benefits Convenience of unlimited usage Fixed monthly bill Liberty Controle benefits Convenient as Post Paid (unlimited TIM TIM calls, local/ld) Flexible as Pre Paid (R$10 credit to use on SMS/Web/Fixed) R$ 27/ month Infinity benefits + Budget Control Pay per Day (e.g R$0.50 SMS/Internet) Brazilian Demographics Population, Mln AB C DE Liberty Liberty Controle Infinity

15 Best Smartphone Portfolio Drives Internet Browsing Unique Users Per Month Smartphone Penetration Mln clients % of CB % % 13% Revenues VAS R$ Bln % Best Device Portfolio Units Device Portfolio Q1 Sales Tablets ipad Samsung Galaxy Tab 7 Liberty Web Tablet (49/month) Basic 2,368 50% 2,354 21% Smartphones iphone 4S Galaxy SII iphone 3GS Galaxy Y Liberty Web (29.90/month) Infinity Web (0.50 /day) Support Internet* 50% 79% Modem 14 Mbps 7.2 Mbps Liberty Web Modem (69.90/month) Infinity Web Modem (1.99/day) Gross Prod. Revenues (Mln reais) % 673 Performance Price % of Internet enabler devices /gross prod. Rev 77% 94% Best Tariff Plans *Includes modem, tablets and web/smartphones 15

16 Agenda Q1 in Few Community Expansion Keeping the Innovation Path Infrastructure & TIM Fiber Update Financials Outlook and Priorities 16

17 Network Integration 2Q12 Tim Mobile Network More than 1,000 antennas connected with fiber (FTTS) Capacity upgraded from 8Mbps (leased copper based) to 100Mbps (owned fiber) Advance in FTTS Plan: 12 main cities (complete SP/Rio and 10 capitals) Starting Leased Lines switch-off (Opex saving) a FTTS Roll-out SP/RJ # Sites % of existing 1,030 1,477 2Q12 1,777 YE % 95% 115% Intelig/ AES Fiber Network Fiber based last meter Fiber to the office for Top customers (last meters) Back to commercial push for Intelig corporate business b Intelig Cust. Connected # access 688 x3 3,045 1,038 1, TIM Fiber TIM Intelig Improving network reliability Pre-start Activities Start-up of TIM Fiber c First Evidences Tim Fiber Residential Ultra BB 3,600 Building authorized 1,100 Building connected IT dedicated platform First customers connected (testers) Soft launch on May 80Mbps measured in field on pre-launch development Commercial launch on Q3 17

18 Ultra broadband: construction and tests underway MSANs Network Topology 2 Optical network Backbone 1 Network Roll Out: Execution at full speed Technical Tests: Architecture works as designed As is Status ~3, ~1,100 Technical lab tests concluded successfully Field tests underway, with first Friendly User Testers connected on the network: - Download speeds reaching 80 Mbps - Minimal signal attenuation verified on the network MSANs CPEs Speed test : 80Mbps 18

19 TIM Fiber: On track for the Q3 Commercial Launch Launch Phases TIM Fiber Day timetable confirmed Q2 Q3 Pre-Launch Test Soft Launch Commercial Launch Key objective Technical Trial of the solution Check of the Business Readiness Start of the Commercial Operations Customer base Employees + Friendly User Testers Beta Testers Customers Base Build-up Geographic Coverage (SP/RJ) Product Communications 1 neighborhood 5 neighborhoods 25+ neighborhoods UBB Naked n/a BTL ATL Channels n/a Telesales D2D + Telesales 19

20 Agenda Q1 in Few Community Expansion Keeping the Innovation Path Infrastructure & TIM Fiber Update Financials Outlook and Priorities 20

21 Consistent EBITDA and Net Income Growth EBITDA Evolution From EBITDA to Net Income R$ Mln R$ Mln 1, Handsets Rev.: -119 COGS: , % Ebitda Margin 26.2% Service Ebitda Margin 31.1% 31.1% 1, Includes R$34 mln one off tax liability EBITDA Var. Services Revenues Var. Handset Margin Var. Marketing and Sales Var. Network and ITX Var. Personnel G&A and others expenses EBITDA EBITDA Depreciation/ Amortization EBIT Net Financial Result Taxes and Others Net Income ΔYoY +13.2% -3.8% +46.4% +29.3% +86.5% +29.5% EBIT Net Income R$ Mln R$ Mln % %

22 Cash Position R$ Mln CAPEX Var Network 60% 77% 17 p.p IT 24% 14% -10 p.p R$ Mln D Working Capital D WC -617 YoY -30 => Inventories -142=> Receivables -466=> Payable +21 => Others 689 Others 16% 8% -7 p.p % ,285-1,903 1Q10 1Q10 OFCF Net Income R$ Mln DOFCF -727 YoY -110=> EBITDA-CAPEX -617 => D WC R$ Mln Including TIM Fiber net debt R$75 Mln 2,558 1,671 1, % Q10-1,277 Net DEBT/ EBITDA (trailing 12m) 1Q x 0.39x 0.40x 22

23 Agenda Q1 in Few Community Expansion Keeping the Innovation Path Infrastructure & TIM Fiber Update Financials Outlook and Priorities 23

24 1Q Takeaways Competition Me too approach from main competitors Increased subsidy and commissioning Price-down CB 52.8 March 2011 Consistency of TIM s Growth % +19% March ,752 Net Revenues 4, Q Q1 Continuous Innovation Tariff plans (Passport; Controle; Infinity modem) Smartphones/tablets ultimate portfolio Seamless 3G/Wi-Fi solution (ex: Airports; Rocinha) Regulation MTR cut asymmetric impact for pure mobile vs. integrated EILD price-cut expected soon 4G auction scheduled Accelerating Revenue Reshape Smartphone penetration 12.6% March % March 2012 LD Data Crossing 1 Bln barrier 15% <14% >18% 14% 2011 Q Q1 TIM Network Acceleration 1,030 antennas connected (FTTS) with capacity increased from 8 to 100 Mbps (transmission) 3G+ roll-out at 42Mbps (access) TIM Fiber launch on scheduling 1,100 buildings connected 3,600 building authorized Early field test: 80 Mbps scored 24

25 Business Priorities for Q2 Competitive Arena - MTR (asymmetric phase) impact - Long distance commoditization Regulation - 4G auction confirmed - EILD new price expected New Business - Ultra BB residential: confirmed - Intelig (corporate): back to commercial push in Q2 Business Developments Forcing FMS even more - Infinity s community expansion - Liberty accelerating (Passport, Controle) Data enter in FMS mode - Best smartphone portfolio (Apple) - Most attractive plans (Pre; Post) - FTTS completed in SP/RJ - 3G+ upgraded to 42 Mbps (access) Benefitting from network sinergies - Switch-off leased line (SP/RJ) - Intelig/AES/TIM network fully integrated by Q2 25