Results Presentation TIM Participações S.A.

Transcription

1 Results Presentation TIM Participações S.A. 1

2 Business Resilience Against a Strong Headwind Operational Improvement Users, Minutes, Unique Users, %YoY % +14% Q11 1Q12 2Q12 3Q12 Customer Base Mln Q11 1Q12 2Q12 3Q12 Minutes of Usage ~18 +22% ~21 4Q11 1Q12 2Q12 3Q12 Data Monthly Unique Users - Mln Leader in customer base growth for the 10 th consecutive quarter Leader in pre-paid #2 in post-paid voice (ex - M2M and Dongles) Record of MoU at 150 min Financials R$ Bln, %YoY Total Revenues Organic EBITDA Organic Net Income 19% 27% 34% 13% 16% % YoY 7% 8% 7% 6% 7% 8% -2% Smartphone penetration reached 43% of total base Increasing investment to R$3.4 Bln (+12% YoY) exlicenses Organic Net Income FY12 = R$1.5 Bln (+17.4% YoY) EBITDA Capex = R$1.6 Bln (ex-licenses) Proposed dividends of ~R$743 mln (+39% YoY) 1Q12 2Q12 3Q12 1Q12 2Q12 3Q12 1Q12 2Q12 3Q12 % Margin

3 Guidance: Check Point R$ billion Guidance % Achievement Total Net Revenues (+10%) 100% Organic EBITDA (+10%) 100% Organic Capex % Tough Year Underscored by Solid Business Foundation Resilience of customer base growth and usage (especially data) ARPU sequentially improving Good cost control (ITX / network costs up 9% while traffic +34%) More investments in infrastructure Macroeconomic slowdown Regulatory scrutiny Image damage Increased competition Intelig s business performance below expectations Net Service Revenue Evolution 13.1% 2011 YoY Net Service Revs 2.7% MTR Impact 1.7% Intelig s Business Impact 1.8% Macro Competition Regulatory Impact 6.9% 2012 YoY Net Service Revs 3

4 Lessons Learned: Focus on Quality 1 Management Change Restructuring of the network Intelig, TIM Fiber and TIM Celular network to become one single entity One Network for all businesses More Strength Great resilience Clear priorities 2 Structuring Quality Direct report to the CEO, a new division responsible to assure quality measures, as well as customer relation satisfaction The least claimed Telecom carrier at consumer protection agency (Procon) Delivery Anatel s network plan Improved IDA (Index of caring performance) from 88 pts in August to near 93 pts in December (2 nd best) 3 Image Repair Launch of a comprehensive website, focused on network quality Market campaign focused on transparency Advertisement with the chairman and employees Anatel Plan disclosure Real coverage footprint Quality KPI s and network improvement/incidents disclosure 4 Incremental CapEx Focus on mobile infrastructure Enhanced 3G coverage Incremental Investments 3 Bi +12% 3.4 Bi 18% of Top Line 2012E 2012A 4

5 Operations 5+

6 The only company to gain market share Total Market Share Growth (% of total lines) 640 bps 30.1% 30.2% 30.1% 29.7% 29.5% 29.5% 29.5% 29.5% 29.8% 29.6% 29.7% 29.1% 25.4% 25.3% 25.5% 25.4% 25.4% 25.6% 23.7% 24.0% 24.5% 25.1% 25.1% 25.5% 26.0% 25.3% 26.5% 26.8% 26.9% 26.8% 26.9% 24.9% 24.6% 24.6% 24.5% 24.9% Vivo 221 bps Claro D YoY -45 Bps +42 Bps +0 Bps #1 Pre-paid 27.6% 28.3% 28.0% 27.2% 24.1% 24.7% 20.1% 19.5% Bps -78 Bps +67 Bps -53 Bps 20.4% 20.1% 19.5% 19.4% 19.7% 19.1% 18.8% 18.8% 18.5% 18.7% 18.7% 18.8% #2 Voice Post-paid Oi +3 Bps 38.2% 38.4% +21 Bps 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Source: Anatel The only mobile operator which grew in % 23.2% 23.9% 21.0% 15.3% 16.7% 2Q Bps -282 Bps +143 Bps Sales Force (Points of sale EoP) Focus on Efficiency (R$; months) Bad Debt Trend (as % of Gross Revenues) Own Stores Mass Channel Q k 326k +96% +9% QoQ SAC/ ARPU SAC % -5% 1.04% 0.92% 0.71% 4Q10 4Q11 4Q10 4Q11 6

7 Consumers Complaits: Good position at Anatel and Procons IDA Index of Attendance (last reported by Anatel) (Points) Anatel Ranking of Complaits (last reported by Anatel) (Index of Complaints under 1,000 access) TIM TIM Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Source: Anatel Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Source: Anatel Volume of claims at Consumer s Protection Agency (Procon) (# Quarterly claims) 21,618 19,245 19,838 18,558 Procon Demands throughout 2012 (Mln of clients; Thousands of Demands) Best position in Telecom 16,013 14,737 12,567 10,687 10,510 9,344 8,229 7,693 8,882 8,913 7,591 6,229 7,166 6,533 7,648 8,745 4Q11 1Q12 2Q12 3Q12 TIM Source: SINDEC data base. Represents 45% of total Procons (12/31/12) TIM P1 P3 P4 Source: SINDEC published in Folha de São Paulo newspaper 7

8 Network and Quality 3G Coverage (# Cities, % Urban Population Covered) Anatel Plan: Network Development (Units TRX, Km Fiber) Anatel Plan: Quality Targets (Preliminary Results) % Urban Pop Covered 54% 66% 72% TRX (000) SMP5 Call Completion 97% 95% 95% 95% # cities a Anatel Plan 2013e 2014e 2012a Anatel Plan 2013e 2014e Data Channel Elements (000) SMP7 Drop Call 1.7% 2.0% 2.0% 2.0% Organic Capex (ex- 4G license) 2012a Anatel Plan 2013e 2014e 2012a Anatel Plan 2013e 2014e (Capex/Sales, Mix of Investments) As % of Net Revs 19.6% 18.0% 18.0% FTTS (Km of Fiber 000) SMP8 Data Connection Rate 99% 98% 98% 95% Infra Invest. Other Invest a Anatel Plan FTTS (#Sites 000) a 1.3 Anatel Plan 2013e e 2014e e 2012a Anatel 2013e 2014e Plan SMP9 Data Connection Drop Rate 3% 2012a 5% 5% 5% Anatel Plan 2013e 2014e 8

9 Marketing 9+

10 Thousands Customer Base Evolution Voice post-paid Base Analysis (ex-m2m and broadband) Customer Base Growth (% YoY) post-paid % (Million lines) Total postpaid base Voice postpaid base D% YoY +15% % : 519k Net adds 34% Net share (#2) Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 postpaid Mix 4Q11 1Q12 2Q12 3Q Bps 14.5% 14.4% 14.5% 14.8% 15.3% Source: Anatel Voice Growth (MOU) (Minutes; %YoY; Top Up) pre-paid % % YoY +1.7% +0.2% +0.2% +6.7% +14.5% Top Up Volume % 4Q11 Source: Anatel 4Q11 1Q12 2Q12 3Q12 4Q11 1Q12 2Q12 3Q12 10

11 Data as Key Driver for Growth Products Net Revenues (R$ Million) Handset Sales Market Share (% of handset revenues from Jan/12 to Nov/12) Smart/Web phone Penetration (% over total base of lines) % Operators 54% 46% Open Market 7% 25% 30% 38% 26.6% 31.1% 1.6x 35.2% 39.1% 43.1% 4Q11 1Q12 2Q12 3Q12 Sales of web/smartphones represented 65% Source: Company estimates TIM P1 P3 P4 4Q11 1Q12 2Q12 3Q12 VAS Gross Revenues (R$ Million; % of Gross Mobile Services Revenues) SMS unique users growth (Million Montlhy unique users) Data users (Million monthly unique users) 16.7% 18.1% 18.7% 19.6% 20.5% +24.6% ~ % > , % 1,031 1,132 1,243 4Q11 1Q12 2Q12 3Q12 4Q11 1Q12 2Q12 3Q12 4Q11 1Q12 2Q12 3Q12 3G coverage (% of urban pop.) 66% 72% 11

12 Stabilized ARPU QoQ ARPU (R$; QoQ%) Post-paid and Pre-paid ARPU (%QoQ) -6.8% +0.1% +3.4% -4.5% +3.5% +5.1% ARPU Generated* Post-paid Received* 1Q12 2Q12 3Q12 1Q12 2Q12 3Q12 YoY% -8.0% -15.3% -11.0% -9.5% -2.8% +3.2% +5.6% Amid a 13.8% MTR cut, ARPU remains stable since Q2 ARPU stabilized on a Quarter over Quarter basis FMS take-uo on voice and data helped ARPU dilution trend Pre-paid Strict churn policy increasing efficiency and ARPU 1Q12 2Q12 3Q12 Incoming Outgoing VAS *Generated: Outgoing Voice Services & VAS; Received: Incoming Services 12

13 Live TIM 13+

14 Live TIM: Up & Running MSANs Network Construction 1 2 Optical network 3 Backbone Buildings authorized Building s connected MSANs installed 7.1 k 8.5 k 3.0 k 4.2 K Q12 3Q12 3Q12 Capex per Client (R$) Quality of Service (Average Speed in Mbps) >700 Quality of Service with Low Cost Dec/15e Market Average Live TIM (nominal) Live TIM (delivered) Download Upload 14

15 Live TIM: Speeding-Up with the New Offer Market Demand (Units) Offers (Units) Launch Promo Actual (jan13) Website Registration 160k Customer Base / Sales ('000 Clients) 10 Customer Base 9 Sales may/12 jun/12 jul/12 aug/12 sep/12 oct/12 nov/12 dec/12 Msan Installation Takeup (average) MKT share per Week per Coverage 10% 5% 0% weeks Week 15

16 Financials 16+

17 EBITDA & Efficiency EBITDA Evolution (R$ Million) 4,658 +1, ~ , mln of provision on advertising credit 26 mln of provision on Anatel administrative procedures established between 2007/ , % EBITDA Margin 26.9% 26.7% 32.5% Service EBITDA Margin 32.4% 32.1% EBITDA 2011 Δ Services Revenues Δ Handset Margin Δ Marketing and Sales Δ Network and ITX Δ Pers./G&A and others Adj. EBITDA 2012 Nonrecurring 3Q Rep. EBITDA 2012 ΔYoY +6.9% -20.9% -2.3% +13.3% +11.8% +8.5% +7.6% Handset Business and Commercial Efficiency (%YoY) Handset Business Net Product Revenues +35% Commercial Efficiency Gross Adds -3.4% COGS Commissioning Expenses +26% % Leased Lines, Traffic and ITX Costs (Compound Growth Rate - Quarterly) Leased Lines costs 0.2% Traffic 6.9% ITX costs (ex-sms) -0.6%

18 Net Income & Dividend From EBITDA to Net Income (R$ Million) 5,010-2, = 42.1 mln provisions 9.1 mln monetary adjustments for the administrative procedures 2, ,449 1,500 EBITDA 2012 Depreciation/ Amortization EBIT Net Financial Result Taxes and Others Net Income 2012 Adj. Net Income 2012 ΔYoY +7.6% +3.6% +12.6% -29.7% +29.1% +13.4% +17.4% Organic Net Income (R$ Million, CAGR) Dividend Evolution (R$ Million, CAGR, Reported Payout) +39% +22% 776 1,278 1, Payout 22% Ratio 42% 51% 18

19 Cash Generation 2012 Operational Free Cash Flow Net Debt (R$ Mln) (R$ Mln) 5,010-3,765 R$ Mln of 4G Licenses ~ R$ 340 Mln of License payable EBITDA: -5,010 D WC: -579 Capex: +3,765 Dividends: +523 Income Tax: +414 Others: , ,824 +1, EBITDA CAPEX Δ WC OFCF %YoY ,342 %Net Rev Net Debt Oper. FCF Non-Oper FCF 2012 Net Debt 5.1 Bln for Organic EBITDA in Bln of Oper. Free Cash Flow in Bln on Organic CapEx in

20 Conclusions & Outlook 20+

21 Conclusion % Households with only mobile services 55% Fixed price premium over mobile Mobile TIM MoU (minutes) FMS on Play 49% Fixed e Mobile Broadband Access per Social Class +600 bps +700 bps x2 x5 Data Monthly Users (Mln) Mobile Data Accelerating 20% 18% 18% 20% 14% 11% 9% 4% ~18 >21 A Class B Class C Class D/E Class 4Q11 1Q12 2Q12 3Q12 Source: PNAD (national institute of statistics) MTR & EILD partially implemented MTR (Mobile Termination Rate) Cut implemented Clear path towards 2016 Great contribution from mobile sector (ARPM -16%YoY) EILD (Leased lines) Resolution 590 released (cut up to 30%) Needed framework to be followed by incumbents Monopoly break MTR Path (R$/minute) a 2013e 2014e 2015e 21

22 % 20% 15% 10% 5% 0% Guidance Mobile Customer Base Million of lines FMS Voice (MOU) Minutes of usage per line Internet for All (Mobile Data) Data as % of Gross Mobile Revenue >200 >26% > Double digit growth 13% 15% 19% Double digit growth e 2014e 2015e e 2014e 2015e e 2014e 2015e Industrial Plan will be released on Feb 8th or 22