TIM Participações S.A

Transcription

1 TIM Participações S.A (Bovespa: TCSL4, TCSL3; NYSE: TSU) UBS LAT/EMEA One-on-One Conference New York December 1 st / 2 nd

2 Re-Launch Plan Update New Commercial Approach and Portfolio Highlights on 3Q Results Intelig Deal Update Attachments - Market Facts and Historical Data 1

3 Our Path in Q09 2Q09 3Q09 4Q09 Brand: new format and increasing Share of Investments Network Quality: capacity, access, transportation (LD) Costumers Satisfaction Recovery in all Consumer Segments Launch of Infinity Plans (Pre and Post-paid) Loyalty (Handset and Monthly Fee Discounts) Push on Sales: - Focused on Postpaid and MNP - Network Rationalization - New ways to encourage Usage Encourage Usage: - Infinity (Pre and Post) and launched of Blue Concept (Local and LD) - Quick-win of pre-paid clients Push on Sales and CRM action Clients migration to new plans (Pre) Focusing on Post-paid: -Liberty - Infinity / Único Go-2-Market Model: Chip Only, as alternative to traditional model Acceleration and Network Development: -2G Capacity -3G Coverage Intelig KPIs Awareness and Quality Customer Base and Market Share MOU Δ Post-paid Clients and SAC/ARPU 2

4 Our Main Achievements Positioning (Brand and and Quality) Subscriber Base Growth Subscriber s Base base Growth Self-financing Brand: improve in Awareness and Top of Mind Customer Satisfaction: recovery quality level in all customer segments Quality: confirmed #2 Anatel (with MOU +30% higher than 1Q09) Overall Post-paid Jul Jan Jul TIM reverses market share trend (net share of 27.3% in 3Q, after 29.1% in 2Q, vs. ~24% of market share) Improving pre-paid customer base (Infinity Pre-paid: >11 million clients in 6 months) End of post-paid base erosion, after 15 months (Infinity Post-paid and TIM Único) Re-launch costs +R$ 0.5 Bln 9M YoY Advertising, CRC, network quality and commissioning Self-financing -R$ 0.7 Bln 9M YoY through Efficiency Plan Interconnection, Bad Debt and Personnel ΔEBITDA +6.7% 9M YoY Despite -0.9% of revenues decrease Continuous improvement on KPIs QoQ Sources: ABA (Associação Brasileira de Anunciantes) 3

5 Brand: improving in Awareness and Top of Mind TIM Player 1 Player 2 Player 3 Share of Investments Awareness 40% 35% 30% 25% 20% 15% 10% 30% 32% 31% 26% 28% 28% 24% 19% 18% 15% 16% 17% 29% 26% 26% 15% 50% 53% 42% 44% 34% 33% 32% 33% 33% 34% 30% 29% 31% 29% 20% 22% 41% 31% 27% 23% 5% Jan-Aug 09 May/09 Jun/09 Jul/09 Aug/09 Sep/09 Share of Voice Top of Mind TV GRP % 25% 23% 21% 32% 23% 21% 20% 31% 29% 20% 18% 29% 29% 21% 19% 30% 28% 22% 20% 27% 27% 22% 22% ABA: #1 Folha de SP: # Jan-Aug 09 Oct-Nov 07 May-Jun 08 Oct-Nov 08 Jun/09 Sources: Ibope Monitor, TIM Brasil - Pesquisa de imagem (Synovate third-party survey institute) and weekly communication tracking * RJ and SP last week of the month 4

6 Customer Satisfaction: quality level recovery in all customer segments From 0 (dissatisfied) to 10 (maximum satisfaction) Customer satisfaction Index Customer Care Satisfaction Δ vs last measure Ranking oct/08 may/09 CRC Average satisfaction, consumer segment 7,9 7, Overall #3 #1 7,5 7,3 Pre-paid 7,1-0, ,5 6,9 Pre #2 #1 6,7 3Q08 4Q08 1Q09 2Q09 3Q09* Post Post High #4 #4 #1 #1 7,1 6,9 6,7 Post-paid 6,5 6,3 6,1 5,9 5, ,7 3Q08 4Q08 1Q09 2Q09 3Q09* Client satisfaction recovery in all segments * Jul/09 and Aug/09 Sources: TIM Brasil - 12nd Customer Satisfaction Monitoring - may-jun/09; CRC Monthly Satisfaction Research 5

7 Quality: Improvement of Customer Care and Network Overall Service Quality YTD 2009 Overall Service Quality Sept 2009 % target achieved in overall service quality, TIM vs. competitors % target achieved in overall service quality, TIM vs. competitors pp YTD % 96.8% vs. FY % 93.9% 92.6% 90.2% # % 97.7% 95.5% 90.9% 85.5% 81.8% 83.0% 65.9% Player 1 TIM Player 6 Player 5 Player 4 Player 2 Player 3 Player 1 TIM Player 6 Player 4 Player 2 Player 5 Player 3 Network Service Quality (*) % target achieved in network quality, TIM vs. competitors % target achieved in TIM network quality Jan/09 Set/09 Delta (p.p.) Main Mobile Operators TIM 84.1% 97.3% Player % 99.1% -0.9 Player % 96.5% ,00% 98,00% 96,00% 94,00% 92,00% 90,00% 88,00% 86,00% 84,00% 87.6% 96.4% 94.0% 90.7% 97.3% 82,00% Fonte: Anatel (*) SMP Anatel 3, 5, 6, 7 and 12 Player % 50.0% Q08 1H09 jul/09 aug/09 sep/09 MOU

8 Subscriber Base Growth: Reverting negative trends Net Additions (000 s lines) 1,392 Returning to increase in post-paid 1,196 1,393 1,446 (306) Post-paid 1,729 1,687 1,687 Pre-paid 1, (1) (250) (397)..Invert the trend 3Q08 4Q08 1Q09 2Q09 3Q09 Net Share (%) 26.5% 25.9% Market Share (%) 1Q08 and market share 25.4% 29.1% 27.3% 25.0% 24.2% 23.5% 23.7% 23.8% 17.4% 18.3% -10.1% 12.1% 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Net Adds YoY Growth (%) -17.2% -42.9% N/A 34.9% 27.5% After four quarters of market share erosion TIM confirmed trend reversal 7

9 0 TIM PARTICIPAÇÕES S.A. Investor Relations Self-financing the Re-launch plan Bln R$ -0.9% Set-09 YTD vs. YA Net Service Revenues Interconnection Bad Debt G&A Commercial Expenses (Fixed and Variable) Network EBITDA % 2.10 More quality in: Traffic (on-net) Clients Organization Brand Re-shaping Recovery Customer Base Improve in Margin despite of Revenues decrease Service Revenues Service Margin* EBITDA % +10.0% +6.7% Sep -08 YTD Sep -09 YTD 8

10 Re-Launch Plan Update New Commercial Approach and Portfolio Highlights on 3Q Results Intelig Deal Update Attachments - Market Facts and Historical Data 9

11 Innovative Commercial Approach Plans Business Model Handsets and VAS Segmented Offers Chip only (for all post-paid plans) Unique and distinctive Win-Win-Win: Complete portfolio of plans with segmented approach New Plans based on Community concept (more than 40 million clients nationwide) Community Free National Roaming - TIM: SAC/Bad Debt reduction, competitive differentiation in service vs. handset - Sales: one more option for sales - Client: flexibility. Handset Benefit or. Service Benefit Exclusivity in devices (e.g.: Windows Phone) Outsourcing of VAS platforms multiplatform applications store: music, games, adult (ex: Qualcomm) Presence of TIM in applications store of main suppliers (e.g.: Brasileirão 2009 in Apple Store) Subscriber Base and Usage Infinity Pre Infinity Post Liberty Handset Revenue SAC / ARPU Microbrowsing 10

12 Highlights on Post-paid plans Da Vinci High Mid Super High All-inclusive Offer (unlimited calls for all directions) Customized Customer Care (premium channel) Exclusive handset offer with 1 free device per year TIM Liberty Single bill and unlimited calls for on-net Free unlimited calls among Family members Bundle with TIM Fixo Free to home calls Infinity Family Low Infinity Benefit (pay per call concept for on-net) Expenses control (no surprises at the end of the month). Controle Pre Infinity Controle Unlimited communication (local and on-net LD) Community of more than 40 million users Minutes bundle and SMS to other carriers Free national Roaming unlimited 11

13 New Offers: Fast market reaction Infinity Pré Mundo Azul Competitive advantage of TIM s offer 70 MOU 90 >11 million clients Infinity Pós Increasing LD market share of traffic (+ 10pp) TIM Único +30% 1Q09 3Q09 % MOU on-net +8 pp 1Q09 3Q09 +40% Post-paid Gross Adds (Voice) Consumer 3Q YoY ~60% of Gross Adds are new Business clients Leveraging on TIM Community ~40 million clients (Local and DDD) 12

14 Re-Launch Plan Update New Commercial Approach and Portfolio Highlights on 3Q Results Intelig Deal Update Attachments - Market Facts and Historical Data 13

15 Company's repositioning: leveraging growth and usage Pre-paid base growth Post-paid base growth Mln Lines Mln Lines Infinity supporting pre-paid 25.2 growth End of postpaid base erosion, after 15 months Jan-08 Dec-08 Mar-09 Sep-09 Jan-08 Dec-08 Mar-09 Sep-09 MOU and ARPU Evolution Min/month, R$/month, MOU ARPU adjusted * ARPU reported Q 2Q 3Q New offers leveraging usage and on-net focus * adjusted by fines revenue reclassification 14

16 Improving Revenues and EBITDA Revenues EBITDA and Margin R$ Mln ΔY/Y ΔQ/Q R$ Million % Margin Service Revenues Handset Revenues Total Net Revenues 2,936 3,083 3,115 2,823 // 3Q08 1Q09 2Q09 3Q ,407 3,012 3,304 3, % -13.0% -2.0% +5.0% -30.9% +1.0% EBITDA Margin EBITDA 2008 EBITDA % 22.3% 22.7% 20.2% Q09 2Q09 3Q09 17,9% 20,0% 23,4% 20.5% 21.8% Less Commercial Efforts 2H08 Gross VAS Rev ΔY/Y ΔQ/Q +23.0% +2.5% 1,968 2,104 % VAS/ Service Rev. 9.5% 11.2% 12.3% 12.0% +2.5pp -0.3pp 9M 08 9M 09 15

17 Efficiency Plan: financing our growth Selling Expenses Strengthening commercial efforts to re-launch the brand R$ Mln YTD: +22% YoY% +18.6% +24.6% +22.1% Interconnection & Network 1Q 2Q 3Q Bad Debt Personnel and G&A Costs with consistent savings through Efficiency Plan R$ Mln R$ Mln R$ Mln 1,045 1,073 1, YTD: -10% %* %* 100 YoY% -5.7% -14.1% -10.5% YoY% -50.5% -47.9% -30.5% YoY% -8.7% -9.0% -3.3% %* YTD: -45% 3.2%* YTD: -7% 1Q 2Q 3Q 1Q 2Q 3Q 1Q 2Q 3Q * % Net Service Revenue

18 EBITDA 3Q YoY Evolution R$ Mln (111.2) Larger on-net Community (158.3) Higher commercial push vs. 2H08-11% YoY % YoY Service Contribution R$ 80 Mln (+4% YoY) Chip-only approach (11.2) Margin % 3Q % Business Generated (Out+VAS) 1 Business Received (Incoming) Handset Contribution Bad Debt Advertising & Sales Other Expenses 2 3Q % 1 - Outgoing + VAS + LD +Others Interconnection & Network Costs 2 - Other Expenses include: G&A, Personnel and Net Other Operating Expenses/Revenues 17

19 Net Result: Back to Profit R$ Mln EBITDA 3Q09 Depreciation & Amortization EBIT Net Financial Expenses Taxes and Others Net Result (663.7) Lower Interest Rates 3G NPV Impact Tax Benefit (REFIS) Tax Reversion Provisioning Tax Benefit (REFIS) 61 (144) (15) 1Q09 2Q09 3Q (61.9) Q (618.0) (152.9) (39.6) (12.1) YoY % -5.0% +7.4% -47.3% -59.5% N/A N/A 18

20 Operating Free Cash Flow & Net Financial Position 3Q09 Operating Free Cash Flow Net Financial Position R$ Million Capex / Sales 13% 2Q09 16% 3Q09 OpFCF / Sales 12% 12% R$ Million 2Q09 Operating FCF Non Op. FCF 3Q (536) 2Q09 3Q09 (2,900) R$ 356 Mln of debt reduction (2,544) EBITDA Gross Debt ΔWork. Cap. CAPEX 392 Operating FCF 392 (35) R$ 3.50 billion (of which 60% long term) ~33% of total debt is denominated in foreign currency (fully hedged) Average annual cost 9.74% in 3Q09 vs.12.54% in 3Q08 (and 10.95% in 2Q09) 19

21 Re-Launch Plan Update New Commercial Approach and Portfolio Highlights on 3Q Results Intelig Deal Update Attachments - Market Facts and Historical Data 20

22 Intelig Deal Update (1/3) New Conditions to to the Merger Agreement1 1 Transaction value remained the same as of April 16 th New payment conditions: Assumption of residual debt from Intelig of ~US$ 70 million 2 (previously zero debt from Intelig) Reduction of share swap range, now up to 5.14% for TIM shares (previously up to 6.15%) Deal expected to be concluded by the end of 2009 (Apr 16 th ) BoD Meeting - signing of the Merger Agreement Deal Time-frame (Aug 8 th ) Anatel s approval (Nov 27 th ) BoD Meeting - new conditions to the Merger Agreement Apr May Jun Jul Aug Sept Oct Nov Dec 1 according to material fact notice 2 final value amount to be concluded following the Valuation report analysis by the closing balance sheet of November 30 th Deal to be concluded until the year-end end 21

23 Intelig Deal Update (2/3) Ownership Structure Original Deal (April 16 th ) Deal Update (November 27 th ) TIM Brasil Serv. e Part. S.A. JVCO Free Float TIM Brasil Serv. e Part. S.A. JVCO Free Float T : 65.56% ON: 76.32% PN: 60.01% T : 6.15% ON: 6.15% PN: 6.15% T : 28.29% ON: 17.53% PN: 33.84% T : 66.27% ON: 77.14% PN: 60.65% T : 5.14% ON: 5.14% PN: 5.14% T : 28.59% ON: 17.72% PN: 34.21% 100% 100% 100% 100% TIM Cel. S.A. 100% TIM Nord. S.A. TIM Cel. S.A. 100% TIM Nord. S.A. 22

24 Brief Description Network Asset Business line Established in 1999 during the privatization process, being an alternative player ( mirror company ) to compete with incumbent operators ~ 500 employees Since Jan/08, owned by Docas Investimento (Brazilian Media and Publishing Group) National and international LD (Code 23) Voice, data and images transmission nationwide. In 2003, launched a local fixed telecommunication service Backbone: km of fiber optic cables Fiber optic cables length: ~ km Metropolitan Network: 18 capitals Corporate 100k clients - LD (national and international) - Data solution for business segment Wholesale - Data transmission (leased lines) Retail - Local service (~260k lines) - ISP (Internet service provider) - LD (national and international) ~50% ~35% ~15% % of net revenue Intelig Deal Update (3/3) Network Footprint Boa Vista Américas II (Florida) Macapá Globnet (New York e Miami) Atlantis 2 (Europa) Belém Manaus Fortaleza Recife Maceió Rio Branco Porto Velho Aracaju Salvador Goiás Brasília DF Goiânia Belo Horizonte Uberlândia Vitória Campo Rib. Preto Juiz Grande Campinas Fora Jundiaí Barueri Rio de Janeiro São Paulo Curitiba Joinville Porto Alegre Florianópolis Uruguaiana Atlantis 2 (Argentina) Central Central ATM/IP Estação satelital terrestre MAN POP Rede em Fibra Óptica Cabo submarino 23

25 Re-Launch Plan Update New Commercial Approach and Portfolio Highlights on 3Q Results Intelig Deal Update Attachments - Market Facts and Historical Data 24

26 Market Facts Stock Performance Shareholders Structure TCLS4 TCSL3 IBOV 100 TIM Part. Total (%) Control (%) Free Float (%) 80 Common 799,924,805 34% 650,537,118 40% 149,387,687 21% Preferred 1,548,522,231 66% 990,098,811 60% 558,423,420 79% Total 2,348,447, % 1,640,635, % 707,811, % *Nov, 2009 (20) (40) Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Telecom Italia TIM Brasil 100% Market Capitalization: R$ Billion Stock Exchange: : BOVESPA Ticker Symbol: TCSL4 (Preferred) Price: R$ 4,55 52 Week Price Range: High R$ 4.99 Low R$ 2.64 Market Panel* Stock Exchange: : BOVESPA Ticker Symbol: TCSL3 (Common) Price: R$ 6,05 52 Week Price Range: High R$ 7.95 Low R$ 4.91 Market Capitalization: US$ 6,80 Billion Stock Exchange: : NYSE Ticker Symbol: TSU (ADR) Price: US$ 26,64 52 Week Price Range: High US$ Low US$ TIM Participações TIM Celular TIM Nordeste ON: 81% PN: 64% Total: 70% 100% 100% *All Market Panel data refer to Nov 26th,

27 Historical indicators: operational results QoQ YoY 3Q09 2Q09 3Q08 % % Brazilian Wireless Subscriber Base (million) % 18.0% Estimated Total Penetration 86.7% 83.5% 73.3% 3.2 p.p p.p. Municipalities Served - TIM GSM 2,958 2,944 2, % 7.0% Market Share 23.8% 23.7% 25.0% 0.1 p.p p.p. Total Lines ('000) 39,600 37,826 35, % 12.5% Prepaid 33,297 31,610 28, % 17.3% Postpaid 6,303 6,216 6, % -7.6% Gross Additions ('000) 5,930 4,855 4, % 29.7% Net Additions ('000) 1,774 1,729 1, % 27.5% Churn 10.9% 8.6% 9.4% 2.3 p.p 1.5 p.p ARPU (R$) % -12.0% MOU % -10.7% ARPM (R$) % -1.5% SAC (R$) % 2.1% Investment (R$ million) % 4.9% Employees 9,351 10,174 10, % -8.1% Numbers are according to previously published earnings release, and therefore, may differ from the subsequent publishing due to rounding and re-classification. 26

28 Historical indicators: financial results Thousands R$ 3Q08 2Q09 3Q09 QoQ % YoY % Net Revenues ,0% -2,0% Services ,0% -1,0% Handset Revenue ,9% -13,0% Operating Expenses ( ) ( ) ( ) 0,4% -1,1% Personal Expenses ( ) ( ) ( ) 4,7% -5,2% Selling and Marketing Expenses ( ) ( ) ( ) 5,3% 22,1% Network & Interconnection ( ) ( ) ( ) 4,7% -10,5% General & Administrative ( ) ( ) ( ) -11,1% -0,5% Cost of Goods Sold ( ) ( ) ( ) -28,2% -11,3% Bad Debt ( ) ( ) (99.552) -6,0% -30,5% Other operational revenues (expenses) (40.804) (60.534) - 48,4% EBITDA ,1% -5,0% EBITDA - Margin over total net revenues 23,4% 22,3% 22,7% 0,5 p.p. -0,7 p.p. Depreciation & Amortization ( ) ( ) ( ) 2,5% 7,4% EBIT ,4% -47,3% Net Financial Results ( ) (65.857) (61.865) -6,1% -59,5% Income (loss) before taxes and Minorities ,3% 20,7% Income tax and social contribution (39.579) (37.956) Net Income (Loss) (12.053) (15.247) Numbers are according to previously published earnings release, and therefore, may differ from the subsequent publishing due to rounding and re-classification. 27

29 Safe Harbor Statements Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the Company, or TIM ), that are not historical fact constitute forward looking statements that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize. Investor Relations Avenida das Américas, Bloco 01 6 andar Barra da Tijuca Rio de Janeiro, RJ Phone: / / Fax: Visit our Website 28