RESULTS: MAIN HIGHLIGHTS

Transcription

1

2 Financial Performance Net Revenues (R$ bln) % EBITDA (Δ% YoY) 4.1% 1.8% +4% in 4.2% 5.2% 1Q 2Q 3Q 4Q RESULTS: MAIN HIGHLIGHTS Net Income (R$ bln) % 1.5 Data Revenues +21.5% in FY13 EBITDA Margin at 28.9% in 4Q13 Services EBITDA Margin at 32% in FY13 Efficiency SAC/ARPU (in months) 1.6x 1.6x 1.5x 1.3x Subs. acquisition costs: R$28 in FY13-6% YoY Leased line cost reduction: -6.0% YoY in FY13 Bad debt at lowest level: -4.4% YoY in FY13 Network Improvement MBB (# of cities) 39 2Q13 3Q13 4Q13 Small Cells & Wi-fi 786 Active Fiber 000 Km cities fully covered with MBB project 3G & 4G expansion (4G RAN sharing) Network quality plan Deployment of LT Amazonas Backbone Offer Evolution Postpaid Customer Base 10.7 dec/12 +15% 12.3 dec/13 Total Base 73.4 mln users Plans Controle and Express Promotional top up Infinity Web + SMS Base mix (Prepaid 83% / Postpaid 17%) HIGHLIGHTS 2

3 REVISITING PRIORITIES 1 Network Quality & Infrastructure Stabilized and improved network performance Prepared network for data evolution Optimized Capex and Opex allocation % of sites with active fiber (FTTS phase 2) on the targeted 35 cities 95% 63% 3Q13 4Q13 2 Strategy & Offer Evolution 3 Institutional Relationships 4 People & Organization Improved customer base mix Managed customer base with segmented offers Evolved offers toward data and internet services music: >250k users in 4Q and 32 mln songs downloaded Participating actively in industry discussions Recovered institutional image and dialogue Open Doors transparency initiative generated excellent results on customer interactions (>400k collaborations/month) Took corporate governance to the next level (CAE) Seeking Best Company to Work For status Reinforcing compliance culture Driving sense of belonging and employee pride music and Infinity WEB + SMS WEBSITE + APP Portas Abertas TV Campaign featuring employees PRIORITIES 3

4 A YEAR OF NETWORK/QUALITY EVOLUTION: PRIORITY #1 Projects that are transforming s infrastructure 1 st Quarter Flawless Deployment of 4G Strategy RAN sharing successfully implemented >30% of 4G market share Fiber Metropolitan Rings >570 MSAN Fiber network stabilization Support backhauling for mobile infrastructure 2 nd Quarter Completion of FTTS 1 st Phase MBB 39 cities Improving customer experience Improve throughput 4G ready Before FTTS Copper (2-8Mbps) After FTTS Own Fiber (300 Mbps) Metro Ring Quality Plan Implemented (war room) # Cities completed 100 2Q13 3Q13 4Q13 Quality improvement in critical cities Smallcell Pilot Project / Wi-fi rollout >150 cells implemented >600 hotspots with seamless authentication 3 rd Quarter New Extension of LT Amazonas Backbone 1,800 km of fiber 27 cities Boa Vista Macapá Manaus Belém Jurupari 4 th Quarter NOC Insourcing Project Launching project of insourced network operating center NETWORK 4

5 Anatel s Index of Caring Performance (in points) other QUALITY IMPROVEMENT EVIDENCES Anatel Complaints over 1,000 lines other Claims at Consumer s Protection Agency (Procon) (in thds) other dec/12 mar/13 jun/13 sep/13 nov/13 dec/12 mar/13 jun/13 sep/13 nov/13 4Q11 2Q12 4Q12 2Q13 4Q13 Source: ANATEL Improvement in all key Anatel indicators compared to 2012 Narrowing gap between IDA s 1 st place and (2 nd ) Stable Anatel s complaints metric Least claimed company at Procon War Room helping to improve network KPIs Source: ANATEL Network KPI s on target (%) (For the main 195 cities) 90% 85% 80% 75% 70% 65% mar/13 Source: SINDEC-Procon dec/13 QUALITY 5

6 Customer Base & Net Additions (mln) Total Net Adds: 39.3 mln Total Net Adds: 19.6 mln Total Net Adds: 9.3 mln CUSTOMER BASE EVOLUTION Q11 4Q11 1Q12 2Q12 3Q12 4Q Growing above market #1 player in prepaid #2 player in voice postpaid >3 mln net adds in Accelerating postpaid performance Austere disconnection policy Source: ANATEL Base per Segment (% YoY) 3G Market Share (%; mln users) 4G Market Share (%; thd users) Post Paid Pre Paid %YoY +15% +2% 41% 26% 23% 9% % % % % 47% 21% 20% 12% 41% 31% 17% 11% Source: ANATEL 4Q12 Source: ANATEL 2Q13 3Q13 4Q13 Source: ANATEL OPERATIONAL 6

7 SAC - Subscriber Acquisition Cost (R$) SAC/ Gross Adds MAINTAINING EFFICIENCY Bad Debt (R$ mln) YoY -11% +7% -9% -10% SAC/ARPU 1.6x 1.5x 1.6x 1.3x Handset Business (% YoY) Product Margin (Revenue Cost) Handset Sold (mln units) Gross adds: 40 millions Postpaid Base: 12.3 mln +15% YoY Total Base: 73.4 mln +4.3% YoY 1.0% 0.9% 0.7% 0.6% Total Data Traffic (megabytes) % over gross revenues Network Cost (% YoY) Total Voice Traffic (bln minutes) % % +15% 0 YTD Nov/12 YTD Nov/13 +50% Leased Lines (R$ mln) -6.0% OPERATIONAL 7

8 EVOLVING MARKETING PATH IN : TRANSPARENCY, SIMPLICITY, QUALITY & INNOVATION Quality VAS Prepaid VAS LDI March April July August October Customer Base Highlights Net Adds Postpaid Mix (% Net Adds Postpaid/ Total) MOU (Minutes of Use) (minutes) Outgoing ARPU (R$) % 11% 48% 21% 78% 64% 49% 47% % Q 2Q 3Q 4Q 2011 Handset & Revenues Highlights Smart/webphone over new sales (%) 70% 65% 83% 4Q11 4Q12 4Q13 ~39 mln smartphone/webphones users Share of handset sales (FY13) (%) 8% Operators 48% Open Market 52% 29% 26% 38% Operator 1 Operator 2 Operator 3 VAS Revenue Growth (% of VAS Revenues over Gross Revenues; R$ million) 18% % 21% 5.4 MARKETING 8

9 Re-visiting Market Structure STRATEGY TOWARDS DATA & INTERNET Households profile With Telephone 57 mln 91% s Position Only mobile phone 32 mln 51% 3G Subscribers (mln users; CAGR 11-13) Smart/webphone penetration (% over total base) Mobile and fixed phone Fixed phone only Purchase power 23 mln 2 mln 3% 37% 7 +82% % 43% 55% Salaries up to R$1.2k 81 mln 53% of pop. 4Q11 4Q12 4Q13 4Q11 4Q12 4Q13 Salaries up to R$3.1k 106 mln 70% of pop. Consumption People that access Internet (10 years or +) 83 mln 49% of pop. Data Users (Monthly unique users; CAGR BOU (Bytes of Use) (average megabytes per user) Households with internet connection (%; CETIC jun 13) No Yes Fixed 60% 40% Mobile 21% 24.3 mln of households 74% Big opportunity for FMS on Data +25% +75% Q11 4Q12 4Q13 Nov/12 Nov/13 Source: Anatel; Company Source: PNAD 2012, CETIC.br TIC Domicílios 2012 MARKETING 9

10 FIBER: RESHAPING THE FIXED BROADBAND MARKET Building Up Size Accelerating Growth Addressable HH (000 HH) Penetration of new neighborhoods (sales/addressable HH) Net Adds in (000 users) Customer Base (000 users) 1, % % Q12 2Q12 4Q13 Sep/12 Dec/13 Changing market dynamics Evolving overall market performance Net Adds speed mix (SP + RJ) (Mbps) Price per Mbps* (R$/Mbps) UBB Market Share (SP + RJ) (connections >34Mbps) Average Speed (Mbps) > 34 Mbps Mbps < 12 Mbps 17% 26% 57% 4Q12 * 12 months average of price / Mbps Source: Anatel; Akamai 3Q13 50% 15% 34% 4Q13 GVT Vivo 29.8 NET Other 56% Source: Anatel; Akamai 3Q13 Fiber 44% Live South Korea Japan US SP + RJ Australia Italy Brazil st position 43 rd position 84 th position FIBER 10

11 Net Revenues (R$ mln; % YoY) +6.2% FINANCIAL RESULTS +3.9% EBITDA (R$ mln) 18, ,921 5, ,207 Service +1.7% 16,420 16, % EBITDA Margin 26.1% 32.1% Service EBITDA Margin 32.0% Handset +37.4% 2,344 3,220 Revenue 2012 Δ Mobile Services Δ Fixed Services Δ Handset Revenue EBITDA 2012 ΔServ. Revs ΔMkt and Sales ΔNetwork and ITX ΔPers./G&A and others EBITDA ΔYoY +3.5% -28.0% +37.4% ΔYoY +1.7% +2.5% -0.7% +1.4% Fixing EBITDA Drags Leased Lines Cost (% YoY) Intelig: EBITDA-CAPEX (R$ mln) FISTEL Payments (R$ bln) +9.7% YoY % YoY % MTR Exposure (%) Revenues +28% +11% +8% 0% -1% - + 4Q10 4Q11 4Q12 4Q13-5% -12% -10% 30% EBITDA 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4Q10 4Q11 4Q12 4Q13 FINANCIALS 11

12 Profit & Yield Net Income (R$ mln) 1,449 +4% 1,506 FINANCIAL EVOLUTION Dividends (R$ mln, payout) 843 Payout 56% 1, % % 51% % 42% Investments CAPEX (R$ bln) Capex/Sales 18.0% 20.6% 19.4% CAPEX Mix (%) Total: R$ 3.9 bln +90% in infrastructure Focus in transport infrastructure Zero subsidy policy on handsets Operating Free Cash Flow (R$ mln) 5,207-3,561* 571 2,216 OFCF/Net Revenues: 11% EBITDA CAPEX Δ WC OFCF Expansion of +21.4% YoY *OFCF does not consider R$310 mln of LT Amazonas leasing as CAPEX FINANCIALS 12

13 Macro Environment Network Evolution PERSPECTIVES FOR 2014 Offer & Commercial Strategy Continuation of Quality Plan monitoring and execution Expectation of 4G Auction for 700MHz Spectrum Discussions on Sector Cost Modeling and MTR evolution Keen attention to competitive environment trends Network coverage expansion with increased rollout of Macro, Small Cells and Wi-Fi HotSpots Acceleration of Mobile Broadband project from current 40 cities to over 100 cities Focus on operational excellence and network availability by investing on people, systems and processes Voice growth with migration to postpaid and bundling for Voice FMS Speed up data growth with smartphones and tablets, innovative VAS, 4G offers and Data FMS Fixed business growth coming back with positive contribution to results Restructuring commercial channels Rational approach to pricing Recap of Business Plan Capex Evolution (% of Capex for Access Network) Smartphone penetration (Over total base of lines) Data Users (% Customer Base) VAS Revenue Growth (% of Mobile Gross Rev.) 3yrs - Plan Guidance: LTE 3G 2G 43% 55% >75% 30% 37% >50% 18% 21% >40% Revenues: MID single digit EBITDA: MID single digit Capex: >R$11 bln 2014e 2016e 2016e 2016e CONCLUSION 13