Results Presentation TIM Participações S.A.

Transcription

1 Results Presentation TIM Participações S.A.

2 Q2 Financials Highlight R$ mln Guidance Var. % YoY 1H12 Var. % YoY Total Revenue (reported) Total Revenue (MTR adjusted) 4,547 4, % 9,016 4, % 9, % +14.7% >10% Confirmed EBITDA (reported) EBITDA (MTR adjusted) 1,214 1,262 1, % +10.2% 2, , % +12.4% >10% Confirmed CAPEX 1, % 1, % ~R$3 bln Confirmed (+R$0.5 Mln licenses) Anticipation focused on Network Main Achievements Leadership in Prepaid segment Fastest data growth (+40%YoY) and smartphone at 35.2% of total base TIM Fiber started-up (Live TIM brand) Quarter Impact MTR cut (-R$121mln rev; -R$48 mln EBITDA) Macro-economic and competitive environment TIM Fiber start-up costs (~R$11 mln) 2

3 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Effects on Q2: MTR and Macro Environment MTR Macro Environment Total Net Revenues (R$ billion) +10% % R$121 mln impact on net revenues and -R$48 mln on EBITDA Still no elasticity coming on and traffic reshape to offset MTR impact Macro economic scenario slowdown in 1H12 vs. 1H11 (i.e.: level of indebtedness; high commitment of income to debt payment; GDP lower growth) GDP Quarterly Growth (YoY) 4.2% 3.3% 3.1% 3.9% 2.1% 2.2% 1.4% 0.8% 0.7% EBITDA (R$ billion) +10% Q11 3Q11 4Q11 1Q12 e 3Q12e 4Q12e 1Q13e Handset Sale FMS will lead to lower Net Revenues Volume dependency on MTR Δ YoY 143% 83% % % -28% Short term competition aggressiveness Drivers to softening these impacts Revenues Keeping the Macro scenario Innovative approach improvement Costs Intelig/ TIM Fiber EILD regulatory (leased lines swap) framework Source: BCB, Bradesco Corretora and Company s estimates 4Q12 3

4 FMS Secular Trend Remains on Play Fixed to Mobile Substitution impacting Fixed Incumbents benefiting Mobile Segment Fixed Tariff Premium over Mobile Lines in Service Lines ARPM (R$/min) (Δ% yoy) (Δ% yoy) Mobile 40% mobile discount -4.7% +16.7% Fixed -4.9% 3Q11 3Q % % 4Q11 4Q % Mobile Outgoing price (% YoY) -23% -14% -4.0% 1Q12 1Q % Leading Traffic to a Sharp Increase -3.4% +17.6% (Bln Minutes) Fixed Revenue (Δ% yoy) Mobile Revenue (Δ% yoy) 1Q11 3Q11 4Q11 1Q12 Leadership in LD Market Share (% Minutes) -4.1% -7.0% 70% 3Q11 3Q % +11.5% 88.2% 66.5% 53.3% 49.8% 48.5% 48.3% 49.7% 6.7% 28.3% 42.0% 45.8% 47.8% 47.7% 48.1% jun/09 jun/10 dec/10 jun/11 dec/11 mar/12-8.0% 4Q11 4Q % -7.6% 1Q12 1Q % -11.7%** jun/ %** TIM Incumbents* * Telemar, Brasil Telecom, Telesp e Embratel. Source: Companies results, Teleco and Bloomberg estimates; **Excluding one company. 4

5 Operations 5+

6 Operational Growth Remains Strong Customer Base (million lines) Total Market Share Growth (% of total lines) Post Paid +1.7 Δ YoY Q Δ% +25% +24% 640 bps 30.1% 30.2% 30.1% 29.7% 29.5% 29.5% 25.5% 25.4% 25.4% 25.3% 25.4% 23.7% 24.0% 25.1% 24.5% 25.5% 25.1% 25.5% 29.5% 29.5% 29.8% 29.6% 26.9% 26.5% 26.8% 26.0% 25.3% 24.9% 24.6% 24.6% Vivo 270 bps Claro Pre Paid Net Adds (000) Post Paid Pre Paid 1Q11 3Q11 4Q11 1Q ,598 2,359 3,053 4,219 2,786 1,308 SP City Market Share Growth (% of total lines) 34.6% 34.2% 33.9% 32.9% 32.2% 31.8% 31.7% 31.4% 31.1% 25.4% 24.6% 24.8% 25.2% 25.3% 26.4% 27.6% 29.1% 30.9% Largest Prepaid Base 31.7% 30.8% Vivo 23.5% 23.5% 21.6% 24.0% 23.0% 22.5% 22.2% 20.6% 19.7% 19.7% Claro 16.4% 17.7% 17.3% 18.8% 19.9% 19.6% 19.1% 19.0% 18.3% 17.8% Oi 20.4% 20.1% 19.5% 19.4% 19.7% 19.1% 18.8% 18.8% 18.5% 18.7% 1Q10 3Q10 Customer Base Growth (%YoY) 4Q10 1Q11 3Q11 4Q11 1Q12 Oi 1st in yearly growth for 8 consecutive quarters Vivo 18% 20% 18% 17% 15% 14% 16% 19% 20% 18% TIM 17% 17% 19% 24% 25% 25% 26% 26% 27% 24% Claro 15% 16% 15% 16% 17% 18% 18% 17% 15% 13% Oi 15% 10% 7% 9% 13% 12% 15% 16% 12% 15% 1Q10 3Q10 4Q10 1Q11 3Q11 4Q11 1Q12 1Q10 3Q10 4Q10 Source: Anatel 1Q11 3Q11 4Q11 1Q12 Source: Anatel 6

7 Growth Backed by Efficiency Approach Customer Base Growth SAC and SAC/ARPU (% YoY) (R$) Continuous growth on pre-paid 26.8% -210Bps +830Bps 24.7% SAC/ 2.6 and acceleration on postpaid ARPU 18.5% 23.9% Prepaid +860Bps % +360Bps But with a rational approach: Postpaid SAC % (R$) 26-44% -26% o significant subscriber acquisition cost drop Handset Subsidy (R$ million) Bad Debt Trend (as % of Gross Revenues) o continuous bad debt downward trend 1.83% Sustainable business model Capitalized Subsidy % 0.92% o Low bad debt o No subsidies 0 0 o Freedom to customers 7

8 Update on Anatel s Sales Ban Current Situation: TIM is not the worst Outlook: Improvement Plan Presented => Network KPI => Commitment on Network Development Anatel SMP 5 Orig. calls compl. Anatel SMP 7 - Call drop (Points) # TRX Data Channel Elements KM of Fiber ( 000) ( 000) ( 000 Km) % 43x 4.3x % Player A TIM Player BPlayer C Player A => Customer KPI TIM Player B Player C Apr - 11 Apr Anatel Ranking of Complaints Procon Ranking of Complaints (SMP Compl./ Lines in Service * 1000) (Compl. of Integrated System of Procon ) Player A TIM Player B Player C Player A TIM Player B Player C Mar-11 Mar-12 Jun-11 Jun-12 TIM Call Center Index of Complaints (Points) -30% Source: Anatel, Procon and Company => Commitment on Quality Improvement SMP 5 - Call Complete SMP 7 - Drop Call SMP12 - % Call Center (% clusters) Responsiveness 76% 1H ,600Bps 92% 96% 100% 77% 2014E +400Bps +1,300Bps 90% 1H E 1H E Anatel s sales ban is expected to be removed in the next days 8

9 Marketing 9+

10 Innovation Platform Innovation path Liberty Web Infinity Web Liberty Torpedo Infinity Torpedo Liberty Controle Liberty Passport Liberty Infinity New Concept Unlimited Internet offer SMS Hybrid Plan International Local=LD Per Call All you can eat Unlimited Per Day or Month Unlimited Per Day or Month Unlimited Budget Control Unlimited Per Day Infinity Customer Base Liberty Customer Base Infinity Web Unique Users (million lines) (million lines) (daily users, million) Q11 3Q11 4Q11 1Q12 1Q11 3Q11 4Q11 1Q12 1Q11 3Q11 4Q11 1Q12 10

11 And Generating Value Pre Paid Customer Base (000 lines) Post Paid Customer Base (000 lines) Combining volume and 37, % +24% 47,506 58, % 6,956 8, % 10,001 value throughout a complete and unlimited platform of services (local and LD calls, SMS and data) Volume of Top Up growth (Mln recharges) +18% +42% MOU and Post paid Churn (Minutes, % of lines) +3% +24% MOU Churn -80Bps -50Bps Pre-paid consistent growth Post-paid taking-up with increasing traffic and lower disconnections..even with no handset subsidy policy and no loyalty 11

12 Internet Take-Up Supported by Best Handset and Offering Data Revenues (% of Gross Mobile Service Revenues) Smart/Web phone Penetration (% smartphones/total CB (lines)) 13.8% 14.6% +490Bps 16.7% 15.7% 18.1% 18.7% 12.6% 15.4% 19.5% 26.6% 31.1% 35.2% Value Added Services Revenues (R$ billion) 1Q11 3Q11 4Q11 1Q12 1Q11 3Q11 4Q11 1Q % % sold 48% 54% 71% 70% 77% 79% SMS unique users growth Data users (daily unique users) (monthly unique users) ~3X 12, % 18,907 1Q11 3Q11 4Q11 1Q12 3G coverage (% of urban pop.) May 12 57% +1,100Bps 68% 12

13 Financials 13+

14 Consistent EBITDA and Net Income Growth EBITDA Evolution From EBITDA to Net Income R$ Mln R$ Mln 1, Handsets Rev.: +55 COGS: ,214 1, R$54 mln one off event due to mark to market hedge position 26.9% EBITDA Margin 26.7% Service EBITDA Margin 32.7% 32.2% EBITDA Services Revenues Handset Margin Marketing and Sales Network and ITX Personnel G&A and others expenses EBITDA EBITDA Depreciation/ Amortization EBIT Net Financial Result Taxes and Others Net Income ΔYoY +6.4% -14.4% -2.8% +15.1% +8.7% ΔYoY +6.0% +7.8% +3.9% +44.6% +3.2% -0.9%

15 Cash Position Analysis Capex (R$ Mln) Δ Working Capital (R$ Mln) Var Network 61% 67% 600 Bps IT 22% 28% 600 Bps Others 17% 5% -1,200 Bps Δ WC: R$230 mln YoY , % OFCF (R$ Mln) Net Debt (R$ Mln) Including TIM Fiber net debt = R$87 mln ΔOFCF R$-34mln YoY ΔEBITDA-CAPEX =-R$261mln Δ WC R$230mln Δ Other R$3mln 2,520 1,998 2, Net DEBT/ EBITDA (trailing 12m) 0.68x 0.45x 0.47x 15

16 TIM Fiber Update 16+

17 Network and Marketing Highlights MSANs Network Construction 1 2 Optical network 3 Backbone Homes Passed Ready to Sell 220k Buildings authorized 5,700 Building s accessed 2,100 MSANs installed 214 Market Demand Quality of Service (Units) (Mbps) Market Demand and Quality of Service Website Registration Activation 1k 63k Download Speed Upload Speed 1.8 Market Average 0.4 Market Average 35 Live TIM 20 Live TIM 17

18 TIM Fiber Launch Plan: On Track Launch Phases Commercial Launch Soon 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 ~50 ~1 Thousand Thousand Employees + Friendly User Testers Beta Testers Customers end-of-period Geographic Coverage (SP/RJ) 1 neighborhood 5 neighborhoods 20+ neighborhoods Product Naked Ultra Broadband Communications n/a Advertising outside of communication media (BTL) Advertising in mass communication media (ATL) Channels n/a Door to door + Tele sale Outbound Door to door + Tele sale Outbound + Tele sale Inbound 18

19 Conclusions and 2H12 Outlook Concl lusions TIM managed to maintain its solid operational improvements amid tough 1H12 (macro-economic and competitive scenario) Data services continued at a solid pace Leadership in market share of net addition for 8 th consecutive quarter is a clear signal how TIM s offer is indeed the best value option Operational efficiency set the tone, with significant subscriber acquisition cost (SAC) and bad debt reduction Ou utlook Focus on network development, quality improvement and communication to defend post-paid segment and reverse the bad perception from Anatel ban Insist on FMS trend with an innovative approach Support data revenues growth through smartphone penetration and network strengthening Launching TIM Fiber (Live TIM) 19