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VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
VIVO - Apresentation of 1st Quarter 2007 Results
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VIVO - Apresentation of 1st Quarter 2007 Results

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Apresentation of 1st Quarter 2007 Results

Apresentation of 1st Quarter 2007 Results

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  • 1. Vivo Participações S/A 1Q07 Results May 9, 2007 1
  • 2. Vivo Participações 1Q07 Results Table of contents Vivo Operating Performance Financial Performance 2
  • 3. Vivo Participações 1Q07 Results Executive Summary Highlights EBITDA ARPU 5.6% increase over 1Q06 18.1% up from 1Q06 Outgoing Traffic Net Results 22% up from 1Q06 89% decrease in losses over 1Q06 Prepaid Recharges Operating Cash Flow + change in working capital 20.5% increase over 1Q06 R$ 296.7 million Distribution Channels Net Debt National retail store share leadership with 40% 26% decrease over 1Q06 Data Revenue + VAS GSM/EDGE Historical record in the quarter; 28% up from 1Q06 16% of total additions in 1Q07 and 33% in March MOU Unified Systems 10.3% increase over 1Q06 100% of customer base within one common platform * Including replacements 3 público copyright©vivo2007
  • 4. Vivo Participações 1Q07 Results Brand repositioning 4 público copyright©vivo2007
  • 5. Vivo Participações 1Q07 Results Main marketing actions Vivo and Telefonica R$ 1,000 promotion 2,500 Minutes Partnership Postpaid customers using Up to R$ 1,000 in Bonus for free calls to any Speedy can place free recharges paid by Vivo. Vivo cell phone for 6 local calls from their Vivo The higher the recharge months, in local calls. cell phones to any fixed amount, the higher the phone, and from their fixed bonus to talk to any other phones to any Vivo cell Vivo subscriber for 6 phone, during every months in local calls. weekend through 2007 5 público copyright©vivo2007
  • 6. Vivo Participações 1Q07 Results Distribution and coverage leader in its operational area Network Coverage • 100% of the municipalities in Sao Paulo, Rio de Janeiro and Espirito Santo in both CDMA and GSM technologies; • 2,295 municipalities covered against 1,782 of the 8,134 Points of Sale second competitor in our operational area 7,831 • GSM national digital coverage 6,973 Distribution 2.984 5,867 Vivo 303 2.625 • 40% national retail share leadership, 19% above the 2.036 second placed; C1 111 • More than 338 thousand recharge points; 4.847 4.348 3.831 • New recharge partnerships with Santander and Bradesco correspondent bank services C2 99 Vivo C1 C2 Retail Third Party Own Store Post-paid additions Prepaid additions 4% Sales channels share in the total additions 19% 38% 26% • 40% of sales to individuals at the company's own stores, of which postpaid clients accounted for 77% 77% 36% Vivo's Own Stores Retail Third Party 6 público copyright©vivo2007
  • 7. Vivo Participações 1Q07 Results Vivo Operating Performance Financial Performance 7
  • 8. Vivo Participações 1Q07 Results Customer Base - 3.7% - 0.1% 30.138 29.053 29.030 • Best in class solutions in GSM and CDMA. • Vivo Escolha: 33% of the post-paid individual clients; • GSM/EDGE Adoption: 16% of the additions in the quarter*; • Market share leader in its operational area with 30.7% share of total additions; • Focus on customer service and satisfaction 1Q06 4Q06 1Q07 • Constant improvement in the services provided Additions per range * Including replacements 44% 38% 37% • Focus continues on the acquisition of value customers, 47% keeping rationality; 25% 9% • Additions in the high-end were 16p.p higher than 1Q06 1Q06 1Q07 High Medium Low 8 público copyright©vivo2007
  • 9. Vivo Participações 1Q07 Results Loyalty and Retention Actions Results • In the first quarter 2007, Vivo continued its customer loyalty and retention efforts focusing on high- and medium-value customers, prepaid and • Even with the maintenance of the competitive postpaid. pressure in the value segment, the churn remained stable. • Use of rewards program for the replacement of handsets; • Recharge and traffic incentive through bonuses; • Right Planning R$ million + 20.5% Recharges • 20.5% growth in the financial recharge volume in - 6.1% 1Q07 versus 1Q06. • Vivo has been investing in the expansion of virtual credit resellers accounting for 40% of the total recharge; 922 866 • Vivo's prepaid customers have more than 338 719 thousand recharge points; • Recharge incentive campaigns such as a "Bonus up to R$ 1,000 every month paid by Vivo". 1Q06 4Q06 1Q07 recharge financial volume 9 público copyright©vivo2007
  • 10. Vivo Participações 1Q07 Results SAC* SAC reduction as a result of greater commercial and operating efficiency. 1Q07 vs 4Q06 - 20% • 13% SAC reduction due to seasonality and lower expenses with GSM subsidies; - 13% • Reduction of advertising and commissions 125 expenses. 115 100 1Q07 vs 1Q06 • 20% SAC reduction as a result of lower expenses with subsidies, publicity and advertising; • Launch of the GSM technology; 1Q06 4Q06 1Q07 • Better commercial agreements with suppliers; • Exchange rate valuation. *SAC Blended 10 público copyright©vivo2007
  • 11. Vivo Participações 1Q07 Results ARPU and MOU Evolution ARPU MOU + 18.1% + 10.3% - 2.0% - 8.5% 82 30.6 30.0 75 4.2 3.9 68 25.4 38 36 14.2 37 13,7 10,4 44 16,4 16,3 39 15,0 31 1Q06 4Q06 1Q07 1Q06 4Q06 1Q07 Outgoing Inbound B&K Effect Outgoing Inbound • ARPU maintenance in • Aggressive recharge campaigns comparison with the 4Q06 and growth over 1Q06 • Adjusted 1Q07 ARPU 2.9% up from 1Q06 11 público copyright©vivo2007
  • 12. Vivo Participações 1Q07 Results Vivo Operating Performance Financial Performance 12
  • 13. Vivo Participações 1Q07 Results Net Service Revenue R$ million + 15.4% - 1.4% 2,647 2,609 359 337 2,262 • 28% growth in the Data Revenue + VAS in 1.226 1.185 comparison with 1Q06; 930 • 20.5% increase in the financial volume of recharges in 1Q07 x 1Q06 and cost reduction. 1.189 1,263 1.232 143 158 193 1Q06 4Q06 1Q07 Average Customer 29,920 ∆% 28,790 ∆% 28,997 base - 3.1 + 0.7 Other services Monthly Subscriptions and usage Network B&K Effect 13 público copyright©vivo2007
  • 14. Vivo Participações 1Q07 Results Net Data Revenue* + 28.0% + 21.9% • The 1Q07 showed a historical record in Vivo's data revenue; • More than 120,000 full songs sold monthly; • Vivo is one of the country's largest digital music stores; • Vivo is the only operator that charges the download contents, without charging for the traffic; • Reverse Auction Voice Portal; 1Q06 4Q06 1Q07 • Vivo Location base service to families: more than 10,000 Average Customer 29,920 ∆% 28,790 ∆% 28,997 customers. base - 3.1 + 0.7 % of Net Revenue 7.5% 6.6% 8.2% * Data Income including VASs 14 público copyright©vivo2007
  • 15. Vivo Participações 1Q07 Results Operating Expenses* R$ million • Cost of Services Rendered Cost of Increase in the interconnection cost with the end of the partial 434 Services 733 B&K. Adjusting for this effect, the 1Q07 amount would have Rendered 716 shown a R$ 43 million reduction in comparison with 1Q06. 156 • H.R. H.R. 185 Increase over 1Q06 as a result of restructuring expenses. 174 • Cost of Goods Sold Cost of Goods 433 Better agreements with suppliers, impact of the exchange rate 407 Sold 352 and GSM. Provision for 161 • Provision for Bad Debt 73 2.7% of Gross Revenue. Bad Debt 107 • Selling Expenses Selling 550 Decrease over 1Q06 due to lower third party expenses, 603 Expenses 512 especially commissions and marketing. General and 129 • General and Administrative Expenses Administrative 160 21,2% increase over 1Q06 due to higher third party expenses Expenses 156 1Q07 4Q06 1Q06 Bill & Keep Effect *Does not include depreciation 15 público copyright©vivo2007
  • 16. Vivo Participações 1Q07 Results EBITDA and Free Cash Flow R$ million EBITDA and Margin Operating Cash Flow * 32.8% 29.7% 27,8% 29,2% 26,6% 13.4 11.2 760 858 717 757 297 1Q06 4Q06 1Q07 - 114 EBITDA Margin Adjusted EBITDA for B&K Bill&Keep Effects 1Q06 4Q06 1Q07 • Adjusted EBITDA for B&K would have been R$745.8 million in 1Q07 and R$ 844 million in 4Q06. * EBITDA – CAPEX + Change in Working Capital 16 público copyright©vivo2007
  • 17. Vivo Participações 1Q07 Results Net Results R$ million 886 136 • 9 times improvement year over year 740 • Extraordinary non recurring items in 4Q06 amounted R$876 million • Better financial results 10 -19 -179 + 89% 1Q06 4Q06 1Q07 PIS and COFINS Reversal Credit Activation Net Income 17 público copyright©vivo2007
  • 18. Vivo Participações 1Q07 Results Financial Result, Gross Debt and Net Debt R$ million Financial Result 1Q07 * - 119 • S&P confirmed Vivo’s rating and change - 19% its outlook from "negative" to "stable“ 4Q06 - 147 - 36% • Better financial result as a consequence of improved interest rates during the period 1Q06 - 186 Net Debt Gross Debt - 26% - 26% - 10% 4,464 - 7% 5,483 4,500 4,057 60% • Improvement in the short-term / long-term 3,553 65% 68% profile 3,305 40% 35% 32% 1Q06 4Q06 1Q07 1Q06 4Q06 1Q07 Short Term Long Term * Without the effect of Fistel payment 18 público copyright©vivo2007
  • 19. Vivo Participações 1Q07 Results Capex R$ million Total Capex & % Capex / Net Revenue 36% 11% 1,059 8% 120 • Quality improvement 134 • GSM/EDGE • Systems Integration 281 805 235 103 94 86 44 92 98 1Q06 4Q06 1Q07 Network Technology Others 19 público copyright©vivo2007
  • 20. Vivo Participações 1Q07 Results Final Remarks "To be the biggest telecommunications operator in Brazil and one of the biggest in the world is important, but to be the best in what really matters to the customer is still more important. Likewise, to be a reference in the development of high-end technology will make no difference if that technology does not provide useful services to the customer. We wish to transform Vivo in an unforgettable customer experience for both existing and potential new fans." Roberto Lima 20 público copyright©vivo2007
  • 21. Vivo Participações 1Q07 Results Safe Harbor Clause Forward Looking Statements •Some information shows our vision of future and perspectives or objectives, such as the growth of our subscriber base, the distribution of the various services to be offered and the results to be achieved. This information is being made available for the sole purpose of elucidating how we intend to expand our business. Thus, it is not intended to provide projections for accomplishing such objectives. •Many factors may distort our actual results in comparison with the objectives that have been presented, including Brazilian political and economic factors, the development of competitive technologies, the access to the capital required for achieving our objectives and the appearance of strong competition in our market areas. 21 público copyright©vivo2007

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