VIVO - Apresentation of 2nd Quarter 2007 Results
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VIVO - Apresentation of 2nd Quarter 2007 Results

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Apresentation of 2nd Quarter 2007 Results

Apresentation of 2nd Quarter 2007 Results

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VIVO - Apresentation of 2nd Quarter 2007 Results VIVO - Apresentation of 2nd Quarter 2007 Results Presentation Transcript

  • 2Q07 Results Vivo Participações S/A July 20, 2007 1 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Highlights Solid results : • Repositioning campaign • Reversal of market share loss • Churn rate under control • EBITDA up by 107% YoY • Net debt down by 23% YoY • Net result improves by 77% YoY • Reduction in selling expenses YoY • Excellent service and network indicators 2 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Table of contents Operating Performance Financial Performance Vivo 3 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Customer Base Vivo changed and the market responded + 6.0% + 4.2% 34.7% share of net additions in our operational area in 2Q07 125% YoY growth in high-end postpaid additions and 63% growth QoQ 30,240 28,525 29,030 37.3% market share in our operational area* 84% of total activations in GSM/EDGE 50% of postpaid individual base already with Vivo Escolha 2.3% churn rate in the quarter Distribution channels 7,911 points of sale 2Q06 1Q07 2Q07 338,000 recharge points 2,311 municipalities covered * Source Anatel 4 public copyright©vivo2007
  • Vivo Participações 2Q07 Results SAC* - 16% + 7% Components 128 107 24% 100 26% reduction in subsidy per unit YOY with the GSM launch 24% 24% Reduced commissioning in the year 43% 34% Lower entry barriers 43% Advantageous handset acquisition agreements 33% 42% 33% 2Q06 1Q07 2Q07 Subsidy Commissioning Publicity *Blended SAC 5 public copyright©vivo2007
  • Vivo Participações 2Q07 Results ARPU and MOU Evolution ARPU MOU + 24.1% + 14.9% - 0.3% + 2.7% 30.0 29.9 75 77 3.9 4.0 67 24.1 36 35 13.9 13.7 36 9.7 +35.5% +12.5% 39 42 14.4 16.1 16.2 31 2Q06 1Q07 2Q07 2Q06 1Q07 2Q07 Outgoing Inbound B&K Effect Outgoing Inbound 6 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Table of contents Operating Performance Financial Performance Vivo 7 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Net Service Revenues R$ million + 21.2% Data + VAS Revenue + 1.5% 2,609 2,648 7.9% of net service revenue 337 358 15% year-over-year growth 2,184 1,185 1,187 868 More than 200,000 customers with 1,147 1,223 1,260 mobile Internet access 169 201 201 2Q06 1Q07 2Q07 20% growth over the previous quarter Other Services Subscriptions and usage Network usage B&K Effect 8 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Operating Expenses* R$ million 9.0% 759 2.7% 2.3% 716 349.5 Cost of Services Rendered 349.5 339 Provisions for Bad Debt 325.5 ∆% QoQ = +5.9% ∆% YoY = +81.4% 418 161.5 third-party services third-party services ∆% QoQ = - 5.8% ∆% YoY = - 70.1% Strict controls over new costumers acquired Fistel contribution Fistel contribution during the end-of-year campaigns and the 107 101 the overdue portfolio adjusted for end of B&K, 2Q06 1Q07 2Q07 2Q07 would be flat over the 2Q06 2Q06 1Q07 2Q07 % PDD over gross revenue Bill&Keep Effect Incremental PDD 664 174 627 Selling Expenses 165 155 H. R. 512 ∆% QoQ = + 22.5% ∆% YoY = - 5.6% publicity and commissions commissions and public services ∆% QoQ = - 5.0% ∆% YoY = + 6.2% compensation Collective Union agreement third-party services and client-care 2Q06 1Q07 2Q07 Severance payments 2Q06 1Q07 2Q07 547 549 General and Administrative Expenses Cost of Goods Sold 352 162 146 146 ∆% QoQ = + 10.8% ∆% YoY = + 11.1% ∆% QoQ = + 56.0% ∆% YoY = + 0.3% technical assistance for technical assistance for number of gross additions technology transfers technology transfers rent, insurance legal expenses 2Q06 1Q07 2Q07 2Q06 1Q07 2Q07 condominium fees and plant gains in efficiency triggered by maintenance/conservation the conclusion of the unification of the systemic platforms *Excluding depreciation 9 public copyright©vivo2007
  • Vivo Participações 2Q07 Results EBITDA, Cash Flow and Net Result R$ million EBITDA Cash Flow * Net Result 29.7% 26.6% 23.5% 21.0% 11.2 7.9 11.8% 760 -19.3 757.0 -112.8 634.2 296.7 - 493.1 306.3 217.5 137.6 + 77% 2Q06 1Q07 2Q07 2Q06 1Q07 2Q07 EBITDA Margin EBITDA Margin adjusted for B&K * EBITDA – CAPEX + Change in working capital 2Q06 1Q07 2Q07 Bill&Keep effect 10 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Financial Result, Gross Debt and Net Debt R$ million Financial Result Gross Debt Net Debt - 21% - 23% + 1% - 9% 4,686.4 4,333.9 2Q07 124.4 4,057.2 3,705.7 60% 3,305.1 3,336.3 1Q07 118.7 68% 67% 40% 32% 33% 2Q06 213.6 2Q06 1Q07 2Q07 2Q06 1Q07 2Q07 Short Term Long Term 11 public copyright©vivo2007
  • Vivo Participações 2Q07 Results CAPEX R$ million 13% 11% Main Investments 337.9 8% 337.3 expansion of coverage 110.7 100.7 235.4 increase in data network infrastructure 46.3 87.6 93.5 expansion of virtual recharge partners 43.8 190.3 139.6 São Paulo subway mobile network 98.1 2Q06 1Q07 2Q07 new billing format Network Technology Others Total CapEx GSM : 76% absorbed % Capex/Net Revenue 12 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Table of contents Operating Performance Financial Performance Vivo 13 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Loyalty and Retention Actions Results Rewards Program 0.3p.p. in the churn rate QoQ Restructuring of Plans 18% of recharge volume YoY and 8% QoQ Recovery of suspended customers 23% of recharge revenue YoY and 3% QoQ customer recapture 64% of loyalty/retention through rewards program Alteration of Recharge MIX YoY and 17% QoQ Traffic and recharge incentives through bonuses*: R$5 R$11 R$16 R$21 7d on Bonus: Bonus: Bonus: net 5 sms 5 sms 10 sms R$35 R$60 R$100 R$200 Bonus: Bonus: Bonus Bonus: 50 sms 50 sms 50 sms 50 sms * Example of recharge mix with bonuses for the state of São Paulo Loyalty-building and retention efforts focused on high and medium-value customers 14 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Positioning Signs of change: • National coverage and international roaming • Leadership in mobile internet access • Quality and excellence policy • Brand: The true market leader • Best call quality • Launch of new bill format • Improved customer relations The results are visible 15 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Final Remarks 16 public copyright©vivo2007
  • Vivo Participações 2Q07 Results Disclaimer • This presentation may contain forward-looking statements concerning future prospects and objectives regarding growth of the subscriber base, a breakdown of the various services to be offered and their respective results. The exclusive purpose of such statements is to indicate how we plan to expand our business and they should therefore not be regarded as guarantees of future performance. • Our actual results may differ materially from those contained in such forward-looking statements, including Brazilian political and economic factors, the development of competitive technologies, access to the capital required to achieving those results, and the emergence of strong competition in the markets in which we operate. 17 public copyright©vivo2007