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VIVO - Apresentation of 3rd Quarter 2007 Results
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VIVO - Apresentation of 3rd Quarter 2007 Results

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Apresentation of 3rd Quarter 2007 Results

Apresentation of 3rd Quarter 2007 Results


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  • 1. 3Q07 Results Vivo Participações S/A November 5, 2007 , 1 público copyright©vivo2007
  • 2. Highlights g g Acquisition of Telemig and Amazônia Celular q g Purchase of 1.9 GHz frequency Elimination of structural problems Implantation of the “Vivo para o Cliente” program Net revenues up by 15% YoY and 7.5% QoQ EBITDA climbs 31% QoQ and 16% YoY Net Income of R$ 4 million 2
  • 3. Survey reveals: Vivo is the best consumer option! The Brazilian Consumer Rights Association (PRO TESTE) undertakes an annual survey of currently available mobile plans. In the 2007 edition of the “Mobile Tariffs” report, Vivo was the The Brazilian Consumer leading highlight. Rights Association – PRO TESTE - declares Vivo to be the best choice for Source: Gazeta Mercantil – Oct 15 consumers! “...Vivo offers to its users cheaper plans than other mobile operators.” 3
  • 4. Vivo Participações 3Q07 Results Agenda ge da Operating Performance Financial Performance Final Remarks 4
  • 5. Customer base Share of net additions: 26.4% - market leader in its operational area and nationwide Market share: 36.8% in its operational area GSM/EDGE: 77% of total activations Vivo Escolha: 63% of individual postpaid base Churn Rate: 2 2% i th quarter Ch R t 2.2% in the t + 9.0% 9 0% + 3.6% 31,320 30,240 28,726 Distribution Channels 8,020 points of sale 347,000 recharge points , g p New recharge partners: Redecard and Hypercard 3Q06 2Q07 3Q07 5
  • 6. Products and services Residential Phones • fixed-line phone using wireless network • fixed-line tariffs • simplicity and mobility Vivo Flash • wireless residential broadband internet access - desktop des top New Partnerships • Yahoo! • SonyBMG • Terra - Sonora • Dual-delivery: receiving music acquired through cell phone also in the cell-phone computer BlackBerry C Bl kB Curve 6
  • 7. SAC* GSM: more competitive prices capture of higher value clients increase in postpaid additions + 9.5% = + 7.5% 87% growth in high and medium-value postpaid additions in the 3Q07 115 105 107 19% 24% 24% 24% 25% 21% 56% 57% 51% 3Q06 2Q07 3Q07 Subsidy Commission Advertising *Blended SAC 7
  • 8. ARPU and MOU trends ARPU MOU + 7.3% - 1.3% + 3.0% 29.9 30.8 78 77 77 28.7 13.7 13.9 35 35 13.4 39 + 10.5% +7.7% 15.3 16.2 16.9 39 42 42 3Q06 2Q07 3Q07 3Q06 2Q07 3Q07 Outgoing Inbound Outgoing Inbound 8
  • 9. Loyalty and retention Actions Results Reward Program 22% growth in sign-in rate Customer recapture 6,500 customers “recaptured” Restructuring of plans More than 100 000 restructurings 100,000 Recovery of suspended customers 6,000 suspended customers “recovered” Alteration of recharge mix g Recharge revenue: R$994 million, 25% up YoY Recharge incentives Loyalty and retention efforts focused on high- and medium- value customers 9
  • 10. Vivo Participações 3Q07 Results Agenda ge da Operating Performance Financial Performance Final Remarks 10
  • 11. Net service revenue R$ million + 15.3% + 7.5% Data and VAS Revenue 2,846 2,648 2,468 8.3% 8 3% of net service revenue 34% YoY growth 1,252 1,187 1,150 1,373 , 1,260 1 260 1,167 151 201 221 3Q06 2Q07 3Q07 Network usage Subscriptions and usage Other services 11
  • 12. Operating costs* p g R$ million Operating costs under strict 159 control despite fiercely General and Administrative 162 competitive environment 113 Selling 729 Expenses 728 697 Cost of Goods Sold 585 549 512 151 H.R. 165 151 144 Fistel, Fust, Funtel 140 141 Cost of Services 659 640 Rendered 543 3Q06 Q 2Q07 Q 3Q07 Q *Excluding depreciation 12
  • 13. Ebitda and Ebitda margin g Balance between sales and profitability = Revenue 7.5% QoQ Costs 1 2% QoQ 1.2% EBITDA 31.4% QoQ 25.3% 25.7% 21.0% 21 0% R$ million 833.3 715.6 634.2 3Q06 2Q07 3Q07 EBITDA Margin 13
  • 14. Cash flow and net result R$ million Cash Flow * Net Result 961.8 4.4 527.5 444.6 -112.8 112 8 340.7 -196.9 137.6 3Q06 2Q07 3Q07 9M06 9M07 3Q06 2Q07 3Q07 * EBITDA – CAPEX + change in working capital 14
  • 15. Financial result, gross debt and net debt R$ million Gross Debt Net Debt - 29% - 14% - 9% 4,147.6 - 11% 4,699.6 3,705.7 4,038.4 3,336.3 68% 68% 55% 55% 67% 2,957.7 32% 45% 45% 33% 33% 3Q06 2Q07 3Q07 3Q06 2Q07 3Q07 Short Term Long Term Financial Result 3Q07 113.8 2Q07 124.4 3Q06 201.6 15
  • 16. CAPEX R$ million 16% 11% 11% 444.8 135.1 369.2 337.3 114.4 100.7 107.1 48.1 46.3 202.6 190.3 206.7 3Q06 2Q07 3Q07 Network Technology Others % Capex/Net Revenue Main Investments Adaptation to the Number Portability project New Customer Service System and Front Office Increasing GSM Network Capacity and Quality Total GSM capex : 90% already utilized 16
  • 17. Vivo Participações 3Q07 Results Agenda ge da Operating Performance Financial Performance Final Remarks 17
  • 18. Final Remarks Vivo wins the Reliable Brands prize . Most valuable brand in cellular phone in Brazil : R$2.25 billion 18
  • 19. Disclaimer • This presentation may contain forward-looking statements concerning future forward looking 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 intend 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, due to a variety of factors, including Brazilian political and economic factors, the development of competitive technologies, access to the capital required to achieve those results, and the emergence of strong competition in the markets in which we operate. 19