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3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
3Q11 Presentation
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3Q11 Presentation

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  • 1. Results Presentation 3rd quarter | TIM Participações S.A.Rio de Janeiro, 31st October 2011 0
  • 2. Agenda 3Q11: Main Achievements Q 3Q11: Financial Results Conclusions & Outlook 1
  • 3. Q3 Main Achieviments Customer Base: +26.1% YoY Net Revenues +18.9% YoY (confirming Q2; Post-paid accelerating) (confirming Q2 +19.5%) Voice Outgoing: +21% YoY1 Growth Acceleration Net Services Revenues +13.7% YoY (confirming Q2 ) (accelerating vs. Q2 +11.8%) Data: +47.6% YoY (accelerating vs. Q2 +33% ) #2: volume and value Incremental Market Share 36.8%2 Solid KPIs ARPU stabilized (QoQ) ARPM stabilized Internet users >2 2 mln daily >2.2 Smartphone penetration at 19.5% 19 5% EBITDA: +11.3 YoY (+18.7% SAC/ARPU: 1.7x (vs 2 3 3Q10) (vs. 2.3 Normalized)3 Profitability Bad Debt: 0.95% (vs. 1.34% 3Q10) EBIT: +83% YoY (513 mln) Subscriber retention cost increased Net Income: +116% YoY (317 mln) Capex : AES Deal: closed4 Strengthening the R$ 0.84 billion in 3Q11 AuCap R$ 1.7 Bln: fully funded to foundations R$ 1.9 billion YTD (Sept) support business growth 2
  • 4. Able to combine growth and profitabilityR$ mln, IFRS YoY 3Q11 Q Customer B C t Base 1Q11 2Q11 3Q11 9M11 9MYoY 26.1% (MKT Share) Customer 52.8 55.5 59.2 59.2 +26% Base (Mln) Revenues 18.9% Revenues 3,752 4,252 4,371 12,375 +17.5% Service 3,463 3,744 3,887 11,094 +11.6% Service 13.7% 13 7% Revenues Revenues EBITDA 1,033 1,138 1,152 3,323 +11.1% Normalized: EBITDA 11.3% 3Q11: +18.7% 3Q11 +18 7% EBIT 350 529 513 1,392 1 392 +103.0% +103 0% Net Income 213 350 317 880 +169.1% EBIT 83% EBITDA - 736 421 314 1,471 +17.0% CAPEX Net Income 116% Net Debt 1,671 1,998 1,458 1,458 -29.9% -10,0% 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 3
  • 5. 3 waves of growth Customer Base Voice Data Mln users % YoY Min, Billion minutes, Gross Revenue R$ Bln % YoY %, Gross Mobile Revenue, R$ Mln % YoY 3.7 +46% 123 130 +5% 16 +300 Bps 2.5 MoU 90 22.4 % Data/ 12 13 1.8 59.2 +33% Service Net Adds 16.9 834 46.9 39.6 Total 10.5 Traffic 3.4 34 565 2.8 496 +26% 2.5 Customer +19% Revenues +21% Data +47.6% Base +14% +14% (Voice Out) Revenues 3Q09 3Q10 3Q11 3Q09 3Q10 3Q11 3Q09 3Q10 3Q11 Revenues +% Q3 YoY R$ Mln 4,371 % YoY Total 3,466 3,677 +18.9% Revenues +6% 3,887 3,213 3,418 3 418 Customer +13.7% Total Traffic Data +6% Base Service Revenues +26% +33% +48% 3Q09 3Q10 3Q11 Community FMS Internet forStrategy Expansion (Voice) everybody 4
  • 6. Customer Base: Community Expansion Total Mobile Market Total Mobile MarketMln of lines Mln of linesVivo TIM Claro Oi 65,1 67,0 63,4 30,14% 29,80% 29,65% 29,48% 29,48% 29,53% 29,49% 60,8 62,1 57,7 58,9 59,2 56,8 25,47% 25,55% 25,46% 25,39% 25,46% 25,51% 26,04% 53,4 54,7 52,2 57,5 57 5 50,5 50 5 56,2 56 2 25,78% 25,30% 25 78% 25 30% 48,8 24,91% 25,26% 25,11% 25,34% 54,5 24,52% 51,8 52,8 49,2 41,4 41,7 41,5 42,8 46,9 39,6 19,51% 19,69% 38,3 19,38% 19,28% 19,38% 18,85% 18,84% 37,4 Sep‐10 Nov‐10 Jan‐11 Mar‐11 May‐11 Jul‐11 Sep‐11 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Pre-paid Mobile Market - Consistency Post-paid Mobile Market - Accelerating Mln of lines 27.2% Mln of lines 20.7% 50.6 8.7 26.5% 44.3 45.1 .48.5 20.2% 25.3% 25 3% 46.6 46 6 41.8 7.7 39.7 21.2% 7.2 Infinity Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Mkt Share Mkt Share 5
  • 7. Voice Outgoing: Continues to push on FMS Post-paid Pre-paid Voice Outgoing RevenuesNet Adds (000) Net Adds (mln) YoY Liberty Infinity 1Q11 17% +3.1 +646 +2.4 +303 303 +1.6 +1 6 +223 2Q11 20% 3Q11 21% 1Q11 2Q11 3Q11 1Q11 2Q11 3Q11 Total Outgoing Traffic ARPM = ARPU/MOUBln Minutes R$ cent 20 18 18 Reshaping Portfolio… …Portfolio Reshaped 17 30 24.0 Europe Avg.: 15 22.0 ( (Stable) ) R$ 0.22 25 12 19.1 19 1 18.1 10 16.5 17.0 16.3 20 15 ~2X 10 5 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 6
  • 8. Data growth in accelerating mode Mobile Data revenues Unique users monthlyGross Mobile Revenues After Infinity Web y Mln clients 15.7% 15 7% 14.6% 13.6% 13.8%Data / 13.0% 12.9% 14.8 2xService (%) 12.0% +47.6% Post Paid +31.4% +32.3% +33.5% 7.5 +13.9% +14.0% Pre Paid YoY +12.7% Growth 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Sep’10 Sep’11 Smartphone penetration Infinity Web (Pre-Paid) % Internet enabling handsets on total CB Daily Unique users Mln clients users, 18.5% 19.5% ~7x 2.2 16.0% 12.0% 10.0% 8.0% 0.3 Sep10 Dec10 Mar11 Jun11 Aug11 Sep11 A g Sep Oct No Dec Jan Feb Mar Apr Ma Jun Jul Aug Sep Aug Nov May 2010 2011 7
  • 9. Accelerating post-paid through efficient business model Customer Base Post-Paid Bad Debt and SAC/ARPUMln lines 0.6 % Gross revenues, months 0.3 0.3 0.3 0.2 02 0.2 02 Bad B d 2.00% 1.83% 2 00% 1 83% 0.2 1.34% 1.04% debt Net Adds 0.77% 1.08% 0.95% 3Q09: 8,004 8,651 3.1 7,236 7,476 7,701 2.6 6,316 6,615 6,956 2.3 1.8 18 1.6 1.7 17 SAC/ 1.5 +20% ARPU CB YoY 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Handsets sold - volume Subsidy000 units handset sales units, R$ Mln Product +83% 732 712 Revenues +49% 3,507 424 468 433 +64% 3,164 380 2,262 286 1,915 2,125 1,383 Capitalized 54% 71% 85 Subsidy Smart- 64 26 8 48% 28% 29% 0 0 phone 19% 115 1Q10 1Q11 2Q10 2Q11 3Q10 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 8
  • 10. Agenda 3Q11: Main Achievements Q 3Q11: Financial Results Conclusions & Outlook 9
  • 11. EBITDA & Efficiency Drivers EBITDA Service Margin improvement & CB ExpansionR$ Mln 3Q11 vs. 3Q10: Lines (Mln) 32.5% 32.6% Reported: +11 3% +11.3% 31.1% Normalized: +18.7% EBITDA Service 3.75 Margin 0.65 Post Paid 1,138 1,152 EBITDA 2.70 1,035 0.30 1.82 64 0.22 1,152 3,1 Pre PaidEBITDA 1,138 Net Adds 2,4normalized 971 1,6 3Q10 2Q11 3Q11 1Q11 2Q11 3Q11 Network Efficiency Bad DebtR$ Mln R$ Mln YoY % Mln, % YoY % YoY Total Traffic (min): +32.8% YoY Bad Debt % 1.34% 3,435 Gross Rev 1.04% 1.08% 0.95% 3,294 +21.1% 0.77% -39 Bps 3,105 3,061 Outgoing 2,837 2 837 Revenues 69 66 58 61 +11.9% -12.4% 42 1,075 1,085 1,109 1,147 1,203Network and Bad Debt ITX costs 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 10
  • 12. Consistent EBITDA growth EBITDA Evolution (in R$ Mln) From EBITDA to Net Income (in R$ Mln) Revenues Costs Margin 2011 485 (598) (113) 2010 259 (275) (16) Δ (97) Handset Capitalized (64) Positive impacted by FX & Volume l (33) Zero subsidy policy 1,152 (639) Fistel (63) 468 (97) (67) (127) (60) 1,1521,035 513 (61) (135) Margin  317 26.4% 11.7% % 7.2% Ebitda Depreciation Ebit Net Taxes and Net Income and Financial Others Amortization ExpensesEbitda Services Net Commercial Network + G&A + Ebitda3Q10 Revenues Handset Costs ITX Other 3Q11 Expenses ΔYoY +11.3% -15.4% +83.5% +4.4% +81.7% +116.1%ΔYoY +13.7% +7x +6.7% +11.9% +20.8% +11.3%28.2% Ebitda Margin 26.4%30.8% Service Ebitda Margin 32.6% 11
  • 13. Cash Generation Operational Free Cash Flow in 3Q11 Net Debt 3Q 2011 R$ Mln R$ Mln 370 (838) 2,079 in 3Q10 1,152 684 1,998 (144) 684 1,458 •Income Tax •Financial Results Ebitda Δ Working CAPEX Oper. FCF Capital% on Net 26.4% 8,5% 19.2% 15.6% 2Q11 Oper FCF Non-Oper FCF 3Q11Revenues% YoY +11.3% +4x +59.4% +13.4% 12
  • 14. Strengthening Infrastructure 2011 TBR – TRX Accumulative CAPEX Activations 32.319R$ Bn +38% 1.9 1.7 +25% 0.3 1,5 -40% 0.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec EoP 09 EoP 10 2011E TRX - NNE Subsidy -17% 0.6 Activations& Commercial 15.431 Rest of Brazil 48% 1.6 16 52% 1.3 +23% North and Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Northeast Network & IT 0.9 +44% Node B Activations 1.214 +21% YTD Set’09 YTD Set’10 YTD Set’11 +74% 3Q09 3Q10 3Q11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec EoP 09 EoP 10 2011ESubsidy 0.2 0.1 0.1 MW& Commercial Activations 1572Network & IT 0.4 0.4 0.8 +59% +5x Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec EoP 09 EoP 10 2011E 13
  • 15. Agenda 3Q11: Main Achievements Q 3Q11: Financial Results Conclusions & Outlook 14
  • 16. Delivery on Promises Waves of Growth Q3 Results +% YoY Customer Total Traffic Data Base +26% +33% +48% Community Expansion FMS (Voice) Internet for everybody Guidance 2011-2013 9M11CB ExpansionMln lines Market Share >25% >26% 46,9 59,2 Revenue growth g Serv. Rev.: +11.6% Serv Rev : +11 6% (YTD) set/10 set/11 % High Single Digit Total Rev.: +17.5% (YTD)MOU increaseMin/month 123 130 Profitability EBITDA 2011 > R$4.5 bln R$ 3.3 billions (YTD) set/10 set/11 CAPEXSmartphone Penetration 3 Years CAPEX R$ 8.5 bln R$ 1.9 billion (YTD) Smartphone, % CB ~20% 20% 8% EBITDA - CAPEX > R$ 6.6 bln (’11-13) R$ 1.5 billion (YTD) set/10 set/11 15
  • 17. 31st October: Atimus deal closed, ready for a new phase Architecture: Rio de Janeiro/São Paulo 4 reasons behind Atimus Acqusition* Opex & p Corporate Capex Broadband Savings Copper or Fiber Drop Mobile Data Residencial 300 Mb 64/200 ports A l ti Acceleration B db d Broadband Creating value for shareholders The ultimate urban mobile network *EV = R$1.6 Bln / Cash out = R$ 1.5 Bln 16
  • 18. Ready to catch the Brazilian FMS opportunity Fixed Ultra Broadband FMS Voice TIM Fiber Infinity +3.1 +3 1 Net Adds +2.4 21 cities in metro SP/Rio +1.6 Wireline Brazilian Market 8 mln households Liberty +646 % Total Fixed R$ 30 bln TLC market Net Adds BB Fixed +303 lines Market 550,000 corporate clients +223 accesses” 19% 1Q11 2Q11 3Q11 >2Mbps Negative Mobility Voice Price Premium Only Broadband 81%Mobile 79% 21% <2Mbps ARPM (R$/min) ( $/ ) 0 0 FMS Data 0 2X 0 0 Data Daily Unique users, Mln clients -40% 40% 0 2.2Fixed 0 Wireline Accesses 0 (example incumbent A) 2006 2007 2008 2009 2010 2011 % YoY 3Q09 3Q10 3Q11 ‐3% ‐4.8% ‐6.5% Jan Feb Mar Apr May Jun Jul Aug Sep 2011 17
  • 19. Capital Increase & Corporate Structure Number of Shares ‘000 000 New Ne Corporate Str ct re Structure 200 CEO 2,417 2,217 Follow-On Before Follow-On After Follow-On CFO IRO Follow-On ‘000 Reais Number of Shares Base 1,640,853 1 640 853 190,796,858 190 796 858 Greenshoe 81,369 9,461,510 • One single class of shares (Novo Mercado) • Strengthening commitment with the Financial 1,722,222 200,258,368 Community 18

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