Meeting with investors of september 2013

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  • 1. Meeting With Investors TIM Participações S.A. September 2013
  • 2. 15th Listing Anniversary TIM: A Huge Brazilian Company  Presence in Brazil since 1998.  13th largest Private Company in Brazil (source: Exame Magazine - 2013).  Approximately R$22 billion of Market Capitalization. Brazilian Law “Lei das S.A” “Nível” 1 “Nível” 2 Legal Requirements Demand for transparency and disclosures Highest level of Corporate Governance Requirement of protection for minority shareholders 2 Corporate Governance Knowing TIM Better Unique Telco company listed on the Novo Mercado: . 100% Tag Along and equal dividend rights . One single class of shares . Independent Board members . Strict disclosure policy • 72.7 million customers (27.2% Share) • The 2nd Player - Market and Rev. Share. • More than 400,000 points of sales. • More than 130 own stores. • 11 Customer Care Centers (14k attendants) Sales • More than 12,000 Antennas. • 3,393 cities covered. • 95% of urban pop. covered. • 42,470 km of optical fiber network. Network • 11,500 employees. • 23,000 indirect jobs. • R$9.1 billion in taxes payments in 2012. • R$3.8 billion invested in 2012. Social & Economic 27.8 1998 Gross Revenues (R$ Bln) Customer base EoP (Million) 2012 1998 70.3 2012 15,000 km fiber optical backbone 5,500 km fiber optical backhauling Organic Growth Growth Via Acquisition
  • 3. Source: BaCen and Bloomberg. 3 Brazilian Real GDP (%YoY growth) Brazilian Unemployment Rate (Unemployment Rate %) 7,9 8,1 6,7 6,0 5,5 5,6 5,9 5,0 3 4 5 6 7 8 9 10 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e Brazilian Interest Rate (Average %SELIC p.a. Target) 12,5 10,1 9,9 11,8 8,6 8,3 9,8 9,8 5 6 7 8 9 10 11 12 13 14 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e Brazilian Inflation Rate (% IPCA p.a.) 5,9 4,3 5,9 6,5 5,8 5,8 5,9 5,5 0 1 2 3 4 5 6 7 8 9 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e 5,2 -0,3 7,5 2,7 0,9 2,4 2,2 2,5 -1 0 1 2 3 4 5 6 7 8 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e Macro-Economic Fundamentals Inflation Target @ 4,5 %
  • 4. Industry Overview & TIM Business Opportunity
  • 5. TIM (2S13) Vivo (2S13) América Móvil Brazil (2S13) Oi (2S13) Fixed Mobile Fixed Mobile Fixed BB/TV Fixed / Mobile Brazil Telcos X-Ray 5 Fixed BB/TV Fixed / Mobile Mobile Fixed Fixed BB TV TOTAL Customers (‘000) 49,708 18,330 5,911 890 ND Market Share 18.7% 41.1% 29.2% 5.2% ND Net Rev. (R$ Mln) 4,571 9,543 14,114 Mobile Fixed Fixed BB TV TOTAL Customers (‘000) 66,472 10,516 5,945 8,985 ND Market Share 25.0% 22.7% 29.4% 53.0% ND Net Rev. (R$ Mln) 6,121 9,914 16,035 Mobile Fixed Fixed BB TV TOTAL Customers (‘000) 76,200 10,416 3,837 537 ND Market Share 28.7% 23.3% 18.9% 3.2% ND Net Rev. (R$ Mln) 11,177 5,870 17,047 Mobile Fixed Fixed BB TV TOTAL Customers (‘000) 72,195 492 26 - ND Market Share 27.2% 1.1% 0.1% - ND Net Rev. (R$ Mln)* - - - - 9,699 Fixed BB *Organic Revenue
  • 6. 121,0 150,6 174,0 202,9 242,2 261,8 39,4 41,2 41,5 42,0 43,0 44,0 2007 2008 2009 2010 2011 2012 Mobile Penetration Mobile Fixed 64% 79% 90% 105% 124% 133% Customers Growth - Telecom (Mln customers) Market Transformation Total Revenues- R$ Bln +116% +12% Customers Growth – Broadband (Mln customers) Mobile Fixed 6 1,4 4,1 14,6 33,2 52,5 10,0 11,4 13,8 16,3 19,1 2008 2009 2010 2011 2012 +38x +90% *including Corporate/Wholesale Mobile Segment to Support Universalization Mobile Segment as the Growth Driver and Sector Universalization (55%) (48%) (44%) (42%) (45%) (52%) (56%) (58%) 2009 2012 2014 2015 104 CAGR ’12-’15 Mobile: +7% Fixed: -1% 129 116 124 Fixed* Mobile Data: +28% Data: +7%
  • 7. Long Distance Leader 50% Market Share 2nd Overall 72 million customers Prepaid Leader 28.8% Market Share Leveraging on Pure Mobile Competitive Advantage Voice FMS: Mobile is more convenient than Fixed… (R$/minute, voice) 7 2006 2007 2008 2009 2010 2011 2012 50% mobile discount Voice FMS: …TIM, with no legacies, can only gain on the trend (R$ billion, Net Revenue per Group (2012)) Source: Company estimates; CETIC jun’13; Akamai Mobile 21.4 12.2 9.1 17.9 Fixed + Data + Pay TV 12.5 18.5 19.0 0.9 4.3 Total 33.9 30.7 28.1 18.8 4.3 Vivo Claro Oi TIM GVT FMS Focus A pure mobile approach is the most suitable strategy to capture both opportunities 29.5% Rev. Share Customer Base Evolution (Market Share, Source: Anatel) 30,2% 28,7% 24,0% 27,2% 25,3% 25,0% 20,1% 18,7% 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Oi Claro Vivo +3.2 p.p. -1.6 p.p. -0.3 p.p. -1.4 p.p. 2Q13 x 2Q10 TIM
  • 8. Fixed Broadband Average Speed (% Customers) Brazilian Internet Opportunities 75% 72% 60% 67% 66% 24% 26% 38% 31% 31% 1% 1% 1% 2% 3% 2Q12 3Q12 4Q12 1Q13 2Q13 > 12Mbps >2 Mbps até 12 Mbps ≤ 2 Mbps 88% 84% 80% 78% 76% 8% 10% 14% 16% 17% 5% 6% 6% 6% 7% 2Q12 3Q12 4Q12 1Q13 2Q13 > 12Mbps >2 Mbps até 12 Mbps ≤ 2 Mbps 49% 44% 41% 38% 35% 49% 53% 56% 59% 62% 3% 3% 3% 3% 3% 2Q12 3Q12 4Q12 1Q13 2Q13 > 12Mbps >2 Mbps até 12 Mbps ≤ 2 Mbps 1% 1% 1% 1% 1% 59% 57% 55% 52% 49% 40% 42% 44% 47% 50% 2Q12 3Q12 4Q12 1Q13 2Q13 > 12Mbps >2 Mbps até 12 Mbps ≤ 2 Mbps 8 TIM`s services portfolio is ready to capture opportunities in all broadband segments, going mobile or going through its fixed ultra broadband.
  • 9. TIM’s Strategic Priorities 9 Network Quality & Infrastructure1 Strategy & Offer Evolution 2 Institutional Relationships 3 People & Organization 4 Solid Capex investment program. Significant coverage and capacity improvement through extensive own fiber infrastructure. Network Quality War Room approach. Efficient 4G Investment with RAN sharing. Continuous evolution of our offer platforms (transparency, simplicity, convenience, micro- segmentation). Promoting data usage with handset strategy, new VAS offers (e.g. TIMmusic) and 4G launch. Expanding postpaid and business user base. Developing option value of Live TIM ultra-broadband services. External Positioning: Innovation, Quality, Transparency. “Portas Abertas” customer portal for increased transparency and network quality evolution. Focus on regulatory and institutional dialogue. People Focus – highly skilled, highly motivated, right organization. Best Place to Work initiatives. Renewing Sense of Pride and Belonging – One of Brazil’s Top 15 Companies.
  • 10. Recent Results: 2Q13 in Few
  • 11. 0.9% 1.1% 0.7% 1.0% 0.9% Quarter in Few: Improvements Across the Board 7.0% 5.4% 9.7% 2Q132Q12 Organic1 Net Revenue Growth(YoY) Organic1 Net Services Revenue Growth(YoY) Organic1 EBITDA Growth(YoY) -15.3% -11.0% -9.5% -3.6% +0.4% 1Q132Q12 10.0 10.3 10.7 10.9 11.4 2Q132Q12 3Q12 4Q12 2Q13 -0.7% Reported ARPU Performance (YoY) Postpaid Base (mln customers) %Bad Debt/Gross Revs. +20% (YoY) Ex-M2M Financial Operational +14% 1Q133Q12 4Q12 1Q13 6.4% 5.5% 1.4% 1.8% 3.1% 2Q132Q12 1Q133Q12 4Q12 +8.7% (YoY) Reported 5.6% 4.1% 4.4% 2Q132Q12 1Q13 2Q132Q12 1Q133Q12 4Q12 +2.0% (YoY) Reported +1.8% (YoY) Reported 11 Efficient Approach 1: Organic revenues growth adjusted by R$44mln, EBITDA growth adjusted by R$31mln and Net Income growth adjusted by R$20 mln due to one-off impact related to interconnection disputes. Organic1 Net Income Growth(YoY) -1.6% 13.9% 17.9% 2Q132Q12 1Q13 +12% (YoY) Reported 18.7% 19.6% 20.5% 21.4% 22.1% %VAS / Mobile Service Gross Revenues 2Q132Q12 1Q133Q12 4Q12
  • 12. Customer Base Evolution - Market Share (Source: Anatel) Growth Backed by Business Resilience 19.6% 19.6% 24.0% 25.0% 28.0% 26.3% 28.1% 28.8% 2Q12 +67 bps -168 bps +96 bps -1 bps 2Q13 15.3% 16.5% 23.9% 20.3% 38.2% 39.1% 22.0% 23.4% 2Q12 +140 bps +90 bps -353 bps +124 bps 2Q13 29.6% 29.7% 29.1% 28.8% 28.7% 26.9% 26.8% 26.9% 27.0% 27.2% 24.6% 24.5% 24.9% 25.1% 25.0% 18.7% 18.7% 18.8% 18.7% 18.7% Oi Claro Vivo 2Q12 3Q12 4Q12 +28 Bps -89 Bps +43 Bps +5 Bps YoY 1Q13 2Q13 Prepaid Voice Postpaid* 35 26 27 1.6 1.4 1.5 2Q11 2Q12 2Q13 2Q132Q11 2Q12 1.1% 0.9% 0.9% Total TIM SAC & SAC/ARPU (R$; months) Efficient Market Approach (Source: TIM, Anatel) Bad Debt & Postpaid CB (000 customers; %postpaid mix)  Leading net additions.  Consolidating Prepaid #1.  Accelerating on Postpaid.  Maintaining an efficient go- to-market. SAC/ ARPU SAC % Gross Revs Postpaid *Excluding modems and M2M. +25% +14% 14.4% 14.5% 15.8%Mix 12
  • 13. Caring Improvements to Increase Customer Satisfaction Claims at Consumer’s Protection Agency (Procon) (Avg # Claims - the lower the better; Source: SINDEC database) ImprovingcaringReducingcomplaints P3 P4 P1 TIM TIM PRE POS CORP Customer Care Satisfaction Survey (Points; Source: TIM) IDA – Index of Caring Performance (last reported) (Points - the higher the better; Source Anatel) 99.9 93.998.0 92.1 92.8 80.4 84.9 65.9 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 P3 P4 P1 TIM Anatel Ranking of Complains (last reported) (Index of Complains under 1,000 access - the lower the better; Source: Anatel) 0.20 0.320.24 0.360.34 0.470.50 0.65 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 P3 P4 P1 TIM 2,564 4,147 2,262 3,179 6,187 6,990 3,503 6,870 2Q12 3Q12 4Q12 1Q13 2Q13 13 8.0 7.5 7.0 6.5 6.0
  • 14. ARPU Performance (%YoY; R$) Reverting ARPU Trend Voice Usage (000 lines; minutes) Data Performance (monthly unique users; average days of use) 7,638 8,184 8,703 8,956 9,367 2Q12 4Q123Q12 1Q13 127 150 139 145 2Q12 4Q123Q12 1Q13 18.3 19.918.9 18.5 VAS Voice -15.3% -11.0% 9.5% -3.6% -0.7% 2Q12 4Q123Q12 1Q13 After several quarters, ARPU has reversed its trend thanks to a continuous management of the customer base. Voice Postpaid* Total MOU 2Q13 18.1 2Q13 148 2Q12 4Q123Q12 1Q13 Data Users SMS Usage 2Q13 2Q13 2Q12 4Q123Q12 1Q13 2Q13 +21% +13% *Excluding modems and M2M. +23% +16% 14 Organic 18.3 Organic 0.4%
  • 15. 35% 39% 43% 46% 50% 2Q12 3Q12 4Q12 1Q13 2Q13 Data Services Update: Keeping the Good Pace Data users (% over total customer base) VAS (% of Mobile Services Gross Revenues; R$ Million) Handset Sales Market Share Apr-Jun/13 (% of handset revenues; Source: TIM) 19% 22% Smart/Web phone Penetration (% over total base of lines) VAS Gross Revs VAS/Revs 7% 21% 34% 38% 54% 46% P4 P3 P1 TIM Players Open Mkt TOP SELLERS @ ~R$300 27.7% 28.7% 30.3% 31.0% 31.9% 2Q12 3Q12 4Q12 1Q13 2Q13 +25% 23 mln users 78 % on sales 15 1,031 1,291 2Q12 2Q13
  • 16. Financial Evolution Analysis 1,210 EBITDA 2Q12 Organic EBITDA 2Q13 -15 ΔMkt and Sales ΔPers./G&A and others -53 ΔHandset Margin -39 ΔNetwork and ITX +35 ΔServ. Revs 26.6% 25.3% 32.1% 31.5% +125 +5.8% +8.3%-51.2% +1.1%+3.1%ΔYoY 1,263 +4.4% 563 879 879 3,984 4,109 4,065 Thousands Revenue 2Q12 Δ HandsetΔ Fixed Services Organic Revenue 2Q13 Δ Mobile Services +316-86+211 Service Handset 4,547 -33%+5.7%ΔYoY 4,988 -44 One-off Event Reported Revenue 2Q13 4,944 -31 Reported EBITDA 2Q13 1,232 +1.8% 24.9% 31.1% One-off Event 16 +56% +3.1% +2.0% EBITDA Margin Service EBITDA Margin Organic EBIT Net Financial Result Organic Net Income 2Q13 Organic Taxes and Others Depreciation/ Amortization Organic EBITDA 2Q13 From EBITDA to Net Income (R$ Million) ΔYoY One-off Event Reported Net Income 2Q13 +0.9% +8.5% -36% +5.6% +18% +12% 1,263 -671 592 -41 -145 406 -20 386 Net Revenue Evolution (R$ Million, % YoY) From EBITDA to EBITDA (R$ Million) +8.7%+10%
  • 17. Strong Cash Position Net Debt (R$ Mln) Capex (R$ Mln, % YoY) 1,998 2,278 1,984 2Q11 2Q12 2Q13 +14% -13% 725 1,057 2Q11 2Q12 2Q13 +46% +6% → 37% of debt in foreign currency (100% hedged to R$). → Average debt maturity: ~ 3 years. → 0.39x net debt to Reported EBITDA (LTM). → Capex catch up during Q2. → 94% of Capex related to infrastructure (ex-licenses). → No subsidy capitalization. 1,123 0.45x 0.47x 0.39xNet debt/ EBITDA (LTM) 17
  • 18. Network and Infrastructure
  • 19. Development of Infrastructure 19 Optical Fiber Network Evolution (km of fiber) 28,891 38,951 42,470 47,000 2011 2012 Jun/13 Dec/13* *According to Anatel Network Plan FTTS Project Status - 14 Brazilian Main Cities (Stage1) Manaus Florianópolis São Paulo Macapá Salvador Curitiba Maceio Recife Fortaleza Brasília Rio de Janeiro Porto Alegre Belém Aracaju São Luis Palmas Vitoria Teresina Belo Horizonte Campo Grande Imperatriz Goiânia Cuiaba Natal M M M M M M M M M M M M M M M M M M M M M MJ.Pessoa M M M M M M M M M M M M M M M MM M M  1st phase: Connecting sites with own fiber. 88% of sites in the 14 main Brazilian cities are connected with own fiber.  3rd phase: Expanding and fine tuning. Recife is the first city to reach this stage.  2nd phase: Light up the fiber and shift data traffic to own lines. 2nd phase is expected to be completed by 4Q13 M Cities of Stage 1 M Cities (additional 30) of Stage 2 Own Network to Support Traffic Growth (% of total transport network) 52% 80% 48% 20% 2009 2012 Owned Third Parties • Increasing customer experience (throughput 50x faster than previous leased links on copper, 2/8Mbps) • Reduce network congestion • 4G (LTE) ready • Reducing leased lines costs Metro Ring To own fiber up to 300 MbpsFrom copper 2-8 Mbps
  • 20. 11.607 12.120 Jun/12 Jun/13 Network Commitments 20 Network Elements Expansion… (units. Source: Company) …Driving Quality Improvements (% of success; % of call/data connection drop; Source: Anatel) 181 215 Jun/12 Jun/13 250 464 Jun/12 Jun/13 BTS TRX (Voice Capacity; 000) Channel Elements (Data Capacity; 000) 95,7% 97,1% Aug/12 Apr/13 Voice Network Access Rate Voice Network Drop Rate Data Network Access Rate Data Network Disconnection Rate +4% +19% +86% Target agreed w/ Anatel 1,3% 1,1% Aug/12 Apr/13 95,9% 96,0% Aug/12 Apr/13 1,5% 1,7% Aug/12 Apr/13 95% 2% 98% 5%
  • 21. Capex Analysis 21 Organic Capex (ex-4G licenses) (Capex/Sales; Mix of Investments; R$ bln) 9,5 8,3 7,2 5,5 0.4 TIM Claro Vivo Oi Benchmark: Anatel Plan for 2012-2014 (R$ Bln) Owned Network Deployment…. (% of total transport network) 9.9 2012 Extra Capex over Anatel Plan +20% +39% 2012-2014 Capex … Driving Network Opex Savings (% YoY) +81% 22,1% 4,8% 3,5% Total Traffic Customer Base Network Costs Q2 2013 52%48% Owned Rented 80% 20% 2009 2012 0.5 0.3 0.2 2.3 2.7 3.1 2010 2011 2012 2013e 2014e 2015e 19,6% 18,0% 18,0% Infra Invest. As % of Net Revs. Other Invest. 2.8 3.0 3.4 10.7 3.6 Voice Postpaid +23% YoY
  • 22. Live TIM
  • 23. Live TIM: Delivering on Plan 257k 522k 609k 804k 3Q12 4Q12 1Q13 2Q13 Network Evolution (Addressable Households ; Source: TIM) Customer Base (Customers; Source: Anatel) 9.7k 16.3k 26.4k 4Q12 1Q13 2Q13 82% Net Share Live TIM SP+RJ (UBB >34MB ; Source: Anatel) Market Share SP+RJ (UBB >34MB ; Source: Anatel) 38% 19% 13% 11% 10% 9% Live TIM Oper. I Oper. II Oper. III Oper. IV Outras 26% 69% 73% 3Q12 4Q12 1Q13 São Paulo Totaling 26 Districts in São Paulo 23
  • 24. Efficient approach MSAN port occupancy (%), Capex (R$) Coverage (addressable) Thousands of Households ~500 ~1,000 ~2,000 2015201420132012 0 20 40 60 80 2012 2013 2014 2015 ~R$2k Coverage Capex per Home Passed ~R$80 ~R$800 Installation Capex per Sub ~R$300 TIM Fiber Int. Bench. TIM Fiber Int. Bench. ~R$5k Total Capex per Sub ~R$700 TIM Fiber Int. Bench. Port Occupancy (%) 24 4x • 2012: priority coverage in areas with high ‘A/B classes’ concentration • 2013: chess board strategy and entering in class C • 2014: additional coverage in Rio de Janeiro and São Paulo metropolitan regions, focusing class C concentration areas Geographic Expansion Geographic expansion for low-middle class and targeting high income neighborhood TIM Fiber Plan Update 2013/2015
  • 25. Business Outlook
  • 26. 116 129 150 >200 0 50 100 150 200 250 2010 2011 2012 2013e 2014e 2015e 14.5 17.1 18.8 2010 2011 2012 2013e 2014e 2015e High Single Digit growth 4 Ways of Growth Revenue Growth (Total Revenues,R$ billion) CAGR 12-15 Mobile Customer Base Million of lines Double digit growth FMS – Voice (MOU) Minutes of usage per line Internet for All (Mobile Data) Data as % of Gross Mobile Serv. Revs. 26 51.0 64.1 70.3 > 90 2010 2011 2012 2013e 2014e 2015e 13% 15% 19% >26% 0% 5% 10% 15% 20% 25% 2010 2011 2012 2013e 2014e 2015e Double digit growth VAS Revenues MoUCustomer Base Community Expansion FMS (Voice) Internet Services ~2Mln HH ready to sell Tim Fiber Ultra BB >90 Mln >200 min >26% Business Drivers of Growth
  • 27. 27 Total Net Revenues High Single Digit Growth Organic EBITDA 4.6 5.1 Organic CapEx 3.0 3.4 10.7 17.1 18.8 High Single Digit Growth R$ billion 2011 2012 2013 -2015 CAGR Guidance 2013-2015 Guidance
  • 28. Appendix
  • 29. Total Customer Base (% Market Share) Market Share Evolution 29 29,7% 28,7% 26,8% 27,2% 24,6% 25,0% 18,6% 18,7% P3 P4 P1 TIM 2012 Mobile Net Revenue Share (% 2012Total Net Revenue) Total Voice Postpaid Customer Base (% Market Share) 38,2% 38,9% 22,3% 23,8% 23,2% 20,3% 15,6% 16,3% P3 P4 P1 TIM Total Prepaid Customer Base (% Market Share) 28,2% 26,2%28,0% 28,9% 24,1% 25,0% 19,5% 19,6% P3 P4 P1 TIM Size: 266,999 thousand Penetration rate: 134.8% 20,2% 29,5%35,3% 15,0% P3 P4 P1 TIM
  • 30. Internet Users Penetration: large room for growth... (% population who has used internet within the last 3 months) Mobile Internet and Its Great Business Opportunity FMS on Data (% over households with internet connection) 30 89 86 81 80 74 1 3 10 17 21 2008 2009 2010 2011 2012 Mobile Devices are also increasing its presence… (% Presence over households) Source: CETIC jun’13; Data Market Fixed* Mobile *Includes dial-up connection 10 14 23 41 50 2 4 2008 2009 2010 2011 2012 34 39 41 46 49 2008 2009 2010 2011 2012 A: 94% B: 80% C: 47% DE: 14% 68 mln people never used internet …and usage is 4 years behind (% internet users within the last 3 months) 53 58 60 67 69 35 30 30 24 23 10 9 9 7 7 2008 2009 2010 2011 2012 Everyday/Almost Everyday At least once a week At least once a month Euro Area data in 2008: Everyday: 70% Once a Week: 20% Once a Month: 7% Social Class Split Notebooks Tablets
  • 31. Understanding Internet Usage Trends Going deeper into wireless penetration in Brazil (%) 31 79 91 105 124 133 56 63 67 76 80 2008 2009 2010 2011 2012 Our current portfolio reflects consumer’s behavior (Activities over mobile phone; % users who have used mobile within the last 3 months) Source: CETIC jun’13; Data Market; Anatel 22 31 47 5 18 24 49 57 64 2010 2011 2012 Wireless Penetration Real Penetration # SIM Cards Social Class 0 1 2 3+ A 3% 67% 24% 6% B 7% 63% 24% 5% C 17% 62% 17% 3% DE 41% 47% 10% 1% Total 20% 59% 17% 3% Send SMS Listen Music Internet
  • 32. Historical Data: Financials (R$ Thousand) 32
  • 33. Historical Data: Financials (US$ Thousand) 33
  • 34. Historical Data: Operational & Financial Ratios 34 ROA: NOPLAT/Avg. Total Assets. Calculation considers organic Net Income and EBITDA 2013e: Consensus and dividend yield from approved 2012dividends of R$743 mln.
  • 35. 3% Tax Relief - 1º Step: M2M Fistel to drop and Smartphones tax exemption (Law 12,715/2012) Total ~34% Fust/ FUNTEL PIS/ PASEP 1.5% 0.65% ICMSCofins ~28% Tax reduction Reduction in the price to consumer Increase of Penetration Social Impacts Economic Impact Possibility of higher investment in network Better Quality Tax Composition 35 In 2012, TIM paid R$9.1 bln in taxes, fees and contributions (~48% of total net revenues). • R$1 bln in Fistel. • R$8.1 bln in taxes, contributions and others fees. % of Gross Revenues Taxation Over Telecom in Brazil
  • 36. Shareholders Structure and Stock performance Stock Performance (base 100)* 0 20 40 60 80 100 120 140 TIMP3 Ibovespa TSU 36*Last price as of 09/13/2013 TIM Celular S.A. Intelig 100% TIM Brasil Serv. e Part. S.A. Minorities Telecom Italia International N.V. Telecom Italia 100% TIM Participações S.A. ON: 33% (805,662,701)ON: 67% (1,611,969,946) 100%100%
  • 37. Investor Relations Team Avenida das Américas, 3434 - Bloco 01 6° andar – Barra da Tijuca 22640-102 Rio de Janeiro, RJ E-mail: ri@timbrasil.com.br Rogério Tostes E-mail: rtostes@timbrasil.com.br Phone: +55 21 4109-3742 Vicente Ferreira E-mail: vdferreira@timbrasil.com.br Phone: +55 21 4109-3360 Leonardo Wanderley E-mail: lwanderley@timbrasil.com.br Phone: +55 21 4109-4017 Gustavo Valente E-mail: gvalente@timbrasil.com.br Phone: +55 21 4109-3446 Luiza Chaves E-mail: luchaves@timbrasil.com.br Phone: +55 21 4109-3751 Visit our Website www.tim.com.br/ir Safe Harbor and IR Contacts Safe Harbor Statements Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize. 37