Results
   4Q08

          February 27th, 2008
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                    Main phases of TIM Brasil’s Re-launch Pla...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                         Agen...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                        4Q08 ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                  Rigorous Fi...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                             ...
TIM PARTICIPAÇÕES S.A. | Investor Relations


                                                                            ...
TIM PARTICIPAÇÕES S.A. | Investor Relations


                                                                            ...
TIM PARTICIPAÇÕES S.A. | Investor Relations


                                                             Revenues KPI ev...
TIM PARTICIPAÇÕES S.A. | Investor Relations


                                                                            ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                          From EBITDA to bottom line – 4Q08
 ...
TIM PARTICIPAÇÕES S.A. | Investor Relations


                                                                      Net fi...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                             ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                         Agen...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                      A Large...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                             ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                   TIM Brasil’s strong fundam...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                   Network: l...
TIM PARTICIPAÇÕES S.A. | Investor Relations


             High-Value Customer Base with proven innovation attitude

     ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                         Agen...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                       Three markets, one app...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                             ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                            2    Offering por...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                             ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                          4       Sales Force: leveraged footprint and higher...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                       5    Network: quality ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

5   …less buy, more make in transmission
                            Network ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

           6   Organization and team: new, marketing-driven and rapid…

     ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                               6     ...with a new customer-oriented sales st...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                             ...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                                                  Summary …

...
TIM PARTICIPAÇÕES S.A. | Investor Relations

                                   … and commitments for 2009

              ...
TIM PARTICIPAÇÕES S.A. | Investor Relations


                                                            “Safe Harbor” St...
Upcoming SlideShare
Loading in...5
×

Press Release 4 T08 En

367

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
367
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Press Release 4 T08 En

  1. 1. Results 4Q08 February 27th, 2008
  2. 2. TIM PARTICIPAÇÕES S.A. | Investor Relations Main phases of TIM Brasil’s Re-launch Plan 2008 1st half 2008 2nd half – 2009 1st quarter 2009 2nd quarter – 2009 2nd half Phase 0: Current Phase 1: Difficulty Restructuring Position Re-Launch Plan Volume driven New management Loss of Top of Brand strategy team Mind/Preference repositioning Falling ARPM Strict financial Drop in volume New portfolio of Rising bad debt discipline share and value offerings Offering strategy Launch of Fixed- Issue in post-paid Converging is lacking Mobile substitution segment approach offer Loss of Lower Profitability Defend % EBITDA Growth in Value Revenue Share 1
  3. 3. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Phase 0: Current Difficulty Phase 1: Re-Launch Restructuring Position Plan Claudio Zezza Luca Luciani 2
  4. 4. TIM PARTICIPAÇÕES S.A. | Investor Relations 4Q08 / 2008 Achievements ..Lights.. …shadows.. EBITDA margin 4Q08 at 26.2% and 22.2% FY 2008: Drop in market share (below guidance ~26%) meeting company's guidance 24.2% of market share in 2008 vs. 25.8% in 2007 ARPM increase to R$0.35 (R$/min) in 4Q08 Net service revenue FY08 at 5.1% growth, below expectations (guidance >7%): Bad debt 4Q08 at 4.1% of net service revenues: Discipline and stricter credit control (meeting Lower Postpaid customer base (-200K lines YoY) expected FY ~6%) Low incidence of post-paid on total gross adds in 4Q08 (13%) SAC reduction: selectivity and efficiency on High churn of post-paid (10% in 4Q08) acquisition Mix post-paid at 18.1% 4Q08 (vs. 21.7% in 4Q07) Slowdown of ARPU erosion in 4Q08: R$29.9 in 4Q08 vs. R$29.7 in 3Q MOU reduction in 4Q08 (-19% YoY) as consequence of lower push on promotions VAS: +25.5% 4Q08 YoY, reaching 11% of gross service revenues 3
  5. 5. TIM PARTICIPAÇÕES S.A. | Investor Relations Rigorous Financial Discipline EBITDA %: Meeting the company guidance ARPM Increase R$ Million R$ Cent. 890 928 800 ∆ YoY ∆ YoY 4.2% 7.2% ∆ QoQ 0.32 0.35 ∆ QoQ 0.29 16.0% 18.0% 4Q07 3Q08 4Q08 4Q07 3Q08 4Q08 Margin 26.4% 23.8% 26.2% SAC Control Bad Debt Control R$ R$ Million ∆ YoY ∆ YoY 143 131 -12% 98 33.5% 110 110 96 ∆ QoQ ∆ QoQ -13% -8.9% 4Q07 3Q08 4Q08 4Q07 3Q08 4Q08 FY 08 SAC / % Serv. 3.2x 3.7x 3.2x 3.2% 4.7% 4.1% 6.2% ARPU revenues 4
  6. 6. TIM PARTICIPAÇÕES S.A. | Investor Relations Solid KPI’s Slowdown of ARPU erosion VAS (success in innovative services) % of gross service revenue R$ R$ Million 10.8% 9.7% 34.5 9.0% 29.7 29.9 ∆ YoY ∆ YoY -13.1% 25.5% ∆ QoQ 471.3 ∆ QoQ 375.4 402.9 +1.0% 17.0% 4Q07 3Q08 4Q08 4Q07 3Q08 4Q08 TIM FIXO* (fresh market) TIM WEB (boosting VAS) Million accesses Million accesses +25% +70% ~0.20 ~0.5 ~0.16 ~0.3 ~0.01 ~0.2 2007 1H08 2008 2007 1H08 2008 * Including TIM Casa Flex 5
  7. 7. TIM PARTICIPAÇÕES S.A. | Investor Relations Customer Base Profile TIM: Market Share Erosion TIM: more pre-paid Customer Base Million lines Million lines 140.8 150.6 125.8 133.2 36.4 121.0 +24.5% 33.8 35.2 Mobile 31.3 32.5 Market ∆ YoY 31.3 32.5 33.8 35.2 36.4 TIM +16.5% 27.0 28.4 29.8 +22% 24.5 25.8 ∆ YoY ∆ YoY 4Q07 1Q08 2Q08 3Q08 4Q08 6.8 6.8 6.8 6.8 6.6 -3% 4Q07 1Q08 2Q08 3Q08 4Q08 ∆ YoY TIM Market share 25.8 25.9 25.4 25.0 24.2 Post-paid Pre-paid TIM Incr. share 25.5 26.5 17.4 18.3 12.1 % Pos / Total 21.7 20.8 20.2 19.4 18.1 TIM erosion in market share: Market continues to grow at a very strong pace (+24.5% in lines) TIM reduce its market share to 24.2% Incremental market share down to 12.1% in 4Q08 Mix change towards pre-paid (volume): TIM Customer Base grew-up to 36.4 Mln lines mainly on pre-paid (+22%) Post-paid lines down to 6.6 Mln (-200K lines YoY), representing 18.1% of total Customer Base 6
  8. 8. TIM PARTICIPAÇÕES S.A. | Investor Relations Revenue Performance Net Revenue TIM Service Revenue Share R$ Million 3,544 YoY % 3,376 3,186 3,358 2,993 29.6% 27.5% 27.3% 3,100 3,066 3,223 +4.0% 2,838 2,971 276 155 215 292 321 +16.5% 4Q07 1Q08 2Q08 3Q08 4Q08 4Q07 3Q08 4Q08* ∆ YoY +5,3% +4,1% +6,1% +5,0% Net Service Revenue Net Handsets Revenue * Includes net service revenue from Vivo, Claro, TIM, Telemig, Amazônia, Oi and Brt Revenue Growth at 5.1% on a FY basis (below guidance >7%) due to: lower than expected post-paid growth (post-paid Gross Adds at only 13% of Total in 4Q08) high churn on post-paid (10% in 4Q08) MOU reduction in 4Q08 as consequence of lower push on promotions 7
  9. 9. TIM PARTICIPAÇÕES S.A. | Investor Relations Revenues KPI evolution MOU 95 R$ 86 26 Incoming 25 ARPU Outgoing 62 70 The 2008 objective was: R$ 4Q08 FY08 Price increase and to contain the ∆ YoY: Total -19% -1% ARPU dilution 29.9 29.7 Incoming -18% -21% Greater discipline towards the Outgoing -19% +9% pre-paid promotions that 4Q08 FY08 resulted in pre-paid ARPU ARPM increase ∆ YoY -13% -13% R$ Total ARPU performance mirrors the mix deteoration 0.35 0.31 4Q08 FY08 ∆ YoY +7% -13% 8
  10. 10. TIM PARTICIPAÇÕES S.A. | Investor Relations EBITDA YoY performance 45.6 (61.4) R$ Million 11.8 (65.9) (32.7) 16.7 123.0 • Increase due to Higher handset sale Largely impacted by higher commercial volume (+14% YoY) strong credit activities, advertising exp. and collection effort in commissions 4Q07 890.4 927.6 EBITDA 4Q07 Service Handsets Selling Network COGS Bad Debt *Other EBITDA 4Q08 Revenue Revenue Expenses Expenses Expenses Change +4.0% +16.5% +9.5% -1.1% +17.6% +33.5% -5.5% % YoY EBITDA Margin 26.4% 26.2% * Other Expenses include: G&A, Personnel and Net Other Operating Expenses/Revenues 9
  11. 11. TIM PARTICIPAÇÕES S.A. | Investor Relations From EBITDA to bottom line – 4Q08 EBITDA Depreciation Net Financial Taxes and EBIT Net Income 4Q08 Amortization Expenses Others R$ Million (622.2) Growth fueled by higher cost of debt and 3G NPV Tax loss carry forward 927.6 R$160.2Mn (141.4) 135.6 305.4 299.6 Change YoY +4.2% +3.3% +5.9% +153.0% n.m. +65.8% 10
  12. 12. TIM PARTICIPAÇÕES S.A. | Investor Relations Net financial position and FCF – 4Q08 Net Debt Operating Free Cash Flow R$ Million R$ Million 3Q08 OpFCF Non 4Q08 1,084 (782) OpFCF Positive Net Cash Flow 1,229 +1,072 928 (157) (1,670) (2,743) 1,229 EBITDA ΔWkC Capex OpFCF 3Q07 and (1,788) 928 (92) (952) 4Q07 890 1,044 (1,007) 928 4Q07 figures figures R$ 3.2 billion (of which 60% long term) Gross Debt ~28% of total debt is denominated in foreign currency (fully hedged) Average annual cost 12.1% in 2008 vs. 11.4% in 2007 (13.2% in 4Q08 vs. 10.9% in 4Q07) Debt ratio 0.58x - Net debt over 2008 EBITDA 11
  13. 13. TIM PARTICIPAÇÕES S.A. | Investor Relations Paving a sustainable growth TIM became part of Bovespa’ s Corporate Sustainability Index (ISE) On December 1st of 2008, TIM became part of the new portfolio of Bovespa’s Corporate Sustainability Index (ISE) ISE is composed by 30 companies out of 394 traded at Bovespa, comprising only the companies with a strong commitment to sustainability and social responsibility ISE is based on the international concept of the Triple Bottom Line (TBL), which makes an integrated assessment of companies’ social, environmental and financial elements Underlining TIM’s commitment on a constant relationship improvement among all its stakeholders and strengthening its environmental indicators performance Recognized as one of the national companies more committed to management transparency and which contributes to the development of a fair social system, environmentally balanced and economically prosperous 12
  14. 14. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Phase 0: Current Difficulty Phase 1: Re-launch Restructuring Position Plan Claudio Zezza Luca Luciani 13
  15. 15. TIM PARTICIPAÇÕES S.A. | Investor Relations A Large and Competitive Market Customer Base Service Revenue Million lines Billion R$ 25% 14% Double-digit 121 151 38 44 market growth 2007 2008 2007 2008 Penetration 64% 78% Gross Adds Churn Million lines Million lines 35% 32% 75 Churn market... 56 35 46 2007 2008 2007 2008 Churn 32% 34% TIM Player 1 Player 2 R$, R$/min R$, R$/min R$, R$/min ARPU … suffering ARPM Competition increases with 0.39 Mobile Number Portability in strong 0.36 0.31 -13% 0.34 -15% 0.35 -23% 2009: competitive 0.27 17% of population covered in 34.4 29.6 -3% 29.7 -13% 30.3 27.3 25.5 -7% pressure Sep-08 100% by Mar-09 2007 2008 2007 2008 2007 2008 14
  16. 16. TIM PARTICIPAÇÕES S.A. | Investor Relations Loss of TIM Brasil’s competitiveness Top of Mind Preference Oct-08 Oct-08 25% 26% 27% 22% 21% 21% Top of Mind and 20% 18% Preference Player 2 Player 3 Player 4 Player 2 Player 3 Player 4 Revenue Share Market share %* % Market Share 25.8% 29.4% 29.6% 25.4% 24.2% 27.7% (value and volume) 2006 2007 2008 2006 2007 2008 % Post-paid/Base % Post-paid/Base High-Value Base 20.8% 20.2% (Post-paid) 21.3% 21.7% 18.1% 19.4% 18.1% Churn: 10% in 4Q08 Gross Adds: 13% post- paid/total in 4Q08 2006 2007 2008 1Q08 2Q08 3Q08 4Q08 MNP Mobile Number 46% %, Sept-Dec 2008 Portability 11% Increasing competitive pressure in 2009 IN OUT Source: Synovate Image Survey Sept-Oct 08 15 * Includes net service revenue from Vivo, Claro, TIM, Telemig, Amazônia, Oi and Brt
  17. 17. TIM PARTICIPAÇÕES S.A. | Investor Relations TIM Brasil’s strong fundamentals 1 Network: leadership in coverage and quality • voice (coverage and quality) • data (Edge/ 3G) 2 High-Value Customer Base (ARPU ~30R$) with Operating as a proven innovation attitude (VAS 10.8% Gross Service “Pure Mobile” Revenue in 4Q08) company, with solid fundamentals… 3 Unique “Pure Mobile” convergence offering … in line with our DNA • TIM Web: strong growth (+2.5x of base YoY) • TIM Fixo: high satisfaction among early adopters 16
  18. 18. TIM PARTICIPAÇÕES S.A. | Investor Relations Network: leadership in voice and data coverage Voice Data Population covered by GSM* Largest data network = Edge / UMTS 93% Player 2 90% 3G Data Only high quality “Right on spot” Player 3 88% Player 4 88% Native 3.5G (HSDPA) high performance Recovery of Service Quality Congestion % cells with Grade of Service > 2% 10 59% of high-value customer base covered by 3G 8 (Jan-09) 78% by Dec-09 6 4 2 0 Jan Feb March April May June July Aug Sept Oct Nov Dec Jan Jan W1 W2 * Urban population covered (Jan-09) 17
  19. 19. TIM PARTICIPAÇÕES S.A. | Investor Relations High-Value Customer Base with proven innovation attitude ARPU VAS/ Gross Service Revenue Data Revenue Growth Monthly ARPU, R$ % Gross Service Revenue 4Q07 vs. 4Q08 10.8% 34.5 SMS/ 29.5 29.8 29.7 29.9 9.8% 9.7% 4% MMS 9.0% 8.4% VAS-i 38% 4Q07 1Q08 2Q08 3Q08 4Q08 4Q07 1Q08 2Q08 3Q08 4Q08 Reversal of ARPU ... with push in Increase in VAS... dilution data and content 18
  20. 20. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Phase 0: Current Phase 1: Re-launch Difficulty Restructuring Position Plan Claudio Zezza Luca Luciani 19
  21. 21. TIM PARTICIPAÇÕES S.A. | Investor Relations Three markets, one approach: “Pure Mobile” Attractiveness Main Dynamics Key Success Factors Net revenue, Billion R$ 112 “Innovation” 5 Mbps 96 ~50% Fresh market 11 Always on Mobile 1 ~10% BB Fixed 8 46 “Convenience” ~2% Fixed 43 F-M substitution Value for money Ready to go “Positioning” ~5% 50 Churn market Brand Mobile 44 Segmentation 2008 2011 To become the #1 alternative among High-Value Customers 20
  22. 22. TIM PARTICIPAÇÕES S.A. | Investor Relations 1 Brand: repositioning Voice Share Volume/ Value Positioning TIM TV - GRP + Leader 40.5% 34.2% 32.6% Brand Strength 22.6% 20.1% 20.4% 2006 2007 2008* Communication Investment Share - + % Total Investments Delta p.p. TIM Brand Standing Leader 32.3% 30.7% 29.5% 5.9 13.2 13.3 Voice Share + ~70% ATL 23.6% Product (corporate support) 19.1% 17.4% Coherence and recognition 2006 2007 2008* * January-November 2008 21 Source: Ibope Monitor/GRP, Synovate Image Survey Sept/Oct 08
  23. 23. TIM PARTICIPAÇÕES S.A. | Investor Relations 2 Offering portfolio: distinctiveness TV Web Fixed Mobile Convergence Internet From F-M Conver- gence Fixed substitution to multiple play Quick wins New offer portfolio Consumer: Business: Customer Social-demographic Segmented convergent Segmented loyalty Mobile Push Post- segmentation Innovative tariff schemes offering for: • SOHO approach paid Gross (less promotion) • SME “Custom” offer Adds Integration with devices • LA and VAS Jan March May … 22
  24. 24. TIM PARTICIPAÇÕES S.A. | Investor Relations 3 Caring: selectivity Customer Care: Key Points Actions: Current caring model (ex: Consumer) POST-PAID PRE-PAID Quick wins in High Value: personal + Premium A agent Customer Value High value B Service differentiation Outsourcer Post-low C-E Outsourcer Specialization of call centers - F/New Multi-channel vs. Human Touch MNP Management New management model based on access/ value Customer loyalty and development Strict regulations increase structural of existing clients (CRM) costs (and keeps service leverage flat) 23
  25. 25. TIM PARTICIPAÇÕES S.A. | Investor Relations 4 Sales Force: leveraged footprint and higher productivity Customer Points of Sale (PoS) Value # 000 PoS, Dec 2008 Own Education/ Own 9.4 8.5 9.0 Businesses caring Businesses* 7.1 Dealers Ponto TIM Pro-activity GDO Dealers Service Player Player Player 2 3 4 GDO Volume Alternative PoS Productivity by Region Value channel, Gross Adds/PoS/month Dedicated Time 300 200 Average Larger footprint vs. competitors Variance and 100 Metric Push convergence offerings 0 Product/offering needs (store traffic) R1 R2 R3 R4 R5 R6 R7 R8 Differentiation (multi-channel) Control (productivity) 24 * Including Ponto TIM
  26. 26. TIM PARTICIPAÇÕES S.A. | Investor Relations 5 Network: quality and efficiency… 2G Quality Efficient Cost Structure 3G Roll-out Rationalization of costs and contract 3G for data renegotiations Higher 2G (leased lines, energy, ...) transmission quality Value driven New transportation Choices coverage: ~80% model make vs. buy Higher capacity of value base in (load) 2009 Rationalization of investments (right-engineering vs. over-engineering) “Right on spot” Investment in 2G quality Network cost efficiency to support aggressive 3G roll-out 25
  27. 27. TIM PARTICIPAÇÕES S.A. | Investor Relations 5 …less buy, more make in transmission Network Costs Million R$ 21% 15% Leased 30% Lines 2007 2008 Logic considers transmission network: • Make, not buy • Partnerships 26
  28. 28. TIM PARTICIPAÇÕES S.A. | Investor Relations 6 Organization and team: new, marketing-driven and rapid… Reporting to CEO: 1 Marketing driven 11 End-to-end Presence at client CEO 2 Lean Staff simplification (from 12 to 7) Marketing Operations Technology Fewer levels (no GD, no regional coordination) Efficiency 3 Plug and Play End-to-end National Efficient Revenue Presence Performance 4 Change management and motivation State of the art Young (average age: 42 years) 27
  29. 29. TIM PARTICIPAÇÕES S.A. | Investor Relations 6 ...with a new customer-oriented sales structure Sales Structure: 2nd half 2008 Sales Structure: January 2009 CEO # Number of regional # Number of regional operations CEO operations GM COO COO Regional Business Consumer Top clients Business Consumer Coord. Regions 7 Regions Regions Regions 2 4 6 Business Consumer 5 levels between CEO and regional channels 3 levels between CEO and regional channel Sales structure for each region Sales structure for each client segment “Think globally, Act locally” 28
  30. 30. TIM PARTICIPAÇÕES S.A. | Investor Relations The re-launch phases 1Q09 2Q09 3Q09 4Q09 New strategy assessment New Offering: Network optimization • Consumer Organization and Team • Corporate New Caring Model • Convergent Advertising: new format Push on Commercial Convergence: multiple Actions Push on the points of play strategy Push on existing Offers: sale • TIM Fixo • TIM Web • Existing post-paid offer High Churn: Post-paid Subscribers: Results “back on track” Back to Revenue Growth “Clean” our prepaid and postpaid customer base 29
  31. 31. TIM PARTICIPAÇÕES S.A. | Investor Relations Summary … To capture the excellent opportunities in the Brazilian market … … operating as a Pure Mobile company, competing aggressively in the entire telecommunications market: mobile, internet and fixed… … in order to become the # 1 alternative among high-value customers, through: • Brand: repositioning • Offering Portfolio: uniqueness • Caring: selectivity • Sales Team: footprint and productivity • Network: quality and efficiency • Organization and team: new, marketing-driven and rapid 30
  32. 32. TIM PARTICIPAÇÕES S.A. | Investor Relations … and commitments for 2009 Top of Mind Strengthening Preference the Position ARPU Growth in Value Revenue Growth Back to double digit in 2H Service Revenue Share Maintain #2 Operating cash flow Positive (EBITDA – CAPEX) 31
  33. 33. TIM PARTICIPAÇÕES S.A. | Investor Relations “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. Investor Relations Visit our Website Avenida das Américas, 3434 - Bloco 01 http://www.timpartri.com.br 6° andar – Barra da Tijuca 22640-102 Rio de Janeiro, RJ Phone: +55 21 4009-3742 / 4009-3446 / 4009-4017 Fax: +55 21 4009-3990 32
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×