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Tim 4 Q09 Webcast Eng 1
 

Tim 4 Q09 Webcast Eng 1

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    Tim 4 Q09 Webcast Eng 1 Tim 4 Q09 Webcast Eng 1 Presentation Transcript

    • 4Q09 Results Presentation TIM PARTICIPAÇÕES S.A. | Investors Relations Rio de Janeiro, February 24th 2010
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Additional Disclaimer to the Presentation In the following slides we will present the financial statement analysis. For the sake of simplicity, all comparisons refer to TIM operations, excluding the effects of Intelig’s Dec/09 operations. As for the Balance Sheet, the analysis includes Intelig. 1
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Agenda Repositioning Track 4Q 2009 Results Perspectives for 2010-2012 2
    • TIM PARTICIPAÇÕES S.A. | Investors Relations TIM Brasil: Repositioning Track MM lines, EoP Post- Post-paid Base Pre- Pre-paid Base 3 Waves of Development After 15 months, Reversal of Pre-paid discontinuation of the clients loss after 34.7 FROM post-paid base erosion repricing/promo 32.9 REPOSITIO- REPOSITIO- 6.8 30.1 29.9 NING TO 6.4 6.5 6.3 GROWTH 6.2 -0.2 +4.8 Penetration Usage Data -0.4 -0.3 +0.3 Jan-08 Jan-09 Abr-09 Aug-09 Dec-09 Jan-09 Mar-09 Aug-09 Dec-09 2008 2009 2010- 2010 2010-2012 “Difficulties” “Repositioning” “Growth” •Uncompetitive offer: repricing and •Offers innovation: “breaking the rules” •Main growth drivers: promo stop • Penetration •Quality Recovery •Loss of Brand attributes • F-M substitution •Efficiency Plan: Savings >R$1 Billion; • Internet TRACK •Little innovation (~R$800 Mln on the financials) •Need to build own infra-structure / Intelig •Loss of quality •Intelig Acquisition integration •‘Back to growth’ with profitability and cash Clients loss QoQ Acceleration 3 Waves of Development Inertia in 2009 of -R$ 1 Bln 3
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Q4 2009: Visible Signs of Turnaround • Network Quality (Anatel Ranking) • Customer Base: 41.1 MM : 100% in December, with MOU ~ (+1.5 MM vs. 3Q) 100 minutes • ARPU leader: R$27 (vs. R$26.5 in 3Q) • Bad debt represents 2.5% of Service Revenues: -37%YoY • Service Revenues: +5.4% QoQ, due to outgoing traffic (+13% • Reduction of Interconnection QoQ) and subsidy costs weight. • Trend Inversion of Service Revenues YoY drop January: 100% Anatel Quality • Infinity: ~18 million 100.0% 99.5% 97.3% 97.3% 93.4% 94.0% 1 Service Revenues 1Q 2Q 3Q Oct Nov Dec R$ MM 3,248 2,936 3,083 2,823 • EBITDA: R$ 960 MM, +26% QoQ +4.0% +5.0% +5.4% • EBITDA Margin: 28.2% (+542 bps QoQ) EBITDA Margin 28.2% 1Q 2Q 3Q 4Q • Operating FCF: R$ 1.1 Bln 4Q; R$ 0.7 Bln Full Year 22.3% 22.7% • Net Income: R$ 330 MM, +29% 2009FY vs. 2008FY 20.2% • Intelig Acquisition: completed 0 1Q 2Q 3Q 4Q 4
    • TIM PARTICIPAÇÕES S.A. | Investors Relations KPI’s Improvements QoQ: Subscriber Base, traffic, ARPU and Revenues 41.1 39.9 40.3 CB MOU ARPU MM clients oct nov dec Minutes R$ 41.1 99 39.6 42 90 110 26.0 26.6 26.5 27.0 41 30 100 37.8 40 73 39 70 90 >40% 25 36.1 38 80 20 37 Total 70 Outgoing 15 36 60 Voice +4.8% +4.7% +3.8% 35 34 Outgoing 50 +9% 10 33 40 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Positive 18 MM elasticity Infinity 12 11 TIM: breaking the rules Service Revenues Charge per 10 9 call 8 R$ MM 7 • Infinity from “charge per Infinity: 6 Charge per 5 minute” to “charge per +4.0% +5.0% +5.4% 3700 minute 4 3 call” 3,248 3500 2 3,083 Q1 Q2 Q3 Q4 2,936 3300 • Liberty Unlimited talk to Liberty: 2,823 3100 all TIM community 2900 2700 • ‘Chip Avulso’ without Avulso’: 2500 penalty Q1 Q2 Q3 Q4 • SIM unlock handset YoY -0.5% -1.2% -1.0% +0.3% 5
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Reinforcement of Brand Positioning Investments in Advertising Clear and direct communication of offers Share of investments TV, % Best deals Cheaper cost per Minute 32% 31% 31% Player1 30% 34 +4pp 37 +11pp 26% 28% 28% Player2 25% 25% Player1 35 +3pp 23 -1pp 24% 19% 18% Player3 17% Player2 29 -5pp 23 -8pp 15% 16% 15% Player3 29 -7pp 21 -5pp 2006 2007 2008 Jan-Nov ‘09 Communication Waves Brand Credibility Coverage ‘Mundo Azul’ Coverage Innovation 38 +3pp 34 +10pp Player1 44 +3pp 28 0pp Liberty ‘Chip Avulso’ Player2 22 +1pp 25 -7pp Player3 17 -3pp 32 -3pp 6
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Network Quality: 100% of Anatel’s targets achieved Increase in Traffic Volume Network quality improvement (Anatel ranking) MM of total minutes (excluding visitors) % achieved goals in TIM’s network quality 13000 11,956 1 12000 99.5% 98.2% 1 10,458 11000 93.4% 94.0% 9,973 1 90.8% 9,273 10000 9,045 10,411 1 85.5% 9000 1 2008 8,068 Traffic reduction 100.0% 1 1 97.8% 97.3% 7,585 after repricing 8000 1 1 1 2009 70 73 90 99 7000 1 oct nov dec 1 MOU 6000 1 Q1 Q2 Q3 Q4 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 YoY -16.1% -19.1% +0.5% +28.9% 100% of Anatel’s Goals in December (confirmed in Jan.’10) 7
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Agenda Repositioning Track 4Q 2009 Results Perspectives for 2010-2012 8
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Main Financials Results Efficiency Plan: R$0.8 Bln in savings, R$ 0.6Bln of which were reinvested in the Re-Launch Plan (“Self-financing”): + R$0.6Bln (+23.4% YoY): advertising, commissions and customer care - R$0.4 Bln (-8.8% YoY): Network and Interconnection Costs - R$0.3Bln (-43.6% YoY) : Bad Debt - R$0.1Bln (-9.3% YoY) : Personnel and G&A EBITDA: R$959 million in 4Q09 (+26% QoQ) and a 28.2% margin in the quarter; EBITDA FY2009 of R$3,063 million (+5.6% YoY) and a 23.5% margin (+140 bps vs. 2008) Net Profit: R$232 million in 2009 (+29% YoY) Operational Free Cash Flow: positive in R$1,109 million in 4Q09; R$692 million in FY2009 Net Financial Position: R$1,684 million (-R$860 million vs. 3Q) including Intelig 9
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Re- Efficiency Plan for the Business Re-launch %.Net Service Revenues % YoY, Delta (R$MM) 25.1% 28.2% 28.3% 27.9% EBITDA & Margin R$ Million, % Margin Selling +R$630MM Re- Investment on Re- 21.1% 22.4% 23.0% 21.9% launching Plan 28.2% expenses +23.4% 22.7% 22.3% 1Q 2Q 3Q 4Q 20.2% 959 36.8% 36.1% 34.6% 736 759 32.4% 609 Quality of traffic (on- (on- Interconnection 34.9% 31.4% 31.3% 30.8% -R$372MM nettization); structural –8.8% rethinking 1Q09 2Q09 3Q09 4Q09 & Network 1Q 2Q 3Q 4Q Structural Improvement of 9.6% Profitability 6.8% Quality of customer 4.6% 4.0% Bad Debt -R$327MM base; billing and credit R$ Million, % Margin 4.8% -43.6% management 3.6% 3.2% 2.5% 23.5% 22.1% 1Q 2Q 3Q 4Q 3,063 10.1% 2,899 9.3% 8.2% 8.7% Personnel -R$102MM Lean structure and 9.3% 8.6% 8.0% -9.3% G&A Costs 7.4% 2008 2009 1Q 2Q 3Q 4Q 2008 2009 10
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Net Result – 4Q09 R$ Million 330 61 (15) Y/Y variation due to lower impact of tax (144) (620,9) -32% 2009 benefits (R$104Mn vs. 1Q09 2Q09 3Q09 4Q09 vs. 2008 to R$160Mn) R$252Mn 958,5 (55,3) 47,8 337,6 330,0 EBITDA Depreciation & Net Financial Taxes and Net Profit EBIT 4Q09 Amortization Expenses Others +29% Net Profit – 2009FY 180 232 Dividends: Proposal of R$ 0,125 per PN in distribution 2008 2009 11
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Operational FCF & Net Financial Position– 4Q09 Position– (TIM + Intelig Dec/09) Free Operational Cash Flow Net Financial Position R$ Millions R$ Millions R$ 860 Mn debt reduction (996) 32.1% of Total 1,109 1,149 Net Revenues 249 2,544 - R$ 116 Mn of 1,684 956 1,109 Intelig acquisition effect EBITDA ∆ Working CAPEX Oper. Oper. Non-Oper. OCF 3Q09 OCF OCF 4Q09 Capital R$ 4.2 billion (of which 67% on long term) Gross Debt ~28% of debt is denominated in foreign currency (100% hedged) Average Annual Cost 9.7% in 4Q09 vs.13.2% in 4T08 and 9.7% in 3Q09 12
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Agenda Repositioning Track 4Q 2009 Results 2010- Perspectives for 2010-2012 13
    • TIM PARTICIPAÇÕES S.A. | Investors Relations TIM is Ready to Capture Brazilian Market Opportunity “Voice is Good” Free- Free-net Philosophy on- (F- Liberty = unlimited on-net calls (F-M substitution) Mobile Internet Access (microbrowsing) Offers & Promo based on community Selective growth of the mobile connectivity LD for Fixed: economy and simplicity with Intelig market (web via internet key) Attack to fixed monthly fee (F-F substitution) (F- Social networking Penetration Usage Data Market share MOU and ARPU Microbrowsing Browsing Breaking Rules Convergence ‘Mundo Azul’ = One national rate (local and LD) Integrated Solutions of Fixed, Infinity = pay per call Mobile, Voice and Data for: Chip only = exit from handset subsidy market - corporate segment SIM- SIM-unlock = free handset - consumer (selective) 14
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Developing Own Infrastructure 1 2 3 Intelig’s backhauling ring Integrated TIM-Intelig Development of own connection/strengthening Backbone metro rings Backbone Backhauling Metro Key actions 1 Backbone Integration PoP PoP Leased lines 5 2 Connection with Intelig MAN 4 Microwaves 3 MAN TIM conclusion installation Node-B BTS BTS 4 Development of Microwaves and Backhauling - radio Leased lines renegotiation 5 3G/HSDPA 2G/Edge 2G/Edge with OLO’s Access Access Access Increase capacity of infrastructure 15
    • TIM PARTICIPAÇÕES S.A. | Investors Relations Conclusion: TIM - market’s #2 player with the greatest speed of QoQ growth KPI’s Size (Q4) Rank* QoQ Growth In Bps +5 MM lines vs. Q1, 41.1 MM #3 + 380 besides having rigorous Subscriber base (23.6% Market Share) clean-up to save Fistel Stop ARPU erosion due ARPU R$ 27.0 #1 + 200 to outgoing calls Net Service Revenues R$ 3,248 MM #2 + 540 Higher growth QoQ due to push on voice Filling the gap vs. R$ 959 MM #2 +2,630 market leader besides EBITDA the intense commercial effort Margin EBITDA 28.2% #2 + 540 We are ready for the next step, where we’ll focus on the capture of opportunities: • Penetration: fresh market from social inclusion • F-M substitution for Voice • Selective growth for Data • “Option Value” Intelig: LD for Fixed and Convergence 16 * Without considering Oi’s results (not published yet)
    • TIM PARTICIPAÇÕES S.A. | Investors 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.tim.com.br/ir 6° andar – Barra da Tijuca 22640-102 Rio de Janeiro, RJ Phone: +55 21 4009-3742 / 4009-3446 / 4009-3751 Fax: +55 21 4009-3990 17