VIVO - Apresentation of 4th Quarter 2007 Results

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Apresentation of 4th Quarter 2007 Results

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VIVO - Apresentation of 4th Quarter 2007 Results

  1. 1. Vivo Participações S/A February 21, 2008
  2. 2. RESULTS R$ billions 2006 2007 Revenue up by 14.2% 10.9 12.5 Expenses grow by 12.2% (8.3) (9.4) Ebitda increases by 20.7% 2.6 3.1 Ebit up by 219.7% 0.2 0.6 Operating Cash Flow* up by 34% 1.2 1.6 * + Working Capital
  3. 3. Agenda Operating Performance Financial Performance Vivo Participações S/A February 21, 2008
  4. 4. Market leader in its operational area and nationwide Leader in net gains from the year’s main campaigns (Mother’s Day and Christmas) Share of net additions in the quarter: 34.2% and COMMERCIAL Market share: 36.7% in our operational area PERFORMANCE + 4,430 + 2,164 33,484 31,320 29,053 6,247 5,863 5,510 27,237 25,457 23,543 Distribution Channels More than 8,000 points of sale 4Q06 3Q07 4Q07 Prepaid Postpaid 366,000 recharge points
  5. 5. ARPU AND MOU TRENDS ARPU MOU + 1.6% - 2.4% + 3.9% + 1.0% 82 80 30.6 30.8 31.1 77 13.7 38 35 36 14.2 13.9 + 6.1% 16.4 16.9 17.4 44 42 44 4Q06 3Q07 4Q07 4Q06 3Q07 4Q07 Outgoing Incoming Outgoing Incoming Data ARPU up by 33% in the year
  6. 6. SAC* - 10.4% - 10.4% 25% year-on-year growth in 115 115 own-store activations 103 21% 19% 16% 24% GSM: more competitive 23% 22% prices, acquisition of high-value clients and increase in postpaid additions 56% 57% 62% 4Q06 3Q07 4Q07 Subsidy Comissions Advertising *Blended SAC
  7. 7. LOYALTY BUILDING AND RETENTION Initiatives Results Points Program 2.1% Churn Customer recapture Restructuring of plans Recovery of suspended customers Alteration of recharge mix Recharge incentives
  8. 8. PRODUCTS AND National and international roaming. SERVICES Launch of exclusive partnership with Positivo Informática, Brazil’s biggest computer manufacturer. Launch of broadband solutions in the Plano Controle. Launch of new smartphones: allowing increased penetration of the Vivo Smart Mail service in VIVO’s customers base Increase in interactivity initiatives via SMS More than 400,000 broadband users More than 4 million Value Added Services sold in the year, growth of 132%
  9. 9. CUSTOMER SATISFACTION SURVEY “How would you rate your operator on a scale of 0 to 10, where 0 indicates that you are extremely unsatisfied and 10 that you are extremely satisfied?” 8.41 8.33 Vivo ‘s rating is higher than the market average Market Average Vivo The number of “extremely satisfied” clients (score of Source: Total Satisfaction Survey in the 2H07 undertaken by the Instituto GFK 10) grew from 33% to 39%
  10. 10. EMPLOYEE SATISFACTION RESULT OF SURVEY In 2007, Vivo achieved a score of 7.67(level of excellence), the highest employee satisfaction rating since the survey was first implemented. The survey Client focus was considered the most important employee satisfaction element. Participation was the highest since 2003 83% of employees gave their opinions not only on working relations but also on customer service, products, services and internal processes
  11. 11. STRATEGIC POSITIONING Brand strengthening/repositioning Acquisition of Telemig, gaining entry to Brazil’s 3rd largest state Acquisition of 10MHz of additional 1.9 spectrum throughout Brazil, particularly in the 6 states where we had no previous footprint Acquisition of 20MHz of 2.1 frequencies in all our operational areas. All this Increase the Company’s capacity to offer the best services of the market
  12. 12. SO MUCH WORK DESERVES RECOGNITION Vivo is the “Company that Most Respects Consumers” Most reliable sector brand – Seleções / Reader's Digest/ IBOPE 1st Brazil Intangibles Award Most remembered Internet brand – Top of Mind UOL/ DataFolha Vivo para o Cliente and Vivo Voluntário Programs: TOP HR and Top Social - ADVB Brand repositioning: TOP Marketing (ADVB), Premio About and Marketing Best IT Professional 2007: Informatica Hoje magazine, Info Corporate Award and TOP IT
  13. 13. Agenda Operating Performance Financial Performance Vivo Participações S/A February 21, 2008
  14. 14. Agenda Operating Performance Financial Performance Vivo Participações S/A February 21, 2008
  15. 15. Data and VAS Revenue NET SERVICE 9.6% of net service revenue 63% YoY growth REVENUE R$ million + 16.0% 11,089 9,560 4,910 4,173 + 12.8% + 4.9% 2,987 2,846 5,296 2,647 4,742 1,252 1,287 1,226 1,251 1,373 1,440 645 883 170 221 260 4Q06 3Q07 4Q07 2006 2007 Other Services Subscriptions and Usage Network Usage
  16. 16. OPERATING COSTS* R$ miillion Operating costs under strict control despite more competitive environment 666 Services Rendered 659 615 612 Goods Sold 585 407 756 Selling Expenses 704 656 General and 166 159 Administrative 160 182 H.R. 151 185 149 Fistel, Fust, Funtel 144 140 4Q06 3Q07 4Q07 *Excluding depreciation
  17. 17. EBITDA AND EBITDA MARGIN R$ miillion 29.2% 25.7% 26.9% 25.1% 23.7% BALANCE BETWEEN SALES AND PROFITABILITY Revenue 3.8% in the QoQ Costs 2.0% in the QoQ 3,132.8 EBITDA 9.0% in the QoQ 2,596.6 857.6 833.3 908.3 4Q06 3Q07 4Q07 2006 2007 EBITDA Margin
  18. 18. CASH FLOW AND NET RESULT R$ millions CASH FLOW* NET RESULT 1,616.3 885.6 1,204.8 760.2 654.5 527.5 28.3 16.3 4Q06 3Q07 4Q07 2006 2007 4.4 -99.4 * EBITDA – CAPEX +Working Capital 4Q06 3Q07 4Q07 2006 2007
  19. 19. FINANCIAL RESULT, GROSS DEBT AND NET DEBT R$ million GROSS DEBT NET DEBT FINANCIAL RESULT -27.4% -2.6% + 8.5% - 12.8% 3.553,3 2,957.7 4,500.4 4,381.4 4,038.4 2,579.3 146.6 113.8 111.4 65% 55% 55% 35% 45% 45% 4Q06 3Q07 4Q07 Short Term Long Term 4Q06 3Q07 4Q07 4Q06 3Q07 4Q07
  20. 20. CAPEX R$ million 19% 2,123.0 15% 1,919.0 468.8 494.3 % Capex/Net Revenue 414.7 MAIN INVESTMENTS 36% 29% 267.2 1,059.0 11% 977.1 119.7 Increase in GSM 134.1 185.7 Network Capacity and 129.0 Quality 1,239.5 1,157.5 New Customer Service 369.2 805.2 and Front Office system 114.4 662.4 48.1 Adaptation to the 206.7 Number Portability project 4Q06 3Q07 4Q07 2006 2007 Network Technology Others
  21. 21. THERE IS ONLY ONE POSSIBLE RESULT OF ALL THIS: A COMPANY THAT HAS... A consistent strategic A motivated and A highly positive positioning with focus on committed workforce operating and financial customers performance ...possesses all the necessary conditions to ensure its continuous development in one of the biggest markets in the world
  22. 22. DISCLAIMER • This presentation may contain forward-looking statements concerning future 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.
  23. 23. VIVO PARTICIPAÇÕES S.A.

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