Apresentação barclays capital 2010 latin america regulated industries conference

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Apresentação barclays capital 2010 latin america regulated industries conference

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  2. 2. Agenda04 Algar Group10 Algar Telecom: overview and strategy14 Business segmentation35 Consolidated financial results 3
  3. 3. Algar Group Brazilian company Consolidated figures Business areas: R$ million 2009 9M10 IT/Telecom Agribusiness Net revenue 2,709 1,936 Services EBITDA 537 395 Tourism Net Income 195 97 Operates in more than Capex 203 161 1,000 towns and cities Employees 17,000 19,657 61 offices throughout Brazil More than 1.9 million clients4
  4. 4. UniAlgar – Corporate University Focus: Entrepreneurial Leadership UniAlgar in numbers 2010 COURSES ATENDEES R$ 9.4 million invested in 2010 On-site attendance 149 15,100 E-learning 115 41,500 12 years in existence 5
  5. 5. Algar Institute Focus: education of children 2010 main figures Target: public schools Partner schools 100 Students 6,060 Students: elementary Teachers 433 Founded: in 2002 Volunteers 478 States 4 Strategies MG, SP, GO, MA Partnerships with public schools Investments in continuing education for teachers and students Long-term projects of pre-established duration Alliances with NGOs specialized in education6
  6. 6. Corporate Governance Structure Auditing and Risk Management Shareholders’ Committee Meeting Family Council Corporate Governance Committee Fiscal Council Strategy and Portfolio Board of Committee Directors Functional Human Talents Hierarquical Committee Internal Auditing CEO External Auditing COOs of Corporate VP Corporate VP Corporate VP Corporate VP of Human Talents of Mkt. and of Strategic Business areas of Finance Sustainability Development Deliberative body Executive body 7
  7. 7. Governance Timetable “Formal Risk Management 2010 Implementation” “IBGC Corporate Governance Award” (non- 2009 listed) Shareholders Agreement 2008 revised ion Board of Directors 2005 lut Committees vo tE “Garcia Family 2001 en Family Council an Constitution” rm Pe Board of Directors 1999 (FDC support) Professional Board 1995 Advisory Board Composed of friends 1991 Shareholders Agreement Professional executive 1989 management Professional CEO External auditing (Big 5) 1988 and Internal auditing8
  8. 8. Agenda04 Algar Group10 Algar Telecom: overview and strategy14 Business segmentation35 Consolidated financial results 9
  9. 9. Current ownership structure Algar S.A. Minority Shareholders 90,21% 9,79% Algar Operational holding Fixed telephony, broadband Telecom and data products 84,43% 72,48% 100% 84,27% 100% 99,97% CTBC Multimídia Algar Algar Celular Data Net Image Tecnologia Engeset Mídia Mobile telephony Data products Pay TV BPO, IT and Network Telephone Internet provider Consulting maintenance directories10
  10. 10. Overview Integrated telecommunications company Fixed-line and mobile telephony, broadband internet, data, pay TV, BPO, IT services and consulting, network maintenance and telephone directo- ries. More than 1.8 million clients 11,500 km Consolidated figures of optical fiber network R$ million 2009 9M10 Net revenue 1,387 1,110 EBITDA 392 317 % 28 29 Employees 11,368 13,137 11
  11. 11. Strategic guidelines Client-centered company • Make a difference in the client company relationship • Select geographic expansion Revenue diversification • New services Profitability • Increase EBITDA margin • Implement IP technology creating IP Technology a new range of services • Optimize debt service resulting in funds available for Availability of funds growth Human resources • Permanent focus on human resources development12
  12. 12. Agenda04 Algar Group10 Algar Telecom: overview and strategy14 Business segmentation35 Consolidated financial results 13
  13. 13. Business segmentation14
  14. 14. Business segmentation 15
  15. 15. Market positioning To be the most effective telecom company in customer relations Long distance calls: ranked 1st for 11 months Fixed-line local calls: ranked 1st for 9 consecu- tive months Performance Index in customer Mobile calls: ranked 2nd for 7 months and attendance– IDA (ANATEL) ranked 1st for 2 months 1st 2nd From nov09 to oct1016
  16. 16. AreasConcession Started in 1954 87 communities in 4 different states (MG/SP/GO/MS) 1.5% of national GDP and GDP per capita 35% above the national average 2.9 million inhabitantsExpansion The company has authorization to provide telecom services across the country and selected primarily the attractive regions around its backbone High growth potential - region concentrates 50% of the GDP and 60% of Brazilian telecom traffic 17
  17. 17. Backbone18
  18. 18. Major guidelines for growth B2C B2B Focus on convergence Focus on offering customized solutions to medium and small companies Increase broadband services Complete provider of IT/telecom solutions Seek entertainment and communication solutions Be an alternative to the incumbents Expand data business around backbone 19
  19. 19. The company’s corporate clients include20
  20. 20. Fixed-line clients Growth driven by the corporate market in the expansion area Recent customer increases in the concession area are a result of bundle offers Fixed lines (thousands) CAGR: 3,2% +13,2% 772 701 682 658 684 631 611 622 599 587 151 27 73 102 95 2007 2008 2009 Sept09 Sept10 Expansion Concession 21
  21. 21. Mobile clients Strategic focus on post paid clients and on business profitability 9M10 X 9M09: 22% increase in post paid clients and 9% in pre paid 33% of clients are post paid (the industry average is 19%) ARPU of R$ 42.5 –highest among all Brazilian telecoms Mobile clients (thousands) +13,3% :19,0% 556 CAGR 511 491 447 361 67% 234 309 350 342 374 33% 127 138 161 149 182 2007 2008 2009 Sept09 Sept10 Post-paid Pre-paid22
  22. 22. Broadband clients Important component of bundles Highest ADSL penetration among Brazilian incumbents 3G is becoming a complementary product of ADSL Broadband (thousands) +16,3% 267 3,0% CAGR: 1 234 230 220 ADSL Penetration (% of fixed lines in service) 183 228 213 183 203 204 31% 29% 30% 30% 28% 26 39 7 31 2007 2008 2009 Sept09 Sept10 2007 2008 2009 Sept09 Sept10 3G ADSL 23
  23. 23. Pay TV Pay TV via DTH launched in May 2010 Service provided in the concession area of the company Pay TV 67 (thousands) 33 32 31 32 32 34 2007 2008 2009 Sept09 Sept10 DTH Cable24
  24. 24. Recent awards 2010 Best and Biggest Exame Magazine500 biggest in sales and telecom The 70 best IT and Telecom companies to work for - 2010 COMPUTERWORLD Great Place to Work Institute Best companies to work for – 2010 Great Place to Work Institute Época Magazine 2009 Modern Consumer Award Customer service excellence 25
  25. 25. Business segmentation26
  26. 26. Algar Tecnologia The ideal partner to design tailor-made solutions for your company. ITO, BPO, Contact Center and Consulting Solutions 12 years of expertise 9M10 net revenue of approximately R$240 million Over 10,000 associates (employees) 7,000 workstations for contact center and BPO operations 3 Data Centers, with over 13,000 sq.feet. (Tier 3; ISO 20.000/27.000) 3 software houses with CMMI and MPS BR certifications 2,000 servers in operation More than 200 clients in Brazil and in the U.S Operational and commercial presence in Brazil Belo Horizonte (MG), Brasília (DF), Campinas (SP), Rio de Janeiro (RJ), São Paulo (SP), Uberaba (MG) and Uberlândia (MG). *Sales in all Brazil 27
  27. 27. Algar Tecnologia Solution Portfolio BPO Industries BPO Business Process BPO Customer Services Agribusiness Government Contact Center Construction Sanitation Risk Management Education Health Inbound and outbound sales Energy Health Customer Experience Management Financial Management Back-office Media and Telecomentertainment Service Desk IT Telecom Consulting Customer Services IT Infraestructure Services Data Information Technology Application Services Voice Special Projects Managed Services28
  28. 28. Main Clients 29
  29. 29. Certifications and Awards30
  30. 30. Net revenue 2008 x 2009 9M09 x 09M10 R$ 224.0 million R$ 273.1 million R$ 203.2 million R$ 239.8 million 1% 3% 6% 13% 12% 21% 2% 2% 9% 9% 2% 10% 90% 76% 77% 67% 2008 2009 9M09 9M10 Customer Services BPO Consulting IT Services 31
  31. 31. Contribution Margin 2008 x 2009 9M09 x 09M10 R$ 75.0 million R$ 99.3 million R$ 74.7 million R$ 85.0 million 1% 1% 7% 18% 18% 24% 1% 1% 9% 2% 9% 8% 91% 72% 72% 66% 2008 2009 9M09 9M10 Customer Services BPO Consulting IT Services32
  32. 32. Business segmentation 33
  33. 33. Agenda 04 Algar Group 10 Algar Telecom: overview and strategy 14 Business segmentation 35 Consolidated financial results34
  34. 34. Consolidated Revenue Gross revenue Net revenue R$ million 1,431 1,337 + 9,0% 502 1,387 519 + 8,2% Fixed Voice 1,273 Mobile Voice 1,110 219 1,149 1,026 193 Broad band 150 Data 135 267 Pay TV 234 18 19 BPO/IT/Consulting 186 224 Other 53 50 9M09 9M10 2007 2008 2009 9M09 9M10 Data, broadband, pay tv and BPO/IT are the main growth drivers, substituting traditional revenue Data and broadband already represent 29% of total revenue (9M10) 35
  35. 35. EBITDA and Margin Consolidated R$ million EBITDA margin 28% 28% 29% 28% 28% 327 358 392 291 317 2007 2008 2009 9M09 9M10 Telecom BPO/IT and Other 32% 32% Consulting business 261 277 13% 14% 8% 3% 26 31 2 7 9M09 9M10 9M09 9M10 9M09 9M1036
  36. 36. Consolidated Net Income R$ million Net income margin 7% 5% 5% 4% 59 68 77 2% 44 26 2007 2008 2009 9M09 9M10 9M09 vs 9M10: Strong growth of net income due to: better operational results better financial results 37
  37. 37. Consolidated Capex Capex R$ million 299 174 160 132 92 2007 2008 2009 9M09 9M10 Consolidated capex in 9M10 directed to: 21% - Data and broadband 12% - NGN program 10% - Pay-tv via DTH 9% - BPO/IT 8% - Voice38
  38. 38. Consolidated Debt R$ million Net Debt 594 503 508 478 463 Dez/07 Dez/08 Dez/09 Jun/10 set/10 39
  39. 39. Consolidated Debt R$ million Gross debt amortization Main Creditors In 1 year 170 Development banks 146 From 1 to 2 years 140 Domestic banks 266 From 2 to 3 yearst 130 Bonds Capital Market 257 From 3 to 4 years 123 Vendors 10 Over 4 years 116 Ratings “A+(brA)” stable (from Fitch ratings) “brA+” stable (from Standard and Poors)40
  40. 40. Strong points Full service provider Operational efficiency Growth potential Corporate governance Customer relationship Financial solidity 41
  41. 41. Disclaimer Statements in this presentation, as well as oral statements made by the management of Algar Telecom (the “Company”), 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.42
  42. 42. Investor RelationsRua José Alves Garcia, 415Bairro: Brasil38. 400 – 668/ Uberlândia – MG/ BrazilPhone: (5534) 3256 – 2978Email: ri@algartelecom.com.brVisit our Websitectbc.investor-relations.com.br 43
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