Results
1Q09
May 6th, 2009
TIM PARTICIPAÇÕES S.A. | Investor Relations
TIM re-launch plan
Economics ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Economics Pressure Priorit...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Restart phase completed on time
 Strategy and Organization: completed
 ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Customer Base Evolution: 1 Million lines cleaned-up
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Resolution of Embratel’s dispute affected 1Q EBITDA
Financial-...
TIM PARTICIPAÇÕES S.A. | Investor Relations
#2 in Overall Service Quality driven by higher Network Reliability
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Brand Repositioning
3 steps Strategy ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Efficiency Plan: 1Q09 impacts
Direct costs*: ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Signing of Intelig’s deal
Before the merger ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Economics Pressure
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
1Q09 Main results
Flat Revenues: R$3,012 million (+0.6% YoY) – as consequ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Revenues
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Efficiency sustains EBITDA Margin over 20%
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Defended EBITDA – Improved resources allocation
R$ Million
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
EBIT and Net Results – 1Q09
R$ Million
EBITDA Depreci...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Net financial position and Operating Free Cash Flow – 1Q09
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Pressure
Ec...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Issue: pressure on Top Line
 Post-paid customer base erosion along last 12...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Revenues slowdown: post-paid base erosion and pre-paid growth reduction
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
1Q09 suffers from weak Christmas campaign
Incremental Market Shar...
TIM PARTICIPAÇÕES S.A. | Investor Relations
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Economics Pressure
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Challenges
Growth with Profi...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Invert current trend – Sales growth
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Invert current trend – New offers portfolio (2Q09)
Launc...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Efficiency Plan
Quick wins Improvement ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Intelig: synergies for TIM
 Transport network use
...
TIM PARTICIPAÇÕES S.A. | Investor Relations
“Safe Harbor” Statements
Statements in this presentation, as well as or...
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Press Release 1 T09 En

Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Press Release 1 T09 En

  • 1. Results 1Q09 May 6th, 2009
  • 2. TIM PARTICIPAÇÕES S.A. | Investor Relations TIM re-launch plan Economics Pressure Priorities Restructuring on 1Q09 2Q09 Top Line • Strategy and Organization • EBITDA Margin • Flat revenues: • Focus on Value: • Customer Base clean-up defended - Customer base erosion - Push on Post-paid • Embratel’s dispute resolution • Efficiency improved on post-paid (long tail) - Reduce Portability Gap • Network Service Quality • Reinforced - pre-paid MOU decline - Reinvest Pre-paid ARPM improvement customer related - Weak 2008 Christmas to inflate usage • Brand repositioning expenditures (SAC campaign • Speed-up Efficiency plan and caring) and Intelig integration • Signing of Intelig deal 1
  • 3. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Economics Pressure Priorities Restructuring on 1Q09 2Q09 Top Line Luca Luciani Claudio Zezza Luca Luciani 2
  • 4. TIM PARTICIPAÇÕES S.A. | Investor Relations Restart phase completed on time  Strategy and Organization: completed  Customer Base: back to growth as of March, after 1 mln inactive lines clean-up in February  Resolution of Embratel‟s dispute: positive cash impact of R$ 90 mln; one shot cost of R$ 64 mln, booked in 1Q  Back to #2 in Overall Service Quality (vs. # 6 in 2008) according to Anatel’s ranking (99% achievement in March) driven by network reliability (+14.9 p.p. in 5 months)  Brand Repositioning: doubled share of voice, Top of Mind improved (#2 in SP and RJ Panel), phase 1 of offering portfolio re-launch  Efficiency Plan on going and improved Capital Allocation (-5% in HR, G&A and Others, -13% IT, -51% in Bad Debt)  Signing of Intelig acquisition: ready to capture relevant synergies 3
  • 5. TIM PARTICIPAÇÕES S.A. | Investor Relations Customer Base Evolution: 1 Million lines cleaned-up Post-paid Clean-up Base TIM Customer Base Evolution Mln lines Mln lines 29% incremental 25.9% 25.4% 25.0% market Market 24.2% -0.4 23.5% 6.6 6.2 Share share in March 35.2 36.4 36.1 +11% YoY 32.5 33.8 15,00% Dez-08 Gross Churn Mar-09 6.8 6.6 6.2 6.8 6.8 Post-paid Pre-paid Clean-up Base 25.8 27.0 28.4 29.8 29.9 Mln lines Pre-paid 1Q08 2Q08 3Q08 4Q08 1Q09 +0.1 % Post-paid -3.6 p.p. 29.8 29.9 20.8% 20.2% 19.4% 18.1% 17.1% on Total Dez-08 Gross Churn Mar-09 4
  • 6. TIM PARTICIPAÇÕES S.A. | Investor Relations Resolution of Embratel’s dispute affected 1Q EBITDA Financial-economic impacts Impact of Embratel dispute resolution on EBITDA R$ Mln R$ Mln Non +90 -64 95 64 recurring cost Cash EBITDA Impact Impact Reported +14% 609 533 EBITDA  Positive cash impact 1Q08 1Q09  Application of new interconnection tariff EBITDA Margin %  Better relationship with Embratel to Reported 17.8% 20.2% renegotiate leased lines Normalized 20.9% 22.4% +140 bps 5
  • 7. TIM PARTICIPAÇÕES S.A. | Investor Relations #2 in Overall Service Quality driven by higher Network Reliability 2008 FY – Overall Service Quality Feb-Mar/09 – Overall Service Quality % achievement of overall service quality targets, TIM vs. competitors % achievement of overall service quality targets, TIM vs. competitors 99% in March 4Q08: 90.2% #6 #2 99.5% 99.9% 98.4% 97.8% 97.0% 98.0% 97.7% 95.5% 95.1% 93.4% 91.6% 83.9% 85.5% 61.4% Player 1 Player 2 Player 3 Player 4 Player 5 TIM Player 7 Player 1 TIM Player 4 Player 5 Player 3 Player 2 Player 7 Network Service Quality % achievement of network service quality targets % achievement of network service quality targets Nov/08 Mar/09 Delta (p.p.) 99.5% 96.7% TIM 84.6% 99.5% 14.8 Main mobile Player 1 99.0% 100.0% 1.0 84.6% 84.1% 84.1% operators Player 2 95.7% 93.1% -2.7 Player 3 73.1% 46.2% -26.9 ´Nov/08 'Dec/08 ´Jan/09 'Feb/09 'Mar/09 6 Source: Anatel
  • 8. TIM PARTICIPAÇÕES S.A. | Investor Relations Brand Repositioning 3 steps Strategy Top of Mind Sao Paulo and Rio de Janeiro, % 33 30 30 30 30% 29 Customer 22 proximity 20% 19 18 Feb 10% Week 16/03 Week 30/03 TIM Player 1 Player 2 Player 3 New Slogan Advertising Campaign Evaluation Mar % Excellent and good grades Better evaluation vs. competitors and association to attributes as change, revolution, innovation 88% 77% Products 69% Campaigns Apr/May Player 2 Player 3 7
  • 9. TIM PARTICIPAÇÕES S.A. | Investor Relations Efficiency Plan: 1Q09 impacts Direct costs*: 1Q09 YoY: -6% Advertising 85% Brand 100 90 80 70 Commercial Acquisition 60 50 -5% and 15% Value and 40 Management 30 20 Quality 10 0 -51% Bad Debt 2008 2009 Efficiency -13% IT 1 0 - 0% 8 % -0 6 % -0 4 % -0 2 % -0 0% 20% 40% 60% 80% 10% 0 Other costs: -1% 1200 100 0 800 600 -5% HR, G&A and others 400 200 0 2008 2009 CAPEX: Network 37% Intelig -30% 300 250 Comodatum 200 -20% 150 100 Network and IT -35% 50 IT Rationalization 0 2008 2009 8 * Includes costs of Interconnection, Handsets, TFI/TFF, Recharge, VAS content providers
  • 10. TIM PARTICIPAÇÕES S.A. | Investor Relations Signing of Intelig’s deal Before the merger After the merger Deal Structure TIM Brasil Serv. TIM Brasil Serv.  Asset Swap (6.15%) JVC JVCO and Part. S.A. and Part. S.A. O ON: 81.32% ON: 76.32% ON: 6.15% PN: 63.93% 100% PN: 60.00% PN: 6.15%  Waiting approval from HOLDCO authorities 100% 100% 100% 100% TIM Cel. S.A. TIM Cel. S.A.  Lock-up period 100% 100% TIM Nord. S.A. TIM Nord. S.A.  Debt Free Note: information concerning the shareholding percentages of TIM PART are still subject to changes due to the deliberations taken at its Extraordinary Shareholders Meeting, dated of April 2, 2009 and article 171 of the BCL 9
  • 11. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Economics Pressure Priorities Restructuring on 1Q09 Top Line 2Q09 Luca Luciani Claudio Zezza Luca Luciani 10
  • 12. TIM PARTICIPAÇÕES S.A. | Investor Relations 1Q09 Main results Flat Revenues: R$3,012 million (+0.6% YoY) – as consequence of last 12 month post paid churn and with decreasing pre-paid contribution VAS Growth: up 31.4% YoY (approximately 11.2% of gross service revenues) thanks to data service Further Efficiency Gains: • Discretionary costs -8.7% YoY • Bad debt at 4.8% on net service revenue: -51% YoY (or -24% normalized by Telesales effect) Improved EBITDA Margin: +14.4% YoY reported with margin of 20.2%. Normalized EBITDA with Embratel’s dispute agreement, margin would be 22.4%  Negative Operating Free Cash Flow (R$ -1,251Mn) mainly due to Capex 4Q08 disbursement and Fistel tax 11
  • 13. TIM PARTICIPAÇÕES S.A. | Investor Relations Revenues +122% 0,5 Total Revenues (Gross) Customer 0,2 Net Revenues Base TIM WEB Mln lines R$ Million R$ Million Mar/08 Mar/09 (76) 56 3,544 ΔYoY (34) 103 (55) 2,993 3,012 +0.6% 4,212 3,223 4,219 -0.5% 2,838 2,823 +21.5% 155 321 189 1Q08 Outgoing Long Incoming. VAS Product 1Q09 1Q08 4Q08 1Q09 Distance Net Service Revenues ΔYoY -3.8% -6.9% -5.0% +31.4% +17.3% Net Product Revenues 12
  • 14. TIM PARTICIPAÇÕES S.A. | Investor Relations Efficiency sustains EBITDA Margin over 20% Includes Embratel dispute expenses: R$ Personnel and G&A Costs Interconnection & Network Costs 64 Million R$ Million ∆ YoY R$ Million ∆ YoY Total 286 283 261 Total 1,045 1,048 985 Total -8.7% Total -5.7% G&A* 124 119 103 Inter ∆ QoQ connection 837 784 702 ∆ QoQ Personnel 163 164 158 Total -7.6% Network 207 264 283 Total -6.1% 1Q08 4Q08 1Q09 1Q08 4Q08 1Q09 % of Net % of Net 9.6% 8.0% 8.7% Revenues Revenues 34.9% 29.6% 32.7% *includes TI costs Bad debt EBITDA R$ Million 272 ∆ YoY R$ Million ∆ YoY Telesales -51% +14.4% 95 impact Normalized Normalized 95* 64** -23.9% +7.3% 177 931 609 131 134 533 ∆ QoQ ∆ QoQ 1Q08 4Q08 1Q09 +3.0% Margin -27.7% 1Q08 4Q08 1Q09 % of Reported 17.8% 26.3% 20.2% Net Service 6.2%* 4.1% 4.8% Revenues Normalized 20.9% 26.3% 22.4% * Excluding Telesales additional impact (9.6% including impact) * Telesales Impact ** Embratel’s dispute expenses 13
  • 15. TIM PARTICIPAÇÕES S.A. | Investor Relations Defended EBITDA – Improved resources allocation R$ Million 33.0 64.0** 137.2 (14.7) 33.4 (111.0) 95* (61.2) 59.9 609.4 532.8 Investments Savings +14% EBITDA Service Handsets Advertising Network Other EBITDA COGS Bad Debt 1Q08 Revenues Revenues & Sales Expenses Revenues*** 1Q09 Δ YoY -0.5% +21.5% +18.6% +23.3% -5.7% -50.5% -11.7% Reported 17.8% 20.2% Normalized 20.9% 22.4% +140 bps 14 * Telesales Impact ** Embratel’s dispute *** Other Expenses include: G&A, Personnel and Net Other Operating Expenses/Revenues
  • 16. TIM PARTICIPAÇÕES S.A. | Investor Relations EBIT and Net Results – 1Q09 R$ Million EBITDA Depreciation & Net Financial Taxes and Net EBIT Results 1Q09 Amortization Expenses Others 609.4 (641.2) Impacted mainly by additions into pre-tax balance, due to the end of hedge contracts (31.8) (144.0) (69.3) (42.9) Change YoY +14.4% +12.1% -19.0% -5.8% +240.4% +14.8% 15
  • 17. TIM PARTICIPAÇÕES S.A. | Investor Relations Net financial position and Operating Free Cash Flow – 1Q09 Operating Free Cash Flow Net Debt R$ Million R$ Million 609 (1,666) (194) (1,251) Operating Non 4Q08 FCF OpFCF 1Q09 (1,670) EBITDA ΔWC CAPEX Operating (1,251) (96) (3,017) FCF  Negative Working Capital due to 4Q08’s cash-out (CAPEX and FISTEL) R$ 3.47 billion (of which 65% long term) Gross Debt ~35% of total debt is denominated in foreign currency (fully hedged) Average annual cost 12.47% in Q1 09 vs.10.96% in Q1 08 (and 13.2% in 4Q08) 16
  • 18. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Pressure Economics Priorities Restructuring on 1Q09 2Q09 Top Line Luca Luciani Claudio Zezza Luca Luciani 17
  • 19. TIM PARTICIPAÇÕES S.A. | Investor Relations Issue: pressure on Top Line  Post-paid customer base erosion along last 12 months • Lower focus on gross adds and increasing churn in second half 2008 • Post-paid mix down to 17.1% on total customer base (-3.7 p.p. vs 1Q08)  Deceleration of growth of pre-paid revenue, due to lower promotional aggressiveness, especially in the campaign for Christmas • Pre-paid ARPM increase (+53% YoY) • MOU outgoing decrease (-31% YoY)  ARPU dilution mainly due to worse customer base mix: • Pre-paid outgoing ARPU increase (+6% YoY) • Post-paid outgoing ARPU decrease (-4% YoY) • Blended outgoing ARPU decrease (-12% YoY) 18
  • 20. TIM PARTICIPAÇÕES S.A. | Investor Relations Revenues slowdown: post-paid base erosion and pre-paid growth reduction Pos-paid long tail MOU/Price Pre-paid Hundred Base Churn -31% MOU out (min/month) 100 ARPM out +53% (R$/min) Gross ARPU out (R$/month) 1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 Post-paid revenues growth (%YoY) Pre-paid outgoing revenues growth (%YoY) + ++ ++ + 1Q08 3Q08 1Q09 1Q08 3Q08 1Q09 %Average Base YoY* ++ + % Average base YoY* ++ ++ + Post-paid customer base erosion MOU deflated as consequence of price-up 19 * Excludes churn due to the base clean-up
  • 21. TIM PARTICIPAÇÕES S.A. | Investor Relations 1Q09 suffers from weak Christmas campaign Incremental Market Share Pre-paid Gross Adds TIM Vivo/Claro 14% 13% 10% +9% 26% Bonus 10 x Min. usage 12% to earn R$ 6 1 min. oct/08 nov/08 dec/08 Promotion 4Q07 4Q08 3 month 6 month Loss of competitiveness duration 4Q07 4Q08 in dec/08 Market 17.0MM 22.9MM Gross Lower aggressiveness +35% of TIM offer (Post+Pre) Total unitary SAC Gross Adds (% YoY) Jan-Sep 2008  Post: -4% R$ 4Q08  Pre: -12% -16% -14% Post-paid -27% 22% Pre-paid Jan-Sep 4Q 9% 2008 2008 20 * TIM Brasil estimates
  • 22. TIM PARTICIPAÇÕES S.A. | Investor Relations R$ cent/minute ARPU dilution, reflecting Post-paid customer base erosion ARPU outgoing Pre-paid ARPU R$/month ARPM (R$/min) 28.5 29.8 29.7 29.9 26.0 ARPU (R$/month) 1Q08 2Q08 3Q08 4Q08 1Q09 YoY -10% +6% 1Q08 2Q08 3Q08 4Q08 1Q09 ARPU outgoing Post-paid 60 ARPM YoY -14% -14% -12% -13% -12% 55 (R$/min) 50 45 40 % Mix Pós-pago ARPU 35 (R$/month) 30 25 20.8% 20.2% 19.4% 18.1% 17.1% 1Q08 2Q08 3Q08 4Q08 1Q09 YoY -7% -4% 21
  • 23. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Economics Pressure Priorities Restructuring on 1Q09 Top Line 2Q09 Luca Luciani Claudio Zezza Luca Luciani 22
  • 24. TIM PARTICIPAÇÕES S.A. | Investor Relations Challenges Growth with Profitability Invert current trend Efficiency Plan Integration of Intelig Post-paid 450 EBITDA and Operating Efficiency on Network 400 350 Gross Free Cash Flow defense 300 Business development (Long 250 200 150 Churn 100 Financing the growth Distance, Top Clients) 50 0 1Q Apr-Dec 2009 2009 Market Share Incremental SAC G&A e RH Bad debts 30% +15% 600 600 600 25% 500 500 500 20% 400 -5% 400 -51% 400 29% 15% 300 300 300 17% 10% 200 200 200 10% 5% 100 100 100 0% 0 0 0 Avg. Dec Mar 1Q08 1Q09 1Q08 1Q09 1Q08 1Q09 2008 „08 „09 Speed-up of commercial KPIs in 2Q Improve efficiency to sustain growth 23
  • 25. TIM PARTICIPAÇÕES S.A. | Investor Relations Invert current trend – Sales growth Invert current acquisition trends Post-paid gross adds (Voice) 1) Sales Convention (April 2nd) - “The Turnaroud”  1MM handsets sold  Focus on post-paid  New commissioning Jan-08 Jan-09 Feb-08 Feb-09 Mar-08 Mar-09 Apr-08 Apr-09 2) Portability: Port-in/Port-out Post-paid: Improvements on main territories:  Sales incentives 80% TSU: +22 p.p. Consumer TSP: +34 p.p. 60% Average 55% Business 40% 40% 23% 20% Company repositioning: 0% sales KPIs growth starting from 2Q09 4Q08 4 Q08 1Q09 1 Q09 Abr/09* 39904 2008 Mar/09 Apr/09* 24 * Portability results until Apr 26th
  • 26. TIM PARTICIPAÇÕES S.A. | Investor Relations Invert current trend – New offers portfolio (2Q09) Launched offers Next launches Single invoice for business New offer customers Business New post-paid offer Post High Mother‟s Day (free LD) Post Pre Portability % of Gross Adds 0 ,6 CB Infinity: 750 K 0 ,5 (lines) (pre-paid): 0 ,4 0% 33% 0% 0 ,3 0% 0% 0 ,2 0 ,1 0% 0% Company repositioning: 0 0% 0% revenues growth from 2H09 8/Apr 19/Apr 04/May 8/Apr 18/Apr 03/May 25
  • 27. TIM PARTICIPAÇÕES S.A. | Investor Relations Efficiency Plan Quick wins Improvement Re-thinking Efficiency identified  Bad debt  Commercial: channel costs  Network: Intelig integration until now: rationalization ~R$0.8 Bln  IT: contracts  Customer care: revision of renegotiation  Network: contracts caring model Opex +  G&A: costs optimization renegotiation  New sourcing models (revenue Capex  IT: demand rationalization sharing, risk sharing, etc)  Finance company growth  Defend profitability and cash generation (EBITDA margin and Operating Cash Flow) against exchange rate and business risks ~50% of efficiency SAC Customer Care reinvested on +XX% +YY% business 600 600 500 500 400 400 30 20 0 0 30 20 0 0 growth 100 100 0 0 2008 2009 2008 2009 FY FY FY FY 26
  • 28. TIM PARTICIPAÇÕES S.A. | Investor Relations Intelig: synergies for TIM  Transport network use (backbone and metropolitan)  100% leased lines  14.500 km of own Network and optical fiber for TIM Brasil traffic  Optical fiber MAN*  800 Km in MAN* transport under development rings Accelerate Business clients („000) integration to  Cross/upsell of TIM mobile capture Data solutions for Intelig customer 300 solutions for base and Intelig data 200 synergies: Business solutions for TIM customers 100 ~2% of EBITDA LD Net Revenues (R$ Bln) margin  Extension of the LD business to non-TIM customers (18 months) Long 1.0 Distance + *Metropolitan area network 27
  • 29. 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 28

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