2Q09
TIM Participações S.A
Webcasting - 2Q09 Results
August 4th, 2009
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TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Re-launch Plan: Key Actions and Results L. Luci...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Re-launch Plan: Key Actions
Actions in Course
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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Brand: Share of Voice Increase; ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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Efficiency: Self-financing Brand Repositioning Plan ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Re-launch Plan: Key Actions and Results L. Luci...
TIM PARTICIPAÇÕES S.A. | Investor Relations
2Q09’s Main Results
Subscribers base: quarterly growth of +4.8%, following...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Customer Base
Stop Market Share Erosion… ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
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TIM PARTICIPAÇÕES S.A. | Investor Relations
Commercial Efforts …While Efficiency Pla...
TIM PARTICIPAÇÕES S.A. | Investor Relations
EBITDA Structurally Improve – Financing the Growth and the Repositioning...
TIM PARTICIPAÇÕES S.A. | Investor Relations
EBIT and Net Result – 2Q09
R$ Mln
EBITDA Depreciation...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Net Financial Position and Operating Free Cash Flow – 2Q09
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TIM PARTICIPAÇÕES S.A. | Investor Relations
Agenda
Re-launch Plan: Key Actions and Results L. Luci...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Build a Solid Growth Platform
Actions in Course
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TIM PARTICIPAÇÕES S.A. | Investor Relations
Reshaping TIM Brasil: Build a Solid Growth Platform
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TIM PARTICIPAÇÕES S.A. | Investor Relations
The Path for 2009
1Q09 ...
TIM PARTICIPAÇÕES S.A. | Investor Relations
Improving Structural Efficiency of the Company
2009, BRGAAP
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TIM PARTICIPAÇÕES S.A. | Investor Relations
Main Takeaways
2Q Achievements ...
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Press Release 2 T09 En

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


Transcripts - Press Release 2 T09 En

  • 1. 2Q09 TIM Participações S.A Webcasting - 2Q09 Results August 4th, 2009 0
  • 2. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Re-launch Plan: Key Actions and Results L. Luciani 2nd Quarter Results C. Zezza Build a Solid Platform for the Future L. Luciani 1
  • 3. TIM PARTICIPAÇÕES S.A. | Investor Relations Re-launch Plan: Key Actions Actions in Course Repositioning 1 Share of voice increase Brand New format to increase recall and brand linkage Coherence and brand recognition 7 2 Focus on 2G Service Quality : Network 2G: excellence on voice quality 3G: “right on spot” React to 2008’s 3 Selectivity and Multi-channeling inertia on revenues: Caring Services improvement: better flow over demand Caring model evolution: service level vs. client value - minimizing impact 4 Distinctiveness and Innovation on 2009… Offering Infinity pre and post Shock offering: “Recarga Imperdível” - …and preserving “Azul” (DDD = local) “TIM Único” profitability 5 “Back to Sales” Grow again on post-paid and on pre-paid Sales Force Sales Force development (rationalization / productivity) Value-based Commissioning 6 Structural Rethinking Efficiency Revision of go-to-market models and processes Renegotiation with suppliers Growth financing and sustain profitability Build a Solid Growth Platform for 2010 2
  • 4. TIM PARTICIPAÇÕES S.A. | Investor Relations 1 Brand: Share of Voice Increase; Brand Growth of Recall, Appreciation and Brand Linkage Greater Efforts in Communication... ... with Good Campaign Results % share of investment Δ p.p. TIM TIM Terra Manifesto Player 1 Target Azul (May) Da Marca Player 2 (Mar) Player 3 40% 87 32% 78 35% 31% 76 30% 30% 75 30% 28% 28% 70 26% 29% 25% 24% 19% 46 20% 18% 21% 15% 17% 16% 32 15% 16% 10% 18 5% 20 2006 2007 2008 1H‘09 Ranking 3º 3º 4º 1º TIM Recall Appreciation Brand Linkage Δpp vs. leader -6 -13 -14 0 3 Source: Ibope Monitor/GRP, Data Folha, Synovate’s Image Research
  • 5. TIM PARTICIPAÇÕES S.A. | Investor Relations Network 2 Network: Improvement of Service and Network Quality 2008 FY – Overall Service Quality Jan-Jun 2009 – Overall Service Quality % target achieved in overall service quality, TIM vs. competitors % target achieved in overall service quality, TIM vs. competitors 98.7% in June 4Q ‘08: 90.2% #6 #2 99.5% 98.0% 97.7% 99.9% 97.3% 97.0% 95.1% 93.4% 96.0% 93.4% 91.6% 90.7% 83.9% 76.9% Player 1 Player 2 Player 4 Player 5 Player 6 TIM Player 3 Player 1 TIM Player 5 Player 6 Player 4 Player 2 Player 3 Network Service Quality % target achieved in network quality , TIM vs. competitors % target achieved in TIM network quality Jan/09 Jun/09 Delta (p.p.) 99.5% 99.5% 98.9% 100.0% TIM 84.1% 100.0% +15.9 100,00% 96.7% 98,00% Main mobile 96,00% Player 1 100.0% 100.0% 0.0 84.6% 84.1% 84.1% 94,00% 92,00% operators 90,00% 88,00% 86,00% Player 2 95.7% 98.6% +2.9 84,00% 82,00% 80,00% Player 3 53.8% 50.0% -3.8 nov/08 dec/08 jan/09 feb/09 mar/09 apr/09 may/09 jun/09 4 Source: Anatel
  • 6. TIM PARTICIPAÇÕES S.A. | Investor Relations Caring 3 Caring: Improvement in Customer Satisfaction Post-paid Heavy User May 2009 May/08 Oct/08 May/09 +0.9 8,5 - 8.1 - +0.4 8.0 7.9 7.8 7.8 7.8 7.8 7.6 7.6 Customer Satisfaction Evolution 7,5 7.2 7.1 7.5 Evidences: TIM Player 2 Number / frequency of problems Player 1 Player 3 reduction 6,5 8.6 8, 6 Player 1 Player 2 Player 3 Strong recovery in historically 8, 4 8.4 critical areas: SP countryside, RJ Post-paid and Mid-West 8, 2 8.1 May/08 Oct/08 May/09 8.1 +0.8 8,5 8.1 +0.1 8.2 - +0.3 Supporting Actions to the result: 8.0 8 8.0 7.9 7.7 7.8 7.9 7.9 7.8 7.7 Offering: 8.0 7.8 7,5 7.5 7.3 - Competitiveness in handset 7.8 - Media presence 7, 8 - Infinity pre-paid plan 7, 6 6,5 m /6 ai0 u /6 j l 0 s t6 e/0 nov / 0 a n /7 j 0 m r7 a/0 m /7 ai0 u /7 j l 0 s t7 e/0 nov / 0 a n /8 j 0 m r8 a/0 m /8 ai0 u /8 j l 0 s t8 e/0 nov / 0 a n /9 j 0 m r9 a/0 m /9 ai0 May Oct May Oct May Oct May Player 1 Player 2 Player 3 06 06 07 07 08 08 09 CRM: - Pro-active replacement of Pre-paid handset based on value +0.4 May/08 Oct/08 May/09 - Expansion of Premium cell - - +0.3 8.5 8.3 Coverage: focus on areas with high TIM: recovery of client satisfaction 8,5 8.1 8.1 8.1 8.1 8.1 8.2 8.2 8.2 8.1 7.8 concentration of high-value clients after a negative 2008 7,5 6,5 Player 1 Player 2 Player 3 5 Source: Customer Satisfaction Monitoring (Bridge Research)
  • 7. TIM PARTICIPAÇÕES S.A. | Investor Relations Ranking Offering 4 Offering: Inversion of Market Share Erosion Trend in net share TIM Net Adds and Net Share TIM Market Share 000’s lines, % % of market share 25.4 25.2 25.1 25.0 Clean-up: 24.7 ~1Mln lines 24.5 Net share% 24.2 24.0 2008 2009 #1 #2 #1 23.7 2400% 2400% 23.5 23.6 23.6 23.4 37.7% 24.1% 32.2% 29.1% 0 0 2350% 2350% 0 2300% 0 2300% 0 0 Apr May Jun Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 09 09 09 2008 2009 17.4% % Net 2.000 1,729 TIM Customer Base Share 1.500 1,282 Mln lines 37.8 38 37.1 Net 36.4 36.5 1.000 36.4 35.8 36.1 35.7 36.1 37 Adds 500 36 34.7 35.2 35 33.8 34.2 0 34 2Q 2Q 33 32 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun QoQ Speed up: 2008 2009 •Net addtion: 1.7mi 2Q vs. 0.7*mi in 1Q09 Pre 27.0 27.3 27.8 28.4 29.0 29.3 29.8 30.1 29.5 29.9 30.3 30.9 31.6 •ARPU: R$26.6 2Q vs. R$26.0 in 1Q09 Post 6.8 6.9 6.9 6.8 6.8 6.8 6.6 6.4 6.2 6.2 6.2 6.2 6.2 *excluding clean-up base 6
  • 8. TIM PARTICIPAÇÕES S.A. | Investor Relations Offering 4 Offering: Infinity Offer Results 2009 Infinity pre-paid base (000’s lines) ~2.500 Pre ~1.600 ~650 5 Mar Apr May Jun Infinity % Infinity in gross post voice consumer 34% Other Post plans 100% 66% Infinity ~0% May Jun 7
  • 9. TIM PARTICIPAÇÕES S.A. | Investor Relations Sales 5 Sales Force: Stop-loss of Value Customers Base (Post-paid) Force Post-paid 2009 Post-paid Sales Excluding ~0,3Mln Re-launch lines clean-up Total Base Gross Adds 000’s lines, 2009 Churn Gross adds “Back to 1Q* Q1 AprApr May Mag Jun Giu Sales” Net Adds -- - + + Churn Pre-paid Excluding ~1Mln 2009 lines clean-up Gross Adds Pre-paid 1Q* 1Q Apr Apr May Mag Jun Giu Churn Growth Speed Net Adds up - + ++ ++ Reported Excluding ~0,7Mln lines clean-up 1Q* Apr May Jun Q1 Apr Mag Giu previa fechamento Net Adds + + ++ ++ 8 * monthly average in 1Q
  • 10. TIM PARTICIPAÇÕES S.A. | Investor Relations Sales 5 Sales Force: Speed up in Acquisition Dynamics with Focus Force on Value (Post-paid voice) Gross Adds Post-paid (voice) ’08 vs. ’09 “The Turnaround” -46% +29% -34% +42% +2% +13% Jan Feb Mar Apr May Jun Consumer (voice) Business (voice) Value, not volume -62% +27% -24% -47% +41% -13% +43% +32% -20% +12% +26% +14% 4 2 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun 9
  • 11. TIM PARTICIPAÇÕES S.A. | Investor Relations Sales 5 Sales Force: Positive Balance on Post-Paid MNP Force Gap MNP Post-paid Regional Evolution % MNP Port In/ Port Out Jun ‘09 1Q09 Positive Balance on 1 Focus: São Paulo 4Q08 Consumer and Business 2 Positive balance : Northeast, segments Mid-West, RJ and South 3 Speed up in East + 145% Consumer Post- 14 5 % 262% paid 12 5 % 113% 120% Business 210% 10 % 5 107% “Zero balance” 85% 78% 69% 127% 120% 56% 115% 55% 104% 65% 44% 95% 62% 45% 40% 24% 26% 46% 35% 23% 25% 22% 25% 5% 14% 0,0 0 % Jan Feb Mar Apr May Jun TSP TSL TLE TRJ TNE TCO TNO TBR 10 Note: Mobile NP
  • 12. TIM PARTICIPAÇÕES S.A. | Investor Relations 6 Efficiency: Self-financing Brand Repositioning Plan Efficiency and Commercial Re-launch Total Cost Breakdown Costs Δ% 09 vs. 08, BRGAAP - 1% 1Q Advertising & Promotions + 41% Com- 2Q + 15% + 26% mercial Commercial* Bad Debt Evolution % Net Services Revenue, BR GAAP YTD + 8% Bad Debt -48% Improvement in -5% 1Q -5,00% 0,00% 5,00% 10,00% 15,00% 20,00% 9.6% acquisition quality 6.8% -6% 1Q 4.7% 4.1% 4.8% 3.6% Leased Lines +14% Indus- ~0 2Q trial -14% 2Q 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Intercon- nection -20% -10% YTD -2% YTD -9% 1Q Personnel -18% HR, IT and G&A -10% 2Q G&A -6% -10% YTD Note: Excludes non organic effects: Embratel dispute agreement: - R$64 Mln (Mar/09); São Paulo inventories stolen : -R$21Mln (2Q09) -100,00% -50,00% 0,00% 11 *Includes COGS, Selling, CRM and Marketing Expenses
  • 13. TIM PARTICIPAÇÕES S.A. | Investor Relations Econo Financials: Flat Revenues with Structural Increase of Profitability mics 7 Net Total Revenues Net Services Revenues Δ% 09 vs. 08, BR GAAP Δ% 09 vs. 08, BR GAAP 1Q + 0.6% -0.5% 1Q Issue: neutralize 2Q + 3.7% -1.2% 2Q 2008 negative waves (post and pre-paid) -0.8% 1H 1H + 2.2% -5,00% 0,00% EBITDA Growth EBITDA and EBITDA Margin Δ% 09 vs. 08, BR GAAP Δ basis points 09 vs. 08, BR GAAP 20.0% 22.3% 1Q + 14% 1Q 243 2008 2009 2Q + 16% 2Q 228 + 230 Basis points YoY 1H + 15% 1H 237 12
  • 14. TIM PARTICIPAÇÕES S.A. | Investor Relations Econo 7 1st Wave 2008: Loss of Post-paid Voice Base mics 8Mln 6.8 TIM 6.2 Impact on Total Post-paid Revenues Post-paid 6Mln (FY 2009) Base 4Mln Loss of active voice ∆ Jan 09 Jun-08 Jun-09 post-paid lines: - 800K (lines) vs. Jan 08 Total market 25.3 29.0 x ARPU/ 25% post-paid R$100 active voice TIM 20% -4pp lines: Post-paid 20% -R$0.5 bn in 1H Mix ~ R$ 1 Bln 16% (%) 15% Jun-08 Jun-09 TIM 30% -6pp Post-paid 27% Market 25% 21% 2008 Delta 2009 Post-paid base Inertial Share Revenues Post-paid 15% Revenues Jun-08 Jun-09 13
  • 15. TIM PARTICIPAÇÕES S.A. | Investor Relations Econo 7 2nd Wave 2008: Reduction in Pre-paid Base with Promos mics ARPU Promo base vs. Non-Promo base Impact on Total Pre-paid Revenues (FY 2009) Bln R$ ARPU Mainly in 2Q - + Promo Non-Promo Non-Promo Promo Active Base Active Base Mln lines Mln lines - + 2008 Promo Non-Promo 2009 Pre-paid Δ Base Δ Base Inertial Revenue Pre-paid Revenue 2008’s Mar 2008’s Mar Average 2009 Average 2009 14
  • 16. TIM PARTICIPAÇÕES S.A. | Investor Relations Econo mics 7 Conclusions: First Signs of Gradual Improvement on Metrics Back to growth… …while improving profitability Net Adds ARPU EBITDA Mln R$ R$ Mln +1.7 26.6 736 +0.7* 26.0 609 +150% +2% +21% 1Q09 2Q09 1Q09 2Q09 1Q09 2Q09 Revenues Service Revenue EBITDA Margin R$ Bln R$ Bln % 3.3 2.9 22.3 3.0 2.8 20.2 +10% +4% +210bps 1Q09 2Q09 1Q09 2Q09 1Q09 2Q09 * Net of clean-up 15
  • 17. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Re-launch Plan: Key Actions and Results L. Luciani 2nd Quarter Results C. Zezza Build a Solid Platform for the Future L. Luciani 16
  • 18. TIM PARTICIPAÇÕES S.A. | Investor Relations 2Q09’s Main Results Subscribers base: quarterly growth of +4.8%, following a better gross addition (share of net adds of 29%) Net Revenue growth: R$ 3,304 Mln, +3.7% YoY; Net Service Revenue -1.2% YoY, following the post-paid base reduction and the mix deterioration in the last 12 months • On a quarterly basis, Total Net Revenue up +9.7%, and Net Service Revenue +4.0% • Gross VAS revenues: +12.5% QoQ e +21.7% YoY • Stop ARPU and MOU erosion on a quarterly basis Structural efficient growth: to finance the repositioning • Bad Debt strong improvement: -47.9% YoY, accounting for 3.6% of Net Services Revenue • Interconnection & Network: -14.1% YoY • Personnel and G&A: -9.0% YoY and Commercial: +24.6% YoY Profitability improvement: EBITDA of R$ 736 Mln, +15.5% YoY, Margin of 22.3% +230 bps YoY (and +210bps QoQ) EBIT improvement: R$ 88.6 Mln, +117% YoY and Net Loss reduction: -R$ 15 Mln vs. -R$144 Mln in 1Q09 and - R$66 Mln in 2Q08 Positive Operating Free Cash Flow: R$ 407 Mln, +10% YoY… … with an improvement in the Net Financial Position: R$ 2,900 Mln, -R$117 Mln vs. 1Q09 17
  • 19. TIM PARTICIPAÇÕES S.A. | Investor Relations Customer Base Stop Market Share Erosion… … through Revamp in Net Additions Million lines 25.4% Market 29.1% 23.5% 23.7% Share (%) Net 36.1 37.8 Share (%) 17.4% 17.2*% 33.8 ΔY/Y ΔQ/Q 1,729 ∆ Net Adds YoY: +35% 1,282 QoQ: +149%* 29.9 31.6 +17.1% +5.6% 27.0 Net Adds ~700* (000’s) 6.8 6.2 6.2 6.2 -8.9% +0,7% 2Q08 1Q09 2Q09 Post-paid Pre-paid (306) CB YoY 23.1% 11.0% 11.9% 2Q08 1Q09 2Q09 Growth (%) * Excluding the impact of ~1MM clean-up 18
  • 20. TIM PARTICIPAÇÕES S.A. | Investor Relations Service Revenue KPI’s Revenues & KPI’s ARPU R$ Net Revenues R$ Mln ΔY/Y ΔQ/Q 29.8 26.0 26.6 3,186 3,304 +3.7% +9.7% 3,012 2Q08 1Q09 2Q09 YoY % -13.8% -11.7% -11.0% 2,971 2,936 -1.2% +4.0% 2,823 QoQ % +1.2% -13.1% +2.1% ∆ YoY ∆ QoQ 215 189 368 +70.8% +95.0% ARPM 0.37 0.36 0 0 , 4 22.2% -2.2% 2Q08 1Q09 2Q09 R$ 0 5 , 3 0.30 Net Service Revenue 0 0 , 3 Net Handset Revenue 0 5 , 2 ∆ YoY ∆ QoQ ΔY/Y ΔQ/Q 0 0 , 2 -27.1% +4.4% Gross VAS Rev. 397 430 483 +21.7% +12.5% 0 5 , 1 MOU 100 % VAS/ Service 9.8% 11.2% 12.3% +2.5pp +1.1pp Min. 70 73 Rev. Increased penetration of micro-browsing over total customers base 2Q08 1Q09 2Q09 19
  • 21. TIM PARTICIPAÇÕES S.A. | Investor Relations Commercial Efforts …While Efficiency Plan Gets Maintained… .. delivering EBITDA Growth Traction... COGS Bad Debt R$ Mln R$ Mln -47.9% Gross Adds YoY: +20% -21.2% EBITDA QoQ: +27% 60* R$ Mln +43.7% +15.5% 143 134 106 +20.8% +43.9% % of 467 Net Serv. 2Q08 1Q09 2Q09 Revenues 6.8%* 4.8% 3.6% 325 324 Personnel and G&A Costs 637 609 736 R$ Mln 99 -9.0% -3.7% 2Q08 1Q09 2Q09 Selling Expenses 2Q08 1Q09 2Q09 277 261 252 R$ Mln 2Q08 1Q09 2Q09 Margin % 20.0% 20.2% 22.3% +24.6% +16.9% Interconnection & Network Costs 829 R$ Mln 666 709 -14.1% -6.5% ∆ YoY Advertising 84 115 119 =1.4 x 1,073 985 921 2Q08 1Q09 2Q09 2Q08 1Q09 2Q09 20 * Telesales Impact
  • 22. TIM PARTICIPAÇÕES S.A. | Investor Relations EBITDA Structurally Improve – Financing the Growth and the Repositioning R$ Mln 152.6 (141.9) 36.9 97.4 (34.4) (163.4) 151.7 736.0 637.2 ~300 ~290 (~10% Serv. Rev.) (~10% Serv. Rev.) Investments Savings on Growth +R$99 Mln +15.5% EBITDA Service Handsets Advertising Network Other EBITDA COGS Bad Debt 2Q08 Revenues Revenues & Sales Expenses Expenses* 2Q09 Δ YoY -1.2% +70.8% +43.7% +24.6% -14.1% -47.9% -13.1% Margin % 20.0% 22.3% 21 * Other Expenses include: G&A, Personnel and Net Other Operating Expenses/Revenues
  • 23. TIM PARTICIPAÇÕES S.A. | Investor Relations EBIT and Net Result – 2Q09 R$ Mln EBITDA Depreciation & Net Financial Taxes and Net EBIT Result 2Q09 Amortization Expenses Others 736.0 (647.5) 88.6 (65.9) (38.0) (15.2) 2Q08 637.2 (596.3) 40.8 (91.4) (15.7) (66.3) YOY % +15.5% +8.6% +116.9% -27.9% +141.1% -77.0% 2Q09 vs. 2Q08 1.2x 2.2x 0.2x 22
  • 24. TIM PARTICIPAÇÕES S.A. | Investor Relations Net Financial Position and Operating Free Cash Flow – 2Q09 Operating Free Cash Flow Net Debt R$ Million R$ Million % total revenues Operating Non 1Q09 FCF Op. FCF 2Q09 93 (422) 736 12.3% 11.6% +10% -117 407 ~R$ 168 Mln of dividends 371 * EBITDA ΔWork. CAPEX Operating 2Q08 Cap. FCF (3,017) 407 (289) (2,900) * Excluding 3G license R$ 3.67 billion (of which 68% long term) Gross Debt ~33% of total debt is denominated in foreign currency (fully hedged) Average annual cost 10.95% in 2Q09 vs.11.64% in 2Q08 (and 12.47% in 1Q09) 23
  • 25. TIM PARTICIPAÇÕES S.A. | Investor Relations Agenda Re-launch Plan: Key Actions and Results L. Luciani 2nd Quarter Results C. Zezza Build a Solid Platform for the Future L. Luciani 24
  • 26. TIM PARTICIPAÇÕES S.A. | Investor Relations Build a Solid Growth Platform Actions in Course Repositioning 1 Share of voice increase Brand New format to increase recall and brand linkage Coherence and brand recognition 7 2 Focus on 2G Service Quality : Network 2G: excellence on voice quality 3G: “right on spot” React to 2008’s 3 Selectivity and Multi-channeling inertia on revenues: Caring Services improvement: better flow over demand Caring model evolution: service level vs. client value - minimizing impact 4 Distinctiveness and Innovation on 2009… Offering Infinity pre and post Shock offering: “Recarga Imperdível” - …and preserving “Azul” (DDD = local) “TIM Único” profitability 5 “Back to Sales” Grow again on post-paid and on pre-paid Sales Force Sales Force development (rationalization / productivity) Value-based Commissioning 6 Structural Rethinking Efficiency Revision of go-to-market models and processes Renegotiation with suppliers Growth financing and sustain profitability Build a Solid Growth Platform for 2010 25
  • 27. TIM PARTICIPAÇÕES S.A. | Investor Relations Reshaping TIM Brasil: Build a Solid Growth Platform 2008 2009 Recovery in Posiziona- Brand Loss of Preference (-7 pp) and Top of Mind (-1 pp) - Preference mento mark Positioning Ranking #6 in Quality (Anatel) - Top of Mind Customer Satisfaction Index decrease (ranking #3) - Quality of Services (ranking Anatel) - Customer Satisfaction - 6 pp only at post 25.9% 25.4% 25.0% 24.2% 30,00% 23.5% 23.7% 30,00% MS Total 20,00% 20,00% Market 10,00% Reversal post-paid base erosion trend (value base) 10,00% Share Net adds pre 0,00% 0,00% Net adds -10,00% post voice -20,00% -20,00% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 E 4Q09 E R$ Bln R$ Bln 26% EBITDA Margin 24% 20% 22% 18% 20% Keep growing in Economics revenue and Net Total +10% profitability +6% Revenues +6% +5% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 E 4Q09 E Source: TIM internal data 26
  • 28. TIM PARTICIPAÇÕES S.A. | Investor Relations The Path for 2009 1Q09 2Q09 3Q09 4Q09 New portfolio Offers: Usage stimulus, MOU growth. Strategy: Pure Mobile Commercial Push on New Ex: - April (Infinity Pre, Da Vinci) Offer Organization: new - “Recarga Imperdível” - June (Infinity Post, “Único”) - LD Infinity management Team Closing Intelig and Advertising: new format Sales channels Push : Market share Increase : - Back-to Post-paid - Post-paid Voice (BU/CO) capturing early synergies and greater presence in - MNP Focus - Infinity Pre-paid Push media Recovery of Top of Mind Recovery of Customer New Offers (July) Network Quality Satisfaction - 4 in 1 and Preference - New “Imperdível” Network Back to Sale Back to Talk Back to Growth and Brand recover Net Services ++ Revenue + Δ YoY - - Target: restructure the company, recovering strong positioning, sustaining profitability and cash flow 27
  • 29. TIM PARTICIPAÇÕES S.A. | Investor Relations Improving Structural Efficiency of the Company 2009, BRGAAP Δ YoY Strict Rigor in Bad Debt + + % Net Service Revenue 2008 10% Commer- cial 7% 08 vs 07 09* vs 08 5% 4% 2009 4.8% Δ YoY + 3.6% HR, IT and 1Q 2Q 3Q* 4Q* G&A - Industrial Costs Variation 08 vs 07 09* vs 08 Δ YoY ITX Leased Lines Δ YoY + 08 vs 07 + ++ Industrial (Network) - - 08 vs 07 09* vs 08 09* vs 08 + Intelig We do not sacrifice growth to increase profitability We do not “buy" growth by destroying value 28 * 2009 Estimate
  • 30. TIM PARTICIPAÇÕES S.A. | Investor Relations Main Takeaways 2Q Achievements 3Q Priorities Repositioning on track: • Brand • Positioning • Quality • Satisfaction •Stimulate Usage (MOU) Growth of net additions with ARPU increase •Post-paid Profitability preserve through efficiency QoQ improvement in all metrics •Profitability and cash generation Build a Solid Growth Platform for 2010 29

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