Meeting with investors of september 2013
37
Meeting With Investors TIM Participações S.A. September 2013
description
Transcript of Meeting with investors of september 2013
Meeting With Investors TIM Participações S.A.
September 2013
15th Listing Anniversary
TIM: A Huge Brazilian Company
Presence in Brazil since 1998.
13th largest Private Company in Brazil (source: Exame
Magazine - 2013).
Approximately R$22 billion of Market Capitalization.
Brazilian Law
“Lei das S.A”
“Nível” 1 “Nível” 2
Legal
Requirements
Demand for
transparency and
disclosures
Highest level of
Corporate
Governance
Requirement of
protection for
minority
shareholders
2
Corporate Governance
Knowing TIM Better
Unique Telco company listed on the Novo Mercado:
. 100% Tag Along and equal dividend rights
. One single class of shares
. Independent Board members
. Strict disclosure policy
• 72.7 million customers (27.2% Share)
• The 2nd Player - Market and Rev. Share.
• More than 400,000 points of sales.
• More than 130 own stores.
• 11 Customer Care Centers (14k attendants)
Sales
• More than 12,000 Antennas.
• 3,393 cities covered.
• 95% of urban pop. covered.
• 42,470 km of optical fiber network.
Network
• 11,500 employees.
• 23,000 indirect jobs.
• R$9.1 billion in taxes payments in 2012.
• R$3.8 billion invested in 2012.
Social
&
Economic
27.8
1998
Gross Revenues
(R$ Bln)
Customer base
EoP (Million)
2012 1998
70.3
2012
15,000 km fiber
optical backbone 5,500 km fiber
optical backhauling
Organic
Growth
Growth
Via
Acquisition
Source: BaCen and Bloomberg. 3
Brazilian Real GDP
(%YoY growth)
Brazilian Unemployment Rate
(Unemployment Rate %)
7,9 8,1
6,7
6,0 5,5 5,6
5,9
5,0
3
4
5
6
7
8
9
10
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
Brazilian Interest Rate
(Average %SELIC p.a. Target)
12,5
10,1 9,9
11,8
8,6 8,3
9,8 9,8
5
6
7
8
9
10
11
12
13
14
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
Brazilian Inflation Rate
(% IPCA p.a.)
5,9
4,3
5,9 6,5
5,8 5,8 5,9 5,5
0
1
2
3
4
5
6
7
8
9
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
5,2
-0,3
7,5
2,7
0,9
2,4 2,2 2,5
-1
0
1
2
3
4
5
6
7
8
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
Macro-Economic Fundamentals
Inflation Target @ 4,5 %
Industry Overview & TIM Business Opportunity
TIM
(2S13)
Vivo
(2S13)
América Móvil Brazil
(2S13)
Oi
(2S13)
Fixed Mobile
Fixed Mobile Fixed BB/TV Fixed / Mobile
Brazil Telcos X-Ray
5
Fixed BB/TV Fixed / Mobile
Mobile Fixed Fixed
BB
TV TOTAL
Customers (‘000) 49,708 18,330 5,911 890 ND
Market Share 18.7% 41.1% 29.2% 5.2% ND
Net Rev. (R$ Mln) 4,571 9,543 14,114
Mobile Fixed Fixed
BB
TV TOTAL
Customers (‘000) 66,472 10,516 5,945 8,985 ND
Market Share 25.0% 22.7% 29.4% 53.0% ND
Net Rev. (R$ Mln) 6,121 9,914 16,035
Mobile Fixed Fixed
BB
TV TOTAL
Customers (‘000) 76,200 10,416 3,837 537 ND
Market Share 28.7% 23.3% 18.9% 3.2% ND
Net Rev. (R$ Mln) 11,177 5,870 17,047
Mobile Fixed Fixed
BB
TV TOTAL
Customers (‘000) 72,195 492 26 - ND
Market Share 27.2% 1.1% 0.1% - ND
Net Rev. (R$ Mln)* - - - - 9,699
Fixed BB
*Organic Revenue
121,0
150,6 174,0
202,9
242,2 261,8
39,4 41,2 41,5 42,0 43,0 44,0
2007 2008 2009 2010 2011 2012
Mobile
Penetration
Mobile
Fixed
64% 79% 90% 105% 124% 133%
Customers Growth - Telecom
(Mln customers)
Market Transformation
Total Revenues- R$ Bln
+116%
+12%
Customers Growth – Broadband
(Mln customers)
Mobile
Fixed
6
1,4 4,1
14,6
33,2
52,5
10,0 11,4
13,8
16,3 19,1
2008 2009 2010 2011 2012
+38x
+90%
*including Corporate/Wholesale
Mobile Segment to Support Universalization
Mobile Segment as the Growth Driver and
Sector Universalization
(55%) (48%) (44%) (42%)
(45%) (52%)
(56%) (58%)
2009 2012 2014 2015
104
CAGR ’12-’15
Mobile: +7%
Fixed: -1%
129
116
124
Fixed*
Mobile Data: +28%
Data: +7%
Long Distance Leader
50% Market Share
2nd Overall
72 million customers
Prepaid Leader
28.8% Market Share
Leveraging on Pure Mobile Competitive Advantage
Voice FMS: Mobile is more convenient than Fixed…
(R$/minute, voice)
7
2006 2007 2008 2009 2010 2011 2012
50% mobile
discount
Voice FMS: …TIM, with no legacies, can only gain on the trend
(R$ billion, Net Revenue per Group (2012))
Source: Company estimates; CETIC jun’13; Akamai
Mobile 21.4
12.2 9.1 17.9
Fixed + Data + Pay TV
12.5
18.5 19.0
0.9
4.3
Total 33.9 30.7 28.1 18.8 4.3
Vivo Claro Oi TIM GVT
FMS
Focus
A pure mobile approach is the most suitable strategy to capture both opportunities
29.5%
Rev. Share
Customer Base Evolution
(Market Share, Source: Anatel)
30,2% 28,7%
24,0%
27,2% 25,3%
25,0%
20,1% 18,7%
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Oi
Claro
Vivo
+3.2 p.p.
-1.6 p.p.
-0.3 p.p.
-1.4 p.p.
2Q13 x 2Q10
TIM
Fixed Broadband Average Speed
(% Customers)
Brazilian Internet Opportunities
75% 72% 60% 67% 66%
24% 26% 38% 31% 31%
1% 1% 1% 2% 3%
2Q12 3Q12 4Q12 1Q13 2Q13
> 12Mbps
>2 Mbps até 12Mbps
≤ 2 Mbps
88% 84% 80% 78% 76%
8% 10% 14% 16% 17%
5% 6% 6% 6% 7%
2Q12 3Q12 4Q12 1Q13 2Q13
> 12Mbps
>2 Mbps até 12Mbps
≤ 2 Mbps
49% 44% 41% 38% 35%
49% 53% 56% 59% 62%
3% 3% 3% 3% 3%
2Q12 3Q12 4Q12 1Q13 2Q13
> 12Mbps
>2 Mbps até 12Mbps
≤ 2 Mbps 1% 1% 1% 1% 1%
59% 57% 55% 52% 49%
40% 42% 44% 47% 50%
2Q12 3Q12 4Q12 1Q13 2Q13
> 12Mbps
>2 Mbps até 12Mbps
≤ 2 Mbps
8
TIM`s services portfolio is ready to capture
opportunities in all broadband segments,
going mobile or going through its fixed ultra
broadband.
TIM’s Strategic Priorities
9
Network Quality
& Infrastructure 1
Strategy &
Offer Evolution 2
Institutional
Relationships 3
People &
Organization 4
Solid Capex investment program.
Significant coverage and capacity improvement through
extensive own fiber infrastructure.
Network Quality War Room approach.
Efficient 4G Investment with RAN sharing.
Continuous evolution of our offer platforms
(transparency, simplicity, convenience, micro-
segmentation).
Promoting data usage with handset strategy, new VAS
offers (e.g. TIMmusic) and 4G launch.
Expanding postpaid and business user base.
Developing option value of Live TIM ultra-broadband
services.
External Positioning: Innovation, Quality, Transparency.
“Portas Abertas” customer portal for increased
transparency and network quality evolution.
Focus on regulatory and institutional dialogue.
People Focus – highly skilled, highly motivated, right
organization.
Best Place to Work initiatives.
Renewing Sense of Pride and Belonging – One of
Brazil’s Top 15 Companies.
Recent Results: 2Q13 in Few
0.9% 1.1%
0.7% 1.0% 0.9%
Quarter in Few: Improvements Across the Board
7.0% 5.4% 9.7%
2Q13 2Q12
Organic1 Net Revenue Growth(YoY)
Organic1 Net Services Revenue Growth(YoY)
Organic1 EBITDA Growth(YoY)
-15.3% -11.0% -9.5%
-3.6%
+0.4%
1Q13 2Q12
10.0 10.3 10.7 10.9
11.4
2Q13 2Q12
3Q12 4Q12 2Q13
-0.7%
Reported ARPU Performance (YoY)
Postpaid Base (mln customers)
%Bad Debt/Gross Revs.
+20% (YoY)
Ex-M2M
Financial Operational
+14%
1Q13 3Q12 4Q12
1Q13
6.4% 5.5%
1.4% 1.8% 3.1%
2Q13 2Q12 1Q13 3Q12 4Q12
+8.7% (YoY)
Reported
5.6% 4.1% 4.4%
2Q13 2Q12 1Q13
2Q13 2Q12 1Q13 3Q12 4Q12
+2.0% (YoY)
Reported
+1.8% (YoY)
Reported
11
Efficient Approach
1: Organic revenues growth adjusted by R$44mln, EBITDA growth adjusted by R$31mln and Net
Income growth adjusted by R$20 mln due to one-off impact related to interconnection disputes.
Organic1 Net Income Growth(YoY)
-1.6%
13.9% 17.9%
2Q13 2Q12 1Q13
+12% (YoY)
Reported
18.7% 19.6% 20.5% 21.4% 22.1%
%VAS / Mobile Service Gross Revenues
2Q13 2Q12 1Q13 3Q12 4Q12
Customer Base Evolution - Market Share
(Source: Anatel)
Growth Backed by Business Resilience
19.6% 19.6%
24.0% 25.0%
28.0% 26.3%
28.1% 28.8%
2Q12
+67 bps
-168 bps
+96 bps
-1 bps
2Q13
15.3% 16.5%
23.9% 20.3%
38.2% 39.1%
22.0% 23.4%
2Q12
+140 bps
+90 bps
-353 bps
+124 bps
2Q13
29.6% 29.7% 29.1% 28.8% 28.7%
26.9% 26.8% 26.9% 27.0% 27.2%
24.6% 24.5% 24.9% 25.1% 25.0%
18.7% 18.7% 18.8% 18.7% 18.7%
Oi
Claro
Vivo
2Q12 3Q12 4Q12
+28 Bps
-89 Bps
+43 Bps
+5 Bps
YoY
1Q13 2Q13
Prepaid Voice Postpaid*
35 26 27
1.6
1.4 1.5
2Q11 2Q12 2Q13 2Q13 2Q11 2Q12
1.1% 0.9% 0.9%
Total
TIM
SAC & SAC/ARPU
(R$; months)
Efficient Market Approach
(Source: TIM, Anatel) Bad Debt & Postpaid CB
(000 customers; %postpaid mix)
Leading net additions.
Consolidating Prepaid #1.
Accelerating on Postpaid.
Maintaining an efficient go-
to-market.
SAC/
ARPU
SAC
% Gross
Revs
Postpaid
*Excluding modems and M2M.
+25% +14%
14.4% 14.5% 15.8% Mix
12
Caring Improvements to Increase Customer Satisfaction
Claims at Consumer’s Protection Agency (Procon)
(Avg # Claims - the lower the better; Source: SINDEC database)
Imp
rovin
g c
ari
ng
R
ed
uc
ing
co
mp
lain
ts
P3
P4
P1
TIM
TIM PRE POS CORP
Customer Care Satisfaction Survey
(Points; Source: TIM)
IDA – Index of Caring Performance (last reported)
(Points - the higher the better; Source Anatel)
99.9
93.9 98.0
92.1
92.8
80.4
84.9
65.9
Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13
P3
P4
P1
TIM
Anatel Ranking of Complains (last reported)
(Index of Complains under 1,000 access - the lower the better;
Source: Anatel)
0.20
0.32 0.24
0.36 0.34
0.47 0.50
0.65
Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13
P3
P4
P1
TIM
2,564
4,147
2,262
3,179
6,187
6,990
3,503
6,870
2Q12 3Q12 4Q12 1Q13 2Q13
13
8.0
7.5
7.0
6.5
6.0
ARPU Performance
(%YoY; R$)
Reverting ARPU Trend
Voice Usage
(000 lines; minutes)
Data Performance
(monthly unique users; average days of use)
7,638 8,184
8,703 8,956 9,367
2Q12 4Q12 3Q12 1Q13
127
150
139
145
2Q12 4Q12 3Q12 1Q13
18.3 19.9 18.9 18.5
VAS
Voice
-15.3%
-11.0%
9.5% -3.6% -0.7%
2Q12 4Q12 3Q12 1Q13
After several quarters, ARPU has reversed
its trend thanks to a continuous
management of the customer base.
Voice Postpaid* Total MOU
2Q13
18.1
2Q13
148
2Q12 4Q12 3Q12 1Q13
Data Users SMS Usage
2Q13
2Q13
2Q12 4Q12 3Q12 1Q13 2Q13
+21% +13%
*Excluding modems and M2M.
+23% +16%
14
Organic
18.3
Organic
0.4%
35% 39%
43% 46%
50%
2Q12 3Q12 4Q12 1Q13 2Q13
Data Services Update: Keeping the Good Pace
Data users
(% over total customer base)
VAS
(% of Mobile Services Gross Revenues; R$ Million)
Handset Sales Market Share Apr-Jun/13
(% of handset revenues; Source: TIM)
19% 22%
Smart/Web phone Penetration
(% over total base of lines)
VAS
Gross
Revs
VAS/Revs
7%
21%
34%
38%
54%
46%
P4
P3
P1
TIM
Players
Open Mkt
TOP SELLERS @ ~R$300
27.7% 28.7%
30.3% 31.0%
31.9%
2Q12 3Q12 4Q12 1Q13 2Q13
+25%
23 mln
users 78 %
on sales
15
1,031
1,291
2Q12 2Q13
Financial Evolution Analysis
1,210
EBITDA
2Q12
Organic
EBITDA
2Q13
-15
ΔMkt
and Sales
ΔPers./G&A
and others
-53
ΔHandset
Margin
-39
ΔNetwork
and ITX
+35
ΔServ.
Revs
26.6% 25.3%
32.1% 31.5%
+125
+5.8% +8.3% -51.2% +1.1% +3.1% ΔYoY
1,263
+4.4%
563 879 879
3,984 4,109
4,065
Tho
usa
nd
s
Revenue
2Q12
Δ Handset Δ Fixed
Services
Organic
Revenue
2Q13
Δ Mobile
Services
+316 -86 +211
Service
Handset
4,547
-33% +5.7% ΔYoY
4,988 -44
One-off
Event
Reported
Revenue
2Q13
4,944 -31
Reported
EBITDA
2Q13
1,232
+1.8%
24.9%
31.1%
One-off
Event
16
+56%
+3.1%
+2.0% EBITDA Margin
Service EBITDA Margin
Organic
EBIT
Net Financial
Result
Organic
Net Income
2Q13
Organic
Taxes and
Others
Depreciation/
Amortization
Organic
EBITDA
2Q13
From EBITDA to Net Income
(R$ Million)
ΔYoY
One-off
Event
Reported
Net Income
2Q13
+0.9% +8.5% -36% +5.6% +18% +12%
1,263 -671
592 -41 -145 406 -20 386
Net Revenue Evolution
(R$ Million, % YoY)
From EBITDA to EBITDA
(R$ Million)
+8.7% +10%
Strong Cash Position
Net Debt
(R$ Mln)
Capex
(R$ Mln, % YoY)
1,998
2,278
1,984
2Q11 2Q12 2Q13
+14% -13%
725
1,057
2Q11 2Q12 2Q13
+46%
+6%
→ 37% of debt in foreign currency (100%
hedged to R$).
→ Average debt maturity: ~ 3 years.
→ 0.39x net debt to Reported EBITDA (LTM).
→ Capex catch up during Q2.
→ 94% of Capex related to
infrastructure (ex-licenses).
→ No subsidy capitalization.
1,123
0.45x 0.47x 0.39x Net debt/
EBITDA
(LTM)
17
Network and Infrastructure
Development of Infrastructure
19
Optical Fiber Network Evolution
(km of fiber)
28,891 38,951 42,470 47,000
2011 2012 Jun/13 Dec/13*
*According to Anatel Network Plan
FTTS Project Status - 14 Brazilian Main Cities (Stage1)
Manaus
Florianópolis
São Paulo
Macapá
Salvador
Curitiba
Maceio Recife
Fortaleza
Brasília
Rio de Janeiro
Porto Alegre
Belém
Aracaju
São Luis
Palmas
Vitoria
Teresina
Belo Horizonte
Campo Grande
Imperatriz
Goiânia Cuiaba
Natal
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M J.Pessoa
M
M
M
M
M
M M
M
M
M
M M
M
M
M
M M
M M
1st phase: Connecting sites with own fiber. 88% of sites in the 14
main Brazilian cities are connected with own fiber.
3rd phase: Expanding
and fine tuning. Recife
is the first city to reach
this stage.
2nd phase: Light up the fiber and shift data traffic to own lines.
2nd phase is
expected to
be completed
by 4Q13
M Cities of Stage 1
M Cities (additional 30) of Stage 2
Own Network to Support Traffic Growth
(% of total transport network)
52%
80%
48%
20%
2009 2012
Owned
Third Parties
• Increasing customer experience (throughput 50x faster than
previous leased links on copper, 2/8Mbps)
• Reduce network congestion
• 4G (LTE) ready
• Reducing leased lines costs
Metro Ring
To own fiber up to 300 Mbps From copper 2-8 Mbps
11.607
12.120
Jun/12 Jun/13
Network Commitments
20
Network Elements Expansion…
(units. Source: Company)
…Driving Quality Improvements
(% of success; % of call/data connection drop; Source: Anatel)
181
215
Jun/12 Jun/13
250
464
Jun/12 Jun/13
BTS TRX
(Voice Capacity; 000)
Channel Elements
(Data Capacity; 000)
95,7%
97,1%
Aug/12 Apr/13
Voice Network Access Rate Voice Network Drop Rate Data Network Access Rate Data Network Disconnection Rate
+4% +19% +86%
Target agreed w/ Anatel
1,3% 1,1%
Aug/12 Apr/13
95,9% 96,0%
Aug/12 Apr/13
1,5% 1,7%
Aug/12 Apr/13
95%
2%
98%
5%
Capex Analysis
21
Organic Capex (ex-4G licenses)
(Capex/Sales; Mix of Investments; R$ bln)
9,5 8,3
7,2 5,5
0.4
TIM Claro Vivo Oi
Benchmark: Anatel Plan for 2012-2014
(R$ Bln)
Owned Network Deployment….
(% of total transport network)
9.9 2012 Extra
Capex over
Anatel Plan +20% +39%
2012-2014 Capex
… Driving Network Opex Savings
(% YoY)
+81%
22,1%
4,8% 3,5%
Total Traffic Customer Base Network Costs
Q2 2013
52% 48%
Owned Rented
80%
20%
2009 2012
0.5 0.3 0.2
2.3 2.7 3.1
2010 2011 2012 2013e 2014e 2015e
19,6% 18,0% 18,0%
Infra
Invest.
As % of Net Revs.
Other
Invest.
2.8 3.0
3.4 10.7
3.6
Voice
Postpaid
+23% YoY
Live TIM
Live TIM: Delivering on Plan
257k
522k
609k
804k
3Q12 4Q12 1Q13 2Q13
Network Evolution
(Addressable Households ; Source: TIM)
Customer Base
(Customers; Source: Anatel)
9.7k
16.3k
26.4k
4Q12 1Q13 2Q13
82%
Net Share Live TIM SP+RJ
(UBB >34MB ; Source: Anatel)
Market Share SP+RJ
(UBB >34MB ; Source: Anatel)
38%
19%
13%
11%
10%
9%
Live TIM Oper. I Oper. II
Oper. III Oper. IV Outras
26%
69% 73%
3Q12 4Q12 1Q13
São Paulo
Totaling
26 Districts
in São Paulo
23
Efficient approach
MSAN port occupancy (%), Capex (R$)
Coverage (addressable)
Thousands of Households
~500
~1,000
~2,000
2015 2014 2013 2012
0
20
40
60
80
2012 2013 2014 2015
~R$2k
Coverage Capex
per Home Passed
~R$80
~R$800
Installation Capex
per Sub
~R$300
TIM
Fiber Int. Bench.
TIM
Fiber Int. Bench.
~R$5k
Total Capex
per Sub
~R$700
TIM
Fiber Int. Bench.
Port Occupancy (%)
24
4x
• 2012: priority coverage in areas with high ‘A/B classes’
concentration
• 2013: chess board strategy and entering in class C
• 2014: additional coverage in Rio de Janeiro and São
Paulo metropolitan regions, focusing class C
concentration areas
Geographic Expansion
Geographic expansion for low-middle class and targeting high
income neighborhood
TIM Fiber Plan Update 2013/2015
Business Outlook
116 129
150
>200
0
50
100
150
200
250
2010 2011 2012 2013e 2014e 2015e
14.5 17.1
18.8
2010 2011 2012 2013e 2014e 2015e
High Single
Digit growth
4 Ways of Growth
Revenue Growth
(Total Revenues,R$ billion)
CAGR 12-15
Mobile Customer Base
Million of lines
Double digit
growth
FMS – Voice (MOU)
Minutes of usage per line
Internet for All (Mobile Data)
Data as % of Gross Mobile Serv. Revs.
26
51.0 64.1
70.3
> 90
2010 2011 2012 2013e 2014e 2015e
13% 15%
19%
>26%
0%
5%
10%
15%
20%
25%
2010 2011 2012 2013e 2014e 2015e
Double digit
growth
VAS
Revenues MoU Customer
Base
Community
Expansion
FMS
(Voice)
Internet
Services
~2Mln
HH ready
to sell
Tim Fiber
Ultra BB
>90 Mln >200 min >26%
Business Drivers of Growth
27
Total Net
Revenues High Single Digit
Growth
Organic EBITDA 4.6 5.1
Organic CapEx 3.0 3.4 10.7
17.1 18.8
High Single Digit
Growth
R$ billion 2011 2012 2013 -2015
CAGR Guidance
2013-2015 Guidance
Appendix
Total Customer Base
(% Market Share)
Market Share Evolution
29
29,7% 28,7%
26,8% 27,2%
24,6% 25,0%
18,6% 18,7%
P3
P4
P1
TIM
2012 Mobile Net Revenue Share
(% 2012Total Net Revenue)
Total Voice Postpaid Customer Base
(% Market Share)
38,2% 38,9%
22,3%
23,8% 23,2%
20,3%
15,6% 16,3%
P3
P4
P1
TIM
Total Prepaid Customer Base
(% Market Share)
28,2%
26,2% 28,0%
28,9%
24,1% 25,0%
19,5% 19,6%
P3
P4
P1
TIM
Size: 266,999 thousand
Penetration rate: 134.8%
20,2%
29,5% 35,3%
15,0% P3
P4
P1 TIM
Internet Users Penetration: large room for growth...
(% population who has used internet within the last 3 months)
Mobile Internet and Its Great Business Opportunity
FMS on Data
(% over households with internet connection)
30
89 86 81 80 74
1 3 10
17 21
2008 2009 2010 2011 2012
Mobile Devices are also increasing its presence…
(% Presence over households)
Source: CETIC jun’13; Data Market
Fixed*
Mobile
*Includes dial-up connection
10 14
23
41
50
2 4
2008 2009 2010 2011 2012
34 39 41
46 49
2008 2009 2010 2011 2012
A: 94%
B: 80%
C: 47%
DE: 14%
68 mln
people
never used
internet
…and usage is 4 years behind
(% internet users within the last 3 months)
53 58 60
67 69
35 30 30
24 23
10 9 9 7 7
2008 2009 2010 2011 2012
Everyday/Almost Everyday
At least once a week
At least once a month
Euro Area data in
2008:
Everyday: 70%
Once a Week: 20%
Once a Month: 7%
Social Class Split
Notebooks
Tablets
Understanding Internet Usage Trends
Going deeper into wireless penetration in Brazil
(%)
31
79 91
105
124 133
56 63 67
76 80
2008 2009 2010 2011 2012
Our current portfolio reflects consumer’s behavior
(Activities over mobile phone; % users who have used mobile within the last 3 months)
Source: CETIC jun’13; Data Market; Anatel
22
31
47
5
18
24
49
57 64
2010 2011 2012
Wireless
Penetration
Real
Penetration
# SIM Cards
Social
Class 0 1 2 3+
A 3% 67% 24% 6%
B 7% 63% 24% 5%
C 17% 62% 17% 3%
DE 41% 47% 10% 1%
Total 20% 59% 17% 3%
Send SMS
Listen Music
Internet
Historical Data: Financials (R$ Thousand)
32
Historical Data: Financials (US$ Thousand)
33
Historical Data: Operational & Financial Ratios
34
ROA: NOPLAT/Avg. Total Assets.
Calculation considers organic Net Income and EBITDA
2013e: Consensus and dividend yield from approved 2012dividends of R$743 mln.
3%
Tax Relief - 1º Step: M2M Fistel to drop and Smartphones tax exemption (Law 12,715/2012)
Total
~34%
Fust/
FUNTEL
PIS/
PASEP
1.5%
0.65%
ICMS Cofins
~28%
Tax reduction Reduction in the
price to
consumer
Increase of
Penetration
Social
Impacts
Economic
Impact
Possibility of
higher
investment in
network
Better
Quality
Tax Composition
35
In 2012, TIM paid R$9.1
bln in taxes, fees and
contributions (~48% of
total net revenues).
• R$1 bln in Fistel.
• R$8.1 bln in taxes,
contributions and
others fees.
% of Gross
Revenues
Taxation Over Telecom in Brazil
Shareholders Structure and Stock performance
Stock Performance (base 100)*
0
20
40
60
80
100
120
140
TIMP3 Ibovespa TSU
36 *Last price as of 09/13/2013
TIM Celular S.A. Intelig
100%
TIM Brasil Serv. e Part. S.A. Minorities
Telecom Italia International N.V.
Telecom Italia
100%
TIM Participações S.A.
ON: 33% (805,662,701) ON: 67% (1,611,969,946)
100% 100%
Investor Relations Team
Avenida das Américas, 3434 - Bloco 01
6° andar – Barra da Tijuca
22640-102 Rio de Janeiro, RJ
E-mail: [email protected]
Rogério Tostes
E-mail: [email protected]
Phone: +55 21 4109-3742
Vicente Ferreira
E-mail: [email protected]
Phone: +55 21 4109-3360
Leonardo Wanderley
E-mail: [email protected]
Phone: +55 21 4109-4017
Gustavo Valente
E-mail: [email protected]
Phone: +55 21 4109-3446
Luiza Chaves
E-mail: [email protected]
Phone: +55 21 4109-3751
Visit our Website
www.tim.com.br/ir
Safe Harbor and IR Contacts
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.
37
