Press Release Writing: 10 Powerful Press Release Headline Ideas
Press Release 2 T08 En
Transcript of Press Release 2 T08 En
Results
082Q
August 7th, 2008
2
Innovative and Reliable brand: “Living beyond Technology”
TIM PARTICIPAÇÕES S.A. Investor Relations
Opening remarks
Note: 1 - Synovate Institute (Jun/08); 2- Management e Excellence; Revista Razão Contábil and IBRI
First position in Top of mind¹
First position in brand Awareness¹
Choose as the best website in sustainability among the Brazilian telcos²
Best service provider IP NGN Infrastructure of the year – Cisco (2008)
Most innovative application of customer care
– 2008 excellence award (TM forum)
Highlights
Market Overview
Operational Review
Financial Performances
2H08 perspectives
4
1% growth QoQ to R$29.8 despite market
overall drop
The highest ARPU growth among peers
Supported by MOU performance (+7%YoY and
QoQ).
Up 21% QoQ and 49% YoY; leveraged by 3G
10% of net service revenue (vs 7% 2Q07)
Sharp improvement QoQ: -25%;
6.8% of net service revenue (down from 9.6%
in 1Q08).
19% higher than 1Q08 to R$637 Mn;
2pp recovering in EBITDA margin QoQ, despite
partial spill-over of 1Q08 trend.
VAS
BAD DEBT
EBITDA
TIM PARTICIPAÇÕES S.A. Investor Relations
2Q08 Highlights – An improving quarter
ARPU
Quarterly performance
New pre-paid promotion (TIM 10x, focus on
on-net bonus and ARPM)
Focus on post-paid quality (high-end
customer and better mix)
3G launch (May 1st);
TIM web sale grew by 2x QoQ
Increase content partnership (revenue share
agreement)
Actions
Telesales channel total remodeled;
Stricter credit policy;
Commission based on quality of
acquisitions.
Pre-paid offer focus on profitability
(on-net driven);
Reducing leased lines cost through
in-source plan
Strict control over discretionary costs
Highlights
Market Overview
Operational Review
Financial Performances
2H08 perspectives
6
TIM PARTICIPAÇÕES S.A. Investor Relations
Telecom Industry Overview
Market growth remains strong
(purchase power improvement from low classes)
Market net additions fueled by:
Handset subsidies;
Aggressive on-net promotions;
Naked SIM-Card sales.
TIM geared to capture opportunities:
Alternative player to fixed line monopoly, after the number
portability takes place;
Benefit from strong growth in broadband and PC sales;
Strengthening convergent strategy.
56% 59%64% 66%
69%
% Penetration per
total population
Source: Anatel and internal estimates*
% Penetration per
total households
Mobile
74%70% 71% 71%
Fixed
7%
10%14%
16%
BroadbandMn lines Mn lines
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TIM PARTICIPAÇÕES S.A. Investor Relations
Subscriber Base (Mn)
23.1%
32.529.2 31.3
27.5
33.8
Pre-paid segment grew by 26% YoY helped by “TIM 10x” promotion;
Subscriber mix remained above national peers (post-paid stood at 20.2% vs. peers 18.6%);
Churn drop from 9.7% in 2Q07 to 8.4% in 2Q08
Market share fairly stable in the coming quarters;
Focus on customer's share of wallet.
First
Player*
Third
player
•Includes Vivo and Telemig Celular
•Source: ANATEL and company´s data.
TIM Performance
Market Share Performance
2Q07 3Q07 4Q07 1Q08 2Q08
Highlights
Market Overview
Operational Review
Financial Performances
2H08 perspectives
9
TIM fixed
license
TIM PARTICIPAÇÕES S.A. Investor Relations
Roadmap to a Convergent Company
MOBILE
FIXED
Partnership in
Pay TV
TIM Web
TIM Casa Flex
TIM Web
Broadband
TIM Casa
TIM 3G
license
...2006 2007 2008 2008...
Number
portability
Competing on broadband
market with mobility concept
Increase customer's share of
wallet through bundle offers
Capturing opportunities on
fixed voice services through
number portability
Strengthening our mobile
business
Empowered partnership in
Pay TV offers
Convergent Company
+
+
+
=
INTERNET
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Roll-out / Launching
TIM PARTICIPAÇÕES S.A. Investor Relations
Third generation launch
Already in main metropolitan
areas;
Eased by our national coverage;
Launch of unlimited TIM Web
data plans (1Mbps or 7.2Mbps);
TIM Web limited data plans:
Automatic upgrade to (1Mbps);
Advantages
SPEED: Upgrade to 1Mbps
and 7Mbps;
SIMPLICITY: All „TIM Chip‟ are
3G ready; Buy & Play concept;
MOBILITY: Wireless internet
anywhere;
ACCESSIBILITY: Any 3G
device and computers.
Positioning &
partnerships
Push on cross selling offers;
Convergent offers through
wireless network;
TIM + : First notebook
with TIM Chip on-board;
TIM + : TIM mobile
broadband to UOL customer's
base;
TIM + : Pay-TV +
Broadband + Mobile.
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Innovative ServicesContent OfferNew facilities
TIM PARTICIPAÇÕES S.A. Investor Relations
VAS Strategy: Aiming Innovation and Profitability
VAS 3G+
Mobile internet browsing
TIM TV
TIM Music Store
TIM Video Call
Google tools
Orkut WAP (1st in Brazil)
YouTube Mobile
Windows mobile for TIM
smart-phone portfolio
TV channels
UOL Mobile
Sony-BMG content
in exclusivity at TIM
Music Store
TIM auction: a white
label reversal auction
RingBack tones
GPS navigation service
Yellow pages service
VAS revenue: R$397 million (21% QoQ and 49% YoY);
10% of total gross service revenue (7% - 2Q07; 8% - 1Q08)
TIM web broadband sales increased by 2x QoQ (w/ incremental ARPU).
Highlights
Market Overview
Operational Review
Financial Performances
2H08 perspectives
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TIM PARTICIPAÇÕES S.A. Investor Relations
Net Revenue performance
Outgoing voice revenues: Growth in outgoing due to new
promotions dynamic - with MOU and ARPU rebound QoQ;
Value-added services: Strong growth of 21% QoQ and
49% YoY, as a result of our focus on data package offers
and partnerships with strong content providers:
Incoming revenues: Flat incoming revenues due to
aggressive approach to on-net call‟s promotions for the
market as a whole and also F-M pattern change. TIM
maintains the focus on convergence in order to reduce the
dependence on incoming traffic and to capture new sources
of revenues;
Handset revenues: 22% YoY drop explained by lower
handset price and naked SIM cards sales.
3,060 2,993 3,186
Total Net Revenues
R$ Mn
YoY QoQ
Total revenue +4.1% +6.5%
Service revenue +6.8% +4.7%
Handset revenue -22.4% +38.7%
Net Service Revenue Net Handsets Revenue
LeaderIn QoQGrowth
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ARPU
R$
TIM PARTICIPAÇÕES S.A. Investor Relations
1% growth QoQ despite market overall drop and
post-paid mix decline;
Best ARPU among cellcos in 2Q08;
YoY drop due to increase of pre-paid segment and
tariff promotions;
Without incoming effect, ARPU would have
increased by 4.1% QoQ
KPI’s performance (1/2)
ARPU performance:
MOU
Minutes
One of the highest MOU in the market;
Subscriber mix higher quality;
Elasticity effect driven by promotions.
MOU performance:
-14% 7%
+1%
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TIM PARTICIPAÇÕES S.A. Investor Relations
Selling expenses increase amid 3G launch;
SAC/ARPU ratio stood at 4.0x (stable QoQ);
Subsidies broadly stable, w/ focus on SIM card
sales.
SAC
R$ -25%
Improving from 1Q results thanks to recovery
actions (e.g.: channel completely remodeled):
2Q still affected by telesales distribution channel;
Expected to reach ~6% of net service revenue for
the FY2008 (given credit policy process revision).
KPI’s performance (2/2)
SAC performance: Bad debt performance:
BAD DEBT
R$ Mn
9.6%¹
6.8%¹
6.1%¹
¹ Bad debt / net service revenue
+5%
+2%
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Year-over-year drop is still reflecting higher bad debt
provision (amid telesales), and selling and network
expenses (amid 3G launch), slightly offset by VAS
revenues increase (+49%);
Quarterly gain is largely attributed to a better top line
(fueled by VAS and usage performance) and also from
the bad debt recovery and cost control.
TIM PARTICIPAÇÕES S.A. Investor Relations
EBITDA
EBITDA and EBITDA margin
R$ Mn
YoY QoQ
EBITDA -14% +19%
EBITDA margin -4pp +2pp
637535
744
2Q07 1Q08 2Q08
20.0%
24.3%
17.9
535
17.9%
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TIM PARTICIPAÇÕES S.A. Investor Relations
EBITDA and EBITDA margin YoY performance
+6.8%Change % YoY
20.0%24.3%
-22.4% +7.6% +19.2% -13.7% +20.7% +12.1%
EBITDA Margin
743.7
188.8 (62.3)(46.9)
(172.8)
51.6
(34.9)(30.5)
636.7
EBITDA
2Q07
Service
Revenue
Handsets
Revenue
Selling
Expenses
Network
Expenses
COGS Bad Debt Other
Expenses
EBITDA
2Q08
Subs base +23%
Total traffic volume +33%
R$ Mln
Selling expenses were up 7.6%
while gross adds grew by 8.7%
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TIM PARTICIPAÇÕES S.A. Investor Relations
From EBITDA to bottom line – 2Q08
Change YoY -14.4% 4.6% -76.8% -27.4% -73.9% -
* Other non-operating expenses/revenues
R$ Mn
636.7
40.3
596.3
(59.2) (34.1)
(15.2)
636.7
40.3
596.3
(59.2)
(34.1)
636.7
40.3
596.3
(59.2) (34.1)
(15.2)
636.7
40.3
596.3
(59.2)
(34.1)
EBITDA
2Q08Depreciation
AmortizationEBIT
Net Financial
Expenses
Taxes and
Others*Net Loss
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TIM PARTICIPAÇÕES S.A. Investor Relations
Net financial position and FCF – 2Q08
* Excluding 3G
Net cash flow totaled -R$1.115 billion in 2Q
R$ Mn
Net Debt
R$ Mn
(2,096)
(868)
(247) (3,210)
1Q08 OpFCF
Non
OpFCF 2Q08EBITDA WkC Capex* OpFCF*
3G
Licence
637 371
(467)
(868)(1,239)
OpFCF
201
Positive OpFCF in 2Q excluding 3G license
3G license:$1.2 Bi
Of which $207 in
dividend
Operating Free Cash Flow
Gross Debt R$ 4.1 billion (of which 42% long term)
Average annual cost 11.64% in 2Q08 versus 11.66% in 2Q07
Highlights
Market Overview
Operational Review
Financial Performances
2H08 perspectives
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OFFER
TIM PARTICIPAÇÕES S.A. Investor Relations
2H08 perspectives
Key recovery actions
Profitability &
Operational
excellence
Voice: Refocus on postpaid high value segments, remodeling of prepaid (started
in 2Q08) and innovation of promotional dynamics to enhance ARPM;
VAS: Further push on innovative services leveraging on 3G mobile broadband
and enriching media content;
Convergence: Capture opportunities from mobile BB and NP (as of Sept‟08), by
offering services as alternative player to fixed.
Focus on high margin customers: Deeper segmentation of acquisition,
retention and loyalty strategy;
Commissioning: Increase customer value linked to compensation and develop
profitability targets per channel;
Bad debt: Reorganization of monitoring process with stricter rules for credit
analysis (implemented in 2Q08);
Efficiency: Invest in transmission capacity for cost-effective management and
selective reduction/revision of outsourcing model.
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2008 guidance revision taking into account:
Revenues – On-net calls pattern increase for the market as a whole and higher handset sale through direct channels - both events
ended up pressuring incoming and handset revenues
Expenses – Anticipating the investments to capture mobile broadband outstanding growth and number portability opportunity;
Reinforcing the call-center services, strengthening loyalty program to high-end clients and enhancing 3G network capacity.
Based on the aforementioned scenario, we are taking a more conservative position on top line and EBITDA margin
TIM PARTICIPAÇÕES S.A. Investor Relations
2008 guidance revision
Original
target1st Review
Clients Base ~ 37 Mi unchanged
Market Share ~ 26% unchanged
Total Revenue > 12% ~ 9%
EBITDA Margin > 23% unchanged
CAPEX ~ 3.6 R$ Bi unchanged
Update
Review
unchanged
unchanged
> 7%
22.0% ~ 22.5%
unchanged
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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
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6° andar – Barra da Tijuca
22640-102 Rio de Janeiro, RJ
Phone: +55 21 4009-3742 / 4009-3751 / 4009-3446
Fax: +55 21 4009-3990
Visit our Website
http://www.timpartri.com.br