Financial Highlights
Transcrição
Financial Highlights
1 São Paulo – March 2007 “Safe Harbor” Statement This presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements and involve inherent risks and uncertainties. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events 2 São Paulo – March 2007 Main Telecom Groups in Brazil – Subscriber Base - Sep/ 06 Oi TMAR Brasil Telecom Oi (GSM) Region I Brasil Telecom TIM (TDMA/GSM) BRT GSM (Mobile only) Region I Region II Region II 39% 13% Telefonica Vivo (CDMA) – TEF / PT Telefônica (TSP) 23% 3% Telmex / AMX Embratel (LD) Claro (TDMA/GSM) 25% CVC / Pension Funds Telemig / Tele Norte (Mobile only) Region IV 32% Region III 30% Market Share of Fixed Lines in Service 23% 5% Market Share of Mobile Clients 3 São Paulo – March 2007 Brazil´s Telecom Market Main Services Market Share 2 (TNE) 2 Local 29% Mobile 33% Telmex / AMX 20% Other 2% (TSP) BRT 13% 2 (BRT) 2 /Embratel (TMX) Tim 12% Handset Sale 7% Other 6% Data 9% LD 16% Telemar / Oi 21% Telefonica / Vivo 32% (TF/PT) (AMX) (TSU) Operation Status Data/ Broadband Mobile LD Major Players Local Telecom Net Revenues (9M06): US$ 27 billion1 integrated pure fixed integrated LD Carrier pure mobile pure mobile pure mobile Source: Company Reports Note: 1 Considering Tele Norte Leste, Brasil Telecom, Telesp Fixed, Embratel, Tim Brasil, Vivo, Claro, Telemig and Tele Norte Celular. 2 Fixed-line incumbents 4 São Paulo – March 2007 Global industry trends affect local market Consolidation (M&A) Convergence of Services Scale One-Stop Shop 5 São Paulo – March 2007 Consolidation: intense M&A activity in the U.S 1984 1 1997 1998 1999 7 2000 2006 3 M&A Source: FCC, US Department of Justice, companies, team analyses 6 São Paulo – March 2007 M&A activity in Europe and Asia Date Wireline Integration Expansion Mobile Integration Country Buyer Target operator Type Operation focus Dec/04 Italy BT Albacom Fixed – CLEC Geographic expansion Jan/05 France France Telecom Equant Fixed – Dados, IT Vertical integration Apr/05 Czech Rep Telefonica Cesky Fixed – ILEC Geographic expansion May/05 France Telecom Italia LibertySurf Fixed – CLEC Geographic expansion May/05 France Cegetel Neuf Telecom Fixed – CLEC Market share/scale Nov/05 Denmark Nordic Telephone TDC Fixed/mobile – ILEC Private equity Jan/06 Japan KDDI Powercom Fixed – CLEC Vertical integration Jul/04 Denmark TeliaSonera Orange Mobile Market share/scale May/05 Romania Vodafone Mobifon Mobile Geographic expansion Jul/05 France Telecom Amena Mobile Geographic expansion Nov/05 Sweden Telenor Vodafone Sweden Mobile Market share/scale Dec/05 Turkey Vodafone Telsim Mobil Mobile Geographic expansion Jan/06 UK Telefonica O2 Mobile Geographic expansion Mar/06 Japan Softbank Vodafone Japan Mobile Vertical integration Spain Source: Ovum, Morgan Stanley, team analyses 7 São Paulo – March 2007 Consolidation in Brazil despite regulatory barriers Players/Groups in 2000 Today Tomorrow: How Many? Is Brazilian heading towards a duopoly arena? Mexican ? Safra BCI Spanish ? ? Brazilian ? Regulation • Article #14 of General Concession Plan (PGO - April/1998) prohibits wireline incumbents from obtaining any other concession in another region as well as any shareholder from participating in the controlling group of more than one incumbent. - These restrictions can only be removed with a Presidential Decree • In addition to the change in PGO, any consolidation involving fixed line incumbents would require: - Anatel’s approval (“Anuência Prévia” or Previous Consent) - CADE’s approval (Anti-trust Agency Act) São Paulo – March 2007 8 Financial Highlights: Consolidated Ebitda R$ million 45% 44% 41% 40% EBITDA Margin 35% 6,175 6,531 6,765 5,353 4,598 3,558 2001 2002 2003 2004 2005 9M06 9 São Paulo – March 2007 Financial Highlights: Capex R$ billion • 10.1 Since 1998: R$ (~US$ 12 billion): 27 billion – 80% Fixed line / 20% Mobile Mobile 2.2 (2) 7.9 (1) 2.4 2.0 CAPEX 9M06 revenues • 2006/2007 Focus: 0.9 0.8 1.5 0.4 2001 2002 (1) Regulatory Targets ( 2) Mobile license: R$ 1.1 billion 1.3 2004 net and Regulatory Requirements (Fixed-line network) 1.1 2003 of – Quality 1.6 1.1 12.4% and enhance capacity of data broadband and mobile platforms 0.7 0.6 1.1 = – Expand 2.0 1.7 Fixed • 2005 9M06 • Capex 2006E: R$ 2.4 billion - 75% Fixed 25% Mobile line 10 São Paulo – March 2007 Financial Highlights: Free Cash Flow* R$ billion FCF yield (12 m) = 28%** 4.0 4.0 3.5 2.3 2.5 -5.9 2001 2002 2003 2004 2005 9M06 (*) – After CAPEX (**) – Based on TNE prices on January 04, 2007 ($14.52) 11 São Paulo – March 2007 Financial Highlights: Debt Position – Sep/06 Amortization Schedule – Sep / 06 Net Debt 9.1 7.8 7.7 • Total Debt = R$ 8.9 billion 0.88 x EBITDA 3.6 3.4 6.5 6.1 5.6 C A S H 2001 2002 2003 2004 2005 Sep-06 Sep-06 2.0 1.9 1.2 0.3 2006 2007 2008 2009 2010+ Main Achievements: - Lower leverage (-39% from 2002) - Extended maturities (74% of total debt in the long term) - Lower foreign currency exposure (55% in Sep/06 vs 65% in Dec/05) - Decreased financial expenses / hedging costs - Average cost of debt : 98.8% (CDI) 12 São Paulo – March 2007 Financial Highlights: Key Ratios Net Debt* / EBITDA CAPEX / EBITDA (%) (*) – EOP EBITDA / Net Interest Expense Dividends / EBITDA 13 São Paulo – March 2007 Global industry trends affect local market Consolidation (M&A) Convergence of Services Scale One-Stop Shop 14 São Paulo – March 2007 Convergence: multi-services network redefining the telecom industry worldwide Platform Voice Data Video Voice Data Fixed telephony Video IPTV Wimax Mobile telephony 2,5/3G* Pay TV VoIP Wimax TV ? Digital TV Technological barriers Services fragmented Notes: *Video Streaming; Non-exhaustive examples Complementary services 15 São Paulo – March 2007 Examples of Bundled Services Prepaid Plans Low End “Dose Certa” – Pre-Paid Recharge with only R$ 1.00 - Lower Recharge (R$ 1.00) - SIM alone - Bundles with Fixed Line and Payphones Post Paid Plans “Oi Conta Total” now offering Pay TV (Fixed+Mobile+Broadband+Pay TV) Middle-High End - Control Plans - Loyalty Plans - Coverage - Relationshi p + Benefits: • • • • Discounts in Combo Products No Adhesion Fee Free Modem for Velox Free Sky-Directv instalation Kit 16 São Paulo – March 2007 Oi FLEX - an Oi handset that converges fixed and wireless lines, a single brand offer... What is it? Oi in the street and fixed at home Mobile phone that works like a fixed phone at home Benefits Convergence: Make and receive calls through a fixed network in one handset Comfort: Enjoy all mobile phone benefits (one contact agenda, etc) Mobility: Reach up to 100 m and answer fixed calls with mobile, as if it was an extension Economy: Client are guaranteed best tariffs depending on plan and type of line 17 São Paulo – March 2007 Way TV Overview Region Concession Way TV acquisition Cable TV and Broadband company operating in Minas Gerais Concession in 4 cities No Network owned – Capacity leased from Infovias Bidirecional Network 400,000 homes passed 90,000 total subscribers 46,000 Cable TV/ 44,000 broadband Strong Growth with low acquisition costs Net Revenue Breakdown Costs and Expenses Breakdown Others 12.8% Infovias Third Party Services 30.8% 11% Broadband 52.6% IP Cable TV 47.4%% 14.8% Content 15.4% Personnel 15.1% 18 São Paulo – March 2007 And we distribute content in our multi-platafform… • • • • • • Ring Tone. Truetone. Full track. Ring Back Tone. Vídeos. Interatividade. • • • • Streaming do show. Download do show. Download das músicas. Download de conteúdo. móvel associado. Oi TV • Transmissão do Show. • Interatividade. • Venda de conteúdo móvel e de banda larga associado. Oi Magazine • Transmissão ao vivo. • Entrevistas/chat com os artistas. • Concursos/Premiação. Conteúdo: Show Lulu Santos • Matérias sobre o show. • Chamadas incentivando o uso de interatividade e serviços no Oi. 19 São Paulo – March 2007 20 São Paulo – March 2007 Oi, One Step Ahead, converging services Service Convergence: One single Brand Bundled Services Pure Fixed or Mobile companies 21 Source: Telemar São Paulo – March 2007 Consolidate leadership in the Region through clear and focused strategy From Product to Client Approach… • Improve the knowledge from customers, seeing them in an integrated view • … building a company based on 4 pillars Segmentation aiming to align product portfolio • Customer Focus: integrated and convergent offers with client’s real needs • Integrated and innovative offers in the retail and corporate markets • Velox and Oi as major growth drivers • Creation of an internet platform • Operational excellence, focusing on costs savings • Consolidate client’s perception of quality • Avoid irrational competition • Partnership for content • Focus on ARPU instead of traffic • Management Processes: aligned with the strategy and focused on results • People: with attitude and dedicated to serve • Innovation: new businesses to regain growth momentum • Customer loyalty • Cross selling • Bundled services • Scale • Operating/ financial synergies 22 São Paulo – March 2007 Important Notice to Our Shareholders In compliance with the terms of article 12 of CVM Instruction no 358*, TELEMAR advises its shareholders that the Company cannot be held responsible for any public disclosure of information by third parties regarding the acquisition or disposal of equity stakes equivalent to 5% or more of each class of shares or of the rights pertaining to these shares or other securities issued by the Company. Outstanding shares* TNE Common 127.373.900 Preferred 254.747.800 Total 382.121.700 Outstanding shares* TMAR Common 107.063.093 Preferred (A) 130.440.468 Preferred (B) 1.110.794 Total 238.614.355 (*) - Ex-treasury (*) Shareholders owning a direct or indirect controlling stake in the company, shareholders who elect the members of the Board of Directors, or any private individual, legal entity or group of same, acting jointly or representing a common interest, that attains a direct or indirect stake equivalent to 5% (five percent) or more of the company’s capital, must send to the CVM (Brazilian Securities commission) and, as the case may be, to the stock exchanges and over-the-counter entities where securities issued by the company may be traded, as well as publicly disclosing, under the terms of article 5… 23 São Paulo – March 2007 Company Overview We are the leading provider of telecommunications services in Region I of Brazil, which consists of 16 states, including the states of Rio de Janeiro, Minas Gerais, Bahia, Espirito Santo and Ceará. We are the largest provider of fixed-line telecommunications services in South America based on the total number of lines in service, which we are starting to market under our Oi Fix brand name. As of December 31, 2006, we had 17.1 million fixed-lines installed, of which 100% have been digitized, and 14.4 million fixed-lines in service. We provide mobile telecommunications services in Region I on the GSM technology platform. As of December 31, 2006, Oi had approximately 13.1 million subscribers. We also provide broadband services using ADSL technology. In Region I, as of December 31, 2006, we had approximately 1.1 million broadband subscribers (Oi Velox). We also market voice and data services to corporate customers throughout Brazil. The Brazilian states that comprise Region I represent approximately 64% of the country's territory, with a population of 102 million, producing approximately 41% of Brazil´s GDP. IR Contacts: Rua Humberto de Campos, 425 / 8º andar -Leblon Rio de Janeiro - RJ Phone: ( 55 21) 31311314/1315/1316 Fax: (55 21) 3131-1155 E-mail: [email protected] Visit our website: www.oi.com.br/ir 24 São Paulo – March 2007