Telefonica Brasil S.a. · BMFBOVESPA:VIVT3
Telefonica Brasil — Q3 2023 Earnings Presentation
14 slides from Telefonica Brasil's earnings presentation, Nov 1, 2023
Slide 1: Results 3Q23
RESULTS 3Q23 October 31st, 2023 Telefônica Brasil S.A. Investor Relations 1
Slide 2: Disclaimer
DISCLAIMER This presentation may contain forward-looking statements concerning prospects and objectives regarding the capture of synergies, growth of the subscriber base, a breakdown of the various services to be offered and their respective results Our actual results may differ materially from thos
Slide 3: Solid operating and financial performance lead to robust cash generation and shareholder distribution
Solid operating and financial performance lead to robust cash generation and shareholder distribution Shareholder Operating Revenues Profitability Remuneration +11.7% YoY +5.2% YoY +9.6% YoY 42.2% EBITDA +16.7% YoY 112 million Total Accesses Core Revenues growth R$ Margin (+1.6 p.p. YoY) R$ 19.6% of
Slide 4: Total Revenues growing considerably above inflation as Core accelerates
Total Revenues growing considerably Total Revenues R$ million, % of Total Revenues above inflation as Core accelerates Mobile Revenues +9.4% R$ million +13.5% +7.5% -5.8% Handsets & Mobile Electronics Solid MSR growth Service Rev. fueled by robust Prepaid commercial Mobile +9.0% activity and +12.7%
Slide 5: Robust ARPU growth led by solid operating momentum as customers focus on quality services
Robust ARPU growth led by solid operating momentum as customers focus on quality services Mobile Accesses Mobile Market Share million % Postpaid subscriptions presented Prepaid significant growth -6.8% year-over-year, already representing 62% Postpaid of all accesses +5.2% (+2.9 p.p. YoY) Postpaid1
Slide 6: Leadership in fiber reinforced by strong deployment and unique convergent portfolio
Leadership in fiber reinforced by strong deployment and unique convergent portfolio FTTH Homes Passed FTTH ARPU Growth million YoY % Vivo Fibra is present in 439 cities across Brazil (+59 YoY) FTTH ARPU evolution turns positive, as we combine price hikes with a top-notch fiber experience FTTH Homes
Slide 7: Digital B2B Revenues continue to gain share within our business, with important upside potential
Digital B2B Revenues continue to gain Digital B2B Revenues R$ million (LTM) share within our business, with important upside potential Currently, we provide digital solutions to only ~10% of our B2B customers, thus providing us with a significant captive addressable market, especially in SMEs Profes
Slide 8: Leveraging on one of Brazil's largest B2C customer bases to increase our share of wallet
Leveraging on one of Brazil’s largest B2C customer bases among all sectors to increase our share of wallet Financial Services¹ Video + Music OTTs Electronics Revenue Revenue Revenue R$ million R$ million R$ million \\\\\ \\\\\ Vivo Money grew its portfolio 2.8 million video + music OTT Complete port
Slide 9: Vivo continues to advance in its social and climate actions
Vivo continues to advance in its social and climate actions, with the clear goal of leading positive change within the Company’s reach Climate Environment Energy Vivo will begin operating in the Launch of the Climate Action Energy Self-production modality, Plan, which presents how Vivo in partnershi
Slide 10: Opex evolution is considerably below revenue growth, as we continue to optimize operating costs
Opex evolution is considerably below revenue growth, as we continue to optimize our operating costs Costs Costs of Services & Goods Sold R$ million +4.6% • Cost of Services grew as a result of the increasing digital 33% of costs solutions revenue • Cost of Goods Sold expanded driven by strong sales
Slide 11: Capex in line with guidance, coupled with solid operational performance, leading to strong cash flow expansion
Capex in line with guidance, coupled with solid operational performance, leading to strong cash flow expansion Capex¹ Operating Cash Flow¹ R$ million R$ million, 9M23 (9.530) 9.752 OpCF Margin¹ LTM % % of sales As of September 2023, Vivo covered 127 cities with 5G, reaching ~40% of the population wi
Slide 12: Double-digit net income and free cash flow growth in 9M23, combined with a low level of debt
Double-digit net income and free cash flow growth in 9M23, combined with a low level of debt Net Income1 Free Cash Flow³ R$ million R$ million YoY % YoY % +2.2% +4.3% +47.2% +10.4% +16.3% Net Debt² +26.4% R$ million Sep-23 Net Debt Free Cash Flow Yield4 (LTM) (including IFRS-16) R$ 12.7bn 11.7% Free
Slide 13: Shareholder remuneration continues to be a priority, and the recent prior consent approval for capital reduction
Shareholder remuneration continues Shareholder Remuneration¹ to be a priority, and the recent prior R$ million consent approval for the capital reduction gives us further flexibility Capital Reduction: update and next steps ✓ Requested for Prior Consent from Anatel was submitted on February 15, 2023
Slide 14: Investor Relations
For further information: Investor Relations ri.telefonica.com.br/en ir.br@telefonica.com 14