Telefonica Brasil S.A. · BMFBOVESPA:VIVT3
Telefonica Brasil — Q1 2023 Earnings Presentation
16 slides from Telefonica Brasil's earnings presentation, May 9, 2023
Slide 1: Results 1Q23
RESULTS 1Q23 May 9th, 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: Strong operating performance driving further revenue acceleration and robust cash generation
Strong operating performance driving further revenue acceleration and robust cash generation Shareholder Operating Revenues Profitability Remuneration mn bn bn 112 million +15.4% YoY +9.6% YoY +26.4% YoY Total Accesses +12.3% YoY % Core Revenues growth R$ 38.9% EBITDA Margin R$ 24.6% of Total Revenu
Slide 4: Total revenues expanding the most in over 10 years as core services accelerate
Total revenues expanding the most in Total Revenues R$ million, % of Total Revenues over 10 years as core services accelerate Mobile Revenues +16.3% R$ million +12.1% +20.6% +18.0% Outstanding Handsets mobile service Mobile Service revenue Prepaid Rev. expansion arising Mobile +15.9% from initial 5G
Slide 5: The mobile business continues to accelerate, as Vivo increases its market share and reduces churn
The mobile business continues to accelerate, as Vivo increases its market share and reduces churn Mobile Accesses Mobile Market Share million % In 1Q23, postpaid numbers were impacted by 199k dongle Prepaid disconnections and +14.2% by an additional clean-up of 457k Vivo is the leader in all Postpai
Slide 6: Vivo's 5G deployment is quickly expanding to meet demand
The need for high quality connectivity continues to grow, and Vivo’s 5G deployment is quickly expanding to meet this demand Population with 5G Vivo’s 5G Accesses Mobile Traffic # of cities with Vivo’s 5G SA¹ 5G at Lollapalooza 68% of all handsets sold in stores are 5G ready, and the entry level pric
Slide 7: As FTTH continues its expansion, customer totalization leads to increased lifetime value
As FTTH continues its expansion, the totalization of customers leads to increased lifetime value and reduced churn rates FTTH¹ Homes Passed million Vivo Total’s Vivo Fibra is monthly churn in present in 436 1Q23 was 0.39%, cities throughout significantly lower Brazil than the standalone (+95 YoY) ch
Slide 8: Vivo is the main supplier of key B2B services to companies of all sizes
Vivo is the main supplier of key B2B Digital B2B Revenues R$ million services to companies of all sizes, and revenues are growing rapidly Digital B2B Revenues is quickly expanding Digital B2B/Total Revenues Digital B2B Revenues’ CAGR 19-23: +35% By going beyond just offering connectivity services to
Slide 9: We continue to develop our B2C ecosystem, scaling up financial services and video content
We continue to develop our B2C ecosystem, scaling up financial services and video content partnerships to enhance lifetime value Financial Services¹ Video + Music OTTs Revenue Revenue R$ million R$ million Distribution of OTT services Loan Portfolio through Vivo's invoice R$ million • Insurance for
Slide 10: Vivo's B2C value proposition strengthened by digital services and electronics portfolio
Vivo’s value proposition in B2C is strengthened by additional digital services and a complete portfolio of tech electronics Additional Ecosystem Services Complete Electronics Portfolio Beyond Smartphones Vida V - Health & Wellness Revenue Vivo’s physical and digital • Acquisition of Vale Saúde Sempr
Slide 11: Commitment to Racial and Gender Diversity and advancing Climate and Energy practices
Vivo reinforces its commitment to Racial and Gender Diversity and is advancing in its Climate and Energy practices Women in Executive Leadership Distribution Generation Program Women in Power Plants Leadership roles # % Women are present +7 new inaugurated in 36.8% of executive power plants, leaders
Slide 12: Costs move with the shift in revenue mix as digital solutions gain relevance
Costs continue to move accordingly to the shift in revenue mix, as digital solutions gain relevance Costs R$ million Costs of Services & Goods Sold +13.7% • Cost of Services up +18.4% supporting the expansion of digital 32% services and impacted by higher regulatory taxes led by mobile base growth +
Slide 13: Capex intensity starts to reduce, leading to strong operating cash flow generation
Capex intensity starts to reduce, leading to strong operating cash flow generation in the quarter Capex¹ Operating Cash Flow¹ R$ million R$ million, 1Q23 (9.530) 9.752 OpCF Margin¹ LTM % % of sales As guided, Capex in 2023 will be below R$9bn, providing an important support for current and future ca
Slide 14: Solid performance driving Net Income growth, with shareholder remuneration reaching R$1.3 bn YTD
Solid operating and financial Net Income performance driving Net Income R$ million growth, with shareholder remuneration reaching R$1.3 bn YTD Shareholder Remuneration YTD Dividends + IOC¹ Declared² R$1.2 bn + Share Buybacks R$0.1 bn Total R$1.3 bn Payment of 2022 Remuneration 1st Tranche: 2nd Tranc
Slide 15: Strong Free Cash Flow generation, totaling R$3.1 billion in 1Q23
Strong Free Cash Flow generation, totaling R$3.1 billion in 1Q23, allowing for controlled levels of indebtedness Gross Debt³ Net (Cash) Debt³ Free Cash Flow¹ Gross debt increasing with Solid FCF generation allowed us to 1Q23 issuance of R$3.5 bn in ESG maintain sound levels of leverage R$3.1 billion
Slide 16: Investor Relations
For further information: Investor Relations ri.telefonica.com.br ir.br@telefonica.com 16