Telefonica Brasil S.a. · BMFBOVESPA:VIVT3
Telefonica Brasil — Q2 2021 Earnings Presentation
18 slides from Telefonica Brasil's earnings presentation, Jul 28, 2021
Slide 1: Results 2Q21
R E S U LT S 2Q21 Telefônica Brasil S.A. Investor Relations July 28th, 2021
Slide 2: Disclaimer
DISCLAIMER This presentation may contain forward-looking statements concerning prospects and objectives regarding 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 those contained in such forwar
Slide 3: Revenue acceleration driven by mobile and fiber accesses, net profit growing 20.9%
REVENUE ACCELERATION DRIVEN BY POSITIVE EVOLUTION OF MOBILE AND FIBER ACCESSES, COMBINED WITH NET PROFIT GROWING 20.9% 97 million total accesses 47mn 4.0mn Mobile Postpaid Fiber +3.2% +3.1% Total Revenue Mobile Service Accesses Homes Connected Growth Revenue Growth Largest total mobile +41.3% YoY, C
Slide 4: Core revenues growing 8.2% YoY in 2Q21, representing 89% of total business
CORE REVENUES CONTINUE AT FULL SPEED, GROWING 8.2% YOY IN 2Q21, AND REPRESENT 89% OF VIVO’S TOTAL BUSINESS Core Businesses Total Revenues¹ Revenues from Core Businesses R$ million, % R$ million Mobile Handsets 8,734 9,453 +8.2% 10,317 10,649 +3.2% 2,116 2,462 +16.4% FTTx IPTV +5.6% 6,618 6,990 Digit
Slide 5: Demand for premium connectivity improving mobile service revenues
DEMAND FOR PREMIUM CONNECTIVITY AND INCREASED CUSTOMER ACTIVATION IMPROVING MOBILE SERVICE REVENUES, WITH OPTIMISTIC TRENDS FOR THE NEXT QUARTERS Mobile service revenues growth YoY Mobile Revenues R$ million 6,990 +5.6% 2.1% 3.1% Continued trend of mobile service revenues 6,618 acceleration with 0.2
Slide 6: Solid mobile leadership reaffirmed in 2Q21
SOLID MOBILE LEADERSHIP REAFFIRMED IN 2Q21, WITH OPERATING FIGURES CONFIRMING A FLIGHT-TO-QUALITY AND IMPROVED CUSTOMER LOYALTY Mobile Market-share¹ Mobile Customer Base Postpaid KPIs million Customer acquisition enhanced as migrations and portability improve… 81.0 +8.8% 33.0% 33.0% 74.4 Net adds +3
Slide 7: Core fixed revenue expansion driven by demand for high-quality connectivity
CORE FIXED REVENUE EXPANSION DRIVEN BY INCREASING DEMAND FOR HIGH-QUALITY CONNECTIVITY AND DIGITAL SERVICES Growth of Core Fixed Revenues YoY Core Fixed Revenues¹ R$ million 19.0% 17.2% 16.4% 2,462 +16.4% 17.0% Core Fixed Revenues 10.9% 15.0% ramping up in the last 8.3% 9.1% 13.0% 2,116 11.0% two qu
Slide 8: Vivo reaches 4 million fiber customers
VIVO REACHES 4 MILLION FIBER CUSTOMERS BY ACCELERATING NET ADDITIONS AND FOOTPRINT EXPANSION, DELIVERING QUALITY HIGH-SPEED CONNECTIVITY Fiber Homes Passed Fiber Homes Connected thousand 1.3x thousand 1.4x +1.183 +693 17,309 13,032 9,528 4,046 2Q19 2Q20 2Q21 2,863 Number 2,170 142 216 293 of cities
Slide 9: FiBrasil neutral fiber network is up and running
FIBRASIL, NEUTRAL FIBER NETWORK CREATED IN PARTNERSHIP WITH TELEFÓNICA INFRA AND CDPQ, IS UP AND RUNNING AND WILL DEPLOY 500K FTTH HPs IN 2H21 Planned coverage expansion Initial cities Initiating with 1.6 million HPs in 34 cities 1H21 outside the state of São Paulo Regulatory approvals Plan to reach
Slide 10: Positive evolution of fiber ARPU and speed
POSITIVE EVOLUTION OF FIBER ARPU, WITH CUSTOMERS DEMANDING HIGHER SPEEDS, COMBINED WITH A COMPLETE PORTFOLIO OF SERVICES THAT REDUCES CHURN Fiber ARPU and speed evolution Focus on high-value customers, improving ARPU and churn FTTH ARPU Evolution Customer acquisition Customer engagement Higher speed
Slide 11: Vivo rolls out building blocks of its digital ecosystem
VIVO CONTINUES TO ROLL OUT THE BUILDING BLOCKS OF ITS DIGITAL ECOSYSTEM, DEEPENING THE REACH OF ITS RELATIONSHIP WITH CUSTOMERS Financial services Health and wellness Key Enablers 97 million accesses +1,600 stores and online channels A portfolio of financial services, in a Initiating with telemedici
Slide 12: Vivo's digital channels are gaining traction
VIVO’S DIGITAL CHANNELS ARE GAINING TRACTION, ENHANCING THE OVERALL CUSTOMER JOURNEY AND INCENTIVIZING FURTHER ENGAGEMENT Increased relevance of digital channels… ...improving customer experience, activations and engagement 19mn Unique users 78% of customer (above Industry benchmark) NPS¹ contacts 5
Slide 13: ESG initiatives continue to expand
ESG INITIATIVES CONTINUE TO EXPAND, REINFORCING VIVO’S COMMITMENT TO GENERATE A POSITIVE IMPACT FOR ALL ITS STAKEHOLDERS +1.5 million equipment Distributed generation refurbished by FY2021 project will deliver a total capacity of 81 aMW by 1H22 with a new stage of ‘Recycle with Vivo’, that aims to a
Slide 14: Business transformation and evolving cost base
VIVO IS TRANSFORMING ITS BUSINESS AND THE COST BASE IS EVOLVING AS THE SALE OF HANDSETS AND DIGITAL SERVICES ESCALATES ex-Cogs: Cost of Services and Goods Sold -0.3% Total Costs¹ R$ million R$ million 6,214 6,423 +3.4% ▪ Positive evolution of handset sales and B2B 1,883 +22.6% equipment 1,536 1,883
Slide 15: Improved capex allocation supporting growth in cutting-edge technologies
IMPROVED CAPEX ALLOCATION AIMED AT TRANSFORMING THE COMPANY AND SUPPORTING GROWTH IN CUTTING-EDGE TECHNOLOGIES CAPEX Capex light fiber expansion Capex, R$ Million ▪ FiBrasil and partnerships with American Tower and Phoenix Capex/Sales, % reducing time to market with less CapEx intensity +17.9% ▪ Exp
Slide 16: Net profit growing 20.9% and new R$2.1 billion tax gain
NET PROFIT GROWING 20.9% IMPROVES THE BASIS FOR SHAREHOLDER REMUNERATION AND A NEW TAX GAIN OF R$2.1 BILLION IS A SOURCE OF INCREMENTAL CASH Net income Extraordinary tax gain R$ million Positive effect due to the Supreme Court decision to deduct ICMS from the basis of calculation of PIS/COFINS contr
Slide 17: Free cash flow totaled R$4.1 billion in first 6 months of 2021
FREE CASH FLOW TOTALED R$4.1 BILLION IN THE FIRST 6 MONTHS OF 2021, REPRESENTING A FREE CASH FLOW YIELD OF 12% (LTM) Free Cash Flow¹ R$ million, Δ YoY 147 (639) 18 (411) 61 4,892 4,067 6M20 FCF After Leasing Recurring EBITDA Capex Interest and Income Working Capital Leasing Payments 6M21 FCF After L
Slide 18: Investor Relations
For further information: Investor Relations w w w. t e l e f o n i c a . c o m . b r / i r i r. b r @ t e l e f o n i c a . c o m +55 11 3430.3687