Telefonica Brasil S.a. · BMFBOVESPA:VIVT3
Telefonica Brasil — Q1 2012 Earnings Presentation
23 slides from Telefonica Brasil's earnings presentation, May 10, 2012
Slide 1: Results 1Q12
Results 1Q12 Jelefinica | vivo Telefonica Brasil S A. 05.10.2012
Slide 2: Disclaimer
Disclaimer For comparative purposes, the 1Q11 figures were prepared on a combined basis. Thus, the annual variations presented may differ from those reported in the financial statement filed with CVM through the Quarterly Information — ITR form. This presentation may contain forward-looking statemen
Slide 3: Agenda
Agenda af Operating Performance. Financial Performance. | Operational Integration. Reha vivo
Slide 4: Operating Performance
O1 Operating Performance
Slide 5: Highlights of the Quarter
FP Highlights of the Quarter * Leadership expansion in all mobile customer segments + Integration leading to enhanced performance in Large Corps and SMEs * Continued accelerated annual growth even with MTR reduction + Margin of 34% even in the face of integration process and commercial activity duri
Slide 6: In 1Q12 we continue to harvest on our superior data approach
In 1Q12 we continue to harvest on our superior data approach... and Fixed Space. infr: 1.7 MM homes 6,000 KM of Passed in UBB in fiber in the wealthiest regions FTTH solution of SP ...with a superior solution delivering top edge experience. s driving data adoption in the smartphone... Pol 1011 1012
Slide 7: Growth in accesses during the quarter shows the attractiveness of our data and voice offers
Growth in accesses during the quarter shows the attractiveness of our data and voice offers. Fixed Voice Fixed Broadband = Mobile Postpaid mPay TV = Mobile Prepaid 1012 4011 =Mobile » Fixed** 1011 1011 1Q12 ce; Are Siders. 150 thousand TVA customers consolidated in June 2011 includes nied vote, fed
Slide 8: In the mobile business, Telefónica Brazil increased its leadership in all customer segments
In the mobile business, Telef6nica Brazil increased its leadership in all customer segments <4 a 748 - 61" 166) | | ae Oi 1GH2 1011 4011 1012 : =Blended =Postpaid Broadband "Prepaid «Postpaid § erect 10% 2a11 3014 4ait 1012 1011 4a 1012 t = Data i —A% prepaid customers - YoY ——A% of recharge - YoY I
Slide 9: In the fixed business, fiber adoption and corporate business performance are the quarter highlights
J In the fixed business, fiber adoption and corporate business performance are the quarter highlights 146 146 1 4.6 92 a =| en at 89 = 1Q11 2011 3011 4011 1Q12 aati Mat Tai £_Lscuueeenteananannisnsentnenenniennnee "Fixed Accesses «Fixed Broadband + 14.3% 34% 30% 25m 26% 7% © 25% © 1010 2Q10 3Q10 4Q1
Slide 10: Strong financial results even considering the integration process and strong commercial activity
Strong financial results even considering the integration process and strong commercial activity. R$ million 1Q11 | A% YoY 8,314.3 3.7% Total Net Operating Service Revenue) | 8,133.0 4,924.2 3,208.7 181.4 2,847.3 35.4% ~ 4,128.5 -15.2% Irena “0 Petia | vivo Telefonica Brasil S.A.
Slide 11: Financial Performance
02 Financial Performance
Slide 12: Mobile net revenue maintained accelerated growth even in the face of MTR reductions
Fr Mobile net revenue maintained accelerated growth even in the face of MTR reductions in the quarter 1 30° 894 0,34 1911 4a 1012 2a sat aati 1012 f 29.4% JE 33.0% ME 33.3% | IE MTR impact 05 “mobile Service Rev./Total Revenue MlAccess and Usage lll Network Usage Data and VAS 1 ©) vevoriwin ckenuenn
Slide 13: Data and VAS revenue continue to be the main driver of revenue growth
Data and VAS revenue continue to be the main driver of revenue growth and already accounts for around 27% of net service revenue 2a11 3aQnt 4a 1Q12 - + 4X £ 39.1%) 321 3 B we | “4a 4Qit 012 Mi Messaging P2P Mi Internet Other 1011 1012 Investor Relations f 3 Yilefiniea | vivo Telefonica Brasil S.A.
Slide 14: Corporate business responds for 48% of the wireline net revenue
Fr Corporate business responds for 48% of the wireline net revenue 1Q12 1Q11 14 4Q11 Gey 32.0% M Voice” Mi DataandPayTV — Others 0 & Data and Pay TVv/Wireline net revenue i Individual @ Corporate Investor Relations 14 Telefonica Brasil S.A.
Slide 15: Consolidated expenses increased by 5.6% yoy, affected by non recurrent events
Consolidated expenses increased by 5.6% yoy, affected by non recurrent events and higher commercial activity in the quarter = RS Million YoY 31.9% 6.8% -10.7% 10.3% 21.9% na. 5.6% 51 (148) (48) a8 w. 2 — mmm (5.467) (5.178) = 1011 Personnel Services Goods Sold Selling G&A Others 1Q12 Rendered Expens
Slide 16: 1Q12 recurrent EBITDA reaches R$2,8 billion and adjusted margin of 33.5%
1Q12 recurrent EBITDA reaches R$2,8 billion and adjusted margin of 33.5% RS Million 1011 4Qi1 1Q12 Investor Relations 46 Telefonica Brasil S.A 2.927 2.783 3Q11 4a 1Q12 @ Recurrent EBITDA +“ Adjusted Margin ® sale of non strategic assets in the amount of R$216.5 million in the 1Q12 and R$380.1 millio
Slide 17: 1Q12 EBIT reaches R$1.5 billion and net result of R$1 billion
Fr 1Q12 EBIT reaches R$1.5 billion and net result of R$1 billion RS Million 1.985 1.756 1011 4011 1012 i | : 1011 EBITDA D&A Financial Taxes 1012 Result 1911 411 1012 Investor Relations oy Tenia | vivo Telefonica Brasil S.A.
Slide 18: Higher capex execution in the quarter focused on network expansion, integration and quality
J Higher capex execution in the quarter focused on network expansion, integration and quality RS Million = x Cwm 1011 4att 1012 9,2% *Short Term = Long Term 713 1011 1012 = % Capex iNet Operating Revenue 1011 4011 1012 Investor Relations 18 ‘Yeleforion | vivo Telefonica Brasil S.A.
Slide 19: Operational Integration
03 Operational Integration
Slide 20: We have been keeping our top quality positioning in the mobile and have strengthened the fixed
Fr We have been keeping our top quality positioning in the mobile and have strengthened the fixed. Mobile Attendance Index - IDA "Fixed Complaints volume in Anatel 99,4 | Best IDA 95 : 87,9: ; Anatel STFC Anatel ADSL Anatel TV Zz e@ a a) Mar/11_— . Marii2— : Jan Feb Mar Apr May Jun Jul Aug Sep Oct N
Slide 21: With improved quality and solid processes we could rebrand our fixed services and restructure
Fr With improved quality and solid processes we could rebrand our fixed services and restructure our organization, executing and delivering the original plan. Impact inthe i Main future quarter : benefits REBRANDING Stores selling mobile and fixed products; mb CI @ ° Convergent customer experience;
Slide 22: As an integrated company we also move forward on our convergent approach
Fr As an integrated company we also move forward on our convergent approach, especially for the corporate customer. Infrastructure - Use of Mobile Infrastructure (HSPA, Fiber and Radio) outside Sao Paulo to provide corporate services (VPN IP, IP Internet and Metrolan) with better prices and lower op
Slide 23: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TELEFÔNICA BRASIL S.A. Date: May 10, 2012 By: /s/ Carlos Raimar Schoeninger Name: Carlos Raimar Schoenin