Telefonica Brasil S.a. · BMFBOVESPA:VIVT3
Telefonica Brasil — Q3 2021 Earnings Presentation
18 slides from Telefonica Brasil's earnings presentation, Oct 28, 2021
Slide 1: Results 3Q21
R E S U LT S 3Q21 Telefônica Brasil S.A. Investor Relations October 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: Fixed revenue back to growth and highest mobile service revenue expansion in 6 years
FIXED REVENUE BACK TO GROWTH AND HIGHEST EXPANSION OF MOBILE SERVICE REVENUE IN 6 YEARS, WITH NET PROFIT UP +8.5% AND ACCELERATED BUYBACKS 97 million total accesses 48mn 4.4mn Mobile Postpaid Fiber +0.4% +5.7% Total Fixed Mobile Service Accesses Homes Connected Revenue Growth Revenue Growth Leading
Slide 4: Core revenues representing almost 90% of Vivo's total business
CORE REVENUES REPRESENTING ALMOST 90% OF VIVO’S TOTAL BUSINESS, WITH STRONG SERVICE CORE PERFORMANCE IN 3Q21 Core Businesses Total Revenues¹ Service Core Revenues R$ million, % R$ million Mobile Handsets 10,792 11,033 +2.2% 8,627 9,318 +8.0% 2,174 2,496 +14.8% FTTx IPTV Ex-Handset: +8.0% 6,453 6,822
Slide 5: Postpaid continues to gain momentum as connectivity and digital services expand
POSTPAID CONTINUES TO GAIN MOMENTUM AS CONNECTIVITY AND DIGITAL SERVICES Mobile EXPAND IN RELEVANCE Mobile Service Revenue growth YoY Mobile Revenues R$ million 5.7% 7,163 7,391 +3.2% 2.1% 3.1% Solid fundamentals leading to another 0.2% quarter of robust mobile -1.0% 1,280 1,272 -0.6% Highest YoY% s
Slide 6: Quality of network and CX underpin Vivo's market leadership and customer base expansion
QUALITY OF NETWORK AND CX UNDERPIN VIVO’S MARKET LEADERSHIP AND Mobile CUSTOMER BASE EXPANSION, ENHANCING LIFETIME VALUE Mobile Market Share¹ Mobile Customer Base Lifetime Value Market-share million Postpaid churn, ex-M2M² % Mobile 82.3 +7.2% market leader 33.0% 76.8 1.8% 1.2% 1.2% 34.2 32.8 3Q19 3Q
Slide 7: Return to growth of total fixed revenues, as fiber businesses thrive
RETURN TO GROWTH OF TOTAL FIXED REVENUES, AS FIBER BUSINESSES THRIVE AND Fixed CORPORATE DATA & ICT MAINTAINS THE POSITIVE MOMENTUM Total Fixed Revenues Core Fixed Revenues R$ million R$ million 3,628 3,642 +0.4% 2,496 +14.8% 2,174 2,174 2,496 1,364 1,222 355 Core Fixed Revs 288 FTTx (FTTH+FTTC)¹ No
Slide 8: Fiber revenues reach R$1.5 billion with impressive compounded growth
FIBER REVENUES REACH R$1.5 BILLION WITH IMPRESSIVE COMPOUNDED GROWTH, Fixed DRIVEN BY ACCELERATION OF MONTHLY NET ADDITIONS Fiber Revenues Fiber Customer Base R$ million Fiber Accesses CAGR CAGR million 3Q19-21 3Q19-21 5,274 +32.3% 1,492 +40.3% 3,984 918 3,013 855 681 355 4,356 1,116 IPTV 2,332 3,13
Slide 9: Vivo has Brazil's largest FTTH footprint and will continue deploying
VIVO HAS BRAZIL’S LARGEST FIBER-TO-THE-HOME FOOTPRINT AND WILL CONTINUE Fixed DEPLOYING AT AN ACCELERATED PACE, REACHING 29 MILLION HOMES PASSED BY 2024 New Homes Passed Target Cost per Home Passed million R$ ≈400 Cost of HP +11mn 29 ≈300 significantly reduced due to efficiencies and in- depth exper
Slide 10: Vivo is capturing double-digit growth opportunities in B2B
VIVO IS CAPTURING DOUBLE-DIGIT GROWTH OPPORTUNITIES IN B2B BY DELIVERING Digital AN ECOSYSTEM OF IT AND DIGITAL SOLUTIONS THAT INCREASE ENGAGEMENT B2B Revenues¹ over B2B Digital Services² B2B Digital Ecosystem Total Revenues (LTM) over B2B Revenues (LTM) Vivo is a one-stop shop for companies that ar
Slide 11: Joint venture between Vivo and Anima Educação for lifelong learning
JOINT-VENTURE BETWEEN VIVO AND ANIMA EDUCAÇÃO TO CREATE A BUSINESS Digital PLATFORM FOCUSED ON LIFELONG LEARNING AND EMPLOYABILITY Education initiative Signing of an MoU¹ aiming to create a + 50/50 Joint-Venture that will offer digital courses, focused on lifelong Client acquisition Educational Cont
Slide 12: Vivo continues to invest and evolve in ESG
VIVO CONTINUES TO INVEST AND EVOLVE IN ESG THROUGH INITIAVES RELATED TO ESG DISTRIBUTED ENERGY, DIVERSITY AND INNOVATION PROGRAMS Expansion of the Distributed Generation Program, Green energy which already has 19 plants in operation, and New target of 83 renewable inauguration of the first biogas pl
Slide 13: Acceleration of core businesses is transforming the cost base
THE ACCELERATION OF VIVO’S CORE BUSINESSES IS TRANSFORMING THE COST BASE, THAT REMAINS UNDER CONTROL AND BELOW INFLATION Total Costs¹ vs. Inflation LTM²: Cost of Services and Goods Sold R$ million +10.25% 6,470 6,620 +2.3% ▪ Increase on Cost of Services (+8.7% YoY) given higher volumes of licenses a
Slide 14: Recurring EBITDA growth of 2.1% supported by core revenues
RECURRING EBITDA GROWTH OF 2.1% SUPPORTED BY SOLID PERFORMANCE OF CORE REVENUES, WITH DIGITALIZATION SAVINGS ALLEAVIATING THE RAMP UP OF INFLATION EBITDA Evolution R$ million 551 (309) (1,849) EBITDA Mg 40.0% (4,771) 10,792 11,033 417 4,414 4,830 Revenues 3Q20 ∆ Core Revs ∆ Non-Core Revs Revenues 3Q
Slide 15: Investments in growth technologies and capex allocation for fiber and 5G
VIVO’S INVESTMENTS IN GROWTH TECHNOLOGIES AND CAPEX ALLOCATION INITIATIVES ARE PAVING THE PATH FOR FIBER ACCELERATION AND 5G ROLLOUT CAPEX¹ RAN Sharing Agreement with TIM Capex/Sales, % ▪ 4G Coverage Expansion concluded, with 716 Capex, R$ Million cities (≈360 cities for each operator) ▪ Consolidati
Slide 16: Net profit expands 8.5% and sustains shareholder remuneration
NET PROFIT EXPANDS 8.5% AND SUSTAINS SHAREHOLDER REMUNERATION, ENHANCED BY THE ACCELERATION OF SHARE BUYBACKS Net Profit Share Buyback 11.7mn R$ million Shares in Treasury 0.69% of Total Equity 1,315 1,212 ▪ Share Buybacks are consistently being executed and have been accelerated to further increase
Slide 17: Free cash flow totaled R$6.7 billion in the first nine months of 2021
FREE CASH FLOW TOTALED R$6.7 BILLION IN THE FIRST 9 MONTHS OF 2021, ALLOWING VIVO TO FUND THE ACQUISITION OF OI MOBILE’S ASSETS AND INVEST IN SPECTRUM Free Cash Flow Yield (LTM) Free Cash Flow¹ 9M21 10.2% R$6.7bn Free Cash Flow/Sales (LTM) 16.9% Leverage Gross Debt, R$ billion Net Debt (Cash), R$ bi
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