Telefonica Brasil S.a. · BMFBOVESPA:VIVT3
Telefonica Brasil — Q4 2020 Earnings Presentation
19 slides from Telefonica Brasil's earnings presentation, Feb 24, 2021
Slide 1: Results 4Q20 Telefônica Brasil S.A.
Results 4Q20 Telefônica Brasil S.A. Investor Relations F e b r u a r y 2 4 th, 2 0 2 1
Slide 2: Disclaimer
This presentation may The exclusive purpose of contain forward-looking such statements is to statements concerning indicate how we intend future prospects and to expand our business objectives regarding growth and they should therefore of the subscriber base, a not be regarded as breakdown of the va
Slide 3: Leadership reaffirmed during this challenging year, accelerating digitalization
Leadership reaffirmed during this challenging year, accelerating digitalization combined with strong financial performance and shareholder remuneration 95mn Total Accesses 33.6% Mobile Market Share 15.7mn +52.9% FTTH¹ Homes Passed FTTH1 Revenues YoY +4 mn in Mobile at historic highs +4.7mn +8.2% Acc
Slide 4: Revenues in key segments continue to improve in 4Q20
Revenues in key segments continue to improve in 4Q20, with consistent customer base growth and improved monetization Postpaid Revenues Prepaid Revenues +1.2% +4.9% +13.0% +4.3% Postpaid evolution Prepaid revenues driven by strong net continue to grow due additions and to accelerated net continued ex
Slide 5: Vivo is transforming its revenue profile: Core Businesses represent 88% of Revenues
Vivo is transforming its revenue profile: Core Businesses represent 88% of total Revenues, with a positive outlook for the future Core -1.6% Mobile 9,523 9,828 +3.2% 11,086 11,377 11,193 Handsets 2,071 2,259 +9.1% Total Core Revenue¹ Revenues by FTTx Composition segment R$ million, % +3.2% R$ millio
Slide 6: Solid recovery of Mobile Service Revenues, driven by postpaid and prepaid
Solid recovery of Mobile Service Revenues, driven by growth in both postpaid and prepaid Postpaid² 57% of Total Mobile Accesses 80% of Mobile Services Revenues ARPU R$ Postpaid ARPU 7,452 7,569 +1.6% recovering to pre- Covid levels with 49.9 50.6 51.0 our “more-for- 829 809 -2.4% more” strategy 2Q20
Slide 7: Quality of service driving strong mobile net additions and low churn
Second to none quality of service and user experience driving another quarter of strong mobile net additions, combined with churn at historically low levels Mobile Market Share Postpaid Churn ex-M2M 33.6% Leadership reaffirmed as 32.9% Lowest churn in 4Q19 1.65% market share 5 years, for the remains
Slide 8: Core fixed revenues continue to thrive as fiber and digital services grow
Core fixed revenues continue to thrive as FTTH Revenue R$ million fiber and digital services increase their CAGR 18-20 relevance +45% FTTH is the main 2,259 +9.1% growth catalyst of our core fixed 2,071 business, delivering +45% CAGR in the last 2 896 years 710 -4.2% 586 Core Fixed 426 Revenues¹ 741
Slide 9: Ramp up of fiber accesses supporting superior customer mix and ARPU
The ramp up of fiber accesses continues as strong as ever, supporting a superior customer mix and increased ARPU FTTH accesses FTTH Net Additions Thousand Thousands 1.7x +36% +31% 248 145 4Q19 4Q20 3,378 2,477 1,893 Accelerated adds of high-quality customers in 4Q20 ▪ >35% of FTTH gross additions ar
Slide 10: Vivo accelerated fiber deployment reaching 15.7 million HPs in 2020
Vivo accelerated fiber deployment reaching 15.7 million HPs in 2020 and plans to reach >24 million by the end of 2024 FTTH HPs LatAm’s Largest FTTH footprint Independent and Neutral Fiber (million) +>8 mn Network +4.7 mn Equivalent to the sum of FTTH ▪ Advanced negotiations with a major HPs in UK, G
Slide 11: Accelerating growth in services beyond connectivity
Vivo is accelerating growth in services beyond connectivity, with initiatives across the digital space that are increasingly gaining traction vivo marketplace New contracts/month Monthly credit origination Gross R$ Initial results Merchandise 6.7x Promising 2.5x 2.4x Value confirm R$ initial results
Slide 12: Acquisition of Oi's Mobile Assets enhances Vivo's position
The acquisition of Oi’s Mobile Assets enhances Vivo’s position in quality of service and generates value to shareholders through the capture of synergies Amount to Spectrum Client Sites Milestones be paid Base Dec 14, 20 Dec 31, 20 Jan 28, 21 Fev 08, 21 Public Filing with Purchase Filing with Auctio
Slide 13: Vivo continues to deliver sustainable cost efficiencies
Vivo continues to deliver sustainable cost ▪ Decrease in G&A and Personnel Costs due to cost control initiatives and government measures related to COVID-19; efficiencies ▪ Reduction in Commercial Expenses driven by lower spend with commissioning, call centers, billing and advertising, benefited 5,6
Slide 14: Digitalization and simplification initiatives continue to advance
Digitalization and simplification initiatives continue to advance while maximizing savings and improving customer experience Billing 84% Collection 64% 94% R$ 1.5 bn e-billing penetration Payments using digital in opex saved of the R$ 1.6 (+12 p.p. YoY) platforms vs. 2017 bn target for 18-21 period
Slide 15: Smart capex allocation to be benefitted by sharing initiative with TIM
Smart capex allocation to be benefitted by sharing initiative with TIM Network Sharing with TIM Capex Initiatives Deliverables Capex¹ (R$ million) Coverage Expansion Capex¹/Sales 4G coverage expansion with ▪ 348 cities by Feb 21 (≈174 for each less Capex intensity operator) 21.0% 20.0% 12 ,00 0 ▪ 73
Slide 16: Unification of Share Classes and strong dividend payout
Conclusion of the Unification of Share Classes and strong dividend payout, reinforcing our solid governance and shareholder remuneration practices Net Income and Proposed Remuneration² based on 2020 Proposed Shareholder net income: vivt3 ▪ Trading with one ticker in B3 and ADRs backed by voting Remu
Slide 17: Effective financial management resulting in Free Cash Flow increase of 12.6%
Effective financial management and rational capex allocation resulting in Free Cash Flow increase of 12.6% YoY in 2020 Improvement due to execution of working capital initiatives Free Cash Flow¹ (1,342) 12,000 R$ million and YoY Δ 281 1,119 470 (209) 10,000 1,055 8,000 6,000 8,235 9,140 9,610 4,000
Slide 18: Important ESG results strengthen Vivo's commitment to sustainability
Important ESG results strengthen Vivo's commitment to being a protagonist in building a more sustainable society Environment Social Governance 7.7 tons R$ 59.4 mn invested in education, Industry Mover 2021 of electronic waste collected 2.4 mn people benefitted in S&P’s Sustainability Yearbook (+15%
Slide 19: Investor Relations
For further information: Investor Relations +55 11 3430.3687 i r. b r @ t e l e f o n i c a . c o m w w w. t e l e f o n i c a . c o m . b r / i r