Transcript Titulo

May, 2003
Overview – March/2003
• Integrated Telecom Service Provider
-15.0 million wirelines in service
- 1.7 million wireless clients
• Concession Area (Region I) - Local Service and SMP
– 65% of Brazilian territory/94 million people
– 40% of country’s GDP
– Over 21 million households
• Leadership in local services in Region I (98% market
share)
• National and international long distance services
• Regional mobile services (GSM)
• National Data, Corporate & Value Added Services
• TNLP4: most liquid stock in Brazilian market
• TNE: among the most liquid L.A. ADR at the NYSE /2002
• Free Float: 80% of total shares
• Market value: US$ 4.2 billion (Apr/03)
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RJ-AAA-AAMMDD
• Level 2 ADR (NYSE: TNE): 30% of total shares
TNE – Shareholders´Structure
Tele Norte Leste Participações S.A. (TNE)
Telemar
Participações S.A.*
Treasury
2.2%
17.9%
79.9%
Free float
100.0%
79.5%
Free float = 18.9%
Treasury stock = 1.6%
Norte Leste (TMAR)
100.0%
*Controlling Shareholder (53% of voting shares)
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RJ-AAA-AAMMDD
100.0%
TNE – Capital Structure
Capital
R$ 4,644 million
Shares
Common
1/3
Preferred
130,186 Mn
260,371 Mn
2/3
Tele Norte Leste
Participações S.A.
(TNE)
Telemar
Participações S.A.
5.0%
5.0%
2.2%
BNDESPar
25.0%
11.3%
381,8 Mn
390,557 Mn
Total
17.9%
Total outstanding
shares (ex-treasury)
79.9%
Free float
Treasury
Stock
Fiago
AG Telecom
ASSECA Participações
11.3%
Lexpart Part.
19.9%
11.3%
BrasilCap
Brasil Veículos
11.3%
* 53% of TNE common shares
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RJ-AAA-AAMMDD
L.F. Tel
Managing Structure
Board of
Directors
Audit
Committee
Fiscal
Committee
TNE
Executive Committee
TMAR CEO
Public Relations
Asset Management
Strategy and
Regulation
Human Resource
Legal Counsel
CFO
Billing Cycle
Treasury
Procurement
Financial Planning
Investor Relations
Controlling
TMAR
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Internal Audit
OiCEO
Wireline Network – Lines Installed & in Service
(million lines)
Lines in service (LIS)
Lines installed (LI)
18.1
14.8
11.8
8.8
July 1998*
15.1
17.5
15.0
12.8
10.5
7.8
1998
* Company´s acquisition.
1999
2000
2001
2002
1Q03
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7.2 8.1
9.7
17.5
Wireline Network – Broadband Accesses
(in thousands)
120
90
92
125
93
DVI (ISDN)
58%
81%
77%
47%
42%
15%
19%
Mar/02
Jun/02
Velox (ADSL)
23%
Sep/02
Dec/02
Mar/03
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85%
53%
Wireline Network – Long Distance Backbone
RR
AP
Belém
São Luís
Fortaleza
PA
MA
Terezina
PE
Natal
RO
RN
PB
PI
AC
CE
AL
TO
SE
Recife
MT
Maceió
BA
Brasília
Montes Claros
Paracatu
Goiânia
MG
GO
Belo Horizonte
RJ
PR
São Paulo
Curitiba
SC
RS
Florianópolis
• 18,000 km fiber optical
cable
ES Vitória
SP
Campinas
Salvador
• Interstate transport
network
• 20 integrated metropolitan
rings in 18 states
Patrocínio
Uberlândia
MS
Aracajú
• Cover over 80% of
Brazilian Industrial GDP
Rio de Janeiro
• 350 remote satellite
stations
• 8 Hub satellites
• DWDM, SDH and IP
Porto Alegre
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AM
Wireless Platform - Oi’s subscriber base
(in thousands)
Prepaid
Post-paid
1,624
1,504
1,401
20%
21%
22%
1,722
22%
978
677
22%
20%
80%
Sep/02
79%
78%
Jan/03
Feb/03
78%
80%
78%
78%
Oct/02
Nov/02
Dec/02
Mar/03
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502
22%
Financial Results 1Q03 – Net Revenues
(R$ Mn)
Oi
TNL
291
244
3,226
3,218
2,785
4Q02
1Q03
2,980
3,041
4Q02
4Q02
1Q03
1Q03
1Q02
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TMAR
Financial Results 1Q03 – Gross Revenue Breakdown
Wireline
Local (ex - VC1)
Local Fixed-to-Mobile (VC1)
Long Distance (ex - VC2/3)
LD Fixed-to-Mobile (VC2/3)
Network Usage
Data
Public Phones
Other
Wireless
Services
Subscription
Outgoing Calls
Domestic/Inter. Roaming
Network Usage
Other SMP Services
Handset Sales
1Q03
%
4Q02
%
1Q02
4,234
1,881
711
514
152
330
271
196
180
100%
44%
17%
12%
4%
8%
6%
5%
4%
4,034
1,863
665
470
125
347
221
182
161
100%
46%
16%
12%
3%
9%
5%
5%
4%
3,759
1,644
702
342
121
426
230
148
147
219
137
32
52
12
35
6
82
100%
63%
15%
24%
6%
16%
3%
37%
318
76
17
27
7
21
4
242
100%
24%
5%
8%
2%
7%
1%
76%
-
4,352
4,034
318
100%
93%
7%
Total Gross Revenue
Wireline
Wireless
4,453
4,234
219
Consolidated Net Revenue
3,218
100%
95%
5%
3,226
%
100%
44%
19%
9%
3%
11%
6%
4%
4%
-
3,759 100%
3,759 100%
0%
2,785
% Change
QoQ
5%
YoY
13%
1%
14%
7%
1%
9%
50%
22%
26%
-5%
-22%
23%
18%
8%
32%
12%
22%
-31%
-
81%
91%
93%
73%
68%
44%
-66%
2%
18%
5%
13%
-31%
0%
16%
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Gross Revenue - R$ Mn
Consolidated Revenues – Local Services
Drivers
1Q03/4Q02
Montly Subscription
25
Pulses
-4
+ R$ 67 Mn
(+2.5%)
46
Fixed to Mobile
Other
-3
Installation
0
Total
64
Decrease in average lines in service
and traffic
Fixed to mobile tariff adjustment
in February
1Q03/1Q02
160
Pulses
+ R$ 246 Mn
Fixed to Mobile
96
Tariff increase in June/02 and traffic
growth (5% yoy)
9
Decrease in fixed to mobile traffic
(campaigns incentivating fixed-fixed
calls)
(+10.5%)
Other
Installation
Total
1
-19
246
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Montly Subscription
Consolidated Revenues – Long Distance Services
Drivers
1Q03/4Q02
Intra-State
Inter-State
+ R$ 71 Mn
(+11.9%)
11
Intra-RegionaI: increase in average
revenue per minute (lower promotions/
discounts)
10
11
Inter-Regional
Inter-regional & International: Increase
in traffic and market share
12
International
Fixed to Mobile (VC2/3)
27
Total
71
Fixed-Mobile: Traffic increase (CSP 31)
and tariff adjustment in February
1Q03/1Q02
Intra-State
Inter-State
+ R$ 204 Mn
Inter-Regional
56
Market share gains in all segments
(new services contributed with
R$ 77 million) and tariff increases
40
53
(+44.1%)
Fixed to Mobile (VC2/3)
Total
24
32
204
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International
Consolidated Revenues – Data Services
Drivers
1Q03/4Q02
+ R$ 50 Mn
(+22.7%)
14
SLDD/SLDA
24
EILD
-4
Packet/Frame Relay
8
Other
8
Total
50
1Q03/1Q02
IP
Pricing pressure on leased lines
(mainly to other providers EILD)
20
12
SLDD/SLDA
+ R$ 41 Mn
(+17.8%)
EILD
Packet/Frame Relay
The Brazilian Data Market is
growing by 10% a year.
Telemar´s revenue increased by
17.5% yoy and 22.4% qoq,
mainly due to market share
gains (also helped by Pegasus´
acquisition).
-12
7
Other
14
Total
41
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IP
Consolidated Revenues – Wireless Services
Drivers
1Q03/4Q02
(-31.2%)
-161
Outgoing Calls
25
14
Netw ork Usage
15
Subscription
Other
Total
Growth in services (+89%)
partly compensating the
decrease in handsets sales
(-66%)
7
100
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- R$ 100 Mn
Handset Sales
Oi´s Operating & Financial Performance – 1Q03
Gross Revenue (R$ Mn)
184
366
Net Additions (in Thousands)
314
500
900
80%
80%
321
26%
66%
69%
79%
Handsets
Pre Paid
74%
Services
34%
31%
21%
4Q02
1Q03
Market Share/Net Additions 1Q03 *
20%
3Q02
4Q02
1Q03
Wireless Market-Share Region I (Mar03)
Oi
56%
Oi
Band
A+B
* Region I (Band B net adds estimated)
Post Paid
10.6%
44%
88.4%
Band
A+B
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3Q02
20%
Costs & Operating Expenses* - 1Q03
(R$ Mn)
4Q02
13%
40%
G&A /
Other
1,966
18%
Cost of
services
Selling
1,743
Interconnection
1,351
29%
1Q03
G&A and Other
8%
1Q02
4Q02
1Q03
18%
35%
Selling
Cost of
services
* Ex depreciation and amortization
39%
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Interconnection
Costs & Operating Expenses – Main Changes - 1Q03/4Q02
(R$ Mn)
TNE*
Analysis
Change
Costs and Operating Expenses 1Q03
R$
4Q02
%
Average increase in mobile interconnection rates in
February/03 (22%)
Interconnection
654
587
67
11.4%
Personnel
204
229
(25)
-10.9%
A 6.8% reduction in average headcount at TMAR/TNL and
higher severance costs in 4Q02
Third Party Services
475
544
(69)
-12.7%
Decrease in maintenance expenses/dealer commissions
(Oi)/consulting expenses (Corporate + Legal +IT)
Materials
126
290
(164)
-56.6%
Decrease in handset sales
Rent / Insurance
145
170
(25)
-14.7%
Decrease in rental expenses at TMAR
16
63
(47)
-74.6%
Lower marketing campaigns in 1Q03 (Oi and 31Global)
Provision for Doubtful Accounts
141
122
19
15.6%
Subscription frauds at Oi
Other Op. Expenses (Income)
(18)
(39)
21
-53.8%
Non recurring revenues in 4Q02
(223)
-11.3%
Marketing
Total
1,743
1,966
* TNE Consolidated - accounts for elimination of intercompany transactions.
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R$ Mn
Personnel – 1Q03
(full–time employees)
TMAR+Oi
Contax
28,736
29,987
27,471
24,206
24,511
21,090
11,981
18,449
19,743
10,287
10,244
15,490
1999
2000
2001
2002
Mar/03
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1998
Bad Debt Provisions – 1Q03
(% of gross revenue)
5.6%
4.2%
1Q02
2Q02
3Q02
3.2%
2.8%
4Q02
1Q03
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3.0%
Consolidated EBITDA – 1Q03
(R$ Mn)
51.5%
47.2%
45.9%
41.7%
3,218
3,226
3,083
2,785
39.1%
2,780
1Q02
1,311
2Q02
Net Revenue
1,285
3Q02
Ebitda
1,260
4Q02
1,476
1Q03
Ebitda Margin
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1,434
Financial Results – 1Q03
(R$ Mn)
4Q02
Financial Revenue
123
75
Financial Expenses
(575)
(484)
Interest on Loans/ Debentures
(265)
(248)
Monetary & Exchange Variations*
(149)
23
Banking Fees & Contingencies
(108)
(115)
Premium Amortization, PIS & Cofins
(34)
(127)
Other
(19)
(17)
(452)
(409)
Net Financial Result
Increase in interest rates
(CDI) and in total debt during
1Q03
* Net of currency swap results.
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1Q03
Consolidated Income Statement – 1Q03
(R$ Mn)
4Q02
3,218.3
3,226.1
Operating Expenses
1,088.9
1,379.2
Interconection Costs
653.7
586.8
1,475.7
1,260.0
985.1
980.7
531.6
260.0
452.1
409.1
60.9
(114.2)
113.5
(207.8)
Employee Profit Sharing
11.2
98.2
Minoritary Interest
48.4
96.1
Net Income
(112.3)
(100.7)
EPADR (R$)
(0.30)
(0.27)
Net Operating Revenue
EBITDA
Depreciation and Amortization
EBIT
Financial Result
Income Before Taxes
Income Tax and Social Contribution
Reversal of Income Tax/
Interest on Capital Statement
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1Q03
Consolidated CAPEX – 1Q03
(R$ Mn)
21.6%
16.5%
15.8%
13.9%
697
509
440
386
244
453
5.8%
255
135
185
196
251
255
243
88
97
2Q02
Wireline/Contax
3Q02
Wireless
4Q02
1Q03
Capex/ Net Revenue
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1Q02
Total Debt
Short Term
Long Term
(-) Cash
(-) Long Term Financial Investments
(=) Net Debt
Mar-03
11,616
2,053
9,563
(1,479)
(132)
10,005
Dec-02
10,774
1,769
9,006
(1,513)
(141)
9,121
Mar-02
9,361
1,424
7,937
(1,044)
8,317
(+) Suppliers
(+) Other Accounts Payable
(=)Total
1,188
271
11,464
1,635
381
11,136
1,648
165
10,131
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Debt Position (Mar/03)
(R$ Mn)
Debt Profile – Currency & Cost (Mar/03) – After swap effect
Currency
Interest Rates
3%
3%
16%
CDI
Local
TJLP
US$
81%
97%
Floating Rate (FC)
Libor +5%
* Based on CDI at 26.5% p.a.
Currency
Cost
US$
Basket
Real
Libor + 5%
12.3%
25.0%*
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Cost of Debt
Debt Profile – Repayment Schedule (Mar/03)
(R$ Mn)
Total Debt:
11,616
3,196
2,306
2,407
1,041
955
2S2003
2004
2005
2006
2007
2008
2009
onw ards
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495
323
2Q2003
893
Growth Focus
Wireline
Services
Data &
Corporate
Integrated
Strategy
Wireless
Services
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Long
Distance
Growth Focus - Local Wireline Services
•Lower Platform Growth (in line with GDP)
•Increase in Value Added Services
• Maintain leadership in home market
Local
Service
Data &
Corporate
• Advanced voice services
(corporate/middle market)
• Value added services
Wireless
Services
• Increase ARPU
• Reduce interconnection costs
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Long
Distance
Growth Focus - Data & Corporate Services
•Growth above the market
• Increase penetration in SME (home
market)
Local
Service
Data &
Corporate
• ADSL (high end residential/SOHO/small
businesses)
• Nationwide services (corporate level)
Wireless
Services
• Leverage on national backbone
(Telemar + Pegasus)
• Competitive Service Level Agreements
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Long
Distance
Growth Focus - Long Distance Services
•Offer of New Services (Increase Market Share)
•Growth above the market
• Leadership in home market
• Protect existing market
Local
Service
Data &
Corporate
– Retail: loyalty/retention programs
+ promotions
– Corporate: best quality (call
completion/billing) + competitive
service plans (discounts/volume)
Wireless
Services
• Conquer new markets (interregional/international/SMP
• Leverage on relationship & brand
• Leverage on efficiency (lower cost
service provider)
• Best quality service provider
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Long
Distance
GROWTH FOCUS - Wireless Services
•High Growth + Synergies with Wireline
Long
Distance
Data &
Corporate
Wireless
Services
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Local
Service
• Market segmentation /Innovative
Plans (MTV & Celebrities/Oi Family)
• Stimulate data / SMS growth
• Increase Focus on Corporate Market
• Leverage on competitive advantages
– Synergies with wireline company
– Regional coverage
– GSM technology (speed & features)
• Low handset subsidies/aggressive
service plans
• Increase national & international
roaming
Outlook 2003
• Platform Growth: Wireline: stable
Wireless: 1.3 million net adds
• Revenue Drivers: (1) DLD, Data and Mobile growth
(2) Local tariff increase (June)
• Cost: strict control
• Bad Debt : ~3.8% of gross revenues
• EBITDA TNE: ~ 42% - 45%
• CAPEX: R$ 1.8 b (55% TMAR/40% Oi/ 5% Contax)
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• Net Debt: flat to small reduction YE03/YE02
“Safe Harbor” Statement
Investor Relations
Rua Humberto de Campos, 425 / 8º andar
Leblon
Rio de Janeiro -RJ
Phone: ( 55 21) 3131-1314/1313/1315/1316/1317
Fax: (55 21) 3131-1155
E-mail: [email protected]
Visit our website: http://www.telemar.com.br/ri
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This presentation contains forward-looking
statements. Statements that are not historical
facts, including statements about our beliefs and
expectations, are forward-looking statements and
involve inherent risks and uncertainties. These
statements are based on current plans, estimates
and projections, and therefore you should not
place undue reliance on them. Forward-looking
statements speak only as of the date they are made,
and we undertake no obligation to update publicly
any of them in light of new information or future
events