Transcript Titulo

March, 2003
Overview – December/2002
• Largest integrated telecom company in Brazil
– 15.1 million fixed lines in service (Dec/02)
– 1.4 million mobile subscribers (Dec/02)
• Concession Area
– 65% of Brazilian territory/93 million people
– 40% of country’s GDP
– Over 21 million households
• Leadership in local services (98% market share)
• National and International long distance services
• Regional Mobile services (GSM)
• National Data, Corporate & Value Added Services
• TNLP4: most liquid stock on Brazilian market
• TNE: most liquid Brazilian ADR on NYSE
• Free Float: 80% of total shares
• Market value: US$ 3.0 billion (Mar/03)
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RJ-AAA-AAMMDD
• Level 2 ADR (NYSE: TNE): 29% of total shares
TNE – SHAREHOLDERS’ STRUCTURE
Tele Norte Leste Participações S.A.(TNE)
Telemar
Participações S.A.*
Treasury
2.3%
17.9%
79.8%
Free float
100.0%
100.0%
79.5%
Norte Leste (TMAR)
Free float = 18.9%
Treasury stock = 1.6%
* Controlling Shareholder (53% of voting shares)
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RJ-AAA-AAMMDD
100.0%
TNE – CAPITAL STRUCTURE
Capital
R$ 4,477 million
Shares
Common
1/3
Preferred
127,949 m
255,897 m
2/3
375,065 m
383,846 m
Total
Tele Norte Leste
Participações S.A.
(TNE)
17.9%
Telemar
Participações S.A.
5.0%
Total outstanding
shares (ex-treasury)
5.0%
2.3%
BNDESPar
25.0%
11.3%
Free float
Treasury
Stock
Fiago
AG Telecom
ASSECA Participações
11.3%
79.8%
Lexpart Part.
Brasil
51.4%
NYSE
28.4%
19.9%
11.3%
BrasilCap
Brasil Veículos
11.3%
* 53% of TNE common shares
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L.F. Tel
CORPORATE STRUCTURE
Board of Directors
• Eleven members (three actually on leave)
• Board Committees [Finance; Procurement & CAPEX; Compensation / Stock Option Plan]
Fiscal Committee
• Five members, appointed by:
– Controlling Shareholder (Telemar Participações) - 3
– Minority Shareholders (voting shares) -1
– Minority Shareholders (preferred shares) -1
• Objectives: review and approve the Company’s accounting issues and procedures
Executive
Committee
• Two members: TMAR´s and Oi’s CEO
Independent
Accountants
• PricewaterhouseCoopers
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General
Shareholders’
Meeting
CORPORATE GOVERNANCE AT TNE
• Shareholders` Rights
• Conduct/Ethics Code
• Fair Disclosure
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• Sarbanes-Oxley
DIVIDEND POLICY
• All shares have the right to receive a minimum annual payment
of 25% of adjusted net income, but
TNE
• Preferred Shares (and ADR) are entitled to a minimum of
 6% of the Company´s Capital, or
Whichever is
higher
 3% of the Company´s Shareholders´ Equity
• All shares have the right to receive a minimum annual payment
of 25% of adjusted net income, but
 Class B Shares (TMAR 6): 10% of the Company´s Capital
(allocated to this class)
1.5% of total preferred shares
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TMAR
Preferred shares are entitled to:
 Class A Shares (TMAR 5): 10% higher dividend than the one
paid to the Common Shares
98.5% of total preferred shares
MANAGING STRUCTURE
Board of
Directors
Fiscal
Committee
TNE
Executive Committee
TMAR
CEO
Public Relations
Asset Management
CFO
Strategy and
Regulation
Legal Counsel
Treasury/ Investor Relations
Procurement
Financial Planning
Controlling
TMAR
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Internal Audit
Oi CEO
MAIN ACHIEVEMENTS
2002
1998
International
Processes
Services
Local Voice and regional LD;
Regional Data Communic.
All Unified
Restructuring 16  1
- Optimization of Resources;
- Process Standardization;
- Management Centralization;
- Merger of wireline companies;
- Better utilization of tax loss
carry-forwards
Local & Advanced Voice
Domestic & International LD
Nationwide Data Transmission
Contact Center
Network Management / Internet
Market Vision
Market Approach
Geographic
Services
Platform Expansion
Customer Segmentation
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16 Companies
16 IT Systems
15 Network Platforms
23 Network Management Centers
116 Call Centers
Management/Processes/IT
ANATEL TARGETS: REAPING THE BENEFITS
• Oi’s operational launching
• National long distance service
Revenues of
R$ 557 million in
six months
• International long distance service
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• Nationwide data service
WIRELINE PLATFORM AND UTILIZATION RATE
Million Lines in service (LIS)
Million Lines installed (LI)
Utilization rate (wireline)
+ 110%
CAGRLIS =
20.4%
LIS 2002
+2% YoY
18.1
14.8
11.8
7.8
8.8
89%
July 1998*
1998
* Acquisition of the Company
12.8
10.5
93%
89%
15.1
92%
82%
1999
2000
2001
86%
2002
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7.2
8.1
9.7
17.5
NETWORK: BACKBONE TELEMAR + PEGASUS
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
1,401
20%
978
22%
677
502
386
179
20%
19%
21%
81%
80%
80%
22%
78%
78%
79%
Aug/02
Sep/02
Oct/02
Nov/02
Dec/02
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Jul/02
CONSOLIDATED REVENUES
R$ Mn
Gross revenue
Net revenue
+ 132%
CAGR =
23.4%
16,091
+18%
YoY
13,660
11,874
10,851
8,433
6,946
10,103
8,122
6,222
1998
1999
2000
2001
2002
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5,158
CONSOLIDATED REVENUES – MAIN DRIVERS
12M02
12M01
Wireline
Local (includes VC1)
Long Distance (includes VC2/3)
Advanced Voice Services
Public Phones
Additional Services
Network Usage
Data
Other
Wireless
15,608
9,852
2,066
260
669
303
1,497
906
56
483
13,660
8,793
1,568
178
570
258
1,495
787
10
-
Total
16,091
13,660
yoy change
R$
1,949
%
14%
1,059
12%
498
32%
82
46%
99
17%
45
17%
2
0%
119
15%
46
463%
483
2,432
18%
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Gross Revenue - R$ Mn
CONSOLIDATED OPERATING EXPENSES*
R$ Mn
Cost of services
2001
Interconnection
6,545
Selling expenses
18%
6,545
26%
G&A and other
oper. expenses
6,584
21%
4,095
3,470
3,488
35%
2001
2002
6,584
1999
2000
2001
2002
8%
19%
37%
36%
2002
* Ex depreciation and amortization
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1998
CONSOLIDATED OPERATING EXPENSES - MAIN DRIVERS
Costs and Operating Expenses - R$ Mn
Interconnection
Personnel
Third Party Services
Materials
Rent / Insurance
Other
SubTotal
Marketing
Provision for Doubtful Accounts
Management Fee
Other Operating Expenses (Income), Net
Total
TNL*
Oi
yoy
change R$
Mn
12M02 12M01
2,369
2,335
35
801
906
(104)
1,663
1,320
344
652
286
366
451
293
159
80
29
51
6,016
5,167
850
139
180
(41)
616
778
(162)
58
51
7
(245)
369
(614)
6,584
6,545
39
12M02
26
32
187
417
63
4
729
65
2
(51)
746
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* TNE Consolidated - accounts for eliminations of intercompany transactions.
HEADCOUNT - CONSOLIDATED
27,471
24,206
28,736
24,511
21,090
11,981
18,449
Contax
TMAR+Oi
15,490
10,287
1998
1999
2000
2001
2002
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-
BAD DEBT PROVISIONS
% of gross revenue
One time
adjustments*
5.7%
3.8%
5.6%
4.2%
2.5%
2.0%
3.0%
2.8%
3Q02
4Q02
1.6%
1Q02
1999
2000
2001
2002
* Equivalent to 1.4% of gross revenue
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1998
2Q02
CONSOLIDATED EBITDA
R$ Mn
EBITDA margin (%)
Net revenue
EBITDA
50%
44%
45%
35%
33%
11,874
99
00
01
02
10,103
8,127
6,222
5,290
5,158
4,032
3,558
2,735
1,689
1998
1999
2000
2001
2002
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98
CONSOLIDATED INCOME STATEMENT
R$ Mn
2000
2001
2002
02/01
Net Operating Revenue
6,222.3
8,126.9
10,103.1
11,874.0
17.5%
Operating Expenses
2,573.6
2,460.6
4,210.2
4,214.6
0.1%
Interconection Costs
916.4
1,634.8
2,334.6
2,369.2
1.5%
2,732.3
4,031.6
3,558.3
5,290.2
48.7%
2,757.4
2,802.0
2,926.4
3,863.1
32.0%
1,229.6
649.5
1,408.5
116.9%
42.3
39.5
443.6
1,961.1
342.1%
Income before Tax and Social Cont.
12.1
1,206.0
203.8
(524.2) -357.2%
Net Income
95.7
709.4
140.4
(415.6) -396.0%
EBITDA
Depreciation and Amortization
EBIT
Financial Result
EPADR (R$)
97.9
0.29
1.90
0.38
Increase of
CAPEX in 2001
Debt increase
yoy and
impact of F/X
rate
(1.1) -392.1%
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1999
CONSOLIDATED BALANCE SHEET
R$ Mn
Current Assets
12/31/01
12/31/02
19,472
26,766
27,485
12/31/00 12/31/01 12/31/02
TOTAL LIABILITIES
26,766
27,485
3,566
5,609
5,513
1,358
2,199
1,635
6,054
4,950
6,089
Cash and ST Investments
2,093
1,234
1,513
Suppliers
Accounts Receivables - Services
2,502
2,146
2,725
Loans and Financing
786
1,388
1,769
Recoverable Taxes
1,144
1,293
1,457
Salaries Benefits and Social Sec.
186
182
260
315
277
394
Taxes
548
524
765
Dividends Payable
458
538
703
Other Accounts Payable
230
778
381
3,028
9,075
10,818
Other Current Assets
1,176
1,949
2,362
Recoverable Taxes
Long Term Assets
953
1,561
1,681
Other
223
388
681
Permanent Assets
Investments
Property Plant and Equipment
Deferred Assets
12,242
19,867
19,034
42
160
433
12,200
19,249
17,965
458
636
-
Current Liabilities
19,472
Long Term Liabilities
Loans and Financing
2,045
7,549
9,006
Contingencies Provisions
882
1,491
1,773
Other Accounts Payable
101
35
39
Deferred Income
Minoritary Interest
Shareholder´s Equity
179
2
2,368
10,331
2,057
10,023
-
2,034
9,120
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TOTAL ASSETS
12/31/00
FINANCIAL RESULTS
R$ Mn
Financial Expenses
12M02
821
502
(1,265)
(2,463)
Interest on loans/ debentures
(376)
(824)
Monetary & exchange variations
(426)
* (953)
Banking fees & monetary adjustment of
Provision for contingencies
(219)
(339)
Premium amortizations and financial taxes
(PIS, Confins)
Other
(156)
(88)
(312)
(35)
Net Financial Result
(444)
(1,961)
Debt growth
& Brazilian
Currency
devaluation
* Gross of R$ 894 million of interest on currency swaps.
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Financial Revenue
12M01
CONSOLIDATED CAPEX - TNE
R$ Mn
CAPEX / Net Revenue
99.6%
Wireline
Wireless
48.5%
36.1%
17.1%
34.5%
10,060
1999
2000
2001
2002
2,172
7,888
2,500
1998
2,244
1999
2,804
2000
2001
2,031
2,000
945
700
1,086
1,300
2002
2003E
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1998
CONSOLIDATED NET DEBT
R$ Mn
Dec/01
Dec/02
Total debt
8,937
10,774
• Short term
1,388
1,769
• Long term
7,549
9,006
(1,235)
(1,513)
-
(141)
7,702
9,121
(-) Cash
(-) Long term financ. invest.
(=) Net debt
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R$ Mn
CONSOLIDATED DEBT – CURRENCY & COST (DEC/02)
Currency
5%
Interest Index
4%
4%
5%
CDI
18%
TJLP
Local
US$
91%
Currency Basket
73%
Fixed Rate (Foreign
Currency)
Floating Rate
(Foreign Currency)
* With a CDI of 25% p.a.
Currency
Cost
US$
Basket
Real
Libor + 5%
12.3%
23.2%*
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Cost of Debt
CONSOLIDATED DEBT – REPAYMENT SCHEDULE (DEC/02)
Total debt: R$ 10,774 Mn
28%
20%
18%
16%
2nd
half
9%
5%
4%
1st
half
2003
2004
2005
2006
2007
2008
5%
2009
onwards
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11%
WIRELESS PROJECT ROLLOUT  Oi
Distribution
Resource
optimization
~ 400 cities covered; 48 million people
GPRS coverage in 6 main capitals
2,467 sites (BTS)
CAPEX optimization (co-siting: 971 in / 531 out)
International roaming
Main suppliers: Nokia, Siemens, Alcatel, Ericsson
Coverage focused on
profitable areas
• 1,824 points of sales (breaking exclusivity of
A & B band agreements)
• Diversified channels with high capillarity
– Retail, specialized agents/dealers, stores, telesales
• Corporate sales effort combined with Telemar
Consumer and corporate
focus through high
capillarity and diversity of
channels
•
•
•
•
•
Focus on profitable
growth, minimizing OPEX
and CAPEX
Tight headcount structure: 846 employees
Infrastructure sharing
Outsourcing (including call centers)
Synergies with Telemar
Strong brand name
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Coverage
•
•
•
•
•
•
• Innovative
campaign:
31 years
• Differentiated
service plans
• Diversified
handsets
offer
Initial targets (July/2002)
First achievements (December/2002)
• 500,000 clients in 12 months
• 1,400,000 clients in just 6 months
• ARPU of R$ 26
• ARPU R$ 33 (first 6 months)
• MIX Pre/Post:
90%/10%
• MIX Pre/Post:
80%/20% (6 months)
• Market share and gross additions in
line with fair market share
• Market share and gross additions well
above fair market share
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Oi  POST-LAUNCHING RESULTS
REVENUE GROWTH STRATEGY
Local
Service
Data &
Corporate
Integrated
Strategy
Mobility
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Long
Distance
REVENUE GROWTH STRATEGY
Local Service
•Platform Growth in line with GDP
•Increase Value Added Services
• Maintain leadership in home market
Local
Service
Data &
Corporate
• Advanced voice services
(corporate/middle market/SOHO)
• Best carrier’s carrier – network
leverage (home market)
• Increase ARPU
• Value added services
Mobility
• Reduce interconnection costs
(Fixed to Mobile)
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Long
Distance
REVENUE GROWTH STRATEGY
Data & Corporate
•Opportunity to Increase Market Share
Local
Service
Data &
Corporate
• Increase offer to SME (home market)
• ADSL (high end/SOHO/small
businesses)
• Nationwide services (corporate level)
• Leverage on national backbone
Mobility
(Telemar + Pegasus)
• Competitive Service Level Agreements
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Long
Distance
REVENUE GROWTH STRATEGY
Long Distance
•Offer of New Services (Increase Market Share)
• Leadership in home market
Local
Service
Data &
Corporate
• Conquer new markets (interregional/international/SPM – dial
code)
• Protect existing market
– Retail: loyalty/retention programs
+ promotions
Mobility
– Corporate: best quality (call
completion/billing) + competitive
service plans (discounts/volume)
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Long
Distance
REVENUE GROWTH STRATEGY
Mobile services
•New Technology + Migration Fixed to Mobile
Long
Distance
Data &
Corporate
Mobility
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Local
Service
• Deepen market segmentation
(MTV & Celebrities)
• Stimulate “DATA” + SMS Growth
• Focus on Corporate Businesses
• Leverage on competitive advantages
– Synergies with wireline company
(TMAR)
– Regional coverage
– GSM technology (speed & features)
• Low handset subsidies/aggressive
service plans
• Increase national & international
roaming
2002 Outlook
Reached
• Revenue Drivers Plant Growth
New Services
New Markets
Improve ARPU
+ 300/400K
DLD+ILD+Mobile (Oi)
Corporate (Region 2 and 3)
2001: R$ 61.80
325K
Launched (Jun-Jul)
Pegasus Acquisition
2002: R$ 64.00
• Cost Drivers
45% EBITDA Margin
-40%
5.0%
2002: 45% EBITDA Margin
-37%
3.8%
• CAPEX Reduction
R$ 2.5 billion
R$ 2 billion
• Net Debt
R$ 10 – 10.4 billion
R$ 9.2 billion
• PCS launching
500K subs
1,400K subs
Operating Effic.
Headcount
Bad Debt Control
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OUTLOOK 2002 - REVIEW
OUTLOOK 2003
• Platform: Wireline: in line with GDP
Wireless: +/- 1 million adds
• Revenue: (1) DLD, data and mobile growth
(2) Local and LD tariff increase (June)
• Cost : strict control
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• Net Debt: flat to small reduction
“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