Transcript Titulo

Corporate Presentation
August/2003
0
General Overview
Corporate Presentation
1
HIGHLIGHTS
• Integrated Telecom Service Provider
– 14.9 million wirelines in service
– 2.6 million wireless clients (August/03)
• Concession Area (Region I) - Local Service and PCS
– 65% of Brazilian territory/94 million people
– 40% of country’s GDP
– Over 20 million households
• Leadership in local services (97% market share – Region
I)
• Domestic and international long distance services
• PCS Mobile services (GSM)
• Data, Corporate & Call Center Services
• Most liquid stock in Brazilian market (TNLP4)
• One of Most liquid Latam ADR (NYSE: TNE)
• High Free Float: 80% of total shares/ADR: 27%
• Market value: US$ 5 billion (August/03)
Corporate Presentation
2
SHAREHOLDERS’ STRUCTURE
Tele Norte Leste Participações S.A. (TNE)
Treasury
Telemar
Participações S.A.*
18.3%
*Controlling Shareholder (55% voting shares)
81.7%
Free float
80.8%
100.0%
Free float 19.2%
(TMAR)
100.0%
100.0%
Note: % of holdings excluding treasury stock
Corporate Presentation
3
CAPITAL STRUCTURE
Capital
R$ 4,644 million
Common
shares
1/3
Preferred
shares
2/3
Total shares
17.9%
260,371 m
390,557 m
79.9%
Tele Norte Leste (TNE)
2.2%
Telemar
Participações
5.0%
Total outstanding
shares (ex-treasury)
381,777 m
130,186 m
5.0%
Free float
Treasury
Stock
BNDESPar
25.0%
11.3%
Fiago
AG Telecom
ASSECA Participações
27.3%
NYSE (ADR/TNE)
Lexpart Part.
11.3%
L.F. Tel
19.9%
11.3%
BrasilCap
52.6%*
Bovespa
Brasil Veículos
11.3%
Corporate Presentation
* 13.1% - Annex IV
4
PERSONNEL
full-time employees
Fixed & mobile businesses
Contact center
31,928
31,393
27,471
24,206
28,736
24,511
21,090
11,981
18,449
21,175
15,490
10,287
Jul_1998
Corporate Presentation
1998
1999
2000
2001
2002
10,218
Jun_2003
5
WIRELINE PLATFORM
million lines
Lines in service
Lines installed
Universalization goals
24% CAGR
18.1
14.8
11.8
7.2
8.1
Jul_1998*
7.8
8.8
1998
9.7
17.5
15.1
17.5
14.9
12.8
10.5
1999
2000
2001
2002
Jun_2003
* Company’s acquisition
Corporate Presentation
6
BROADBAND ACCESS
thousand lines
ISDN
ADSL
Increasing
focus on ADSL
140
120
92
93
19%
23%
81%
77%
125
42%
47%
58%
53%
59%
41%
Jun_2002
Corporate Presentation
Sep_2002
Dec_2002
Mar_2003
Jun_2003
7
LONG DISTANCE AND DATA TRANSMISSION NETWORK
International
connections
RR
AP
Belém
São Luís
Fortaleza
PA
AM
MA
Terezina
RN
Natal
João Pessoa
PB
PI
PE
AC
RO
CE
Recife
AL
TO
SE
BA
MT
Maceió
Aracajú
Salvador
Brasília
Montes Claros
Paracatu
Goiânia
MG
GO
Main features
• Coverage of 80% of Brazilian Industrial GDP
• Interstate and intrastate transport network
Patrocínio
Uberlândia
MS
Belo Horizonte
São Paulo
SC
• 350 remote satellite stations
• ATM, TDM/SDH and IP Networks
Corporate Presentation
Rio de Janeiro
International
connections
Curitiba
• 20 integrated metropolitan rings in 18 states
– 8 Satellite Hubs
RJ
Campinas
PR
• 18,000 km of fiber optical cables
•
ES Vitória
SP
RS
Florianópolis
Porto Alegre
Rio – location of our Network
Operations Center (NOC)
8
WIRELESS PLATFORM
thousand subscribers
Prepaid
Post-paid
Oi – 2.2 million
subscribers in just 12
months
2,648
1,722
1,401
20%
22%
2,236
20%
20%
80%
80%
78%
80%
502
22%
35
78%
Jun_02
Sep_02
Corporate Presentation
Dec_02
Mar_03
Jun_03
Aug_03
9
Oi’s OPERATING & FINANCIAL PERFORMANCE – 2Q03
Net additions - Oi
Post-paid
thousand subscribers
Prepaid
500
900
80%
80%
20%
20%
3Q02
4Q02
321
514
69%
85%
31%
1Q03
15%
2Q03
Net additions – Region I
thousand subscribers
1,517
68.3%
59.3%
55.4%
1,115
902
Oi´s market share
(net adds)
46.1%
900
470
514
500
321
3Q02
Corporate Presentation
4Q02
1Q03
2Q03
10
Oi’s MARKET SHARE – AUGUST/2003
Region I
GSM - Region I
14.1%
64.5%
Brasil
6.5%
Source: Anatel
Corporate Presentation
11
WIRELESS PENETRATION – AUGUST/03
% - States in Region I
Brazil – 23%
Region I – 17%
Region II– 25%
Region III– 27%
61
41
36
28
27
23 23 22
20
15 15
10
TO
AC
RO
PR
GO
SC
MT
MS
RS
DF
SP
8
MA
BA
PB
CE
PA
AL
SE
RN
PE
AP
RR
AM
ES
MG
RJ
8
PI
21 20 20 20 20
17 16 15
14 13 13 12 11
Source: Anatel
Corporate Presentation
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WIRELESS PROJECT ROLLOUT  Oi
Coverage
Distribution
Resource
optimization
Corporate Presentation
•
•
•
•
•
•
~ 400 cities covered; 48 million people
GPRS coverage in 6 main capitals
2,680 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: 933 employees
Infrastructure sharing
Outsourcing (including call centers)
Synergies with Telemar
Strong brand name
13
REVENUE GROWTH
R$ million
Gross revenue
Net revenue
23.4% CAGR
16,091*
13,660
+19.8%
11,874
10,851
9,023
8,433
6,946
10,103
8,122
7,533
6,222
5,565
5,158
1998
1999
2000
2001
2002
1H02
6,561
1H03
* Wireless startup from 2H02
Corporate Presentation
14
COSTS & EXPENSES
R$ million
17.4% CAGR
6,545
6,584
+21.3%
4,090
3,469
3,606
3,487
2,973*
1998
1999
2000
2001
2002
1H02
1H03
* Recurring costs (excluding extraordinary rev. of R$ 153 million /Sistel)
Corporate Presentation
15
EBITDA
R$ million
44%
50%
33%
35%
45%
47% *
45%
EBITDA Margin
98
99
00
02 1H02 1H03
01
5,290
4,032
3,558
2,735
2,592*
2,955
1,689
1998
1999
2000
2001
2002
1H02
1H03
* Recurring EBITDA (ex-Sistel)
Corporate Presentation
16
EMPLOYEE PRODUCTIVITY – TMAR
Lines in Service/Employee
1.604
+398%
Net Revenue/Employee
EBITDA/Employee
R$ Thousand
R$ Thousand
1.605
+541%
1.281
+777%
939
984
579
458
561
560
322
397
356
200
177
255
66
1998
1999
2000
2001
2002
1H03
1998
1999
2000 2001
2002 1H03*
1998
203
112
1999
2000 2001
2002 1H03*
* Annualized
Corporate Presentation
17
WIRELINE PRODUCTIVITY – TMAR
R$
Net Revenue/ ALIS
Costs & Expenses /ALIS
EBITDA/ALIS
+14%
717
722
764
744
767
818
-10%
483
+63%
474
405
393
385
436
379
317
1999
2000
2001
2002
1H03*
1998
1999
2000
2001
2002 1H03*
1998
1999
382
270
234
1998
374
2000
2001
2002 1H03*
*Annualized
ALIS: Average Lines in Service
Corporate Presentation
18
CAPITAL EXPENDITURES (CAPEX)
R$ million
Wireline
Wireless
100%
49%
35%
17% 15%
8%
36%
98
99
00
01
CAPEX/Sales
02 1H02 1H03
10,060
2,172
2,500
2,500
1998
Corporate Presentation
2,244
2,244
1999
2,804
7,888
2,031
945
1,086
2,804
2000
2001
2002
825
447
378
1H02
480
198
282
1H03
19
CAPITAL EXPENDITURES (CAPEX)
US$ million
9,981
692
148
4,278
1,532
1,236
2,095
1998
Corporate Presentation
1999
2000
2001
2002
1H03
Total
20
Quarterly Results
Corporate Presentation
21
GROSS REVENUE BREAKDOWN
R$ million
Gross revenue
Wireline
Local (including VC1)
Long distance (including VC2/3)
Network Usage
Data
Public phones
Other
2Q03
%
1Q03
%
4,256
2,617
681
317
289
195
158
100
61
16
7
7
5
4
4,214
2,592
666
330
271
196
160
100
61
16
8
6
5
4
292
174
43
58
13
52
8
118
100
59
15
20
4
18
2
41
219
137
32
52
12
35
6
82
100
63
15
24
6
16
3
37
Total Gross revenue
Wireline
Wireless
Contact center
4,570
4,256
292
22
100
93
6
1
4,453
4,214
219
20
100
95
5
0
Consolidated net revenue
3,343
Wireless
Services
Subscription
Outgoing calls
Domestic/inter. roaming
Network usage
Other SMP services
Handset sales
3,218
2Q02
%
3,764
2,378
464
395
223
159
146
100
63
113
10
6
4
4
–
–
–
–
*
–
–
–
3,774
3,764
–
10
2,780
% Change
QoQ
1
1
2
-4
7
-1
-1
YoY
13
10
47
-20
30
22
8
–
–
–
–
–
–
–
–
33
26
34
13
3
47
22
45
–
–
–
–
–
–
–
–
100
100
–
–
3
1
33
6
21
13
0
115
4
16
* Wireless startup from 2H02
Corporate Presentation
22
LOCAL SERVICES
2Q03/2Q02 – YoY
Main drivers
Monthly
subscription
147
Pulse
+ R$ 239 million
(+10.0%)
56
Fixed to mobile
• Local rate increase (Jun/02)
57
(F-M)
Other
2
Installation
• F-M rate increase (Feb/03)
-22
239
Total
2Q03/1Q03 – QoQ
Fixed to mobile
35
(F-M)
3
Pulse
+ R$ 26 million
(+1.0%)
Monthly
subscription
-9
Other
0
Installation
Total
Corporate Presentation
• F-M rate increase (Feb/03)
-3
26
23
LONG DISTANCE SERVICES
2Q03/2Q02 – YoY
Main drivers
153
Domestic
+ R$ 217 million
(+46.9%)
17
International
Fixed to mobile
• Market share gains (new
services: R$ 86 million), rate
increase and traffic growth
47
(F-M)
217
Total
2Q03/1Q03 – QoQ
Domestic
+ R$ 15 million
(+2.2%)
Fixed to mobile
(F-M)
• DLD: market share gains
-8
International
Total
Corporate Presentation
14
• ILD: backlog cleanup/1Q03
• F-M rate increase (Feb/03)
9
15
24
DATA SERVICES
2Q03/2Q02 – YoY
+ R$ 67 million
(+30.2%)
Main drivers
IP
39
SLDD/SLDA*
7
-16
EILD*
Packet/frame
relay
11
Other
26
Total
67
2Q03/1Q03 – QoQ
IP
23
SLDD/SLDA*
+ R$ 18 million
(+6.6%)
-8
EILD*
-12
Packet/frame
relay
Other
Total
Market growth, market share
gains (new long term
contracts) and increasing
sales of IP & ADSL services
4
11
18
*Leased lines to companies and other telcos
Corporate Presentation
25
WIRELESS SERVICES
2Q03/1Q03* – QoQ
+ R$ 73 million
(+33.2%)
Main drivers
Handset sales
37
Outgoing calls
7
• Aggressive growth:
2.2m subscribers in
just 12 months (514K net
adds-2Q03)
17
Network usage
Subscription
11
Other
1
Total
73
Handsets
+R$ 37 million
Services
+R$ 36 million
* Startup as of 3Q02
Corporate Presentation
26
COSTS & OPERATING EXPENSES* – 2Q03
R$ million
1Q03
G&A/other
10%
Selling 17%
1,743
Cost of
35% services
1,864
38%
1,469
Interconnection
Cleanup
of outstanding
payments
2Q03
G&A/other
2Q02
1Q03
2Q03
12%
35%
Cost of
services
Selling 20%
Special sales
campaigns
* Excluding depreciation & amortization
Corporate Presentation
33%
Interconnection
27
COSTS & OPERATING EXPENSES – MAIN CHANGES (2Q03/1Q03)
R$ million
TNE
Change
Item
1Q03
R$ m
Interconnection
621
654
(33)
-5.0
Personnel
219
204
15
7.4
• Headcount/severance costs/sales
commissions
Third Party Services
501
475
26
5.5
• Dealers’ commissions/consultancy
Handset Costs
156
82
74
90.2
• Handset sales (+85.7%)
Rent/Insurance
108
115
(7)
-6.1
• Lower costs with leased lines
37
16
21
131.3
Provisions for Doubtful Accounts
(PDA)
152
141
11
7.8
Other Operating Exp. (Revenues)
70
56
14
25.0
Marketing
%
Comments
2Q03
• Backlog cleanup in 1Q03
• Marketing campaigns (mothers and
valentine days)
• Stable level in spite of macro
environment - PDA/Sales: 3.3%
(3.2% in 1Q03)
• Lower infrastructure rental revenues
Total
Corporate Presentation
1,864
1,743
121
7.0
28
PROVISIONS FOR DOUBTFUL ACCOUNTS
% of gross revenue
4.2
3.0
2Q02
Corporate Presentation
3Q02
3.2
3.3
1Q03
2Q03
2.8
4Q02
29
EBITDA
R$ million
47%
42%
39%
46%
44%
EBITDA Margin
2Q02
3Q02
4Q02
1Q03
2Q03
1,476
1,479
1Q03
2Q03
1,311
1,285 *
2Q02
3Q02
1,260
4Q02
* Startup of wireless business
Corporate Presentation
30
FINANCIAL RESULT – 2Q03
R$ million
1Q03
2Q03
Financial revenues
133
134
Financial expenses
(586)
(651)
Interest on loans/debentures
(265)
(232)
Monetary & exchange variations
(164)
(220)
Banking Fees & contingencies
(108)
(126)
Premium amortization, PIS & Cofins
(31)
(29)
Other
(18)
(44)
(452)
(518)
Net Financial result
Corporate Presentation
Interest on currency
swaps (+R$ 54 m);
Restatement of provisions
& liabilities (+R$ 29m)
31
DEBT POSITION
R$ million
Jun/02
Dec/02
Mar/03
Jun/03
Total Debt
9,700
10,774
11,616
11,394
• Short term
1,220
1,769
2,053
2,264
• Long term
8,481
9,006
9,563
9,130
(-) Cash
(573)
(1,513)
(1,479)
(1,789)
–
(141)
(132)
(86)
9,128
9,121
10,005
9,519
(-) Long term financial invest.
(=) Net debt
A 5% reduction
in 2Q03
Corporate Presentation
32
DEBT PROFILE – CURRENCY & INTEREST (JUNE/03)
Currency
Interest index
Libor
US$
2%
TJLP**
98%
2%
16%
82%
CDI
Local*
* After currency swaps
** BNDES long term lending rate (12% p.a.)
Corporate Presentation
33
DEBT REPAYMENT SCHEDULE (JUNE/03)
R$ million
FC:8,306
Total debt = 11,394
LC:3,088
3,112
2,340
2,420
1,100
1,032
882
508
2H2003
2004
2005
2006
2007
2008
2009+
9.7
20.5
21.2
27.3
9.1
4.5
7.7
% of total
Corporate Presentation
34
CAPEX
R$ million
Wireline
Wireless
14%
2Q02
17%
3Q02
22%
4Q02
6%
9%
1Q03
2Q03
CAPEX/SALES
697
509
386
255
251
135
2Q02
Corporate Presentation
253
295
453
255
3Q02
4Q02
185
101
97
88
194
1Q03
2Q03
35
CASH FLOW: EBITDA & CAPEX
R$ million
1,476
EBITDA
1,311
CAPEX
386
1,285
1,260
185
1,479
295
1,291
1,184
509
697
925
776
EBITDA (-)
CAPEX
563
2Q02
Corporate Presentation
3Q02
4Q02
1Q03
2Q03
36
Growth Strategy & Outlook 2003
Corporate Presentation
37
GROWTH STRATEGY
Local
Wireline
Data &
Corporate
Integrated
Offer of Telecom
Services
Long
Distance
Corporate Presentation
Wireless
(GSM)
38
WIRELINE LOCAL SERVICES
Platform and traffic growth (GDP/Regulation)
• Leadership in home market
Local
service
Data &
corporate
• Advanced voice services (corporate/
middle market)
• Increase ARPU (V.A. Services)
Long
distance
Wireless
services
• Reduce interconnection costs (F-M)
• Customized Offer (Regulation)
Corporate Presentation
39
LONG DISTANCE SERVICES
New services (increase market share): DLD, ILD and SMP(mobile)
• Leadership in home market
• Retail – loyalty/retention programs +
promotions
Local
service
Data &
corporate
• Corporate – best quality (call
completion/billing) + competitive service
plans (discounts/volume)
• Conquer new markets (domestic/
international/SMP)
Long
distance
Wireless
services
• Leverage on relationship & brand
• Increase efficiency & quality (low cost + high
quality service provider)
• Avoid price wars
Corporate Presentation
40
DATA & CORPORATE SERVICES
Growth above market average (market share gains)
• Increase penetration in SME (home market)
Local
service
Data &
corporate
• ADSL (high end residential/so-ho/small
businesses)
• Nationwide services (corporate level)
Long
distance
Corporate Presentation
Wireless
services
• Best Service Provider (quality end to end /
SLA)
41
WIRELESS (GSM)
Aggressive growth / Enhance competitive position
Local
service
Data &
corporate
• Market segmentation/innovative plans (MTV
& Celebrities/Oi Family)
• Streamline product portfolio
• Leverage on competitive advantages: GSM,
regional coverage, synergies with Telemar
Long
distance
Corporate Presentation
Wireless
services
• Optimize distribution channels
• Positive EBITDA in 2004
42
OUTLOOK 2003
• Network
– Wireline ~14.9 million lines in service
– Wireless ~3.0 million subscribers
• Revenue drivers
– Mobile, DLD and Data
– Rate increases (2H03)
• Bad debt ~3.8% of annual gross revenues
• EBITDA Margin in the mid- 40’s
• Capex ~R$ 1.7 billion for 2003
• Net debt ~R$ 8.5 billion (2003 YE)
Corporate Presentation
43
“SAFE HARBOR” STATEMENT
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
Corporate Presentation
Investor Relations
Rua Humberto de Campos, 425 / 8º andar
Leblon
Rio de Janeiro -RJ
Phone: ( 55 21) 3131-1314/1313/1315
Fax: (55 21) 3131-1155
E-mail: [email protected]
Visit our website: http://www.telemar.com.br/ri
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