December/2003. Corporate Presentation

Transcription

1 December/2003 Corporate Presentation

2 General Overview 1

3 HIGHLIGHTS Integrated Telecom Service Provider 15.1 million wirelines in service (Dec/03) Over 4.0 million wireless subscribers (Jan/04) Region I 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 (Region I) Region I I Domestic and international long distance services PCS Mobile services (GSM) Region III Data, Corporate & Call Center Services Most liquid stock in Bovespa (TNLP4) ~ US$ 57 m / day (Jan/04) Most liquid Latam ADR (TNE) ~ US$ 25 m / day (Jan/04) High Free Float: 82% of total shares/adr: 28% Market value: US$ 6.2 billion (Jan/04) 2

4 SHAREHOLDERS STRUCTURE Tele Norte Leste Participações (TNE) Total outstanding shares (ex-treasury) 381,777 m 100.0% 81.0%* Telemar Norte Leste -TMAR (Wireline) Total outstanding shares (ex-treasury) 241,489 mm 100.0% 100.0% (Data) (Wireless) * Excludes treasury stock (1.8 % of total shares) 3

5 CAPITAL STRUCTURE Capital R$ 4,644 million Common shares Preferred shares 1/3 130,186 m 2/3 260,371 m Total outstanding shares (ex-treasury) 381,777 m Total shares 390,557 m 18.2% Tele Norte Leste (TNE) 81.8%* Telemar Participações** Free float 5.0% 11.3% 5.0% 25.0% BNDESPar Fiago AG Telecom ASSECA Participações 28.4% NYSE (ADR/TNE) 11.3% Lexpart Part. L.F. Tel 11.3% 11.3% 19.9% BrasilCap Brasil Veículos 53.4% Bovespa * Excludes treasury stock ** Controlling Shareholder ( 54.9% of voting shares) * 13.1% - Annex IV 4

6 PERSONNEL full-time employees Fixed & mobile businesses Contact center 31,928 31,928 24,206 24,511 24,206 24,511 21,090 21,090 27,471 11,981 28,369 18,082 37,690 28,032 15,490 10,287 9,658 Jul_

7 WIRELINE PLATFORM million lines Lines in service Lines installed 13% CAGR Jul_1998* * Company s acquisition 6

8 BROADBAND ACCESS thousand lines Increasing focus on ADSL % 86% ISDN % % 47% % 59% 24% 76% ADSL 37% Dec_02 Mar_03 Jun_03 Sep_03 Dec_03 7

9 LONG DISTANCE AND DATA TRANSMISSION NETWORK RR AP International connections Belém São Luís AM PA MA Terezina CE Fortaleza RN Natal AC RO MT TO PI BA PE PB João Pessoa Recife AL Maceió SE Aracajú Salvador Main features Coverage of 80% of Brazilian Industrial GDP Interstate and intrastate transport network 18,000 km of fiber optical cables 20 integrated metropolitan rings in 18 states 350 remote satellite stations 8 Satellite Hubs ATM, TDM/SDH and IP Networks MS RS PR Brasília Goiânia GO Uberlândia Belo Horizonte SC SP Campinas Curitiba Porto Alegre Montes Claros Paracatu Patrocínio Florianópolis MG São Paulo RJ ES Vitória Rio de Janeiro International connections Rio location of our Network Operations Center (NOC) 8

10 WIRELESS PLATFORM thousand subscribers Prepaid Post-paid Oi 2.5 million net adds in ,893 2,236 2,849 20% 17% 83% 1,401 20% 1,722 22% 20% 80% 80% 80% 78% Dec_02 Mar_03 Jun_03 Sep_03 Dec_03 9

11 Oi s OPERATING PERFORMANCE Net additions (thousands) ,044 Pre-paid 80% 69% 85% 83% 90% Post-paid 31% 20% 15% 4Q02 1Q03 2Q03 17% 3Q03 10% 4Q03 Net additions in Region I (thousand subscribers) 1,517 1,115 1,336 2,340 Total ,044 4Q02 1Q03 2Q03 3Q03 4Q03 Share 59% 68% 46% 46% 45% 10

12 Oi s MARKET SHARE DEC/2003 GSM Region I 18.4% 81.3% Brasil 8.8% Source: Anatel 11

13 WIRELESS PENETRATION IN BRAZIL DEC/ Brazil 26% Region III Region II 31% Region I 22% TO AC RO PR GO SC MT MS RS DF SP MA PI BA PB CE PA AL SE RN PE AP RR AM ES MG RJ Source: Anatel 12

14 WIRELESS PROJECT ROLLOUT Oi Coverage ~ 450 cities covered; 48 million people GPRS coverage in 6 main capitals 3,141 sites (BTS) CAPEX optimization (co-siting: 1,700 BTS) International roaming Main suppliers: Nokia, Siemens, Alcatel, Ericsson Coverage focused on profitable areas Distribution 1,809 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 Resource optimization Tight headcount structure: 990 employees Infrastructure sharing Outsourcing (including call centers) Synergies with Telemar Strong brand name Focus on profitable growth, minimizing OPEX and CAPEX 13

15 REVENUES R$ million Gross revenue Net revenue 22.1% CAGR 19,427 16,091* 6,946 5,158 8,433 6,222 10,851 8,122 13,660 10,103 11,874 14, * Wireless startup from 2H02 14

16 COSTS & EXPENSES R$ million 17.5% CAGR 7,782 6,545 6,521 3,469 3,487 4,

17 EBITDA R$ million 33% 44% 50% 35% 45% 44% EBITDA Margin % CAGR 5,353 6,221 4,032 3,558 1,689 2,

18 EMPLOYEE PRODUCTIVITY TMAR Lines in Service/Employee Net Revenue/Average Employee R$ thousand EBITDA/Average Employee R$ thousand +443% 1,597 1, % 984 1,022 1, %

19 WIRELINE PRODUCTIVITY TMAR R$ Net Revenue/ ALIS Costs & Expenses /ALIS EBITDA/ALIS +19% +68% % ALIS: Average Lines in Service 18

20 CAPITAL EXPENDITURES (CAPEX) R$ million 100% Wireline Wireless 49% 36% 35% 17% 12% CAPEX/Sales ,060 2,172 2,500 2,244 2,804 7,888 2,031 1, , ,

21 CAPITAL EXPENDITURES (CAPEX) US$ million 10,381 4, ,532 1,236 2, Total

22 FINANCIAL RESULTS R$ million 4Q02 1Q03 2Q03 3Q03 4Q03 Financial revenues Financial expenses (521) (586) (651) (807) (693) Interest on loans/debentures (248) (265) (232) (217) (197) Monetary & exchange variations 12 (164) (220) (359) (224) Banking Fees & contingencies (151) (108) (127) (135) (151) PIS & Cofins (116) (31) (29) 2 (76) Other (17) (18) (43) (98) (46) Net Financial result (446) (452) (518) (606) (530) 21

23 DEBT POSITION R$ million Dec/02 Mar/03 Jun/03 Sep/03 Dec/03 Total Debt 10,774 11,616 11,394 11,153 12,160 Short term 1,769 2,053 2,264 2,606 2,662 Long term 9,006 9,563 9,130 8,547 9,498 (-) Cash (1,513) (1,479) (1,789) (2,412) (4,325) (-) Long term financial invest. (141) (132) (86) (86) - (=) Net debt 9,121 10,005 9,519 8,655 7,835 A 9% reduction in 4Q03 (-R$ 820 million) 22

24 DEBT REPAYMENT SCHEDULE (DEC/03) R$ million Total debt = 12,160 FC:9,049 LC:3,111 3,269 2,662 2,616 1,906 1, % of total

25 OPERATING CASH FLOW MARGINS R$ million 1,476 1,479 1,663 1,603 EBITDA 1, Margin 600 1,291 1,184 1, CAPEX Q02 1Q03 2Q03 3Q03 4Q03 24

26 Growth Strategy & Outlook

27 GROWTH STRATEGY Local Wireline Data & Corporate Integrated Offer of Telecom Services Long Distance Wireless (GSM) 26

28 OUTLOOK 2004 Network (YE) Wireline 15.1 million lines in service Wireless 5.4 million subscribers ADSL 450,000 customers Bad debt ~3.0% gross revenues EBITDA ~43%of Gross Revenue Capex R$ billion (60% -TMAR /35% - Oi) Net debt ~R$ 7.0 billion (YE) 27

29 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 Investor Relations Rua Humberto de Campos, 425 / 8º andar Leblon Rio de Janeiro -RJ Phone: ( 55 21) /1313/1315/1317 Fax: (55 21) invest@telemar.com.br Visit our website: 28