3Q17 results. Rio de Janeiro, November 13, 2017

Similar documents
2Q17 RESULTS. Rio de Janeiro, August 9, 2017

APIMEC-Rio 3Q16. Rio de Janeiro, December 19, 2016

1q16 results Rio de Janeiro, may 12, 2016

Results 2Q15_. Investor Relations Telefônica Brasil S.A. July, Investor Relations Telefônica Brasil S.A.

Telecom Italia 1H 2010 Results

Telefónica Czech Republic

Preliminary Results January September 2014

1Q13 RESULTS Lisbon, 23 May

Strategic plan NY, june 6, 2016

Orange Polska 1Q 18 results. 26 April 2018

Vivo Investor Day Unique combination of Value and Growth

Telefónica O2 Czech Republic

Telefónica O2 Czech Republic

Telefónica Deutschland. Quarterly Results January March 2013

Sunrise Communications Group AG. Olaf Swantee

INVESTOR DAY. Amos Genish Chief Executive Officer. São Paulo March 15 th 2016

SmarTone Telecommunications Holdings Limited

Singtel Investor Day. Advanced Info Service Plc. 13 June Ticker: ADVANC (SET) AVIFY (ADR) Add AIS IR

SmarTone Telecommunications Holdings Limited

4Q13 results. Rio de Janeiro, February Oi S.A. 0

MAGYAR TELEKOM GROUP Q RESULTS PRESENTATION AUGUST 8, 2018

Q Results

Mobile market dynamics. Telkom SA Limited Analyst day

France Telecom. 1Q10 results. April 29 th, 2010

Building the Foundation for Growth FRANCO BERNABE

Swiss-common Sense. Presentation at Bank Bellevue Conference 16 January 2015, Flims. Mario Rossi, CFO

Creating Value in Italy

2015 INTERIM RESULTS. 21 AUGUST, 2015 CHINA UNICOM (HONG KONG) LIMITED

2Q 2018 Results Conference Call

Earnings Release 4Q17

/ Q3-19 / Quarterly Operating Report / December 2018

Bharti Airtel. Management Presentation Singtel Investor Day

Important Notice. This communication is not an offer to sell or the solicitation of an offer to buy any securities.

Paul Saleh. CFO and acting CEO Sprint Nextel Corporation. Dec. 3, 2007

Swisscom: In time to TIME Mario Rossi, CFO Swisscom AG

First Quarter Fiscal 2019 Earnings. July 26, 2018

INTOUCH 9M18 Result Opportunity Day

UBS Media Conference Neil Berkett, Acting CEO 5 December 2007

Financial Report January March May TDC Group

/ Q2-19 / Quarterly Operating Report / September 2018

O2 Czech Republic, a. s. February Investor Presentation

magazineluiza COMPETITIVE ADVANTAGES 2013 HIGHLIGHTS 2014 EXPECTATIONS

Investor Presentation

Bharti Airtel. Management Presentation Singtel Investor Day

Investor Day December 2017

Sunrise Communications Holdings S.A.

Analyst and Investor Day Vodafone Italy

Investor Briefing Q Results. SK Telecom (K-IFRS, Non-audited)

Bharti Airtel. Investor Conference Presentation Feb 2016

FY2015 Results Presentation CEO & Managing Director - Julian Ogrin CFO - Leanne Wolski

Third quarter and first nine months 2017 Results Release. October 19 th, 2017

Vodafone Japan. Shiro Tsuda, Executive Chairman Bill Morrow, President. 19 September 2005

2016 Interim Results. For the six months ended June 30, August 10, 2016 Hong Kong

France Telecom investor day, June 10th 2004: Building the integrated broadband communication services Group

2015 Financial Results Presentation

8x8, Inc. (NYSE:EGHT) Fourth Quarter and Full-Year Fiscal 2018 Earnings. May 24, 2018

Telefónica O2 Czech Republic

Financial Report October December 2016 February 3rd, TDC Group

Agenda. Introduction to Airtel. Our Strengths. The Industry and Opportunity. Our Strategy

2Q18 Results Presentation. August 2018

First quarter 2009 Results Conference Call

Quarterly Results January-September 2008

Forward-looking Statements

Quarterly Results January March 2008

TIM Group. May 17, Amos Genish Piergiorgio Peluso

TELECOM ITALIA GROUP Goldman Sachs European Mobile Data Seminar London, 9 March Telecom Italia MARCO PATUANO

Business Model Evolution from MVNO to Multiple Play Operator based on WIMAX: The Spanish Scenario

Investor Relations May 13th, 2009

Forward-looking Statements

Wal-Mart Stores, Inc. (NYSE: WMT) Bill Simon Executive Vice President & Chief Executive Officer Walmart U.S.

Windstream Reports First-Quarter Earnings Results

Non-Deal Roadshow. Taipei. Prepared by Group Investor Relations

BT Group plc Q1 2018/19 trading update

Vodafone Group Plc Interim Management Statement

BECOMING A DIVERSIFIED SERVICE PROVIDER. CHRISTOPHER MATTHEISEN Chief Executive Officer

2017 annual general meeting. 27 October 2017

Vodafone Netherlands Webinar. 10 December 2013

Mitel Networks. Canaccord Genuity 34 th Annual Growth Conference. August 14, 2014

second QUARTER 2016 July 19, 2016

StoneCo Ltd. Announces Preliminary First Quarter 2019 Results Announces Investments in Two Software Companies

2008 objectives have been met, in line with the vision expressed 1 in NExT

Financial results Q3 2017

3Q18 Financial Results. November 8, 2018

Bharti Airtel. Investor Conference Presentation Sep 2015

Q Financial Results Conference call for investors May 15 th, 2014

Bharti Airtel. Management Presentation Singtel Investor Day

Preliminary Results FY th May 2017

For personal use only

Global Media and Communications Conference

2016 Acquisition and Retention Study. Drivers of customer retention

Investor Presentation

Investor Presentation

SmarTone Telecommunications Holdings Limited

Leveraging Unique Assets

COMPANY PRESENTATION Marshall Chesrown Chairman & CEO

AMAP. Nick Read CEO AMAP

Investor Presentation. June 2014

france telecom cautionary statement ODDO SECURITIES - TMT Forum 23 May 2007 Gervais Pellissier- Senior Executive VP, CFO

TriNet Group, Inc. Investor Presentation March 2018

Transcription:

results Rio de Janeiro, November 13, 2017

Important notice This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and the applicable Brazilian regulations. Statements that are not historical facts, including statements regarding the beliefs and expectations of Oi S.A. Under Judicial Reorganization (the Company or Oi ), business strategies, future synergies, cost savings, future costs and future liquidity are forward-looking statements. The words will, may, should, could, anticipates, intends, believes, estimates, expects, forecasts", plans, aims and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. There is no guarantee that the expected events, tendencies or expected results will actually occur. Such statements reflect the current views of the Company s management and are subject to a number of risks and uncertainties. These statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, corporate approvals, operational factors and other factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. All forward-looking statements attributable to the Company or its affiliates, or persons acting on their behalf, are expressly qualified in their entirety by the cautionary statements set forth in this notice. Undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. Except as required under the Brazilian and U.S. federal securities laws and the rules and regulations of the CVM, the SEC or other regulatory authorities in other applicable jurisdictions, the Company and its affiliates do not have any intention or obligation to update, revise or disclose any changes to any of the forward-looking statements herein in order to reflect current or future events or their developments, changes in assumptions or changes in other factors affecting the forward-looking statements herein. You are advised, however, to consult any further disclosures the Company makes on related subjects in reports and communications that the Company files with the CVM and the SEC. 2

Results - Highlights (Brazil) Quarter HIGHLIGHTS o Oi records net income from Brazilian operations and year-on-year improvement in EBITDA and EBITDA margin. Our Brazilian operations recorded net income for the first time since 3Q15, totaling R$ 217.5 million in. Consolidated net income, which includes international operations, totaled R$ 8 million in the quarter. Routine EBITDA totaled R$ 1,597 million in, 4.1% up on. Routine EBITDA margin reached 27.0%, 2.2 p.p. more than in. o Net service revenues resume sequential growth trajectory. Net service revenues moved up 2.3% over, driven by increased penetration of convergent products, recharge volume growth in the prepaid segment and increased postpaid revenues due to higher sales of new unlimited plans. o The Company reduced costs by R$ 337 million in and R$ 1.5 billion in the first nine months of 2017. Operational efficiency promotes sustainable cost reduction, supported by continuous improvement in quality indicators. o Oi continues increasing infrastructure investments, reinforcing its commitment to business sustainability and the future of the Company. Oi increased investments by 36.3% over, reaching R$ 1.3 billion in. CAPEX/Net Revenues totaled 22.6%, compared with 15.9% in. In 9M17, total investments reached R$ 3.8 billion, 11.6% higher than in 9M16. o Since the beginning of the Judicial Reorganization, Oi s operations have generated R$ 2.6 billion in cash. In, our cash moved up by R$ 287 million, supporting the increase in the Company s investments in these three months. o o Initiatives designed to increase operational efficiency and improve customer experience result in consistently better operating indicators. Active management based on infrastructure modernization and expansion of network capacity, preventive actions to increase productivity, better customer service and digitalization lead to operational efficiency gains and better customer experience. As a result, Oi has been recording substantial improvements in the customer experience, with continuous reductions in ANATEL (-13.9% y.o.y.) and Small Claims Court (JEC Juizado Especial Cível) (-33.7% y.o.y.) complaint indicators. Oi keeps evolving in the Judicial Reorganization process and continues to negotiate with creditors seeking the best proposal for a Judicial Reorganization Plan, to be submitted for approval at the General Meeting of Creditors on December 7. 3

Results - Financial Highlights Acceleration of investments and focus on operational efficiency sustain ebitda and margin growth. RevenueS reverts to quarterly growth. Financial highlights R$ million y.o.y. q.o.q. Brazil Net Service Revenues 1 Residential Personal Mobility Customer 2 B2B Net Customer Revenues 2 Routine OPEX Routine EBITDA Routine EBITDA Margin CAPEX Routine EBITDA Capex Net Income from Brazilian Operations 5,863 2,321 1,884 1,761 1,596 5,676 4,321 1,597 27.0% 1,339 258 218 6,149 2,345 1,897 1,754 1,832 5,934 4,658 1,534 24.8% 982 552-1,267-4.7% -1.0% -0.7% 0.4% -12.9% -4.3% -7.2% 4.1% +2.2 p.p 36.3% -53.3% N/A 5,733 2,227 1,814 1,713 1,627 5,573 4,191 1,601 27.6% 1,229 372-2,977 2.3% 4.2% 3.9% 2.8% -1.9% 1.9% 3.1% -0.3% -0.7 p.p 8.9% -30.7% N/A Consolidated Consolidated EBITDA 3 1,605 1,645-2.4% 1 - Excludes handset revenues; 2 - Excludes revenues from handsets and network usage; 3 Excludes international operations (Africa and East Timor) 1,617-0.7% 4

Results - Operational Highlights Broadband and pay TV continue to grow in the residential segment reinforcing the convergence strategy. b2b reports quarterly growth of customer base. Operational highlights Thousand RGUs Total - Brazil 62,931 y.o.y. q.o.q. 67,893-7.3% 63,216-0.5% Residential Fixed line Broadband Pay TV Residential ARPU 16,121 9,465 5,207 1,449 81.1 16,498 10,087 5,164 1,247 77.1-2.3% -6.2% +0.8% +16.2% +5.3% 16,272 9,657 5,219 1,396 76.5-0.9% -2.0% -0.2% +3.8% +6.0% Personal Mobility Prepaid Postpaid 39,626 32,807 6,820 44,118 37,318 6,800-10.2% -12.1% +0.3% 39,802 32,963 6,839-0.4% -0.5% -0.3% B2B Fixed line Broadband Mobile Pay TV 6,543 3,685 539 2,307 12 6,634 3,794 558 2,270 12-1.4% -2.9% -3.4% +1.6% -2.5% 6,501 3,696 542 2,251 13 +0.6% -0.3% -0.5% +2.5% -7.3% Public phones 641 644-0.4% 641 +0.0% 5

Results - Residential (Brazil) Residential SEGMENT CONTINUES TO EVOLVE IN OPERATIONAL AND FINANCIAL TERMS, supported by convergence. Customer revenues reverts to growth in the quarter. Fixed line Gross adds +14.9% Bundles 1 penetration % of total fixed line customer base +7.0 pp ARPU -2.5% +4.0% Oi Total base Customers ( 000) 653 898 +28% 1,168 1,411 1,749 4Q16 1Q17 +21.0% Sales of speeds 15 Mbps % of total broadband sales +12.6 pp +1.1% +6.0% Churn. -44.0% ARPU. +30.8% Broad band +19.4% 9,1 9,4 9,6 9,8 10,3 High-end Mix % of total pay TV customer base +3.9 p.p. Gross Average Speed +6.3% +5.2% Fixed line 1P Fixed line inside 3P bundle Residential² Net customer revenues 2-1.1% +4.0% Oi Total TV 26.5 27.3 28.4 29.0 30.3 4Q16 1Q17 4Q16 1Q17 1 - Includes the discontinued offer OCT (Oi Conta Total); 2 - Excludes revenues from network usage. 6

Results - Personal Mobility (Brazil) MOBILITY REVENUES GROW, DRIVEN BY THE NEW PORTFOLIO OF OFFERINGS, which provide greater flexibility and improve customer experience. Prepaid Postpaid + Control Revenues¹ % quarter on quarter -0.7 2.5 Revenues¹ % quarter on quarter -0.8 4.4 Postpaid Gross ARPU R$ +6.9% Net customer revenues² Other²³ +0.4% +2.8% % Y.o.Y. 4Q16 1Q17 4Q16 1Q17 Antes do Ilimitado Após o Ilimitado Postpaids + Control +9.2% Success of Oi Livre offerings that allow the exchange of minutes for data through Minha Oi app. Unlimited minutes plans in Postpaid promoted profitability and product sales. Launching of Control with the Online Bill option as a strategy of migration from Prepaid to Postpaid, increasing ARPU and customer loyalty. Prepaid -3.1% % Oi Livre on total base % Average recharges R$ Pospaid Gross Monthly average Control Gross Monthly average % Oi Mais on total base % +20.7 p.p. +17.3% +13.8% +25.5% +25.1 p.p. Data revenues already account for 59% of customer revenues, growing 6.4% in q.oq and 12.5% y.o.y. 42,0 62,8 30,0 55,1 Revenues from network usage grew 22.8% in the quarterly comparison, driven by unlimited plans that stimulated incoming traffic. Other Offers Oi Livre Before unlimited plans After unlimited plans Before online bill After online bill 1 - Excludes long distance revenues; 2 - Excludes revenues from handset and network usage; 3 Includes long distance revenues. 7

Results - B2B (Brazil) b2b STRATEGY OF PRIORITIZING QUALITY AND CUSTOMER EXPERIENCE AND THE OFFER OF UNIQUE DATA AND IT SOLUTIONS BEGIN TO PRODUCE POSITIVE EFFECTS. The macro scenario continues to impact B2B......which has been working on quality improvement and innovative solutions as alternatives for the generation of value-added to customers Large Companies seeking cost reductions; Closing of agencies and points of sales; Exposure to government customers, who have relevant stakes in Corporate revenues; Rise of credit risk for SMEs; Pressure for reducing prices of products within the regulated market. Quarter with best historical quality indexes; Migration strategy and offers for products that are not in the regulated market. Large Companies¹ Average installation time 2 % y.o.y. -12.9% 4Q16 1Q17 Billing complaints % y.o.y. -40.6% 4Q16 1Q17...this strategy begins to produce first results. Evolution of Base % quarter on quarter -0.4-0.3-1.0-0.8 0.6 B2B Net service revenues % quarter on quarter -4.3-2.3 4Q16-4.9 1Q17-4.5-1.9 Focus on offer realignments; Attractive conditions in portability; Construction of new sales channels seeking quality gross adds. 1 - Corporate and Wholesale; 2- Advanced voice and data; 3 - Fixed line and broadband; 4 Door-to-Door sellers SMEs Average installation time 3 % y.o.y. -26.4% 4Q16 1Q17 Productive sellers DtD 4 with over 10 RGUs/month 1Q17 +49.7% 4Q16 1Q17 B2B presents quarterly growth of RGUs for the first time since the second quarter of 2014. 8

Results - Digital Transformation (Brazil) DIGITIZATION CONTRIBUTES TO simplify processes and services, reflecting IN efficiency gains, cost reduction AND IMPROVEMENT OF customer experience. Oi continues to develop and launch innovative digital solutions that improve customer experience and enable operational efficiency gains to the Company. Highlights up to August/17: TV e-billing Minha Oi bar code Reconnection of service online request Online Bill for Control offer SEP/17 New User Interface on Minha Oi Scheduling of instore customer service through Minha Oi Oi Pontos new page OCT/17 An example of an innovative solution is the Técnico Virtual ( Virtual Technical ) App, which has over 1 million downloads, whereby customers can solve problems, such as broadband connection, through their mobile phone. Solved problems by Técnico Virtual app Efficiency (%) 39% May/17 43% June/17 +14 pp 44% July/17 51% Aug/17 53% Sep/17 E-billing +85.8% E-care +83.0% E-commerce +61.4% 9

Results - Investments (Brazil) Acceleration of investments in infrastructure sustains continuous improvement in the quality of NETWORK. The Company continues to increase its investments in infrastructure and network committed to the sustainability of the business... CAPEX R$ million Brazilian operations INVESTIMENT FOCUS Capex / Net Revenues 982 15.9% +36.3% 1,339 22.6% +11.6% 3,401 3,794 9M16 9M17 17.9% 21.3% Expansion and modernization of the transport network 2G, 3G and 4G network sharing Migration of 2G customers to 3G/4G and of 3G to 4G Fiber and capacity swap, in order to improve network resilience Consolidation of IT architecture...while at the same time increasing the efficiency of invested capital... Traffic cost R$/MoU Data license cost R$/Data access National Backbone R$ / Mbps (TX)... improving quality of services and user experience. Data traffic 2G/3G/4G, Tbps dez/15 IP traffic - ADSL Tbps +189% Set/17 +87,3% 95,4% Data access 2G/3G/4G dez/15 +2,1pp Set/17 Average ADSL bandwidth Mbps / User 97,45% +72,3% 98,2% dez/15 SMP8 Data connection rate 2G/3G SMP9 Data drop rate 2G/3G 0,0% 99,59% 98% set/17 5% -45% -49% -40% dez/15 set/17 dez/15 set/17 0,26% 0,17 % dez/15 set/17 2015 2017 Former Current Agreement Agreement Former Current Agreement Agreement 10

Results - Business Transformation initiatives to increase operational efficiency and improve customer experience reflect on consistent progress in quality indicators. Active management based on infrastructure robustness initiatives and network resilience; focus on preventive actions that increase productivity; improvements in service quality and digitalization of services all generate operational efficiency gains and improve customer experience. Progress of operational and quality indicators demonstrate these improvements Average waiting time to resolution Repairs queue (Fx,+Vx+TV) -20.6%. Customer care costs -11.1%... continually reflecting in improvements of complaint indicators. ANATEL complaints Monthly average. -33.7% Incorporations and closer management of NSPs¹ Operational Efficiency Expansion of network investments Rework in 30 days Repeated repairs or installation guarantee -16.6% +8.0% Customer satisfaction 2 JEC claims Monthly average. Better Customer Experience -13.9% Digitalization of services Evolution of customer care management model Average time to service installation¹ Installations queue -29.7% Repeated calls volume -24.8% 1 Results of the operations of the absorbed network services providers (NSPs); 2- Customers who called Customer Care are contacted within 24 hours after the call and are questioned about how satisfied they are regarding the service provided by the operator. This research is used for the attendant remuneration and the suppliers bonus. 11

Results - Costs and Operational Expenses (Brazil) Operational efficiency and rigid cost control continue ENABLING SUSTAINABLE opex REDUCTION AND INCREASE OF INVESTMENTS. Operational efficiency and cost control have sustained maintenance of margin Routine operating costs and expenses R$ million Brazilian operations 4,658 23 70 137 28-337 Million (-7.2%) 65 77 52 34 12 month inflation: +2.5% 114 120 4,321...and cash generation, sustaining the continuous growth of investments. Routine EBITDA R$ million Brazilian operations 1,534 1,676 +4.1% 1,692 1,601 1,597 4Q16 1Q17 Handset costs Personnel MTR tariffs cuts Intercon. (ex-mtr cuts) Thirdparty services Network maint. Marketing Rent & Prov. Insurance Contingencies Other 24.8% 27.4% 27.9% 27.6% 27.0% EBITDA Margin 14,389 29 200 364 94-1.5 Billion (-10.4%) 43 295 1 11 405 271 12,886 +2.2 pp Operational cash flow (routine EBITDA Capex) R$ million Brazilian operations -53.3% 552 318 465 372 258 9M16 Handset Personnel costs MTR tariffs cuts Intercon. (ex-mtr cuts) Thirdparty services Network Marketing Rent & Prov. maint. Insurance Contingencies Others 9M17 4Q16 1Q17 12

Results Cash Position The company's operation generated A R$287 million CASH AMOUNT in the quarter. Since the START OF THE judicial reorganization, cash generation was R$2.6 billion. Cash Position R$ millions Evolution of cash position since the begining of the JR Plan 7,431 1,597 1,339 +287 million 67 61 157 7,717 R$ millions 5,106 +2.6 billions 7,717 Cash balance Routine EBITDA Capex Working Capital Legal sphere¹ Financial Operations Cash balance Cash balance 2Q16 Cash balance 1- Judicial deposits + taxes. 13

Judicial Reorganization Process STATUS of the JudiciaL reorganization PROCESS Request for Judicial Reorganization Presentation of the 1 st list of creditors by the Judicial Administrator Presentation of the 2 nd list of creditors by the Judicial Administrator Presentation to the judge of the new JR plan considering new financial conditions approved in Oi s Board of Directors Credit Holders Meeting to approve the JR Plan (first call) Ratification of the plan by the judge Jun 20, 2016 Sep 20, 2016 May 17, 2017 Oct 11, 2017 Dec 7, 2017 Interactions with creditors for adjustments in the JR plan Sep 05, 2016 Mar 28, 2017 Jun 26, 2017 Oct 19, 2017 Feb 1, 2018 Presentation of reorganization plan to the judge Presentation to the judge of new financial conditions as adjustments to the JR plan Beginning of the registration for the Creditors Settlement Program of up to R$ 50 thousand 1 End of the registration phase of the Creditors Settlement Program of up to R$ 50 thousand 1 Credit Holders Meeting to approve the JR Plan ¹ (second call) ¹ The second Credit Holders Meeting is scheduled in the event of the Meeting not being convened on first call due to lack of quorum. 14