Q4 2024 TIM SA Earnings Call
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Have joined the meeting as an attendee and will be muted throughout the meeting good morning, ladies and gentlemen, and welcome to Genie <unk> 'twenty 'twenty four fourth quarter results Videoconference call, we'd like to inform you that these.
Event is being recorded and all participants will be in listen only mode. During the company's presentation. There will be a replay for this call on the company's web site. After gene assay remarks are completed there will be a Q&A session for participants at that time further instructions will be given.
Now our first award to Recency head of IR. Please go ahead Sir.
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Please note that management may make forward looking statements in this presentation may contain them refer to the disclaimer on the screen and on our Investor Relations website now let's review our results.
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Yes.
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Yes.
Hello, everyone and Albert's organics elite seal of Timothy.
I'm pleased to present to you a robust set of results in a dynamic here when we overcame challenges and took advantage of our strengths to meet all of our targets 2024 was marked by powerful cash generation. Thanks to solid financial and operational results. We closed the year with 70 revenue growing.
Six 4% at the top of the guidance range at.
At this speed that we outpaced inflation event with the second half of tougher macro environment and a favorable comparison base in the fourth quarter service revenues grew five 1% our revenues were driven by mobile services, which expanded by six 6% compared to 2023.
And mobile highlighted the excellent performance of postpaid rising close to 9% year over year as a consequence of an expanding customer base with migration and a low churn of 0.7%. Our EBITDA ended 2024, increasing by 8% when compared to.
2023, with another year of margin expansion. These show the consistency and the ability to operate efficiently our proxy for operating free cash flow grew close to 23% year over year.
Percentage of revenue will reach more than 20% in 2020 for innovative offers continuous infrastructure development and service improvements supported these strong financial results behind our three b strategy lays an ADL delivering what clients value the most.
We are focused on providing exceptional customer value through network quality affordability and service excellence and their best network, we focused on expanding fiber coverage across Brazil to migrate traffic and clients and starting box clients protection positively.
We have more than 600 receded cover 20% more than second place.
<unk> traffic is more than double compared to a year ago.
For 2025, and we will ensure consistency in natural development, while promoting the message of network quality leadership to consumers yet.
The emphasis on technology innovation and network Densification to address natural gaps demonstrates a proactive stance in meeting customer needs and expectations as network quality becomes a core brands.
And best offer 2024 was masked by innovation true content per phone expansion, while guaranteeing data monetization, we launched new concept in postpaid and prepaid in parallel with tourney and historical gap into a differentiation element.
We expect to deepen our distinctive Vanessa with digital ecosystem expand shrunk and a renewed more for more approach innovation will again play a role in using next best action tools to personalize a revamp of our prepaid go to market strategy to deliver the best service during 2024, we used <unk>.
Speaker Change: Allergy in our favor to maintain service quality indicators at the highest contract.
Speaker Change: Digitalization continues to be an important source of opportunities and our new app should become a relevant driver for that tracking in 2025 customer journey evolution will continue aiming at reducing pain points and improving overall quality at.
Speaker Change: It seemed like the experience in our digital channels associated with the early sort of ability features and value driven management of our clients and showcase this team's dedication to providing tailor solution than me diverse customer needs. In recent months, we have seen growing concerns about themes ability to overcome challenges imposed.
Speaker Change: By its mature peers and new entrants, but we are sure of our strengths and client attraction and retention climb monetization and service and experience team.
Speaker Change: Theme outpaced its peers at growing the postpaid base by seven 3% year over year reinforcing the idea that net additions should be rent relative to the size of the customer base and not only in the absolute number we were the only large player to defend our market share in postpaid against the new enter.
Speaker Change: As we've been explaining nowadays this is primarily a game of migration and churn reduction thus maintaining postpaid churn at low level is vital to have a strong client base profile.
Another area of clear Frank for theme is the monetization of its client base, we have the highest ARPA of the industry above 31, reais growing 6% versus 2023 to accomplish these we combine more for more strategy plus upsell tactics to move clients up the ladder and cross sell initially.
Speaker Change: To expand our relevance in clients' pockets higher customer engagement, all swelled to increase loyalty and consequently, reduce churn about 28% of our customers at more than one product. It is fair to say, we have a diverse universe of metrics and sources when it comes to measuring carrying service quality.
Speaker Change: There is the sector regulator Annabel private protection agency like are they climb yoki public consumer protection agencies, such as <unk> and consuming the Pentagon and also internal metrics when looking at the numbers from these different sources. It is clear that team as an outstanding array suitability being champion in most.
Speaker Change: That solve their problems faster and according to clients' expectations, we still have room to improve when it concerned the number of complaints who are the least complain about and some of the sources, but we have yet to close some gaps in others. Finally web then artwork evaluation. There is no doubt that team as the best.
Speaker Change: Factor in Brazil, we started being present in more places that antibody us both in <unk> and a five.
Speaker Change: And according to the recent report of open signal towards the most awarded operator in the mobile network experience report, we won seven out of 14 categories, leaving behind our peers. In these outstanding results highlight that we are the number one operator inconsistent quality for three years in a row.
Speaker Change: According to what we're seeing now this battery connects the most with clients experience. The challenge we face for network and you know well is related to perception, but this is a marathon and not a sprint rates consistency in having the best net romantics and consistent in communicating this leadership to consumers is essential.
Speaker Change: In sum, we have our strengths and work to ensure they remain a differentiating factor for team at the same time, we transform our weaknesses into opportunities to improve themes overall operational performance.
Speaker Change: Now I will talk about areas of opportunity to generate new revenue streams, they are becoming more and more relevant to our mobile per four months and this will be the case for 2025 and the years ahead.
Speaker Change: Throughout 2024, we were at regaining momentum in the development of our digital ecosystem. Our five G Fund managed by Apple Adventures reached three embassies and more recently in the in out of our foods became an LP.
Speaker Change: The arrival of a new major investor further strengthen set defined peer leading performance within an innovation ecosystems customer platforms projects are evolving accordingly embedding fruits in different segments in a curtailed at all dose of each more than 160000 families enrolled over the last six.
Speaker Change: Months in education. This complete up maintains a solid read them to reach 800000 enrollments and courses in digital and entertainment services.
Speaker Change: Extra partnership reach an important milestone with him and in the rides that subscribe to 27% of the company finally, our mobile apps and data monetization basis rapidly response, as we integrate our proprietary inventory with Google and meta and maintain a consistent rollout of Tim.
Speaker Change: <unk> new products.
Speaker Change: The other frontier for revenue growth is b to B Iot.
Speaker Change: The beginning of this project with some more than 700 million Reais in contractor revenues in 2024, we added $270 million in new contracts. Most of these contracts refers to prevent the customer first one agribusiness it where we have close to 20 million actors covered with forging the second one logistic with her.
Speaker Change: Highways, representing most of the growth in our coverage span more than five 6000 kilometers of roads.
Speaker Change: Sir one utilities for which we sold more than 340000 smart lighting units, we connectivity services during 2024 with focus on structuring sales processes and internal operations in a proactive approach to capturing market opportunities and becoming a reference among b to b.
Speaker Change: Clients of these verticals for 2025, and we need to further develop this opportunity aggregating solution and expanding our addressable market. We are working with a robust pipeline of prospective clients across various vertical so the future looks promising now we move along through more financial details with our share.
Andre: For Andre.
Andre: Hello, everyone I'm Andre as he address your philosophy.
I'm pleased to share that we ended the year with solid the figures overall co firing our capacity to increase cash generation and create more value for our shareholders. Once again, we believe it's an a beta that's grew more than inflation with a six 2% year over year.
Andre: <unk> in the fourth quarter.
Andre: This contributed to a strong year with NIH questions year over year increase in our margin, reaching 49.6% after accounting for leasing back a bit to.
Andre: After Lee is rose by double digits in 2024 with the margin expanding by one seven percentage points. This was a consequence of our efforts show concluded their commissioning tower project faster than we expect and terrain never say to our contracts.
Andre: It's worth mentioning that most of the signs were paid with only a small part remaining for 2025, our net income grilled double digits for the seventh consecutive quarter consolidated a year delivering the highest organic in that income in our history, reaching more than three.
Andre: Hi.
Andre: Shareholder Hemlo narration achieved annual level totaling $3 5 billion.
Andre: With yields of 10% our consistent operational performance combined with disciplined capital allocation.
Andre: Result in Capex over revenues, reaching 17.9 firsthand this drove strong growth in operation cash flow, which increased by almost 23% year over year with the margin expanding to 20.5% in 2024, our balance sheets.
Andre: <unk> as strong supporting shareholders, whom we're narration infiltrate projects, they're twins intensify our results have firm our ability and commitment to fulfill our promise even in the face of challenges now back Chavez.
Andre: Before we conclude our resolve discussion it is worth recapping some ESG developments in 2020 for confirming team's commitment and highlight in partnership in projects that generate positive social impact under the partnership with Geraldo for Alcoa as we have transformed <unk> into a fully connected subject community.
Andre: Illustrative team's dedication to bridging the digital divide is always our ESG initiatives are embedded in the company broad strategy. So we are testing <unk> solution, let me, how customers and net or behave in an actual network condition.
Andre: In addition, we continue to perform outstandingly in multiple indexes and certifications by integrating social responsibility into its core strategy team and answers his brand reputation and contributes to long term value creation to.
Andre: To conclude this section it is worth highlighting that we met all of our targets. We stood at the top of the service revenue guidance range. It with excellent postpaid performance check EBITDA grew above revenues with margin expansions check Capex remained flat in the middle of the range check.
Andre: Operating cash flow with a robust performance grew by more than 20% check last panel lease shareholder remuneration is confirm at $3 5 billion Reais. Following our proposal four the shareholder meeting to approve 2 billion in dividend.
Andre: Check looking ahead setting the stage for these strategic direction in the coming years will enforce our focus on sustainable growth by adding new revenue opportunities and putting a renewed efforts into efficiency.
Andre: Selecting a commitment to long term value creation, our updated plan reflects changes in macro and telecom market conditions. We evolved our priority is to extract the most from our four strategic pillars mobile b to b efficiency abroad, but each area is supported by specific strategy.
Andre: Is aimed at enhancing our value proposition and mobile doubled down on b to be extracting the most from our assets and resources, while monitoring for opportunities to complement the ore transport parts of our business. The emphasis on people society and the environment underscores <unk> commitment to responsible.
Andre: <unk> business practices by prioritizing these areas aimed to strengthen its market position and drive sustainable growth in a competitive landscape with that we introduced a new guidance for $25 27, remembering that our projections are always subject to revisions in the face of material changes.
Andre: In the macro environment and business development assumptions, our strategic guidelines for sustainable growth focus on revenue and EBITDA progress with margin expansion. This is a combination of mobile code evolution increased relevance of new revenue streams and our renewed efforts inefficiency our investment plan.
Andre: <unk> pointed to a flattish capex, despite forex oscillation and maintenance of the leadership status of our network. Once again. This reflects our commitment to efficiency and operational excellence. These dynamics translated into strong cash flow evolution with margin expansion and this cash being generated.
Andre: Is returning to shareholders in the form of interest on equity and dividend.
Andre: Once more we are upping our targets for that as well, reaching the end of this video I want to thank our entire team for delivering such robust results. We endured many challenges and find solutions to keep our ships in the right direction and are running at a solid base now let's move to the live Q&A session.
Okay.
Speaker Change: Thank you Alberto before proceeding to the Q&A I would like to pass the floor to Alberto Grizzly for initial remarks. Please Mr. Alberto the floor is yours.
Speaker Change: Thank you and good morning, everybody before we start the Q&A just a remark on the material factor, we just disclosed about Cc bank.
Speaker Change: Basically we enter into an agreement that settles all Denise pizza terminate the partnership and monetize our participation subject to some regulator approvals to set them confirms the strategic importance of the customer platform initiatives and generating value of the company and its shareholders. We will continue to work with.
Speaker Change: And the ecosystem of partnership, including new opportunities now in the financial services.
Speaker Change: Additional details of the financial and economic impacts of this deal it will be disclosed in due time.
Speaker Change: So we can now pass to the live Q&A session. Please.
Speaker Change: Thank you Roberto will now start the Q&A session for investors and analysts if you issue ask a question. Please press arrays and button wait while we pull for questions.
Speaker Change: Our first question comes from Marcello Santos from JP Morgan. Please Mr. Santos Youre My phone is open.
Marcello Santos: Hi, good morning, Alberto and delay of St. Jude.
Speaker Change: Thank you very much for taking the call and taking the questions.
Speaker Change: I have two first on the guidance what are the main macro economic assumptions embedded like perhaps inflation effects what are you considering.
Speaker Change: To put those numbers in the second.
Speaker Change: The outlook for prepaid and if there are relevant initiatives that you were.
Speaker Change: Targeting to perhaps improve the trends that you can control. Thank you.
Speaker Change: Let's start on myself all of it was that was immune cells. So when we look at the guidance.
Speaker Change: Basically these has been elaborated our budget has been elaborated a few months ago when the situation was.
Speaker Change: A bit easier on inflation and specifically on the other elements.
Speaker Change: So the line in terms of Forex and GDP growth.
Speaker Change: That guidance has been.
Speaker Change: Has been issued.
Speaker Change: Basically today over the last week and we've been working with more with the assumption on inflation that are in line with the current trends that one day. We're seeing now of course, you know there is a lot of volatility of.
Speaker Change: Of inflation.
Speaker Change: Inflation, a few weeks ago, we were below five and now we are below five so.
Speaker Change: Need to live with these we are used to deal with this since we operate in Brazil for a long time, but basically the main difference was in inflation when we provided the budget and we updated this.
Speaker Change: On more actual numbers as we issued the guidance today or yesterday night.
Speaker Change: When it comes to prepaid.
Speaker Change: Our performance are basically driven by a number of factors. The first one is related to the migration of customers from prepaid to Controle. So this is part of our strategy and the end.
Speaker Change: And of course at this.
Speaker Change: Dream that revenues from one side to move in accretive way on the other side. So the benefits of doing these as our revenue becomes a larger revenue in postpaid and our ability to monitor monetize postpaid and controller is better than in prepaid.
Speaker Change: Then there is another factor that is basically related to everybody every call every hour Seth another competitors perform this strategy. So if you look at the recharge market as a whole it's decreasing over time.
Speaker Change: So this is tweaking is increasing as the market. So this is the context, where we operate.
Speaker Change: In our case in the fourth quarter, we have.
Speaker Change: A tougher comparison base because of the same quarter of the previous year, we were issuing a price up Dave from 15, Reais to 17 rise.
Speaker Change: So this is explained the intensity of the decline for the last quarter and just anticipating a beta also the first quarter of this year.
Speaker Change: A tougher competitive basis versus the first quarter of last year. Because this year. For example, we have carnival in there in March and this tends to reduce the number of available base for recharge that I can say better we have been working for a while now.
Speaker Change: On.
Speaker Change: Revamp a turnaround of our prepaid business we.
Speaker Change: We launched a new offer and new communication campaign.
Speaker Change: So you remember our.
Speaker Change: Last year and so we're working across the board on the offer on the communication and on the channel and our own customer base to increase the performance of prepaid going for all this.
Speaker Change: This takes some time, but our commercial team is fully focused on that.
Speaker Change: Thank you very much.
Our next question comes from Bernard Goodman for NXP place Mr. Goodman Your microphone is open.
Speaker Change: Okay.
Bernard Goodman: Hi, Good morning, everyone. Thanks for taking my question or actually I have two on my side.
Speaker Change: First question is related to Capex.
Speaker Change: Your guidance seems squad for boat as somewhat surprising that capex remains stable leading to a decrease in capex to sales in the coming years, we have already discussed the topic of greater efficiency and the structural changes in the industry, but it would be interesting to understand more about.
Speaker Change: The company's efficiency levers is this level sustainable considering a higher exchange rate and the second one is about your fiber operation you mentioned that you're open to multiple options I understand that the market's more challenging today and more competitive.
Speaker Change: <unk> also reflects this dynamic dynamics to some extent in this context what is your appetite in this segment would you consider selling the current operation as well or is that off the table. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Let me go for the first one on Capex.
Speaker Change: So when you look on Capex.
Speaker Change: We have.
Speaker Change: A number of lever says and I will start with the easiest one.
Speaker Change: So if you look at Capex first of all a big chunk of these Capex is network capex.
Speaker Change: So as you know we have been able to reach as the largest four G coverage.
Speaker Change: A couple of years ago, we closed 2024 with the largest five G coverage also and.
Speaker Change: Once you look at the drivers of this cost going forward.
Speaker Change: Primarily it's less about coverage and it's more about the quality of service and capacity.
Speaker Change: This is the main driver.
Speaker Change: Although we addressed the efficiency of the Capex deployment.
Speaker Change: While maintaining the leadership in that the quality of the network service that we offer because that's a trade off.
Speaker Change: The first one is primarily related.
Speaker Change: To the way, we negotiated already with our main providers of the.
Speaker Change: <unk> and network services.
Speaker Change: Whereby we put together last year, we discussed this.
Speaker Change: Primarily a one to one calls.
Speaker Change: A quite competitive tender, where we were quite successful in lowering the TCE all of our network cost and by doing this of course, we took some.
Speaker Change: Execution activities on our side like the swap of the network or somebody that we are shifting from one vendor to another window by doing so we optimized the TCR and so when you look at the numbers.
Speaker Change: $1 <unk> in 2025, it will deliver more than $1 in 2024 because of the economies that we achieved so this is the first the first driver and this is primarily achieved because it's something that we did last year.
Speaker Change: The second one it's primarily related to the assertiveness of the investment that's all we got a quite strong methodology, whereby we allocate capex, where we have or we expect to have.
Commercial advantages.
Speaker Change: And we call. These Tripoli approach and so we align everything capex commercial and communication in order to increase the efficiency of our capital allocation.
Speaker Change: And then you have your last comments about.
Speaker Change: The risk of the Forex.
Speaker Change: Related to our contract that was passed diesel to Andrea to just explain a bit how it works for us.
Speaker Change: We have.
Speaker Change: I suppose until exchange rates consider that the majority of our contracts have a exchange rate bands. So.
Speaker Change: As I mentioned, we have a very literal I suppose a chill so fluctuations in exchange rates.
Speaker Change: Yeah.
Speaker Change: Going to your second question about five or so.
Speaker Change: A few comments.
Speaker Change: For.
Speaker Change: Articulating the answer on the Nonorganic options. So if you look at the market itself as you rightfully pointed out that the market is very competitive and there are a number of.
Speaker Change: The company reports from the satisfy their highlighting these every month. So there is a lot of competitive especially on price.
Speaker Change: So it's not very attractive irrespective of valuation because it's difficult to address these without a stronger and widespread.
Speaker Change: Consolidation process that is happening at the end of the day.
Speaker Change: For us it's a it's a small business said because it's below 4% of revenues and is dilutive on our free cash flow generation so our organic.
Speaker Change: Our organic stance that is basically to optimize the operation of course, when we say that we are open at all.
Speaker Change: Our options are.
Speaker Change: You have the option on one extreme where we consolidator and on the other extreme where we sell a lot and there are number of variety of option in the middle and when we say that we are open on all of them that we're looking at all of them.
And so we just need to find the right target at the right moment to move for order with one of these options.
Speaker Change: Okay, very clear I'll battle and Andre Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Leonardo almost rone UBS placements are almost your microphone is open.
Speaker Change: Hi, everyone. Good morning, Thank you for taking the questions I have a couple of them. The first one is regarding.
Speaker Change: The <unk> partnership I know you cannot disclose.
Speaker Change: How much.
Speaker Change: Actual how much are you actually monetizing of that partnership we understand that but.
Speaker Change: It will probably be below what was on the balance sheet right. So we may see a write off.
Speaker Change: That may be purely.
Speaker Change: That will likely be noncash, but could that affect dividend, even though it is noncash.
Even in a nonrecurring basis that Mike My question on the FCC expected dividend and the second one unrelated if you could discuss a leasing how much of the levy is adjusted by <unk> and what other inflation metrics that are used to adjust Lisa. Thank.
Speaker Change: Thank you.
Speaker Change: No not at all.
Speaker Change: So I would think the first one and then I'll pass.
Speaker Change: The floor to Andre for the leasing question on the first one actually be emotive monetization factories. There. So we're talking about.
Speaker Change: $270 million in gross revenues.
Speaker Change: That have been accrued over the length of the partnership and the other 520 million Reais and this is a positive impact.
Speaker Change: On our cash.
Speaker Change: Uh huh.
Speaker Change: I think that here. The the answer is we always say that we are going to generate more cash.
Speaker Change: Her time, so our cash flow are expanding.
Speaker Change: And this is going to be a positive contribution of expanding and when it comes to the expanding cash flow as you see in our guidance, we are increasing shareholder remuneration concentrated in that dividend and interest on equity and that's why we've got something more now coming to Asa over the course of 2025.
Speaker Change: That was not in our guidance that's all.
Speaker Change: The approach has always seen if we we don't distribute 100% because we're looking at opportunities in some vertical sentence our business lines.
Speaker Change: Positive.
Speaker Change: On our cash profile.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Essentially is it as you know the.
Speaker Change: These items the major impact definitely had an inflation we are continuing the henkel stage at all.
Speaker Change: Our contracts.
Speaker Change: And now we have a part in it is EPC and a five mg each ATM, but they're the major pricing oops EPC, but we are conscientious yohan negotiation considering that we ended the declamation program.
Speaker Change: With the sites that came from oil, but we have increased the then that were related to <unk>. So is still have.
Speaker Change: S based Johanna negotiations contracts.
Speaker Change: Understood. Thank you very much so obviously in the guidance already assumes all the current inflation situation right.
Speaker Change: Very good and very good answer on the on the on the dividend Robert Thank you very much of the day.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Vitor Tomita from Goldman Sachs. Please Mr. Damita your microphone is open.
Vitor Tomita: Hello, Good morning, all and thanks for taking our questions. We have two questions from our side. The first one is on the guidance. If you could give us a bit more color on the drivers for further margin expansion given thats. Your profitability is already quite high for the factor and given the inflationary pressures.
Vitor Tomita: And our second question would be on the more on the balance sheet side. We have noticed the receivable is increasing faster than the revenue continually over the last three quarters, even though receivables had been growth had been growing more in line with revenue prior to that could you give more give us some more detail.
Vitor Tomita: On the dynamics for receivables. Thank you very much.
Speaker Change: Hi vehicle a relationship there guys.
Speaker Change: As the as the previous guidance, we are confirming that we increase the additional more than revenue.
Speaker Change: We will do this with the continuing enough our productivity and we have a very good results in the last quarter and in margin rate and the biotech space called chance you'll happened in <unk>.
Speaker Change: It takes five this will come with.
Speaker Change: Our continued focus to chill working zero based approach we.
Speaker Change: We are.
Speaker Change:
Speaker Change: Looking for new opportunities in digital is that our process also.
Speaker Change: As a national organization also conscious that as it relates to inflation and the and the question is true.
Speaker Change: Let's see opportunities and in makeup I any sets image.
Speaker Change: Uh huh.
Speaker Change: Related to the free cash flow. The second question about the increase in receivables. This is.
Speaker Change: Is that something that is of our dynamics remember that we have a first in mass over the year.
Speaker Change: Our satellites in the second semester with another satellite Israel. This is is.
Speaker Change: It's inside our expectations, we don't have any kind of.
Speaker Change: A strong generic effects that affect this.
Speaker Change: I don't know if I address your question.
Speaker Change: Just a quick follow up looking at the previous quarters there was already.
Speaker Change: An increase in receivables in the second and third quarter, so thinking more about the underlying trends there digested. This.
Speaker Change: This is a reality.
Speaker Change: No sorry, if there's something that Andy what's now the centralized up the App because you see an increase in the third quarter or fourth quarter right. So yes. The second semester and then the and then we have also we have an increase and the Iot.
Speaker Change: The receivables.
Speaker Change: Is the Mitchell B and the B to B have.
Speaker Change: There isn't.
Speaker Change: Different dynamics from the mobile the customer and the consumer mobile so we will see an increase but.
This is related to the increase of the Iot revenues.
Speaker Change: Understood. Thank you.
Speaker Change: Our next question comes from Fannie Karen Murray from HSBC, Mr. Jenner Murray your microphone is open.
Speaker Change: Hi.
Speaker Change: So my first question is related to.
Revenue guidance is it fair to assume that most of this revenue growth.
Speaker Change: Half is coming from.
Speaker Change: Paid growth.
Speaker Change: Considering that your fixed segment then.
Speaker Change: <unk> segment continued to be under pressure.
Speaker Change: And what part of what percentage is actually attributed to the new initiatives that you have in terms of the they are in your guidance.
Speaker Change: And one is.
Speaker Change: Last year, there has been more challenges in terms of pricing up and getting more for more so we see that talent discontinue this year and is the price of possible for the next few years.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: I would think the tool so when it comes to the Ah <unk>.
Speaker Change: Growth drivers for the revenues going for or the.
Speaker Change: There are a number of of drivers that we're considering so one of the big one is clearly postpaid we're being performing well over many quarters and we foresee this to happen going for OIBDA.
Speaker Change: Driven by the price adjustments that we do and that will come.
Speaker Change: More on this on the rationality of the market as we see now.
Speaker Change: The prepaid to Controle migration and that.
Speaker Change: That will continue and the intra postpaid migration that is happening at double digit rates and that continues to drive revenues up. So yes postpaid is it's an important driver for revenue growth.
Speaker Change: I think it is fair to eat.
Speaker Change: There are two other important business lines and the revenue grow water one is related to the customer platform strategy that we just discussed at the beginning of the of the Cola whereby we will.
Speaker Change: We see about monetize monetization opportunities in the partnership that we are.
Speaker Change: Running.
Speaker Change: The new one that we are building.
Speaker Change: If you look at our.
Speaker Change: <unk> for example, and this is something that we launched sometime.
Speaker Change: Sometimes ago, we've been tweaking the value proposition and in the last six months that we brought in.
Speaker Change: 160000 subscribers.
Speaker Change: It's a it's a good numbers in our own assessment in terms of this progress.
Speaker Change: The thing that we're doing.
Speaker Change: We are open again to work in financial services. This is another large set of partners that we can work on and then we got the energy that is another priority. So the overall customer platform can contribute in our revenue growth going forward.
Speaker Change: The third one is the b to B b.
Speaker Change: Business line, where we have been capturing.
Speaker Change: Revenues over the last two years. So it started basically the Iot solution from zero and we will continue to push these going for or the in the vertical that we identified including an expansion of the portfolio and the capabilities that we're offering to our customers I will say that when you look at these at these three.
Speaker Change: And these three lines at <unk>.
Speaker Change: <unk> revenue growth drivers.
Speaker Change: When you look specifically on mobile and the rationality of the market, we see and IC still constructive.
Speaker Change: A market context.
Speaker Change: It is true that a lot.
Speaker Change: Lastly, there has been more let's say, it's been a bit more erratic in the second quarter, so, especially one of our.
Speaker Change: I mean competitive though has been a a rethinking some of the price out there had been implemented it went down but at the end of the then they went up at the end of the year. So these principally from the from last year and that you are right on this.
Speaker Change: This time in time of last year, we were executing a front book price upgrade that is not foreseen at this point in time in the first half.
Speaker Change: But the situation may change because we still believe that the market environment that is being rational.
Speaker Change: I didn't say that.
Speaker Change: Back book price increase are happening and in between the first quarter and second quarter like last year and I think this is a it's been executed.
Speaker Change: The fact that we are not upgrading from book prices at the same time or at the beginning of the year can produce some let's let's put it this way some churn.
Speaker Change: Emperor increase versus last year, because we are aligning customer base had gross additions.
Speaker Change: But there is.
Speaker Change: It's something that our window out to face.
Speaker Change: Okay.
Speaker Change: That's all fine.
Speaker Change: Yeah. Thanks, Paul.
Speaker Change: Our next question comes from says our defense of Rone Santander. Please Mr. <unk> your macro and sovereign.
Speaker Change: Okay.
Speaker Change: Hi, Jim Good morning first of all congrats congrats on.
Speaker Change: The quarter results.
Speaker Change: Your first question will come.
Speaker Change: Revenue growth in Europe to go with expecting just I would like to understand how much of this.
Speaker Change: This guidance comes for all come from price increases.
Speaker Change: And regarding this.
Speaker Change: See the company evolving competitive scenario, okay. So do you imagine as Jim potentially be more aggressive.
Speaker Change: And my second question is regarding the six six partnership.
Speaker Change: As you mentioned this open our best.
Speaker Change: This partnership opens up at for you to operate again on the financial sector to have it.
Speaker Change: Anything you can disclose on this on the stock.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: Lets address the first one so as I said, we see the market.
Irrationality is still in place it but with some are more erratic behavior in the last half of 2024, we are not planning.
Speaker Change: To be more aggressive.
Speaker Change: We are we tend to try to be more intelligent in the way, we monetize our customer base.
Speaker Change: And so I don't see an hour more aggressiveness on our site.
Speaker Change: If.
Speaker Change: If.
Speaker Change: If you look at the drivers for.
Speaker Change: For our revenue growth.
Speaker Change: On mobile.
Speaker Change: And especially on postpaid.
Speaker Change: And they look at a balanced growth pattern that the combined customer base growth and auto growth and if you look at the way. We grew in 2024. So if you look at the paper analysis of the evolution of our revenues from <unk> in 2004.
Speaker Change: You will see that.
Speaker Change: We moved on.
Speaker Change: On a quite balanced way in between.
Speaker Change: The volume impact and the price impact and you can see also that we managed to grow faster than our competitors in the postpaid. So our price adjustments are important because they are an element of the P factor.
Speaker Change: But what we are aiming at is a balanced growth in between the quantity price within price or price adjustments are important as well as our intra.
Speaker Change: The planned migration.
Speaker Change: You don't see these because it's a it's not disclosed.
Speaker Change: The number of pure postpaid is increasing significantly because we're moving our controle to postpaid and it has a positive impact.
Speaker Change: On revenue growth for postpaid so it's a combination of these factors.
Speaker Change: Our fintech that go into the second question.
Speaker Change: Yes.
Speaker Change:
Speaker Change: We just.
Speaker Change: Closed.
Speaker Change: We just set up and we see so we can now analyze the options that are available.
Speaker Change: In America and in the coming months.
Speaker Change: So clearly the combination of financial services and telco, it's quite powerful we believe its powerful so we believe it can be material again, and we will start working on these as the settlement with the previous paradigm is completed.
Speaker Change: Perfect. Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Carlos deliver Rita thrown it though BVA. Please.
Speaker Change: Please Mr. Dilger Rita Yeah, My phone is open.
Speaker Change: Hi, good morning Alberto team.
Speaker Change: Two very good questions. The first one on costs and expenses youre actually decreasing the selling and marketing expenses, both year over year and quarter over quarter, while growing revenues can you help us make sense of that especially on these particular competitive context and secondly, just follow up on <unk> do you have any.
Speaker Change: <unk> and two when you can actually received the proceeds from this pending orbitz partnership. Thank you.
Speaker Change: So I'll take the first one I will leave a andre on the second one when it comes to the sea.
Speaker Change: Sales and marketing in general.
Speaker Change: A lot of Ah I will make some examples or a lot of improvement comes from digitalization digitalization is something that is proceeding across the border and across a number of activities that will give you. Some example, and DC spacing, primarily the main driver of the increase efficiency.
Speaker Change: When I talk about digitalization and I'm talking about the digital recharges.
Speaker Change: Digital sales.
Speaker Change: The one of the latest example is being quite important that was the peak adoption within our postpaid customer base big peaks as a unitary cost of debt is lower than any any other costs.
Speaker Change: And so we move from zero to 50% over the last 12 months the more I'd be more than 12 months over the last 18 months and that if you look at the call Center. If you look at the.
Speaker Change: Ability for us to retain court on digital channels are there. So this is basically the main driver behind the optimization of our sales and marketing cost.
Speaker Change: Looking for all the.
Speaker Change: We still have a.
Opportunities and these are the opportunities that we have gone up ports, you're going for or the an example consider the customer relation we are just issue inger.
Speaker Change: A new.
Speaker Change: So the new App is being launched at the end of last year. It's a in a in soft launcher. So it doesn't have the right now 100% of our customer base and the functionality that we're going to put that in the new offer are going to be effective in improving the relationship with <unk>.
Speaker Change: Our customers like for complaints and therefore by launching the is that we're going to review his father, our customer service cost on the human side. So we got all these packages so of initiatives within sales and outside sales, but we didn't safety was the main driver of the reduction.
Speaker Change: Yeah.
Speaker Change: Uh-huh College, and some affirmation of the beginning of the call we cannot give much detail on the effects of it as a statement and then 500 centimeter is pretax.
Speaker Change: And all of the balance sheet effects, we don't comment there.
Speaker Change: Quarters.
Speaker Change: Okay. Thank you so much super clear.
Speaker Change: Just as a reminder, if you wish to ask a question. Please press the race and button wait while we pull for questions.
Speaker Change: Our next question comes from Danielle Fidelis thrown Bradesco BVI.
Speaker Change: Mr. Fidelity My phone is open.
Speaker Change: Hi, good morning, everyone and thank you very much for taking my questions I have three questions. If I may the first one I would like to know if you're feeling any impact.
Speaker Change: From new cell over the past 30 days things they started to onboard clients.
Speaker Change: Second question.
Speaker Change: If you see any structural reason for it seemed to grow less than two years or more than peers email buyer revenues going forward and third.
Speaker Change: Just to understand the impact of inflation in revenue growth in.
Speaker Change: In the future should we expect.
Speaker Change: The higher the inflation the higher the price increases and then the higher the revenue growth or that's a very simplistic and that's another way.
Speaker Change: You should think thank you.
Speaker Change: Okay.
Speaker Change: So coming to the first one in terms of the impact on new back we don't see it.
Speaker Change: And so that's a simple a simple answers so far when it comes to our growth in mobile as you know we have a.
More prepaid versus our.
Speaker Change: Our competitors and so when I say that the recharge market is shrinking.
Speaker Change: Yeah basically this is something that since we have a more prepaid revenues versus the others in the overall revenue composition of clearly this way it's more for us.
Speaker Change: Versus the others and that's the reason why we are deploying a number of initiatives and the beat to be one that we discuss with the customer platform that we've been discussing in these color to be able.
Speaker Change: To maintain a sustainable revenue growth, but then going forward when it comes to passing inflation to our customers you know that we do these at specific times of the of the year. So we believe that we can impact inflation to our postpaid customer base as a matter of fact, we are over the last year or two.
Speaker Change: You know roughly the extent of inflation they've been passing over of course the reason the limiter there it depends on how much demand is impacted by these increases and this in turn has to do also with the overall economy.
Speaker Change: Contacts and so these are you know what he is available for customers to spend.
Speaker Change: We are executing for you doing all of the price adjustment.
Speaker Change: In a similar fashion this year, whereas last year and what we though is that we look afterwards.
Speaker Change: Bonser customers in terms of channel ATM churn levels.
Speaker Change: The collection curve, so our ability to collect and this is a sort of empirical approach here as we go for or that we pass visa and we check if demand is able to compensate for this adjustment as for the year, we are going with the same intensity as of last year.
Speaker Change: Daniela Thank you very much alright, thank you alright.
Speaker Change: Okay.
Speaker Change: Ladies and gentlemen, since there are no further questions has turning the floor to Mr. Alberto <unk> for his final remarks. Please Mr. Roberto you May proceed.
Speaker Change: Also I want to thank you everybody for participating in our call today, a special thank you to our team and we are fully focused on executing 2025 address the challenges that the macro scenario present and also pursue the upside of reach that we have in our plan.
Speaker Change: I would like also to invite you.
Speaker Change: U S Telecom Italia, Tim Italy called the 13th there's only a couple of days when we will have the chance to complement how we plan to create additional value to shareholders addressing a topic that we get question frequently. So thank you for your participation today and hopefully with you again in a couple of days.
Speaker Change: Tim Italia Conference call. Thank you everybody.
Speaker Change: This does conclude the fourth quarter of 2024 conference call of Ciena say for further information and details of the company. Please access our website at <unk> Dot Com Dot BR Slash IR you can disconnect from now on thank you.
Speaker Change: Once again and have a wonderful day.
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