Corporate presentation
Transcription
Corporate presentation
Investor Relations Corporate presentation June 2012 Brazilian Telecommunications Market Oi: Profile, Footprint and Strategy Operational and Financial Results Attachments 1 BRAZIL SNAPSHOT Income Classes Land Area 2005 • 8.5 Mn Km2 (80% of the size of Europe) Population • 191 Mn inhabitants (5th largest) • 57 Mn households (84% urban) 2011 Income* A/B 15% 22% R$ 2,907 C 34% 54% R$ 1,450 51% 24% R$ 792 6th largest economy in the world • GDP: US$ 2.5 Trillion (2011) • Currency – US$ 1.00 = R$ 1.88 (Dec/11) D/E Strong expansion in GDP per capita combined with record low unemployment rate have resulted in a significant shift in income classes * Average income per household Source: PNAD, O Observador – OPSOS2011, IBGE 2 BRAZIL’S IMPORTANCE IN THE WORLD ECONOMY GROWS AND TELECOM IS KEY TO FURTHER DEVELOPMENT OF THE COUNTRY Where we were Where we are GDP, current prices, trillions of US$, 2007 GDP, current prices, trillions of US$, 2011 14 USA 4.4 Japan 15.1 USA China 7 5.9 China 3.5 Japan Germany 3.3 Germany 3.6 England 2.8 France 2.8 France 2.6 Brazil 2.5 England 2.5 Italy 2.1 Spain 1.4 Italy 2.2 Canada 1.4 Russia 1.9 Brazil 1.4 India 1.8 3 THERE IS POTENTIAL TO INCREASE PENETRATION AND INTEGRATION OF TELECOM SERVICES IN BRAZIL Fixed voice penetration Lines/homes Mobile penetration Lines/ population 77% 125% 70% 88% 121% 106% 100% Broadband penetration Accesses/ homes 30% 137% Pay TV penetration Subscribers/ homes 23% 42% 48% 75% 82% Source: Anatel, Pyramid 87% 61% 4 BRAZILIAN TELECOM SECTOR EVOLUTION 1998 PREPRIVATIZATION • State – owned monopoly • Lack of Investments • Low quality of services • Huge pent-up demand • Incipient Internet 2003 2008 2012 POSTPRIVATIZATION FOCUS ON COMPETITION CURRENT SCENARIO • Multiple players • Focus on universal competition and quality of services • Expansion of fixed and mobile services • GSM Launch • Broadband start-up • Consolidation • Mature fixed; mobile and broadband as growth drivers • Convergence in early stages • Launch of 3G (2008) • Expansion of Pay-TV (Cable TV and DTH) • Tough competition • Mature Mobile services: multiple chip is a market trend (on net-calls) • Pay-TV and broadband as growth drivers • 3G services is a reality • Convergent Players 5 BRAZILIAN TELECOM INDUSTRY MATURE LOCAL FIXED VOICE • Accesses losses (FMS in accesses) • Lower traffic per terminal (FMS in traffic) • More competitive market in high-end and SME (new entrants) CONTINUED EXPANSIONS IN THE MOBILE DATA MARKET WITH STRONG COMPETITION Brazilian Market (Mar/12) Access (million) Fixed Broadband Pay TV 14 Wireline 17 43 • Market evolution, mainly in the pre-paid (naked sim-card) market based in the multiple chip trend • ARPU for the industry has been reduced • Different business models 251 BROADBAND AND PAY TV WITH STRONG GROWTH • Fierce competition in areas that concentrate high-end clients • Continuous expansion and falling ARPU • Penetration: • Fixed Broadband: 30% of households • Pay TV: 24% of households Mobile CAGR (03-11): Broadband: 39% Mobile: 23% Wireline: 1% Pay-TV: 17% Source: ANATEL, Teleco and Team analysis; FMS - Fixed to Mobile 6 Substitution; SME - Small & Medium Enterprises BRAZILIAN TELECOM INDUSTRY: MOBILE MARKET MOBILE MARKET* (MILLION) 242.2 202.9 174.0 150.6 250.8 44.1 45.6 198.2 205.2 2011 Mar/12 35.8 30.4 27.9 122.7 2008 143.6 2009 167.1 2010 Pre-paid Includes 3G (mini-modem and data package) Source: Teleco, Anatel and Team analysis • Naked sim-cards continues as a national trend • Penetration rate reached 128% in Mar.12 • Multiple chip is a market trend (on net-calls) • Pre-Paid: represents 82% of the total access Post-paid 7 BRAZILIAN TELECOM INDUSTRY: BROADBAND MARKET Fixed Broadband BROADBAND MARKET (MILLION) 23.3 18.1 14.1 10.9 7.4 4.3 6.0 2.7 6.4 4.8 0.9 3.0 3.7 7.0 7.7 9.0 2008 2009 2010 ADSL 6.8 24.7 • Broadband: Strong growth in accesses • Fixed broadband penetration: 30% of households (17.3MM access) • ADSL corresponds to 63% of total fixed broadband accesses and 44% of the total (fixed + 3G mini modem) Cable and Others Source: Teleco, Anatel and Team analysis Mobile Broadband 10.5 10.9 2011 Mar/12 • 3G becomes an alternative for broadband access • 56% growth in the last 12 months (2,661,000 access) 3G (mini-modem) 8 BRAZILIAN TELECOM INDUSTRY: PAY-TV PAY-TV MARKET (MILLION) 12.7 9.8 0.2 7.5 0.3 0.4 2.8 4.5 3.8 4.3 5.0 5.5 2008 2009 2010 2011 6.3 0.4 2.1 Cable *Others: MMDS and UHF Source: Teleco, Anatel and Team analysis DTH 7.0 13.6 0.2 7.7 5.7 Pay TV • Pay-TV: Strong growth in accesses • Penetration: 24% • DTH represents for 81% of net additions in the 1Q12 • Pay-TV: More growth opportunities in classes C and D due to lower households penetration Mar/12 Others* 9 COMPETITION: MAIN TELECOM GROUPS IN BRAZIL Economic Group Vehicle Service Clients mkt share Revenue mkt share Fixed 44% Mobile 19% Fixed Broadband 30% Pay TV 3% Fixed 25% Mobile 30% Fixed Broadband 21% Pay TV 4% Embratel Fixed 20% Claro Mobile 25% Net/Embratel Fixed Broadband 28% Net/Embratel Pay TV 54% Tim ~Pure Mobile Mobile 27% 14% Nextel Pure Mobile Mobile - 5% Sky Pure Pay TV Pay TV 30% 4% GVT ~Pure Fixed Fixed 7% Fixed Broadband 10% Fixed 4% Fully Integrated Telefônica Telmex / AMX Others Integrated Mobile - Fixed Broadband 11% Pay TV 8% Mar/12 21% 26% 24% 3% 2% 10 Brazilian Telecommunications Market Oi: Profile, Footprint and Strategy Operational and Financial Results Attachments 11 CORPORATE SIMPLIFICATION • 3 listed companies • 7 share classes • Complex capital structure • 1 listed company • 2 share classes • Capital structure improvement TNL • • TNLP3 TNLP4 TMAR • • • TMAR3 TMAR5 TMAR6 BRT • • BRTO3 BRTO4 COMMON PREFERRED TmarPart 56.6% TmarPart - Direct controllers 12.0% Direct controllers 39.1% Free-float 31.4% Free-float 60.9% OI S.A. • • OIBR3 OIBR4 12 CURRENT OWNERSHIP STRUCTURE PT 12.1% AG Tel 19.3% LF Tel 19.3% FATL 11.5% BNDES 13.1% Previ 9.7% Funcef 7.5% Petros 7.5% 100% Telemar Participações (TmarPart) 17.7% Oi S.A. (OIBR) OI S.A. (Bovespa: OIBR4/OIBR3 & NYSE:OIBR / OIBR.C) Shares** Capital Mn shares Other TmarPart FreeFloat Controlling* % % % ON 513,809,697 56.6 12.0 31.4 PN 1,123,988,051 0.0 39.1 60.9 Total 1,637,797,748 17.7 30.6 51.7 100% Telemar Norte Leste *Includes minorities stakes of,PT, AG, LF, FATL, BNDES and Pension Funds ** ex-treasury Listed companie 13 Competitive differentials Broad Infrastructure Lidership in covergence • 4,505 municipalities covered by fixed network • 168 thousand of Km of Optic Fibers • Oi has 6 thousand cellular towers connected to its Fiber • Oi covers ~80% of Brazilian households • 10 years of experience in convergence: in Brazil, Oi pioneered convergent Telecom offers that changed the market Proven Execution Capacity • Anticipation of universalization targets in 2001 • Launch of Oi Mobile in region 1, being the fourth entrant, reaching leadership in market share after 3 years • Reaches 20% market share in the city of SP in 2 years • Integration with BrT done in around 1 year, capturing more than R$1 billion in synergies Leading Telecommunication provider and the only integrated player offering quadruple play services in Brazil 14 BROAD INFRASTRUCTURE GLOBAL NATIONAL 22,000 Km 115,000 Km Globenet submarine cables interconnecting the Americas National backbone Largest coverage area in Brazil REGIONAL • Present in all Brazilian states and +4,800 municipalities • 30,000 km of LOCAL Largest public WiFi network in Brazil Over 4,500 sites covered by satellite metropolitan rings One of the largest and most diversified Telecom networks in the world Source: Oi, Anatel, Atlas Brasileiro de Telecomunicações 2011; Teleco; press 15 UNIQUE POSITION HARD TO BE REPLICATED NATIONWIDE PRESENCE + FULL BUNDLE • Unique last mile capillarity to meet growing demand in Brazilian social mobility • Company in the best position to take advantage on governmental digital inclusion programs Only company able to offer bundles across the entire country* * Except SP B2C • North and Northeast regions grew 14% and 15% in past 3 years (Brazil grew 10%): Oi has a lidership position in the regions that grow the most 16 CHANGE IN APPROACH FROM PRODUCT TO SEGMENT PRODUCT Fixed Voice Broad band SEGMENTS Mobile Pay TV RESIDENTIAL PERSONAL MOBILITY CORPORATE AND BUSINESS Leverage largest residential customer base in Brazil Increase competitiveness to attend fair share of the market Maintain leadership position in the segment and enter new markets (SP & IT) 17 CHANGE IN APPROACH FROM PRODUCT TO SEGMENT SEGMENTS RESIDENTIAL PERSONAL MOBILITY CORPORATE AND BUSINESS Residential RGU’s Personal Mobility RGU’s Business / Corporate RGU’s (Million) (Million) (Million) 18.4 17.8 17.9 37.5 0.4 3.8 0.4 4.4 0.4 4.6 4.9 14.2 13.0 12.8 2010 2011 Mar/12 Pay TV Fixed broadband Fixed line 32.6 2010 Pre-Paid 43.3 44.1 5.3 5.6 38.0 2011 7.8 8.1 1.8 2.4 2.4 0.5 0.5 0.5 5.0 5.1 5.2 2010 2011 Mar/12 7.4 38.5 Mar/12 Post-paid + Oi Controle Pay TV Fixed broadband Fixed line 18 WE HAVE A STRATEGY FOCUSED IN SEVEN KEY INICIATIVES PERSONAL MOBILITY RESIDENTIAL •1 Leverage the largest residential base in Brazil •2 Grow presence in prepaid and leverage differentials 1a • Consolidate leadership position in fixed broadband •3 Capture fair share of high-end post-paid customers 1b • Complete Residential Bundle with TV offer •4 Capture measure data growth CORPORATE AND BUSINESS •5 Regain historical presence in SME •6 Make Oi relevant player in SP corporate •6 Position Oi as important ICT provider 1c • Maintain leadership in convergence Structural Enablers • Reinforce the organization • Improve network capacity and coverage • Aggressively expand channel expansion • Improve service quality in customer service and field service operations Source: Pyramid, IDC 19 Aggressive Commercial activity Residential Mobility • Convergent offering of unlimited fixed and mobile pre-paid services (unlimited calls from ‘Oi Fixo’ and ‘Oi Cartão’ for just R$ 29.90 per month) • ‘Oi Smartphone’ plans: Integrated and unlimited voice, internet, SMS and Oi WiFi services, and aggressive discounts for smartphones • ‘Oi Internet Total’: access anywhere via fixed and 3G network and wi-fi. Already represents 10% of high speed broadband sales; • Subsidized mini-modem for new ‘Oi Velox 3G’ clients • ‘Oi TV Mais Package’, with 44 paid channels for R$ 29.90/month. Most appealing entry-level package of the market • Unlimited calls to any Oi and local ‘Oi Fixo’ for 30 days for just R$14.90 New offerings and plans for residential and mobility clients leverage quarterly sales 20 The reduction of TRADITIONAL TELECOM FRONTIERS, BRINGS OPPORTUNITIES AND Oi is ALREADY CAPTURING THEM Internet Over the top IT Telecom (2012) (2012) (2011) (2011) FEMTOCELL LTE (2012) Media FIBRA IPTV Financial services (2012) (2009) (2012) (2011) 21 Brazilian Telecommunications Market Oi: Profile, Footprint and Strategy Operational and Financial Results Attachments 22 REVENUE GENERATING UNITS (RGUS) 1Q12 x 4Q11 TOTAL REVENUE GENERATING UNITS – RGUS (THOUSAND) 69.693 64,083 827 7,355 37,496 771 7,848 43,263 66,074 824 7,690 39,294 Residential 69,693 70,826 771 7,848 757 8,112 43,263 44,106 The wireline client base decreased at a slower pace while broadband and pay TV accelerated, resulting in the stability of the base and reverting the downward trend. Personal Mobility Acceleration of post-paid growth and focus on greater profitability of the pre-paid base 18,404 17,810 18,266 17,810 17,850 2010 2011 Mar/11 Dec/11 Mar/12 Residential Personal Mobility Business / Corporate Business / Corporate Maintenance of growth pace within the segment Others 23 Residential CLIENT BASE 1Q12 x 4Q11 RESIDENTIAL - RGUs (THOUSAND) Convergence 18,404 17,810 18,266 17,810 17,850 402 351 341 351 396 4,412 4,614 3,841 4,412 3,999 Through bundled solutions, the Company remains focused on increasing the residential base with more than one product. The total residences with more than one Oi product/service grew 1.3pp, totaling 6,238 thousand. Sales Channels and Portfolio 14,161 2010 13,046 2011 Fixed Line 13,925 Mar/11 13,046 Dec/11 Fixed broadband 12,841 Mar/12 In line with the strategy of strengthening the channels, growth of Oi-owned stores and franchises, as well as the change in the commission system for partners, contributed to the result. Pay TV 24 Personal mobile CLIENT BASE 1Q12 x 4Q11 PERSONAL MOBILITY - RGUs (THOUSAND) 43,263 37,496 5,285 39,294 44,106 5,285 5,570 37,978 38,536 4,660 4,891 32,605 43,263 Pre-paid 37,978 34,634 The sales performance of post-paid plans stems from the addition of more benefits to the offers and the strengthening of sales channels, which started in 4Q11 and advanced in 1Q12. These are already bearing fruits. We highlight that in March 2012 Oi became the market leader in terms of post-paid net additions in Brazil. Post-paid 2010 2011 Pre-paid Mar/11 Dec/11 Post-paid + Oi Controle Mar/12 The new plan structure brings a clearer communication for the consumer and is part of a more aggressive position in the prepaid market to leverage sales and revenue. 25 Business / corporate CLIENT BASE 1Q12 x 4Q11 BUSINESS / CORPORATE - RGUs (THOUSAND) 7,848 7,690 7,848 8,112 2,242 2,178 2,242 2,385 523 514 523 535 7,355 1,806 512 Business • Investment in training the teams and new regional offices • Increasing door-to-door sales team to 4,000 employees Corporate 5,037 2010 5,083 2011 Fixed line 4,998 Mar/11 Broadband 5,083 Dec/11 Mobile 5,192 Mar/12 • Data grows 12% vs. 1Q11 and 5% vs. 4Q11 • Mobility grows 45% vs. 1Q11 and 9% vs. 4Q11 • Modernization of network and resumption of sale of internet access boosted results • Strengthening of sellers headcount 26 CONSOLIDATED NET REVENUE 1Q12 x 4Q11 CONSOLIDATED NET REVEUES* (R$ MILLION) 29,479 890 8,620 8,021 The rise in revenue from the expansion of the Oi Velox and Oi TV base, whose offers are increasingly attractive, has partially compensated for the decrease in wireline revenue in the residential segment 27,907 746 8,470 Personal Mobility 8,190 11,949 10,501 2010 2011 Residential Residential Personal Mobility 6,933 6,958 6,802 193 2,127 1,867 2,746 159 2,112 2,150 2,536 155 2,111 2,106 2,429 1Q11 4Q11 1Q12 Business / Corporate The performance is influenced by the seasonal effect, provided that historically the fourth quarter has a stronger usage due to the December holidays. Other Services * The pro-forma results amount to the old TNL data as if the takeovers had occurred on January 1, 2012 27 CONSOLIDATED EBITDA 1Q12 x 4Q11 CONSOLIDATED EBITDA* (R$ MILLION) The performance basically results from the combination of three factors: • growth in Revenue Generating Units (RGU) • aggressive commercial policy • reduction in operating costs and expenses 10,295 8,766 These results are in line with Oi’s long-term strategy, announced at Oi Investor Day. 1,985 1,838 2,012 2010 2011 1Q11 4Q11 1Q12 34.9% 31.4% 28.6% 26.4% 29.6% EBITDA Margin * The pro-forma results amount to the old TNL data as if the takeovers had occurred on January 1, 2012 28 Net Income NET INCOME (R$ MILLION) Following the approval of the ownership restructuring on 02/27/2012, TNL, Coari and the shareholders of TMAR were incorporated by Oi S.A., TNL and Coari became extinct and TMAR became a 346 wholly-owned subsidiary of Oi S.A.. As a result, the figures in this report represent Oi S.A. (the remaining company, and the new name of Brasil Telecom S.A.) at the end of March 2012, when it had taken over 141 only one month of TMAR, Coari and TNL (from 93 02/28/2012 to 03/31/2012). However, for a better understanding of the business, we present the 1Q11 4Q11 1Q12 consolidated pro-forma results equivalent to the old TNL figures, with the exception of Net Income, as if the takeover had taken place on January 1st, 2012. Net income as the basis for payment of dividends. Oi S.A. now includes all of shareholders of the group 29 Capex 1Q12 x 4Q11 CAPEX (R$ MILLION) Network The company maintained investments in implementing and expanding the 2G/3G mobile network, in addition to increasing coverage and speed of broadband and adapting the infrastructure of telecommunication services. 4,959 783 286 3,090 IT Services 616 2,132 226 3,890 829 2,248 2010 Network 168 50 611 2011 1Q11 IT Services 370 136 1,091 1,626 183 99 Optimization of systems, mostly directed to the improvement of servers and the unification of internal systems. 809 4Q11 1Q12 Others 30 indebtedness GROSS DEBT (R$ MILLION) 29,920 29,719 7,667 4,579 28,404 5,872 NET DEBT (R$ MILLION) 29,719 32,845 3,979 4,579 18,711 22,253 2010 25,140 22,531 25,140 2011 Mar/11 Dec/11 Long Term Short Term 16,326 14,390 16,326 17,472 Mar/12 28,866 Mar/12 2010 2011 Mar/11 Dec/11 1.8x 1.9x 1.5x 1.9x 2.0x Net Debt / EBITDA 31 Debt Pro forma TOTAL DEBT PROFILE (After hedge) Interest GROSS DEBT AMORTIZATION (R$ billion) Currency 32,845 2,999 Foreign, 0.7% CDI, Others, 43% 40% BRL, 99.3% TJLP, 17% Gross Debt 2012 3,506 3,634 2013 2014 2,257 2015 4,090 16,359 2016 2017 onwards FUNDING SOURCES (R$ billion) Balanced debt profile, with average term and cost of 5 years and 101.5% of CDI, respectively, and post-hedge foreign exchange exposure of 0.7% 32,845 576 9,334 8,988 1,514 2,158 6,475 4,952 Gross Borrowing Bonds Debt Costs and Hedge Debentures Asia Europe/ National CommerAsia Develop- Cial Banks 32 ment Bank Guidance & Dividend Policies Dividend Policy Guidance (R$ billion) 2012-2015: TOTAL AMOUNT OF R$ 8 BI R$2 Bn already paid in May/12 PARAMETERS 2012 2015 Revenue Generating Units (RGU) million 74.9 106.8 1 Residential 19.8 25.7 2 2 2 Personal Mobility 45.8 67.8 2012E 2013E 2014E Business/Corporate 9.3 13.3 Net Revenue - R$ billion 28.9 38.6 EBITDA – R$ billion 8.8 12.8 Capex – R$ billion 6.0 6.0 Net Debt – R$ billion 24.9 28.4 1 2015E Covenants • Net Debt /EBITDA: 3.0x • Net debt includes payment of dividends of the fiscal year • EBITDA registered in the year prior to the year of dividend payment Thanks to these results, the company reaffirms its confidence and reiterates the guidance and dividend policies announced at the Investors Day 33 Brazilian Telecommunications Market Oi: Profile, Footprint and Strategy Operational and Financial Results Attachments 34 BROAD INFRASTRUCTURE SIGNIFICANTLY SUPERIOR TO THE COMPETITION Municipalities Covered by Fixed Network by Operator Thousands of Km of Optic Fibers by Operator Oi has 6 thousand cellular 7x towers connected to its Fiber 3x 4,505 5x 168 Oi covers ~80% of Brazilian households 124 51 34 644 134 Telefônica América Móvil 118 GVT Telefônica América Móvil GVT 35 Cash flow 1Q12 2,012 1,231 539 962 781 358 EBITDA Capex EBITDA - Capex non-cash items working capital operational cash flow 231 Interest 175 38 -86 Income Tax Authorizations and concessions Free Cash Flow 36 Cash flow 2011 8,766 5,110 2,512 1,385 3,656 EBITDA Capex EBITDA - Capex 4,783 2,516 562 non-cash items working capital operational cash flow Interest Income Tax 351 1,353 Authorizations and concessions Free Cash Flow 2010 10,296 3,572 3,021 674 9,071 3,789 6,724 EBITDA Capex EBITDA - Capex 382 non-cash items working capital operational cash flow Interest Income Tax 150 4,750 Authorizations and concessions Free Cash Flow 37 FIXED INCOME: BONDS AND RATINGS BONDS ~R$ 8 billion in the international capital market Issue Feb/12 Sep/11 Sep/10 Apr/10 Dec/10 Maturity Feb/22 Sep/16 Oct/20 Apr/19 Dec/17 Amount (R$ Mn) US$1,500 BRL 1,100 US$ 1,787 US$142 EUR 750 Coupon (% annual) 5.75% 9.75% 5.50% 9.50% 5.12% Yield(% annual) 5.75% 9.875% 5.80% 6.45% 5.48% RATINGS Oi´s soundness is reflected in the ratings awarded by the world’s leading risk assessment agencies Agency Global Scale Local Foreign Currency Currency Domestic Scale Fitch BBB BBB AAA(bra) Moody’s Baa2 Baa2 Aaabr S&P BBB- BBB- brAAA 38 Financials Operational MAIN HIGHLIGHTS Oi S.A. Pro-Forma 1Q12 4Q11 1Q11 2011 2010 Revenue Generating Unit (‘000) 70,826 69,693 66,074 69,680 63,956 Residential (‘000) 17,850 17,810 18,266 17,796 18,277 Personal Mobility(‘000) 44,106 43,263 39,294 43,264 37,757 Business / Corporate(‘000) 8,112 7,848 7,690 7,848 7,094 757 771 824 771 827 Net Revenue (R$ million) 6,802 6,958 6,933 27,907 29,479 EBITDA (R$ million) 2,012 1,838 1,985 8.766 10,295 EBITDA margin (%) 29.6% 26.4% 28.6% 31.4% 34.9% Net Debt (R$ million) 17,472 16,326 14,390 16,326 18,711 Available Cash (R$ million) 15,373 13,393 14,014 13,393 11,209 Capex (R$ million) 1,091 2,132 829 4,959 3,090 Net Debt / EBITDA 2.0 1.9 1.5 1.9 1.8 Others (‘000) 39 Oi’s shareholders ON % extreasury PN % extreasury TOTAL % extreasury Telemar Participações 290,549,788 56.6% - - 290,549,788 17.7% Portugal Telecom 36,367,992 7.1% 218,668,046 19.5% 255,036,038 15.6% Andrade Gutierrez - - 76,090,214 6.8% 76,090,214 4.7% La Fonte - - 76,090,366 6.8% 76,090,366 4.7% 20,060,877 3.9% 38,533,108 3.4% 58,593,985 3.6% Petros 204,547 0.04% 2,096,861 0.2% 2,301,408 0.1% Funcef 471,434 0.1% 3,880,336 0.4% 4,351,770 0.3% BNDES 4,634,853 0.9% 23,749,003 2.1% 28,383,856 1.7% Outros 161,520,206 31.4% 684,880,117 60.9% 846,400,323 51.7% TOTAL (ex-treasury) 513,809,697 100% 1,123,988,051 100% 1,637,797,748 100% Treasury 85,198,932 74,089,724 159,288,656 TOTAL 599,008,629 1,198,077,775 1,797,086,404 Oi S.A. Previ 40 Portugal telecom ownership structure in OI 35% Portugal Telecom 12.1% AG 19.3% 35% Fundação Atlântico 11.5% LF 19.3% BNDES / Pension Funds 37.8% 100% 15.6% Telemar Participações 17.7% Oi S.A. PT economic interest in Oi Through AG 2.8% Through LF 2.8% Through TmarPart 2.1% Direct in Oi 15.6% Total 23.3% 41 AG ownership structure in OI Portugal Telecom 12.1% AG 19.3% Fundação Atlântico 11.5% LF 19.3% BNDES / Pension Funds 37.8% 100% 4.7% Telemar Participações 17.7% Oi S.A. AG economic interest in Oi Through TmarPart 3.4% Direct in Oi 4.7% Total 8.1% 42 LF ownership structure in OI Portugal Telecom 12.1% AG 19.3% Fundação Atlântico 11.5% LF 19.3% BNDES / Pension Funds 37.8% 100% Telemar Participações 17.7% Oi S.A. 4.7% LF economic interest in Oi Through TmarPart 3.4% Direct in Oi 4.7% Total 8.1% 43 BNDES ownership structure in OI Portugal Telecom 12.1% AG 19.3% LF 19.3% Fundação Atlântico 11.5% BNDES 13.1% Previ 9.7% Funcef 7.5% Petros 7.5% 100% 1.7% Telemar Participações 17.7% Oi S.A. BNDES economic interest in Oi Through TmarPart 2.3% Direct in Oi 1.7% Total 4.0% 44 Previ ownership structure in OI Portugal Telecom 12.1% AG 19.3% LF 19.3% Fundação Atlântico 11.5% BNDES 13.1% Previ 9.7% Petros 7.5% Funcef 7.5% 100% 3.6% Telemar Participações Previ economic interest in Oi Through TmarPart 1.7% Direct in Oi 3.6% Total 5.3% 17.7% Oi S.A. 45 Petros ownership structure in OI Portugal Telecom 12.1% AG 19.3% LF 19.3% Fundação Atlântico 11.5% BNDES 13.1% Previ 9.7% Petros 7.5% Funcef 7.5% 100% 0.1% Telemar Participações Petros economic interest in Oi Through TmarPart 1.3% Direct in Oi 0.1% Total 1.4% 17.7% Oi S.A. 46 Petros ownership structure in OI Portugal Telecom 12.1% AG 19.3% LF 19.3% Fundação Atlântico 11.5% BNDES 13.1% Previ 9.7% Petros 7.5% Funcef 7.5% 100% 0.3% Telemar Participações Funcef economic interest in Oi Through TmarPart 1.3% Direct in Oi 0.3% Total 1.6% 17.7% Oi S.A. 47 CORPORATE STRUCTURE – shareholders rights BOARD MEMBERS DIVIDENDS • • All shares and ADR OIBR.C: right to receive a minimum 25% of adjusted annual net income Preferred Shares and ADR OIBR: minimum of 6% of Capital divided by the total number of shares or 3% of Shareholders’ Equity divided by the total number of shares, whichever higher • • FISCAL COMMITTEE MEMBERS TAG ALONG • • Common shares have a tag along right of 80% of the value paid upon acquisition of control under existing Corporate Law The Preferred shares do not have tag along rights • VOTING RIGHTS • • Common shares have full rights to vote at shareholder meetings Preferred shares have right to vote only under specific circumstances (a) Minority shareholders (15% or more of the voting shares) have the right to appoint one board member (out of 17) Preferred shareholders (10% or more of the total capital) have the right to appoint one board member (out of 17) 3 to 5 members, appointed by: • Controlling Shareholder (Telemar Participações) – 3 members • Minority Shareholders (10% or more of the voting shares) – 1 members • Preferred Shareholders – 1 member REDEMPTION RIGHTS • Shareholders have the right to redeem under certain special circumstances (b) (a) Approval of management service agreements with foreign entities related to the controlling shareholders; issuance of a new class or increase of an existing class of preferred shares and/or change in the advantages and benefits of preferred shares or in the conditions for their redemption; full right to vote if the Company does not pay dividends for three consecutive years. (b) Issuance by the Company of a new class or increase of an existing class of preferred shares; change in preference right of shares or in the conditions for their redemption; reduction on statutory dividend; merger or spin-off of the company; participation of the Company in a group of 48 companies; change in corporate purpose INVESTOR RELATIONS IR Contacts 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 Bayard Gontijo 55 21 3131-2972 [email protected] Marcelo Ferreira 55 21 3131-1314 [email protected] Patricia Frajhof 55 21 3131-1315 [email protected] Matheus Guimarães 55 21 3131-2871 [email protected] Michelle Costa 55 21 3131-2918 [email protected] Leonardo Mantuano 55 21 3131-1316 [email protected] undertake no obligation to update publicly any of them in light of new information or future events. Address: R. Humberto de Campos, 425 – 7º andar Leblon Rio de Janeiro - RJ Visit our website: www.oi.com.br/ir Twitter: www.twitter.com/oi_investors 49
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