Telefonica Brasil S.A.(VIV) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2024, total revenues increased by 6.5%, driven by a 9.3% growth in mobile service revenues [8] - EBITDA grew by 6.8% year-over-year, while net income expanded by 7.3% [8] - Operating cash flow reached R$3.4 billion, with free cash flow generation at R$2.4 billion [19] Business Line Data and Key Metrics Changes - Postpaid access increased by 6.6%, and homes connected to FTTH grew by 12.3% [8] - Mobile service revenues accounted for 64% of total revenue, with a significant contribution from postpaid revenues [9] - B2B digital services reached R$3.5 billion, up 20% year-over-year, representing 31% of B2B business [13] Market Data and Key Metrics Changes - Vivo's FTTH footprint is available to 26.8 million homes, with 6.3 million homes connected [11] - The average FTTH speed sold increased from around 260 megabits to over 310 megabits [11] - The company reported a postpaid churn rate of 0.97% per month, the lowest historical level [10] Company Strategy and Development Direction - Vivo aims to enhance its value proposition by combining connectivity with a broad portfolio of services [9] - The company is focused on increasing its FTTH take-up rate and leveraging its unique capability to offer combined fiber and mobile plans [11] - Vivo's ESG initiatives have been recognized, positioning the company as a leader in sustainability within the telecommunications sector [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth and profitability despite macroeconomic uncertainties [2] - The company is optimistic about its ability to continue migrating customers from prepaid to hybrid and from hybrid to postpaid [25] - Management highlighted the importance of digital services in driving revenue growth and customer loyalty [38] Other Important Information - CapEx totaled R$1.9 billion in Q1 2024, with a CapEx to sales ratio of 13.8% [18] - The company announced a share buyback program, planning to invest up to R$1 billion until March 2025 [20] - Vivo's cash position surpassed financial debt by R$1.9 billion at the end of March [19] Q&A Session Summary Question: Net adds dynamics and prepaid pricing - Management noted a positive trend in net adds and emphasized the migration from prepaid to hybrid plans, which is driving ARPU growth [22][23][26] Question: Fiber ARPU dynamics and CapEx outlook - Management discussed factors influencing fiber ARPU growth and indicated a reduction in CapEx intensity for 2024 [27][32] Question: Competition in fiber business and prepaid migration ceiling - Management expressed confidence in the ability to migrate customers and highlighted Vivo's competitive advantages in the fiber market [43][47] Question: Effective tax rate and lease size - Management explained the impact of interest on capital distributions on the effective tax rate and provided insights on lease liabilities and efficiency initiatives [49][51][52]