TIM(TIMB) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Service revenue grew above inflation with a year-on-year expansion of 5.2% [3] - EBITDA margin expanded to 51%, with EBITDA increasing by 7.5% [3] - Operating cash flow grew at double-digit, closing the year with a 16% increase [3] - The company delivered BRL 4 billion in cash dividends and BRL 750 million in share buybacks, achieving a 139% payout ratio [14] Business Line Data and Key Metrics Changes - Mobile service revenues increased by 5.4% year-on-year, with postpaid revenues growing by 9.5% in Q4 [5][6] - Postpaid ARPU reached almost BRL 55, growing 3.1% year-on-year [6] - Prepaid segment showed signs of stabilization, with revenue decline decelerating for the third consecutive quarter [7] - Broadband revenues returned to growth in Q4, with UltraFibra revenues increasing by 6.2% year-on-year [9] Market Data and Key Metrics Changes - TIM remains the leader in 5G in Brazil, covering over 1,000 cities, which is 52% more than the second player [4] - In B2B, total contracted value surpassed BRL 1 billion across various verticals [4][10] Company Strategy and Development Direction - The company aims to drive value creation through mobile, B2B, and broadband, supported by artificial intelligence, efficiency, and ESG initiatives [16][17] - The acquisition of I-Systems is expected to enhance operational efficiency and customer experience [19][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue creating value for stakeholders as it enters 2026 [15] - The company is prepared to capture new opportunities in B2B with a scalable portfolio integrating connectivity and digital services [16] Other Important Information - Operating costs grew only 1.8% year-on-year, reflecting ongoing efficiency programs [12] - The company completed a significant network modernization project in São Paulo, enhancing service quality [8] Q&A Session Questions and Answers Question: On margins and efficiency, how much of the efficiency is structural? - Management indicated that the efficiency gains are largely structural, with some temporary effects in Q4 due to interconnection costs and taxation changes [21][26] Question: Regarding the acquisition of I-Systems, what does this suggest about the company's commitment to the asset? - Management clarified that the acquisition provides control over operations and is not indicative of a potential sale of the fiber business, emphasizing a focus on value generation [24][25] Question: What are the main drivers behind the decrease in network and interconnection expenses? - Management noted that while visitor interconnection costs decreased, there were increases in costs related to digital content providers and network expansion [31][37] Question: Can you provide more details on the price increases planned for Q1? - Management confirmed that price adjustments for postpaid customers are underway, similar to previous years, with adjustments occurring in phases [59] Question: What is the outlook for tower lease negotiations and expenses? - Management stated that ongoing negotiations are aimed at maintaining lease costs below revenue growth, despite pressures from inflation and network expansion [50][52]