TIM(US:TIMB)2026-02-11 14:02Financial Performance - Service revenue grew by 5.2% year-on-year, exceeding inflation [3] - EBITDA increased by 7.5%, with an EBITDA margin reaching 51% [3][12] - Operating cash flow expanded by 16%, closing the year with a margin of 22.7% [3][14] - Total shareholder remuneration amounted to BRL 4 billion in cash and BRL 750 million in share buybacks, achieving a payout ratio of 139% [3][14] Business Line Performance - Mobile service revenues increased by 5.4%, with postpaid revenues growing by 9.5% in Q4 [5][6] - Postpaid ARPU reached almost BRL 55, reflecting a year-on-year growth of 3.1% [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 [8][9] Market Performance - TIM remains the leader in 5G in Brazil, covering over 1,000 cities, which is 52% more than the second player [4] - B2B solutions surpassed BRL 1 billion in total contracted value, confirming its role as a structural growth engine [10] Company Strategy and Industry Competition - 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 Commentary 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 focused on maintaining a disciplined capital allocation strategy while exploring new growth avenues [17] Other Important Information - Operating costs grew only 1.8% year-on-year, reflecting ongoing cost optimization efforts [12] - The company completed a significant network modernization project in São Paulo, enhancing service quality [8] Q&A Session Summary Question: Margin and efficiency - Inquiry about the structural versus temporary nature of margin expansion and the strategic implications of the I-Systems acquisition [21] Answer - Management indicated that the margin expansion is largely structural, with the I-Systems acquisition enhancing operational control and efficiency [23][24] Question: Network and interconnection expenses - Questions regarding the drivers behind decreased network and interconnection expenses and the impact of mobile portability [31] Answer - Management noted stable churn levels and attributed the increase in portability to competitors' practices, while also highlighting ongoing cost optimization efforts [34][36] Question: Personal expenses and broadband ARPU - Inquiry about the sustainability of gains from tax over overtime hours and the improvement in broadband ARPU [39] Answer - Management clarified that the ARPU improvement is primarily due to internal optimization efforts rather than overall market dynamics [40][42] Question: Tower leases and tax reform - Questions about the evolution of tower lease negotiations and the impact of Brazil's tax reform [49] Answer - Management confirmed ongoing negotiations to maintain lease costs below revenue growth and indicated that the tax reform would have a neutral impact on free cash flow in 2027 [54][55]