TIM(TIMB)2023-08-01 19:03Financial Data and Key Metrics Changes - The company's top line rose more than 9% year-over-year with EBITDA growing above 17% leading to a margin expansion of more than 300 basis points [34] - Operating free cash flow grew more than 65% versus the second quarter of 2022 and net income more than doubled [34] - Cash position rose by 46% year-over-year, ending the quarter at BRL 3.3 billion, with a net debt-to-EBITDA ratio decreasing to 1.4x [28] Business Line Data and Key Metrics Changes - Total service revenues grew 9.5% year-on-year, with mobile services expanding by 9.7% [39] - Postpaid revenues grew significantly, up by more than 10% year-over-year, with ARPU reaching almost BRL 52 [40] - Prepaid revenue expanded at a sound pace of close to 12% versus the second quarter of 2022, leading to an ARPU above BRL 14 [40] Market Data and Key Metrics Changes - The company achieved the highest mobile ARPU in Brazil across prepaid, postpaid, and blended segments [40] - The churn rate for postpaid reached its lowest mark in 12 quarters, indicating improved customer retention [40][37] - The company is leading in 5G deployment with 40% more sites than the second place [42] Company Strategy and Development Direction - The company is focusing on a value-based competition strategy, providing more for more offers to customers [12] - The second half of the year will see an increased focus on prepaid services and further enhancements to the customer value proposition [13] - The company is accelerating the implementation of partnerships and evolving its B2B verticals to consolidate leadership in key sectors [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining and expanding profitability due to various operational improvements and cost management strategies [36] - The company is optimistic about achieving upside risks to full-year numbers, contingent on several factors [51] - Management highlighted the importance of execution in capturing synergies and recovering inflation in a rational competitive environment [51] Other Important Information - The company was recognized as a great place to work, achieving a favorability of more than 90% [38] - The company is executing initiatives to reduce energy consumption and promote social impact through connectivity projects [38] Q&A Session Summary Question: Update on dividend distribution for this year - Management indicated that there are upside risks regarding shareholder remuneration, with a focus on increasing free cash flow and operating free cash flow margin [6][7] Question: Update on tax reform implications - Management stated that they are monitoring the tax reform discussions and will assess the impact once actual numbers are defined [8] Question: Sustainability of sales and marketing expenses - Management noted that sales and marketing expenses will depend on the number of commercial initiatives launched each quarter, with expectations for increased activity in the second half [11] Question: Price adjustments in prepaid and postpaid - Management confirmed that the bulk of adjustments in postpaid offers is completed, with a focus now shifting to prepaid services for potential price revisions [13][12] Question: Working capital dynamics - Management explained that the major impact on working capital was related to seasonality and vendor payments, with expectations for less pressure in the second half of the year [16] Question: Growth outlook for ARPU and customer base - Management emphasized a balanced growth strategy for both ARPU and customer base, with positive net additions expected in the postpaid segment moving forward [18][19]