tele norte leste participaÇÕes s.a
DESCRIPTION
TELE NORTE LESTE PARTICIPAÇÕES S.A. Overview. Largest Telco in Latin America: 17.7 million lines installed* 14.9 million lines in service* Concession Area: 65% of Brazilian Territory / 93 million people 40% of Country’s GDP Over 21 Million Households - PowerPoint PPT PresentationTRANSCRIPT
September/021
TELE NORTE LESTE PARTICIPAÇÕES S.A.TELE NORTE LESTE PARTICIPAÇÕES S.A.
September/022
Largest Telco in Latin America:
17.7 million lines installed*
14.9 million lines in service*
Concession Area:
65% of Brazilian Territory / 93 million people
40% of Country’s GDP
Over 21 Million Households
Tele Density: 16% ( vs. 22% National Average)
TNLP4: Heaviest Weighted Stock in IBOVESPA
Free Float: 79% of Total Shares
Level 2 ADR (NYSE:TNE): 28% of Total Shares
Market Value: US$ 3.4 billion (August/02)
OverviewOverview
* In June/02
September/023
TELE NORTE LESTE
PARTICIPAÇÕES S.A
79.0% 18.7%
HICORP*OUTSOURCING TNL ACESSO* CONTAX* TNEXT*
TELEMAR
PARTICIPAÇÕES S.A. **
TELEMAR
PARTICIPAÇÕES S.A. **
TELEMARNorte Leste
2.3% Tresuary
79.5%
Free FloatFree Float
18.9%
1.6% Treasuary
FREE FLOATFREE FLOAT
Pegasus
24.4%
Corporate StructureCorporate Structure
*100% owned Subsidiary
** Controlling Shareholder
September/024
• Shareholders´ Meetings
•At least one annual general meeting
• Board of Directors
• Monthly Meetings
• 11 board members (+ 11 alternates) 10 shareholders´representatives plus the CEO
•Independent Accountants
PricewaterhouseCoopers
• Executive Committee
Corporate StructureCorporate Structure
September/025
Finance Committee
• Monthly meetings
• 10 members
• Objectives: Review, analyze and advise the Board of Directors on: Financial Risks,
Insurance Policy, Independent Accountants, Internal Audit Program, Budget, etc.Procurement and Investment Committee
• 6 members
• Objectives: Advise the Board of Directors on procurement and execution on the capital
expenditures program.Compensation Committee
• Semiannual
• 3 members
• Objectives: Define conditions of employees´ benefits in general and the stock option
program in particular.
Board CommitteesBoard Committees
September/026
PersonnelPersonnel
Full-Time Employees 2Q01 3Q01 4Q01 1Q02 2Q02 % yoy
TMAR 16,795 15,803 10,663 10,483 10,283 -39%
Connect 4,141 6,977 3,417 979 152 -96%
TNE+Other Subsidiaries 961 1057 976 427 486 -49%
Wireline Total 21,897 23,837 15,056 11,889 10,921 -50%
Oi 151 286 434 570 663 339%
Contax 9,558 12,119 11,981 10,397 11,594 21%
Total 31,606 36,242 27,471 22,856 23,178 -27%
September/027
Platform GrowthPlatform Growth
8.210.1
12.714.9
7.28.1 7.8
8.89.7
10.511.8
12.8
14.8
18.1
14.8
17.7
14.9
17.7
15.2
Jul-98 1998 1999 2000 2001 Mar-02 Jun-02 Dec02ELines in Service (million) Lines Installed (million)
Average LIS
+19% +23% +26% +17%
1H99 1H00 1H01 1H02
September/028
993
472
1,093
636
192
767
-13
552
142
527
Net Additions Disconnected Lines
Quarterly Net AdditionsQuarterly Net Additions(in 000)(in 000)
2Q01 3Q01 4Q01 1Q02 2Q02
September/029
Revenue GrowthRevenue Growth(R$ Mn)(R$ Mn)
6,946
5,158
8,433
6,222
10,851
8,122
13,660
10,103
1998 1999 2000 2001 2002E
Gross Revenue Net Revenue
+97%
CAGR 25.3%
September/0210
618 614
984
1,245
1,368
Jun_01 Sep_01 Dec_01 Mar_02 jun_02
Employee Productivity - WirelineEmployee Productivity - Wireline
+121%
( LIS/ Employees)( LIS/ Employees)
September/0211
Revenue per EmployeeRevenue per Employee**
(*) Gross Revenue / Full-time wireline employees (R$ 000/year)
(**) Annualized ratio
288 346
514
907
1,265
1,380
1998 1999 2000 2001 1Q02** 2Q02**
September/0212
1,882
2.033
2,229
2,289
2,447
2,568
2,840
2,996
3,121
3,285
3,570
3,684
3,759
3,774
1999 2000 2001 1H02
8,433
10,851
13,660
Gross Revenue - Quarterly Growth Gross Revenue - Quarterly Growth (R$ Mn)(R$ Mn)
3Q
1Q
2Q
4Q
3,9155,015 6,406
7,533
1HALF 2HALF1998 49% 51%1999 46% 54%2000 46% 54%2001 47% 53%
September/0213
Gross Revenue Breakdown Gross Revenue Breakdown (R$ Mn)(R$ Mn)
1H01
1H02
6,406
43.0%
24.0%
11.4% 8.8% 5.9% 6.9%
45.0%
21.9%
10.9% 10.0% 6.0% 6.2%
7,533
(+18%)
Local Fixed-
Mobile
Network
Usage
Long
Distance
Data Other TOTAL
100.0%
100.0%
September/0214
825
1,528
1,266
785 849
2Q01 3Q01 4Q01 1Q02 2Q02 1,397
2,188
1,832
1,372 1,448
Operating Expense Breakdown Operating Expense Breakdown (R$ Mn)(R$ Mn)
Ex- Interconnection
%
-34%
-44%
41
28
20
11
30
22
24
24
31
29
19
21
43
31
22
4
41
29
19
11
2Q01 3Q01 4Q01 1Q02 2Q02
Interconnection Cost Cost of Services
Selling Expenses G&A Expenses/ Other
September/0215
Fixed Mobile Revenue & Interconnection CostsFixed Mobile Revenue & Interconnection Costs(R$ Mn)(R$ Mn)
527
497
569
548563
595 589
573
590
554
576
558
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02
Net F-M Revenue Interconnection Cost
September/0216
2.8%
4.6%
5.1%*
10.6%
5.2%5.6%
4.2%
5.9%
4.9%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 Average2001
Average1H02
R$ Million % of Gross Revenue
* Normalized Level (excluding non-recurring adjustments)
Bad Debt ProvisionsBad Debt Provisions
87 152 380 193 210 158
September/0217
Consolidated Income Statement Consolidated Income Statement
Var.R$ Millions 2Q01 1Q02 2Q02 2Q02/2Q01
Net Operating Revenue 2,438.0 2,784.6 2,780.4 14.0%
Operating Expenses 822.4 784.5 849.1 3.2%
Cost of Services 389.3 426.4 418.0 7.4%
Selling Expenses 286.2 300.9 274.5 -4.1%
G&A Expenses 176.3 173.3 195.4 10.8%
Other Expenses (Revenues), net (29.4) (116.1) (38.8) 32.0%
Interconection Costs 574.4 587.4 599.2 4.3%
EBITDA 1,041.2 1,412.7 1,332.1 27.9%
Equity accounting (6.9) 6.3 1.5 -121.7%
Depreciation and Amortization 728.9 954.0 953.9 30.9%
EBIT 319.2 452.4 376.8 18.0%
Financial Expenses 177.8 322.1 635.8 257.6%
Financial Income (52.4) (128.9) (135.7) 159.0%
Non Operating Expenses (Revenues) (17.7) 2.3 (1.9) -89.3%
Income before Tax and Social Contribution 211.5 256.9 (121.5) -157.4%
Income Tax and Social Contribution 15.8 74.3 (45.1) -385.4%
Employee Profit Share (1.0) - - -100.0%
Minority Interest 79.7 39.6 - -100.0%
Net Income 117.0 143.0 (76.3) -165.2%
September/0218
Consolidated Balance Sheet Consolidated Balance Sheet (R$ Mn)(R$ Mn)
6/30/2001 12/31/2001 3/31/2002 6/30/2002 6/30/2001 12/31/2001 3/31/2002 6/30/2002
TOTAL ASSETS 21,297 26,766 26,261 25,661 TOTAL LIABILITIES 21,297 26,766 26,261 25,661
Current Assets 4,526 4,950 4,950 4,736 Current Liabilities 4,149 5,609 4,438 3,386
Cash and ST Investments 251 1,235 1,044 573 Suppliers 1,420 2,199 1,648 1,245
Accounts Receivables - Services 2,537 2,146 2,227 2,401 Loans and Financing 1,088 1,388 1,424 1,220
Recoverable Taxes 1,154 1,293 1,309 1,462 Salaries Benefits and Social Sec. 155 182 161 140
Other Current Assets 584 276 370 300 Taxes 598 524 500 475
Dividends Payable 168 538 540 135
Other Accounts Payable 720 778 165 170
Long Term Assets 1,413 1,949 1,778 1,612
Recoverable Taxes 1,232 1,561 1,405 1,252 Long Term Liabilities 4,185 9,075 9,555 10,078
Other 181 388 373 360 Loans and Financing 3,160 7,549 7,937 8,481
Contingencies Provisions 1,010 1,492 1,579 1,563
Other Accounts Payable 14 34 39 34
Permanent Assets 15,358 19,867 19,533 19,313
Investments 110 160 159 158 Deferred Income 157 2 - -
Property Plant and Equipment 14,096 19,244 18,735 18,200 Minoritary Interest 2,352 2,057 2,102 2,107
Deferred Assets 1,152 463 639 955 Shareholder´s Equity 10,454 10,023 10,166 10,090
September/0219
Partial Blockage (outgoing calls): 30 days past due
Total Blockage (all calls): 60 days past due
Disconnection: 90 days past due
Lines BlockedLines Blocked
(in 000)(in 000)
1,152 1,185
945995
912
8.1%
6.4% 6.7%6.1%
8.5%
Jun-01 Sep-01 Dec-01 Mar-02 Jun-02
Total Partial % of Total Lines in Service
September/0220
527 767
413
472
636
552
4.5%
3.6%3.4%
3.7%
5.2%
3.5%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02
Disconnected Lines (000) % Average LIS
Disconnected LinesDisconnected Lines (in 000)(in 000)
September/0221
49.3%
44.7%
EBITDA
Margin
EBITDA Growth (R$ Mn)EBITDA Growth (R$ Mn)
(*) Excluding Depreciation and Amortization
Net Revenue OperatingExpenses*
EBITDA
5,565
2,820 2,745
4,744
2,623
2,121
1H01
1H02
September/0222
EBITDA – Quarterly StatisticsEBITDA – Quarterly Statistics
EBITDA (R$ MM) EBITDA Margin (%)
901 865
1,372
437
1,041
1,080
1,4131,332
35%
48%
33%
17%
43%
47%51% 49%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 Average2001
Average1H02
September/0223
2,500
5,158
2,244
6,222
2,804
8,122
10,060 10,103
825
5,565
2,000
1998 1999 2000 2001 1H02 2002
Capex Net Revenue
48.5%
36.1%
99.6%
14.8%
CAPEX / Net Revenue - 1998/2002CAPEX / Net Revenue - 1998/2002
Capex / Net Revenue* Includes PCS
34.5%
September/0224
CAPEX – Quarterly Statistics - ConsolidatedCAPEX – Quarterly Statistics - Consolidated
(R$ Bn)(R$ Bn)
1.82.1
3.23.0
0.4 0.4
10.1
2.0
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 2001 2002E
Wireline Business Wireless Business
September/0225
Wireline CAPEX 1998 / 2002E (TMAR)Wireline CAPEX 1998 / 2002E (TMAR)
2.5
1.3
2.2 1.7
2.8 2.3
7.9
5.3
0.4
1.2 1.0
-
1998 1999 2000 2001 1H02 2002E
wireline CAPEX (R$ bn) Lines Installed (mn)
September/0226TOTAL = 9,701
TOTAL DEBT
11%
8%
18%
20%
DEBT PROFILE
•R$ 6,251 million foreign currency (64%)*:
LIBOR + 5,19% p.a.
•R$ 3,450 million in Brazilian currency (36%):
(+ 17.4% p.a.)
43%2006 and beyond
2002
2003
2004
2005
* 100% Hedged
ST 1,220
Long Term 8,481
Net Debt9,128
Cash 573
R$ mn
Debt Structure – 06/30/02 Debt Structure – 06/30/02
September/0227
Changes in Debt Position – TNE (R$ Mn)Changes in Debt Position – TNE (R$ Mn)
Indebtedness Jun-01 Sep-01 Dec-01 Mar-02 Jun-02Change
Jun02/Jun01
Total 4,248 8,906 8,937 9,361 9,701 5,453 Short Term 1,088 1,160 1,388 1,424 1,220 132 Long Term 3,160 7,746 7,549 7,937 8,481 5,321 (-) Cash (251) (1,870) (1,235) (1,044) (573) (322)
- Net Debt 3,997 7,036 7,702 8,317 9,128 5,131
Suppliers 1,420 1,446 2,199 1,648 1,245 (175) Other Accounts Payable 720 765 778 165 170 (550) Total 2,140 2,211 2,977 1,813 1,415 (725)
Total 6,137 9,247 10,679 10,130 10,543 4,406
September/0228
Cost Drivers:Increase operating efficiencies;Headcount reduction;Maintenance costs reduction;
Bad debt control;Oi – operating / financial expenses
OUTLOOK 2002OUTLOOK 2002
Revenue Drivers: Rate increasePlatform in service growth
New Services – Long Distance /Data New Markets
CAPEX reduction – R$ 2 billion;
Net Debt under control - less than R$ 9 billion.
September/0229
Average Rates for Telecommunication Services* Average Rates for Telecommunication Services* (R$)(R$)
Local Rates 2000 2001 2002ReadjustmentJun_02 (%)
Installation Fee 50 50 30 -40.0%Residential Subscription 14.11 16.64 18.97 14.0%Commercial Subscription 21.96 25.65 29.79 16.1%PBX Subscription 29.3 32.62 29.79 -8.7%Pulses 0.066 0.066 0.072 9.1%
Public Telephone Rates 2000 2001 2002Local 0.05 0.054 0.058 7.4%
Fixed-Mobile Rate 2000 2001 2002(per minute)VC1 0.29 0.34 0.35 2.9%VC2 0.61 0.68 0.74 8.8%VC3 0.69 0.77 0.85 10.4%
Intraregional Long-Distance Rates (per minute) 2000 2001 20020 to 50 km 0.15 0.17 0.19 11.8%50 to 100 km 0.24 0.26 0.27 3.8%100 to 300 km 0.27 0.27 0.29 7.4%Over 300 km 0.32 0.28 0.31 10.7%
Network Usage Rates (per minute) 2000 2001 2002Local 0.04 0.047 0.047 0.0%Long-distance 0.07 0.074 0.074 0.0%
(*) Rates net of taxes, regulated by Anatel
(**) Actual Rates
Disclaimer – The rates are shown as average figures and do not necessarily correspond to actual rates, which may vary from state to state, according to day of the week, duration of the call, etc.
September/0230
National & International Long Distance Calls
New Businesses New Businesses Adding Value Adding Value
Region I
Region III
Region II
Outgoing Calls
Incoming Calls
International Calls
031
Glo
bal
September/0231
Headcount Reduction - 40% in average
Third Party Services Reduction
Bad Debt Control - less than 5% of Gross Revenue (in average)
Marketing Expenses • wireline (30% reduction) • wireless
Cost DriversCost Drivers
September/0232
2002/2001 - CAPEX Reduction - TNE2002/2001 - CAPEX Reduction - TNE
CAPEX
1998 1999 2000 2001 2002
2.5 2.2 2.8
10.1
2.0 2001
R$ 10.1 bn 2002
R$ 2.0bn
TMAR- Wireline BusinessOi - Wireless Business
-80%
September/0233
OiOi
Current Status
Tariffs
CAPEX
September/0234
TNE – PCS ´´Oi´´ - Current StatusTNE – PCS ´´Oi´´ - Current Status
Financing US$ 1.4 billion credit (suppliers and bank facilities);
Launching of the brand name (Jan/02);
Launch of Operations 25th June ;
14 Metropolitan areas (16 as of 03) – 320 cities;
Main Suppliers: Nokia, Alcatel, Siemens;
Distribution channels = over 1,600 point of sales;
2,000 integrated sites;
Employees: 663 in June;
400,000 subscribers in August/02;
Agreement with 19 countries for International roaming;
Technology GSM/GPRS - in all Capitals;
CAPEX through 2004: R$ 2.7 billion (R$ 1.4 billion until 1H02).
September/0235
TariffsTariffs
Oi 40 Oi 80 Oi 160 Oi 300
Monthly Fee (R$) 29.90 47.90 79.90 114.00
Minutes 40 80 160 300
Tariff (R$ / min) 0.75 0.60 0.50 0.38
Post- Paid
Pre-PaidTariffs (R$ per minute)
Normal
0.34
0.69
1.39
1.49
Limited
0.99
FlatOi to Fixed -lineOi to Oi
Oi to other cellular company
Oi to Fixed-lineOi to OiOi to other cellular company
September/0236
1.1
0.4
1.0
2001 2002E
CAPEXCAPEX
• 2001 / 2004: R$ 3.8 bnR$ 1.1bn – License (2001)R$ 2.7 bn – Network
• Network CAPEX (R$ bn):
1H02
September/0237
2002 – Industry Outlook2002 – Industry Outlook
Increasing competition DLD Market (Outgoing calls from Regions 1 and 3)
Data Businesses (Corporate – Nationwide)
Regulatory Issues
Interconnection Battle Long Distance x Local Telcos
Wireline x Wireless
Use of Universalization Funds (FUST)
Bad Debt Control – New Procedures
SMP Rules (Wireless)
Introduction of 2.5 G (?)
Beginning of Consolidation / Alliances / Partnership´s
Cellular/Cellular (Block Strategy – TEM/PT; TIM; Telecom Americas)
ILEC´s / CLEC´s
ILEC´s / Mirrors
ILEC´s / Cellular ( Band B´s / Independents)
ILEC´s / ISP´s (Flat Rate Model)
September/0238
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 undertake no obligation to update publicly any of them
in light of new information or future events.
““SAFE HARBOR” STATEMENTSAFE HARBOR” STATEMENT
Investor Relations
Rua Humberto de Campos, 425 / 8º andar
Leblon
Rio de Janeiro -RJ
Phone: ( 55 21) 3131-1314/1315/1316/1313
Fax: (55 21) 3131-1155
E-mail: [email protected]
Visit our website: http://www.telemar.com.br/ri