tele norte leste participaÇÕes s.a. june, 2002
DESCRIPTION
TELE NORTE LESTE PARTICIPAÇÕES S.A. June, 2002. Consolidated figures except where noted. Overview. Largest Telco in Latin America: 17.7 million lines installed 14.8 million lines in service Concession Area: 65% of Brazilian Territory (16 states) - PowerPoint PPT PresentationTRANSCRIPT
TELE NORTE LESTE PARTICIPAÇÕES TELE NORTE LESTE PARTICIPAÇÕES S.A.S.A.
June, 2002June, 2002
Consolidated figures except where notedConsolidated figures except where noted
2
OverviewOverview Largest Telco in Latin America:
17.7 million lines installed
14.8 million lines in service Concession Area:
65% of Brazilian Territory (16 states)
Pop: 93 Million (54% of Country´s total)
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 (May/02) Market Value: US$ 4.9 billion (May/02) Investment grade rating: Fitch / BBB-
Moody´s / Baa3
S&P / brAA+
3
TELE NORTE LESTE PARTICIPAÇÕES S.A
78.9% 18.8%
HICORPOUTSOURCING
TNL ACESSO CONTAX TNEXTTNL PCS
TELEMAR PARTICIPAÇÕES S.A
TELEMARNorte Leste
Regional Branches
Bahia
Sergipe Rio Grandedo Norte
Alagoas Pará RoraimaEspíritoSanto
Paraíba
Pernambuco
AmapáCeará
Piauí
MaranhãoMinasGerais
Amazonas
Rio de Janeiro
2.3% Treasury
Corporate StructureCorporate Structure
79.6%
Free Float
4
Shareholders’ Structure (After new issue)Shareholders’ Structure (After new issue)
Tele Norte Leste Participações S.A.
(TNE)
Free Float
Preferred Shares -------96.4% Brazil ------------------- 54.0% ADR ---------------------42.4%Common Shares ------- 43.8%
78.9%18.8%TELEMAR *
PARTICIPAÇÕES S.A.
CapitalR$ 4,476,809,955.27
Total Shares: 383,846 mnPreferred: 255,897 mnCommon: 127,949 mn
Shares in Treasury = 2.3%
TOTAL CAPITALBNDESParFiagoAG TelecomASSECA ParticipaçõesLexpart Part.L. F. Tel BrasilCapBrasilVeículos
25.0%19.9%11.3%11.3%11.3%11.3%5.0%5.0%
*53.0% of TNE´s common shares
5
TELE NORTE LESTEBoard of Directors
Chairman – Fersen Lambranho
Senior Management - TNESenior Management - TNE
OiLuiz Eduardo Falco
Telemar Norte LesteRonaldo Iabrudi
CFOAlvaro dos Santos
Tele Norte LesteJosé Pauletti
ContaxJames Meaney
6
17696
709
140141 141166 172
300 248 224 224
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1998 1999 2000 2001
Net Income Statutory Dividends Proposed Dividends
R$ per 000 Shares
98 0.6799 0.6700 0.6701 0.81
Dividend Payments 1998/2001Dividend Payments 1998/2001(R$ Mn)(R$ Mn)
100.000
200.000
300.000
400.000
500.000
600.000
700.000
800.000
7
18.120
Network ExpansionNetwork Expansion
Lines in ServiceLines Installed(in mn)
7.2 8.1 7.88.8 9.7
10.511.8
12.814.8 14.8
17.7 18.0
0
5
10
15
Jul-98 1998 1999 2000 2001 1Q02 2002E
20,0
1998
Utilization Rate (%)
89%
92% 92%
82%84%
1999 2000 2001 2002E1Q02
Digitalization Rate
97%
81%73%
8
PersonnelPersonnel
Full-Time 1Q01 4Q01 1Q02 % yoy
TMAR 18,106 10,663 10,483 -42%
Connect 1,657 3,417 979 -41%
HLD+Other Subsidiaries 866 976 424 -51%
Wireline Total 20,629 15,056 11,886 -42%
Oi - 434 570 -
Contax 8,828 11,981 10,397 18%
Total 29,457 27,471 22,853 -22%
9
Employee Productivity - WirelineEmployee Productivity - Wireline( LIS/ Employees)( LIS/ Employees)
406
560 608
984
1,245
-
200
400
600
800
1,000
1,200
1,400
1Q00 4Q00 1Q01 4Q01 1Q02
10
6,946
5,158
8,433
6,222
10,851
8,122
13,660
10,103
-
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
1998 1999 2000 2001 2002E
Gross Revenue Net Revenue
Revenue Growth - 1998/2001Revenue Growth - 1998/2001 (R$ Mn)(R$ Mn)
+97%
(CAGR: 25.3)
11
1,882
2.033
2,229
2,289
2,447
2,569
2,840
2,997
3,121
3,286
3,570
3,684
3,759
1999 2000 2001 1Q02
8,433
10,851
13,660
Gross Revenue Growth (Quarterly)Gross Revenue Growth (Quarterly)(R$ Mn)(R$ Mn)
3Q
1Q
2Q
4Q
1Q02
+20.4% (yoy)
12
43%
9%5%
24%
2%11%6%
43%
9%4%
24%
2%12%6%
47%
9%4%
22%
2%11%5%
47%
9%4%
22%
2%10%6%
45%
10%4%
22%
2%11%6%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
1Q01 2Q01 3Q01 4Q01 1Q02Local Long DistancePublic Telephone Fixed-to-MobileAdditional Services Netw ork Usage Remun.Data Transmition Other
Gross Revenue: Breakdown per ServiceGross Revenue: Breakdown per Service(R$ Mn)(R$ Mn)
3,121 3,286 3,570 3,684 3,759
1Q01 3Q012Q01 4Q01 1Q02
13
288 346 514
907
1,265
-
200
400
600
800
1,000
1,200
1,400
1998 1999 2000 2001 1Q02
Revenue per EmployeeRevenue per Employee**
(*) Gross Revenue / Full-time wireline employees (R$ 000/year)
(**) Annualized 1Q02 ratio
CAGR: 44.8%**
14
1,024 1,0691,292 1,315 1,348
1,4071,676 1,726 1,676
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
Local Service – Quarterly GrowthLocal Service – Quarterly Growth
24% (yoy)32% (yoy)
Gross Revenue (R$ Million)Gross Revenue (R$ Million)
15
228 249277 278 280 286 310
344369
1T00 2T00 3T00 4T00 1T01 2T01 3T01 4T01 1T02
Long Distance Revenue - Quarterly GrowthLong Distance Revenue - Quarterly Growth
32% (yoy)23% (yoy)
Gross Revenue (R$ Million)Gross Revenue (R$ Million)
16
169 169 172 160174
207189
216237
1T00 2T00 3T00 4T00 1T01 2T01 3T01 4T01 1T02
Data Transmission Revenue - Quarterly GrowthData Transmission Revenue - Quarterly Growth
36% (yoy)3% (yoy)
Gross Revenue (R$ Million)Gross Revenue (R$ Million)
17
Network Usage Revenue – Quarterly GrowthNetwork Usage Revenue – Quarterly Growth
293 294335 356 348
382 390 376426
1T00 2T00 3T00 4T00 1T01 2T01 3T01 4T01 1T02
22% (yoy)19% (yoy)
Gross Revenue (R$ Million)Gross Revenue (R$ Million)
18
Net Revenue - Quarterly GrowthNet Revenue - Quarterly Growth(R$ Mn)(R$ Mn)
1,8241,952
2,117 2,234 2,306 2,4382,626
2,733 2,785
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
21% yoy26% yoy
19
527
497
569
548563
595 589573
590
554
440.0
460.0
480.0
500.0
520.0
540.0
560.0
580.0
600.0
1Q01 2Q01 3Q01 4Q01 1Q02
Net Revenue Interconnection Costs
Fixed Mobile Revenue & Interconnection CostsFixed Mobile Revenue & Interconnection Costs(R$ Mn)(R$ Mn)
20
Fixed- Mobile MarginFixed- Mobile Margin
394 447 439 497 527 569 564 589 590
-2.1% -5.6%
3.6%5.7% 2.6% 6.0%20.1% 21.1%9.0%
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
Fixed-to-Mobile Revenue (R$ mn) F-M Margin (%)
21
-31221
42
28
-2
13
20
41
28
16
8
23
31
22
813
19
31
29
-913
22
43
31
1Q01 2Q01 3Q01 4Q01 1Q02
Other G&ASelling Interconnection CostCost of Services
Operating Expense Breakdown Operating Expense Breakdown (R$ Mn)(R$ Mn)
%
1,2301,399
2,197
1,838
1,372
s
22
48
36
21
-447
35
21
-3
32
34
11
24
41
28
19
12
-15
38
22
54
1Q01 2Q01 3Q01 4Q01 1Q02
Cost of Services Selling G&A Other
Operating Expense Breakdown - Operating Expense Breakdown - (R$ Mn)(R$ Mn)
(excluding interconnection costs)(excluding interconnection costs)
%
710825
1,528
1,266
785
23
Cost of Services Provided Cost of Services Provided (excluding interconnection (excluding interconnection costs, depreciation, & amortization)costs, depreciation, & amortization)(R$ Mn)(R$ Mn)
389.3
481.8523.6
426.4340.1 19.2%18.4%
16.0%14.7% 15.3%
1Q01 2Q01 3Q01 4Q01 1Q02
Cost of Services % of Total Net Revenue
24
Interconnection CostsInterconnection Costs(R$ Mn)(R$ Mn)
587.4571.9
668.7574.4519.6
20.9%
25.5%23.6%
22.5% 21.1%
1Q01 2Q01 3Q01 4Q01 1Q02
Interconnection Costs % of Total Net Revenue
25
Selling ExpensesSelling Expenses(R$ Mn)(R$ Mn)
300.9354.8
512.3
286.2254.2
13.0%
19.5%
11.7%11.0% 10.8%
1Q01 2Q01 3Q01 4Q01 1Q02
Selling Expenses % of Total Net Revenue
26
G&A ExpensesG&A Expenses(R$ Mn)(R$ Mn)
173.3
237.7
172.8176.3146.2 8.7%
6.6%7.2%
6.3% 6.2%
1Q01 2Q01 3Q01 4Q01 1Q02
G&A % of Total Net Revenue
27
6.7%6.4%8.1%8.5%
9.5%
0
2
4
6
8
10
mar/01 jun/01 sep/01 dec/02 mar/02
1,187
945
1,1851,152
995
0
500
1,000
1,500
Mar-01 Jun-01 sep/01 Dec-01 Mar-02
Partial Total
Line Blockage (In Thousands)Line Blockage (In Thousands)
Partial Blockage (outgoing calls): 30 days past due
Total Blockage (all calls): 60 days past due
Disconnection: 90 days past due
47%
53% 61%
39%
* End of Period% of Total Lines in Service
28
Disconnected Lines as a % of Average Lines in Disconnected Lines as a % of Average Lines in ServiceService
552 636
472
413
767 5.2%
3.7%3.4%3.6%
4.5%
0
200
400
600
800
1Q01 2Q01 3Q01 4Q01 1Q020.0%
6.4%
Lines Disconnected (000) % Average LIS
29
EBITDA – Quarterly Figures (2000/02)EBITDA – Quarterly Figures (2000/02)
829965
1,149 1,090
895
1,413
429
1,0391,077
50.7%46.7%45.4%49.4%
54.3%48.8%
42.6%
16.3%
32.8%
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
EBITDA (R$ mn) EBITDA Margin (%)
30
739
716
679
601
829
965
1,149
1,090
1,077
1,039
429
895
1,413
1999 2000 2001 1Q02
2,735
4,033
3,440
EBITDA (Quarterly)EBITDA (Quarterly)(R$ Mn)(R$ Mn)
3Q
1Q
2Q
4Q
1Q02
+31.2% (yoy)
31
Consolidated Income Statement Consolidated Income Statement
One Time ChargeExpenses recovery
(SISTEL)
Var.R$ Millions 1Q01 4Q01 1Q02 1Q02/4Q01
Net Operating Revenue 2,306.4 2,733.0 2,784.6 1.9%Operating Expenses 710.0 1,265.7 784.4 -38.0%
Cost of Services 340.1 523.6 426.4 -18.6%
Selling Expenses 254.2 354.8 300.9 -15.2%
G&A Expenses 146.2 227.5 173.3 -23.8%
Other Expenses (Revenues), net (30.5) 159.8 (116.2) -172.7%
Interconection Costs 519.6 571.9 587.4 2.7%EBITDA 1,076.9 895.4 1,412.8 57.8%
Equity accounting - (9.6) 6.3 -165.6%Depreciation and Amortization 705.5 705.6 954.0 35.2%
EBIT 371.6 199.4 452.6 127.0%Financial Expenses 181.2 297.6 322.1 8.2%
Financial Income (92.2) (529.8) (128.9) -75.7%
Non Operating Expenses (Revenues) (68.6) 51.8 2.3 -95.6%
Income before Tax and Social Contribution 351.2 379.7 257.0 -32.3%Income Tax and Social Contribution 132.2 52.9 74.3 40.5%
Employee Profit Share - 31.8 - -100.0%
Minority Interest 43.9 17.6 39.6 125.0%
Net Income 175.1 277.4 143.2 -48.4%
EPADR (R$) 0.24 0.32 0.16
32
Income Statement- TMARIncome Statement- TMAR
Var.R$ Millions 1Q01 4Q01 1Q02 1Q02/4Q01
Net Operating Revenue 2,311.3 2,741.5 2,786.9 1.7%Operating Expenses 702.4 1,170.3 768.0 -34.4%
Cost of Services 340.2 462.2 378.7 -18.1%Selling Expenses 252.9 417.4 351.7 -15.8%G&A Expenses 140.9 184.5 159.8 -13.4%Other Expenses (Revenues), net (31.6) 106.2 (122.1) -215.0%
Interconection Costs 519.6 600.9 587.4 -2.2%EBITDA 1,089.3 970.3 1,431.6 47.5%
Depreciation and Amortization 672.5 799.2 902.2 12.9%EBIT 416.8 171.1 529.4 209.4%
Financial Expenses 119.0 131.7 238.3 80.9%Financial Income (60.7) (47.8) (32.3) -32.4%Non Operating Expenses (Revenues) (20.7) 20.8 2.7 -87.0%
Income before Tax and Social Contribution 379.2 66.5 320.7 382.5%Income Tax and Social Contribution 189.7 (60.3) 114.7 -290.2%Employee Profit Share - 22.7 - -100.0%Minority Interest - -
Net Income 189.5 104.1 206.1 98.0%
EPADR (R$) 0.43 0.85
33
Consolidated Balance Sheet Consolidated Balance Sheet (R$ Mn)(R$ Mn)
3/31/02 12/31/01 1/31/01 3/31/02 12/31/01 1/31/01
TOTAL ASSETS 26,262 26,766 20,185 TOTAL LIABILITIES 26,262 26,766 20,185
Current Assets 4,950 4,950 5,226 Current Liabilities 4,439 5,609 3,558 Cash and ST Investments 1,044 1,234 967 Suppliers 1,648 2,199 1,217 Accounts Receivables - Services 2,227 2,146 2,644 Loans and Financing 1,424 1,371 429 Recoverable Taxes 1,309 1,293 1,070 Salaries Benefits and Social Securities 161 182 190 Other Current Assets 370 277 545 Taxes 500 524 510
Dividends Payable 540 538 463 Other Accounts Payable 165 796 749
Long Term Assets 1,779 1,949 1,153 - - - Recoverable Taxes 1,406 1,561 976 Long Term Liabilities 9,555 9,075 3,621 Other 373 388 177 Loans and Financing 7,937 7,549 2,629
Taxes 1,579 1,491 959 Other Accounts Payable 39 34 33
Permanent Assets 19,533 19,867 13,806 Investments 159 160 114 Deferred Income - 2 166 Property Plant and Equipment 18,735 19,249 12,589 Minoritary Interest 2,102 2,057 2,342 Deferred Assets 639 458 1,102 Shareholder´s Equity 10,166 10,023 10,498
34
R$ mn 1999 2000 2001 1Q02
Suppliers 999 1,358 2,199 (551) 1,648 Other Accounts Payable 145 230 796 (631) 165 Total 1,144 1,589 2,995 (1,182) 1,813
Loans and Financing 983 2,831 8,920 441 9,361 Cash (696) (2,093) (1,234) 190 (1,044) Total Net Debt 287 738 7,686 631 8,317
Total 1,432 2,327 10,681 (550) 10,131 CAPEX 2,200 2,804 10,061 439
Changes in Debt Position - TNLChanges in Debt Position - TNL
-
35
Changes in Debt Position – TMARChanges in Debt Position – TMAR
R$ mn 1999 2000 2001 1Q02
Suppliers 999 1,346 1,727 (291) 1,436 Other Accounts Payable 145 232 204 (26) 178 Total 1,144 1,578 1,931 (317) 1,614
Loans and Financing 983 2,100 6,254 (752) 5,502 Cash (696) (908) (73) 73 - Total Net Debt 287 1,192 6,181 (679) 5,502
Total 1,432 2,770 8,112 (996) 7,116 CAPEX 2,200 2,804 7,663 228
36
Debt Structure – 31/03/02 Debt Structure – 31/03/02
TOTAL = 9,361
LT DEBT
12%
12%
17%
17%
DEBT PROFILE•R$ 5,824 million foreign currency (62%)*: LIBOR + 6% p.a.•R$ 3,537 million in Brazilian currency (38%):
(+ 17% p.a.)
42%2006 and beyond
2002
2003
2004
2005
* 90% Hedged
ST 1,424
Long Term 7,937
Net Debt8,317
Cash 1,044
R$ mn
37
CAPEX – Quarterly Figures CAPEX – Quarterly Figures (R$ Bn)(R$ Bn)
1.82.1
3.2 3.0
0.4
2.0/2.5
1Q01 2Q01 3Q01 4Q01 1Q02 2002E
Wireline Business Wireless Business
38
Wireline CAPEX 1998 / 2002E - TMARWireline CAPEX 1998 / 2002E - TMAR
2.5
1.3
2.2 1.7
2.8 2.3
7.9
5.3
0.2 0
1.4
0 -
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1998 1999 2000 2001 1Q02 2002E
CAPEX Wireline (R$ bn) Lines Installed (mn)
39
2,500
5,158
2,244
6,222
2,804
8,122
10,060 10,103
439
2,784 2,500
1998 1999 2000 2001 1Q02 2002
Capex Net Revenue
CAPEX & Net Revenue – 1998/2002ECAPEX & Net Revenue – 1998/2002E
48.5%
36.1%
34.5%
99.6%
(R$ Millions)Capex / Net Revenue
15.8%
40
Acquisition of PCS license for Region I (March/2001); US$ 1.4 billion credit (suppliers and bank facilities); Launching of the brand name (Jan/02); Ready to launch (April/02); 14 Metropolitans areas (16 Dec/02E) – 200 cities (285 Dec/02E) with 40 million inhabitants (48 million Dec/02E); Main Suppliers: Nokia, Alcatel, Siemens; Distribution channels = over 1,326 point of sales; Site integrates 1,713 (2,600 Dec/02E); Employees: 622 (880 Dec/02E); 4,000,000 pre-subscribers (June/02); 46 International roaming signed (100 Dec/02E); Technology GSM/GPRS - in all Capitals; Operating Agreement
Infrastructure Co-sitingInterconnectionRoaming International
Operating SynergiesBilling & CreditInfrastructure & BackOfficeData Base
TNE – PCS ´´Oi´´ - Current StatusTNE – PCS ´´Oi´´ - Current Status
41
• Internet Access • National & International Long Distance Calls • Data Business
New Businesses New Businesses Adding Value Adding Value
Region I
Region III
Region IIOutgoing Calls
Incoming CallsInternational Calls
Brazil Outgoing Calls*USA – 34%Japan – 11%Italy – 9%Portugal – 8%
* Source: LatinPanel – 05/05/02
42
Cost Drivers:- Increase operating efficiencies;- Headcount reduction;- Maintenance costs reduction;
- Bad debt control
OUTLOOK 2002 OUTLOOK 2002
Revenue Drivers: - Rate increase- Platform in service growth
- New Services – National and International LD and Data- New Markets – Corporate (Regions 2 and 3)- Improve ARPU
CAPEX reduction;
Net Debt under control.
Launching of PCS – June;
43
Revenue Drivers Revenue Drivers
Platform Expansion (mn)
7.89.7
11.8
14.8
1998 1999 2000 2001 2002
Lines in Service by year end
7.28.6
10.6
13.6 15.2/15.3
1998 1999 2000 2001 2002
Average Lines in Service
15.6/15.8
44
Headcount Reduction - 40% in average
3rd Party services reduction (as a % of net revenue)
Bad debt control - less than 5% of Gross Revenue (in average)
Marketing expenses • wireline (30% reduction) • wireless (partially deferred)
Cost DriversCost Drivers
45
2002/2001 - CAPEX Reduction - TNE2002/2001 - CAPEX Reduction - TNECapex
1998 1999 2000 2001 2002
2.5 2.2 2.8
10.1
2.5 2001
R$ 10.1 bn* 2002
R$ 2.5bn
Wireline BusinessWireless Business
-75%
* Includes carryover effects (4Q01)
46
Industry OutlookIndustry Outlook
28.9132.67 34.87
37.01 39.39 41.85
0
10
20
30
40
50
2001 2002 2003 2004 2005 2006
Residential Lines (In Million)
9.29.37
9.9310.1 10.22 10.34
8
9
10
11
2001 2002 2003 2004 2005 2006
Corporate Lines (In Million)
36.1142.04 44.8
47.11 49.61 52.19
0
10
20
30
40
50
60
2001 2002 2003 2004 2005 2006
Total Lines (In Million)
Source: Yankee Group
Annual Growth 7.7%
Annual Growth 2.4%
Annual Growth 6.5%
47
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 RelationsRua Humberto de Campos, 425 / 8º andar
Leblon Rio de Janeiro -RJ
Phone: ( 55 21) 3131-1314/1315/1313Fax: (55 21) 3131-1325/ 3131-1326
E-mail: [email protected] our new website: http://www.telemar.com.br/ri