tim 4 q09 webcast eng_atualizado

Rio de Janeiro, February 24th 2010TIM PARTICIPAÇÕES S.A. | Investors Relations

4Q09 ResultsPresentation

1

TIM PARTICIPAÇÕES S.A. | Investors Relations

In the following slides we will present the financial statement analysis. For the sake of simplicity, all

comparisons refer to TIM operations, excluding the effects of Intelig’s Dec/09 operations. As for the

Balance Sheet, the analysis includes Intelig.

In the following slides we will present the financial statement analysis. For the sake of simplicity, all

comparisons refer to TIM operations, excluding the effects of Intelig’s Dec/09 operations. As for the

Balance Sheet, the analysis includes Intelig.

Additional Disclaimer to the Presentation

2


Agenda

Repositioning Track

4Q 2009 Results

Perspectives for 2010-2012

3


Post-paid Base

Jan-08 Jan-09 Abr-09 Aug-09 Dec-09

-0.4 -0.3

After 15 months, discontinuation of the post-paid base erosion

+0.3

6.56.3

6.8

6.26.4

Pre-paid Base

Jan-09 Mar-09 Aug-09 Dec-09

-0.2 +4.8

Reversal of Pre-paid clients loss after repricing/promo

29.9

34.7

30.1

32.9FROM REPOSITIO-

NING TO GROWTH

TIM Brasil: Repositioning TrackMM lines, EoP

Penetration Usage Data

TRACK

2008“Difficulties”

20102009“Repositioning”

2010-2012“Growth”

Clients lossInertia in 2009 of -R$ 1 Bln QoQ Acceleration

•Uncompetitive offer: repricing and

promo stop

•Loss of Brand attributes

•Little innovation

•Loss of quality

•Offers innovation: “breaking the rules”

•Quality Recovery

•Efficiency Plan: Savings >R$1 Billion;

(~R$800 Mln on the financials)

•Intelig Acquisition

3 Waves of Development

•Main growth drivers:

• Penetration

• F-M substitution

• Internet

•Need to build own infra-structure / Intelig

integration

•‘Back to growth’ with profitability and cash

3 Waves of Development

4


• Customer Base: 41.1 MM(+1.5 MM vs. 3Q)

• ARPU leader: R$27 (vs. R$26.5 in 3Q)

• Service Revenues: +5.4% QoQ,due to outgoing traffic (+13% QoQ)

• Trend Inversion of Service Revenues YoY drop

• Infinity: ~18 million

• EBITDA: R$ 960 MM, +26% QoQ

• EBITDA Margin: 28.2% (+542 bps QoQ)

• Operating FCF: R$ 1.1 Bln 4Q; R$ 0.7 Bln Full Year

• Net Income: R$ 330 MM, +29% 2009FY vs. 2008FY

• Intelig Acquisition: completed

Deve

lopm

ent

Deve

lopm

ent

Quality

Quality

ProfitabilityProfitability

• Network Quality (AnatelRanking) : 100% in December, with MOU ~ 100 minutes

• Bad debt represents 2.5% of Service Revenues: -37%YoY

• Reduction of Interconnection and subsidy costs weight.

EBITDA Margin

Anatel Quality

1Q 2Q 3Q Oct Nov DecService Revenues

Q4 2009: Visible Signs of Turnaround

January:100%

+4.0% +5.0% +5.4%

R$ MM

1Q 2Q 3Q 4Q

2,9363,248

3,0832,823

1Q 2Q 3Q 4Q

97.3%100.0%99.5%

94.0%93.4%97.3%

1

28.2%

20.2%22.7%22.3%

0

5


ARPU

OutgoingVoice

+9%

R$

Positive elasticity

CB

MM clients

18 MM Infinity

+3.8%+4.7%+4.8%

Service Revenues

R$ MM

+4.0% +5.0% +5.4%

YoY -0.5% -1.2% -1.0% +0.3%

KPI’s Improvements QoQ: Subscriber Base, traffic, ARPU and Revenues

TIM: breaking the rules

• Infinity: from “charge per minute” to “charge per call”

• Liberty: Unlimited talk to all TIM community

• ‘Chip Avulso’: without penalty

• SIM unlock handset

MOU

Outgoing

Total

>40%

Minutesoct nov dec

2

3

4

5

6

7

8

9

1 0

1 1

1 2

Q1 Q2 Q3 Q4

Charge per call

Charge perminute

39.9 40.341.1

41.1

36.137.8

39.6

33

34

35

36

37

38

39

40

41

42

Q1 Q2 Q3 Q4

27.026.526.626.0

5

10

15

20

25

30

Q1 Q2 Q3 Q4

9990

7370

40

50

60

70

80

90

100

110

Q1 Q2 Q3 Q4

3,2483,0832,9362,823

2500

2700

2900

3100

3300

3500

3700

Q1 Q2 Q3 Q4

6


Reinforcement of Brand Positioning

Best deals Cheaper cost per Minute

29

34

35

29

+4pp

+3pp

-5pp

-7pp

Coverage

‘Chip Avulso’

21

37

23

23

+11pp

-1pp

-8pp

-5pp

Coverage Innovation

17

38

44

22

32

34

28

25

+10pp

0pp

-7pp

-3pp

+3pp

+3pp

+1pp

-3pp

Share of investments TV, %

15% 16%

31%

24% 19%

17%

30%32%

25%

31%

26% 28% 28%

25%

15%

18%

2006 2007 2008 Jan-Nov ‘09

‘Mundo Azul’

Liberty

Clear and direct communication of offers

Brand Credibility

Investments in Advertising

Communication Waves

Player1

Player2

Player3

Player1

Player2

Player3

Player1

Player2

Player3

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Increase in Traffic Volume Network quality improvement (Anatel ranking)

MM of total minutes (excluding visitors)

2008

2009

YoY -16.1% -19.1% +0.5% +28.9%

% achieved goals in TIM’s network quality

MOU

Traffic reduction after repricing

Network Quality: 100% of Anatel’s targets achieved

100% of Anatel’s Goals in December (confirmed in Jan.’10)

70 73 90 99

11,956

7,5858,068

10,458

10,4119,045

9,973

9,273

6000

7000

8000

9000

10000

11000

12000

13000

Q1 Q2 Q3 Q4

oct nov dec

97.8% 97.3%100.0%

1

1

1

1

1

1

1

1

99.5%

94.0%

98.2%

93.4%

85.5%

90.8%

1

1

1

1

1

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

8


Agenda

Repositioning Track

4Q 2009 Results


9


Main Financials Results

Efficiency Plan: R$0.8 Bln in savings, R$ 0.6Bln of which were reinvested in the Re-Launch Plan (“Self-financing”):

+ R$0.6Bln (+23.4% YoY): advertising, commissions and customer care

- R$0.4 Bln (-8.8% YoY): Network and Interconnection Costs

- R$0.3Bln (-43.6% YoY) : Bad Debt

- R$0.1Bln (-9.3% YoY) : Personnel and G&A

EBITDA: R$959 million in 4Q09 (+26% QoQ) and a 28.2% margin in the quarter; EBITDA FY2009 of R$3,063 million

(+5.6% YoY) and a 23.5% margin (+140 bps vs. 2008)

Net Profit: R$232 million in 2009 (+29% YoY)

Operational Free Cash Flow: positive in R$1,109 million in 4Q09; R$692 million in FY2009

Net Financial Position: R$1,684 million (-R$860 million vs. 3Q) including Intelig

10


EBITDA & MarginInvestment on Re-

launching Plan

Quality of traffic (on-nettization); structural

rethinking

Quality of customer base; billing and credit

management

Lean structure

Structural Improvement of Profitability

Selling expenses

Interconnection& Network

Bad Debt4.8% 3.6% 3.2% 2.5%

9.6%6.8%

4.6% 4.0%

1Q 2Q 3Q 4Q

Personnel and

G&A Costs 9.3% 8.6% 8.0% 7.4%

10.1% 9.3% 8.2% 8.7%

1Q 2Q 3Q 4Q

20092008

609 736 759959

1Q09 2Q09 3Q09 4Q09

Efficiency Plan for the Business Re-launch

R$ Million, % Margin

%.Net Service Revenues

+R$630MM+23.4%

% YoY, Delta (R$MM)

-R$372MM –8.8%

-R$327MM-43.6%

-R$102MM-9.3%

22.3%

28.2%22.7%

20.2%

21.1% 22.4% 23.0% 21.9%

25.1% 28.2% 28.3% 27.9%

1Q 2Q 3Q 4Q

34.9% 31.4% 31.3% 30.8%

36.8% 36.1% 34.6% 32.4%

1Q 2Q 3Q 4Q

2008

R$ Million, % Margin

2,899 3,063

2009

22.1% 23.5%

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Net Result – 4Q09

2Q09 3Q09 4Q09

(144)(15)

61 330

1Q09(620,9)

(55,3) 47,8

330,0

958,5

337,6

Y/Y variation due to lower impact of tax

benefits (R$104Mn vs. R$160Mn)

2008

180 232

2009

+29%Net Profit –2009FY Dividends:

Proposal ofR$ 0,125 per PN in

distribution

-32% 2009 vs. 2008 to R$252Mn

R$ Million

EBITDA 4Q09

Depreciation & Amortization EBIT Net Financial

ExpensesTaxes and

OthersNet Profit

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Gross DebtR$ 4.2 billion (of which 67% on long term)~28% of debt is denominated in foreign currency (100% hedged)

Average Annual Cost 9.7% in 4Q09 vs.13.2% in 4T08 and 9.7% in 3Q09

956

(996)1,149

1,109

2,544249

1,109

1,684- R$ 116 Mn of Intelig acquisition

effect

Operational FCF & Net Financial Position– 4Q09(TIM + Intelig Dec/09)

Net Financial PositionFree Operational Cash Flow R$ Millions R$ Millions

Oper. OCF 4Q093Q09 Non-Oper.

OCFEBITDA Δ Working

CapitalCAPEX Oper.

OCF

R$ 860 Mn debt reduction

32.1% of Total Net Revenues

13


Agenda

Repositioning Track

4Q 2009 Results


14


‘Mundo Azul’ = One national rate (local and LD)

Infinity = pay per call

Chip only = exit from handset subsidy market

SIM-unlock = free handset

TIM is Ready to Capture Brazilian Market Opportunity

Breaking Rules

“Voice is Good”

Penetration Usage DataMarket share MOU and ARPU Microbrowsing Browsing

Mobile Internet Access (microbrowsing)

Selective growth of the mobile connectivity

market (web via internet key)

Social networking

Free-net Philosophy

Liberty = unlimited on-net calls (F-M substitution)

Offers & Promo based on community

LD for Fixed: economy and simplicity with Intelig

Attack to fixed monthly fee (F-F substitution)

Integrated Solutions of Fixed,

Mobile, Voice and Data for:

- corporate segment

- consumer (selective)

Convergence

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Developing Own Infrastructure

BackboneBackhauling

Node-B

3G/HSDPAAccess

PoP PoP

2G/EdgeAccess

BTS

2G/EdgeAccess

BTS

Leasedlines

Metro

Microwaves installation

4

Backbone Integration

Connection with Intelig MAN

MAN TIM conclusion

Development of Microwaves and Backhauling - radio

Leased lines renegotiation with OLO’s

5

Key actions

1

2

3

4

5

Intelig’s backhauling ring connection/strengthening

Integrated TIM-Intelig Backbone

Development of own metro rings

1 2 3

Increase capacity of infrastructure

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* Without considering Oi’s results (not published yet)

KPI’s Size (Q4) QoQ Growth

Subscriber base

ARPU

Net Service Revenues

EBITDA

Margin EBITDA

41.1 MM(23.6% Market Share)

R$ 27.0

R$ 3,248 MM

28.2%

#3+5 MM lines vs. Q1, besides having rigorous clean-up to save Fistel

#1Stop ARPU erosion due to outgoing calls

Higher growth QoQ due to push on voice

Filling the gap vs. market leader besides the intense commercial effort

Rank*

R$ 959 MM

#2

#2

#2

In Bps

We are ready for the next step, where we’ll focus on the capture of opportunities: • Penetration: fresh market from social inclusion• F-M substitution for Voice• Selective growth for Data• “Option Value” Intelig: LD for Fixed and Convergence

+ 540

+2,630

+ 380

+ 200

+ 540

Conclusion: TIM - market’s #2 player with the greatest speed of QoQ growth

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Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.

Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.

Investor Relations

Avenida das Américas, 3434 - Bloco 016° andar – Barra da Tijuca22640-102 Rio de Janeiro, RJPhone: +55 21 4009-3742 / 4009-3446 / 4009-3751Fax: +55 21 4009-3990

Investor Relations

Avenida das Américas, 3434 - Bloco 016° andar – Barra da Tijuca22640-102 Rio de Janeiro, RJPhone: +55 21 4009-3742 / 4009-3446 / 4009-3751Fax: +55 21 4009-3990

Visit our Website

http://www.tim.com.br/ir

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