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MarketScreener Homepage  >  Equities  >  Bolsa de Valores de Sao Paulo  >  Telefônica Brasil S.A.    VIVT4   BRVIVTACNPR7

TELEFÔNICA BRASIL S.A.

(VIVT4)
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Telefônica Brasil S A : Press Release 1Q20

05/06/2020 | 06:24am EST

2020 RESULTS

January - March

1Q20 Results

Telefônica Brasil S.A.

HIGHLIGHTS

Superior connectivity services support commercial performance in high value segments

  • FTTH customers totaled 2,652 thousand, up 30.4%y-o-y, with 175 thousand net additions in 1Q20;
  • Postpaid accesses grew 6.6% and accounted for 58.5% of total mobile accesses, with a market share of 39.0% in March 2020;
  • Mobile market share of 33.0% in March 2020, 8.7 p.p. higher than the second player;
  • 4.5G coverage was present in 1,260 cities, and FTTH was launched in 22 cities, reaching 186 cities covered in 1Q20;
    Lower Mobile Service Revenue growth offset by FTTH and IPTV revenue performance in 1Q20
  • Mobile service revenue grows 0.1%y-o-y, reflecting more difficult comparison basis due to early price increase of Control plans in 2019;
  • FTTH revenues reached R$626 million (+43.3%y-o-y) and already accounted for 42.4% of broadband revenues;
  • Fixed growing business revenue (Fiber, IPTV and Corporate data and ICT) already represent 54.6% of fixed revenue, +13.0%y-o-y;
  • IPTV revenues came to R$258 million (+29.3%y-o-y) and accounted for 61.0% of pay TV revenues.
    Digitalization contributes to a strong reduction in commercial costs and consequent acceleration of EBITDA margin in the quarter
  • Recurring Operating Costs reduced 3.3%y-o-y in 1Q20, mainly because of lower commercial expenses due to digitalization, automation initiatives and lower handset sales costs;
  • Recurrent EBITDA totaled R$4,431 million (+1.6%y-o-y) in 1Q20, with an EBITDA margin of 40.9%.
    Investments made in recent years with a focus on quality support profitability and solid cash generation in the quarter
  • Investments of R$1,648 million in 1Q20 (15.2% of Net Operating Revenues), focused on the expansion of the FTTH network and increased quality and capacity of the 4G and 4.5G networks;
  • Free Cash Flow after lease payments reached R$2,120 million (+81.9%y-o-y in 1Q20), driven by the expansion of EBITDA, postponement in regulatory tax payments and lower OpEx and CapEx disbursements;
  • Net income amounted to R$1,153 million in 1Q20. Profit distribution based on the 1Q20 profit reaches R$420 million.

2

1Q20 Results

Telefônica Brasil S.A.

Telefônica Brasil S.A. (B3: VIVT3 and VIVT4, NYSE: VIV) discloses today its results for the first quarter of 2020, presented in accordance with the International Financial Reporting Standards (IFRS) and with the pronouncements, interpretations and guidelines provided by the Accounting Pronouncements Committee. Totals are subject to differences due to rounding up or down.

The spreadsheet with the data is available on our Investor Relations website http://www.telefonica.com.br/ri.

GENERAL DATA

Consolidated in R$ million

1Q20

1Q19

∆% YoY

NET OPERATING REVENUES

10,825

10,975

(1.4)

Net Mobile Revenues

7,070

7,081

(0.1)

Net Handsets Revenues

581

598

(2.9)

Net Fixed Revenues

3,754

3,894

(3.6)

OPERATING COSTS

(6,318)

(6,614)

(4.5)

Recurring Operating Costs 1

(6,394)

(6,614)

(3.3)

EBITDA

4,507

4,360

3.4

EBITDA Margin

41.6%

39.7%

1.9 p.p.

Recurring EBITDA 1

4,431

4,360

1.6

Recurring EBITDA Margin 1

40.9%

39.7%

1.2 p.p.

NET INCOME

1,153

1,342

(14.1)

CAPEX | EX-IFRS 16

1,648

1,696

(2.8)

FREE CASH FLOW AFTER LEASE PAYMENTS

2,120

1,165

81.9

TOTAL SUBSCRIBERS (THOUSAND)

93,082

94,994

(2.0)

Mobile Subscribers

74,749

73,529

1.7

Fixed Subscribers

18,333

21,465

(14.6)

  • Excludes the followingnon-recurring effect: In 1Q20: positive effect related to the sale of towers and rooftops in the amount of R$75.7 million.

3

1Q20 Results

Telefônica Brasil S.A.

MOBILE BUSINESS

OPERATING PERFORMANCE

Thousand

1Q20

1Q19

∆% YoY

TOTAL SUBSCRIBERS

74,749

73,529

1.7

Postpaid

43,725

41,023

6.6

M2M

10,407

8,684

19.8

Prepaid

31,024

32,506

(4.6)

MARKET SHARE

33.0%

32.3%

0.8 p.p.

Postpaid

39.0%

40.5%

(1.4) p.p.

Prepaid

27.1%

25.7%

1.5 p.p.

ARPU (R$/month)

29.0

29.5

(1.7)

Postpaid (Human)

51.3

53.2

(3.6)

M2M

3.0

2.9

4.2

Prepaid

12.5

12.1

3.9

MONTHLY CHURN

3.1%

3.2%

(0.1) p.p.

Postpaid (ex-M2M)

1.5%

1.7%

(0.3) p.p.

Prepaid

5.1%

5.0%

0.1 p.p.

Total accesses came to 74,749 thousand at the end of 1Q20, representing an increase of 1.7% over the same period of the previous year. Total market share came to 33.0% in March 2020.

In the postpaid segment, Telefônica Brasil continued to grow consistently, reaching 43,725 thousand accesses in March 2020, up 6.6% y-o-y. Postpaid accesses accounted for 58.5% of the total mobile customer base (+2.7

  1. y-o-y),with a market share of 39.0% in March 2020. The Company remains the leader in 4G-technology handsets, with a market share of 32.1% in March 2020 (7.3 p.p. more than the second player), maintaining the quality of the customer base and the Company's strategy focused on data and digital services.

Postpaid mobile net additions reached 551 thousand in the first quarter of 2020, while prepaid net disconnections totaled 384 thousand accesses in the same period. Sales performance is related to the Company's focus on high value segments, reflected in the disconnection of non-profitable prepaid customers and the prepaid to postpaid migration.

In the Machine-to-Machine (M2M) market, the access base continued to grow substantially, reaching 10,407 thousand customers in March 2020, up 19.8% over the same period in the previous year. Telefônica Brasil is the market leader in this segment, with a market share of 40.4% in March 2020.

Mobile ARPU fell 1.7% over 1Q19, reflecting the lower revenue growth in the quarter.

4

1Q20 Results

Telefônica Brasil S.A.

FINANCIAL PERFORMANCE

Consolidated in R$ million

1Q20

1Q19

∆% YoY

NET OPERATING MOBILE REVENUES

7,070

7,081

(0.1)

Net Mobile Service Revenues

6,489

6,482

0.1

Net Handset Revenues

581

598

(2.9)

Net Mobile Revenues remained practically stable in 1Q20 when compared to the same period of the previous year (-0.1%y-o-y) reflecting the lower volume of handset sales in the last two weeks of March.

Mobile Service Revenues grew 0.1% in 1Q20 mainly due to the anticipation of the price increase applied to the customer base of Hybrid plans in 1Q19, which makes it a tougher comparison base. Postpaid Revenue1grew 0.3% in 1Q20 when compared to the same period of last year, due to the lower level of commercial activity and the price increase mentioned above. Prepaid Revenue reduced by 0.5% y-o-y, confirming the trend of improvement due to the greater rationality of offers.

Net Handsets Revenues showed a reduction of 2.9% when compared to the same quarter of last year, reflecting the reduction in handsets sales as a result of the closure of our physical stores to contain the pandemic caused by Covid-19.

  • Postpaid revenue includes M2M and wholesale.

5

1Q20 Results

Telefônica Brasil S.A.

FIXED LINE BUSINESS

OPERATING PERFORMANCE

Thousand

1Q20

1Q19

∆% YoY

TOTAL SUBSCRIBERS

18,333

21,465

(14.6)

Fixed Broadband

6,741

7,386

(8.7)

FTTH

2,652

2,034

30.4

Pay TV

1,283

1,522

(15.7)

IPTV

753

617

22.0

Voice

10,309

12,558

(17.9)

MARKET SHARE | Fixed Broadband

20.8%

23.6%

(2.8) p.p.

Market Share | FTTH

23.7%

31.2%

(7.6) p.p.

MARKET SHARE | Pay TV

8.3%

8.8%

(0.5) p.p.

Market Share | IPTV

78.6%

80.2%

(1.6) p.p.

MARKET SHARE | Voice

31.3%

33.9%

(2.6) p.p.

ARPU | Broadband (R$/month)

72.2

62.2

16.0

ARPU | Pay TV (R$/month)

108.4

101.8

6.6

ARPU | Voice (R$/month)1

34.4

35.5

(3.0)

We closed 1Q20 with 18,333 thousand fixed accesses, down 14.6% from 1Q19, impacted by the performance of legacy accesses (voice, xDSL and DTH) mainly due to the maturity of these services and the strategic decision to stop selling DTH pay TV services at the beginning of 3Q19.

Fixed broadband accesses came to 6,741 thousand customers in 1Q20, down 8.7% from 1Q19, mainly due to the disconnection of xDSL customers. On the other hand, the FTTH customer base, which has higher ARPU, grew 30.4% over 1Q19, to 2,652 thousand accesses in 1Q20, reflecting the Company's strategy focused on expansion of the fiber network, offering higher speeds and a better customer experience. Broadband ARPU increased 16.0% over 1Q19.

Pay TV accesses decreased 15.7% y-o-y in 1Q20, ending the quarter with 1,283 thousand subscribers, due to the Company's strategic decision to stop selling DTH technology. On the other hand, there was an improvement in the customer mix due to 22.0% growth in IPTV accesses over 1Q19. In this view, Pay TV ARPU increased 6.6% in the quarter, reflecting the Company's strategy of focusing on high-end customers.

Voice accesses totaled 10,309 thousand in 1Q20, down 17.9% from 1Q19, mainly reflecting the fixed-to-mobile substitution and the voice-to-data migration.

1- Changes in the presentation of voice revenues (outgoing voice + interconnection + other services) led to changes in ARPU. The updated base since 2016 is available on our Investor Relations website www.telefonica.com.br/ri.

6

1Q20 Results

Telefônica Brasil S.A.

FINANCIAL PERFORMANCE

Consolidated in R$ million

1Q20

1Q19

∆% YoY

NET OPERATING FIXED REVENUES

3,754

3,894

(3.6)

Broadband1

1,476

1,386

6.6

FTTH

626

437

43.3

Pay TV

423

471

(10.3)

IPTV

258

199

29.3

Corporate Data and ICT

702

616

13.8

Fixed Voice and Others

1,153

1,420

(18.8)

Growing Businesses²

54.6%

46.6%

8.0 p.p.

Legacy Businesses³

45.4%

53.4%

(8.0) p.p.

1- Broadband revenues include residential and SME customers.

2- Growing Businesses considers revenues from FTTH, FTTC, IPTV and Corporate Data and ICT. 3- Legacy Businesses considers revenues from XDSL, DTH, Voice and Others.

Net fixed revenues fell 3.6% in 1Q20 when compared to the same period of last year, impacted by the decrease in Voice Revenues and Others and Pay-TV partially offset by the positive evolution of broadband revenues and Corporate Data and ICT.

Broadband revenues rose 6.6% over 1Q20, fueled by the 43.3% increase in FTTH revenues, that accounted for 42.4% of this line in the period. We continue to focus our efforts on increasing the number of customers connected with fibre and migrating customers to higher speeds with higher ARPU, besides expanding the FTTH network to 22 new cities during the first quarter of 2020. By the end of the period we had Vivo FTTH coverage in 186 cities.

In 1Q20, Pay-TV revenues fell 10.3%, due to the Company's more selective strategy for this service, focusing on high-end products designed to improve the customer experience and optimize profitability (IPTV) whose revenues grew 29.3% over 1Q19.

Corporate data and ICT revenues increased 13.8% over 1Q19, due to strong revenues from new services in the B2B market, including data, cloud, IT services and equipment sales.

Voice Revenues and Others dropped 18.8% y-o-y in 1Q20, primarily due to the maturity of the service and the fixed-to-mobile substitution.

7

1Q20 Results

Telefônica Brasil S.A.

OPERATING COSTS

Consolidated in R$ million

1Q20

1Q19

∆% YoY

OPERATING COSTS

(6,318)

(6,614)

(4.5)

Personnel

(988)

(904)

9.4

Costs of Services Rendered

(2,471)

(2,450)

0.9

Interconnection

(314)

(305)

2.9

Taxes and Contributions

(426)

(409)

4.2

Third-party Services

(1,374)

(1,379)

(0.4)

Others

(357)

(356)

0.2

Cost of Goods Sold

(627)

(754)

(16.8)

Commercial Expenses

(2,004)

(2,216)

(9.6)

Provision for Bad Debt

(455)

(426)

6.7

Third-party Services

(1,502)

(1,724)

(12.8)

Others

(47)

(66)

(29.5)

General and Administrative Expenses

(305)

(306)

(0.3)

Other Net Operating Revenues (Expenses)

77

15

416.0

Recurring Operating Costs 1

(6,394)

(6,614)

(3.3)

Recurring operating costs1, excluding depreciation and amortization expenses, decreased 3.3% in 1Q20 when compared to 1Q19, reaching R$6,394 million in 1Q20, while inflation was +3.3% (IPCA - 12M). The reduction is mainly due to lower commercial expenses and cost of goods sold.

Personnel costs rose 9.4% over 1Q19, mainly due to the internalization of strategic IT and security activities with the objective of obtaining gains in quality and productivity in this area, with a consequent reduction in expenses with third-party services.

The Cost of Services Rendered moved up 0.9% over 1Q19, reflecting higher interconnection and tax expenses.

The Cost of Goods Sold registered a reduction of 16.8% in 1Q20 compared to the same period of last year, reflecting the lower commercial activity due to Covid-19.

Selling expenses registered a reduction of 9.6% when compared to 1Q19, mainly reflecting the increasing digitalization and automation of customer service activities.

The provision for doubtful accounts totaled R$455 million, corresponding to 2.9% of gross revenues in 1Q20, a slight growth when compared to 1Q19 (+0.3 p.p. y-o-y).

Third-party services fell 12.8% compared to 1Q19. The larger share of e-commerce in product, service and recharge sales, the accelerated adoption of e-billing and the increasing use of artificial intelligence (AURA) and the MEU VIVO app led to a reduction in commissioning, call center, back office and bill preparation and mailing costs, in addition to offering our customers a unique and customized experience.

General and administrative expenses fell 0.3% in 1Q20, thanks to ongoing cost control in these lines.

Other net operating revenues (expenses) totaled revenues of R$77 million, mainly due to the sale of towers and rooftops in 1Q20 in the amount of R$75.7 million.

  • Excludes the followingnon-recurring effect: In 1Q20: positive effect related to the sale of towers and rooftops in the amount of R$75.7 million.

8

1Q20 Results

Telefônica Brasil S.A.

EBITDA

Recurring EBITDA1(earnings before interest, taxes, depreciation and amortization) totaled R$4,431 million in 1Q20, up 1.6% over 1Q19, accompanied by an EBITDA margin of 40.9%, 1.2 p.p. higher than in 1Q19. The increase in EBITDA was due to the effective and lasting cost-efficiency measures adopted by the Company.

DEPRECIATION AND AMORTIZATION

Consolidated in R$ million

1Q20

1Q19

∆% YoY

DEPRECIATION AND AMORTIZATION

(2,745)

(2,588)

6.0

Depreciation

(2,080)

(1,888)

10.2

Amortization

(665)

(701)

(5.1)

Depreciation and amortization increased 6.0% in 1Q20 because of the Company's major asset base related to the expansion of its fiber network, in addition to the asset life review conducted in the fourth quarter of 2019.

FINANCIAL RESULT

Consolidated in R$ million

1Q20

1Q19

∆% YoY

NET FINANCIAL RESULT

(195)

(90)

117.1

Income from Financial Investments

45

55

(18.3)

Debt Interest

(140)

(195)

(28.4)

Gains (Losses) on Derivative Transactions

(23)

19

n.a.

Monetary and Exchange Variation and Other

(78)

31

n.a.

In 1Q20, Net Financial Result presented an expense of R$195 million, an increase when compared to the expense of R$ 90 million in 1Q19, mainly due to the lower financial revenue with update of credits and fiscal proceedings considering the usage during the period.

NET INCOME

In 1Q20, Net Income reached R$1,153 million, 14.1% down versus 1Q19, due to higher tax costs in the quarter, higher depreciation expenses, partially offset by continued cost control and EBITDA expansion.

  • Excludes the effect related to the sale of towers and rooftops in the amount of R$ 75.7 million.

9

1Q20 Results

Telefônica Brasil S.A.

CAPEX

Consolidated in R$ million

1Q20

1Q19

∆% YoY

Network

1,384

1,514

(8.6)

Technology / Information System

201

165

21.8

Products and Services, Channels, Administrative and Others

63

17

278.2

CAPITAL EXPENDITURES | EX-IFRS 16

1,648

1,696

(2.8)

Rights of Use | IFRS 16

130

49

165.2

TOTAL | IFRS 16

1,778

1,745

1.9

CAPITAL EXPENDITURES EX-IFRS 16 / NET REVENUES

15.2%

15.5%

(0.2) p.p.

In 1Q20, Capex reached R$ 1,648 million, which represents 15.2% of Net Operating Revenue for the period, in line with the three-year guidance disclosed by the Company. The amount invested was mostly for the footprint expansion and adoption of FTTH and IPTV and for the strengthening of capacity in 4G and 4.5G technologies, in addition to investments in network maintenance and conservation, supporting the growth in demand for data and ensuring the quality of services provided to our clients.

CASH FLOW

Consolidated in R$ million

1Q20

1Q19

∆% YoY

Recurring EBITDA

4,431

4,360

1.6

Capital Expenditures

(1,648)

(1,696)

(2.8)

Taxes and Net Financial Result

(196)

(230)

(14.9)

Working Capital Variation

70

(909)

n.a.

FREE CASH FLOW FROM BUSINESS ACTIVITIES

2,657

1,525

74.2

Lease Payments

(538)

(360)

49.3

FREE CASH FLOW AFTER LEASE PAYMENTS

2,120

1,165

81.9

Proceeds form the Sale of Towers

470

0

n.a.

Non-Recurring Items

0

(44)

n.a.

FREE CASH FLOW AFTER LEASE PAYMENTS AND NON-RECURRING EFFECTS

2,590

1,121

131.0

Free Cash Flow after Lease Payments reached R$2,120 million on 1Q20, 81.9% higher over 1Q19 (R$955 million), reflecting EBITDA growth, lower OpEx and CapEx payments and the postponement of payment of regulatory taxes (Fistel, Condecine and EBC), that normally occurs in the first quarter of the year but, due to the measures adopted by the Government to minimize the impacts of the Covid-19 pandemic, will occur in the second semester of 2020.

Free cash flow after Lease Payments and non-recurring effects1increased 131.0% over 1Q19 (R$1,468 million), mainly due to the sale of towers, in addition to the effects of the Free Cash Flow from Business Activity.

1 - Payment related to organizational restructuring in 1Q19 of R$44.2 million; and receipt of the sale of towers and rooftops in 1Q20 of R$446.1 million (net of income tax).

10

1Q20 Results

Telefônica Brasil S.A.

DEBT

LOANS, FINANCING AND DEBENTURES

ISSUANCES

CURRENCY

INTEREST RATE

DUE DATE

SHORT

LONG

TOTAL

TERM

TERM

PSI

R$

2.5% to 5.5%

2023

4

0

4

BNB

R$

7.0% to 10.0%

2022

15

21

36

Confirming

R$

110.0% to 122.5% of CDI

2020

641

15

655

Debentures 1st Issue - Minas Comunica

R$

IPCA + 0.5%

2021

29

29

57

Debentures 5th Issue - Single Series

R$

108.25% of CDI

2022

1,011

999

2,010

Debentures 6th Issue - Single Series

R$

100.00% of CDI + 0.24%

2020

1,015

0

1,015

Financial Leases

R$

IPCA

2033

47

331

378

Contingent Consideration

R$

SELIC

2025

0

487

487

ISSUANCES | EX-IFRS 16

2,761

1,882

4,643

IFRS 16 Effects | Leasing

R$

IPCA

2033

2,151

6,588

8,739

TOTAL | IFRS 16

4,912

8,470

13,383

NETDEBT| EX-IFRS 16

L. T. DEBT PROFILE

Consolidated in R$ million

03/31/2020

12/31/2019

03/31/2019

1Q20

Short-Term Debt

2,761

2,162

1,324

Year

Pro forma

IFRS 16

Long-Term Debt

1,882

2,849

4,568

(R$ million)

(R$ million)

Total Debt

4,643

5,011

5,892

2021

104

2,942

Cash and Cash Equivalents1

(5,493)

(3,407)

(4,088)

2022

1,045

1,533

Net Derivatives Position

(1)

(16)

(55)

2023

36

1,176

Contingent Consideration Guarantee Asset2

(487)

(484)

(470)

2024

32

783

Net Debt

(1,337)

1,104

1,279

After 2023

666

2,035

Net Debt / EBITDA AL3

(0.08)

0.07

0.07

Total

1,882

8,470

1- Includes the investment in BNB given as a guarantee for the loan from that bank.

2- Alignment of the classification criterion for the asset backing the contingent consideration to calculate pro-forma net debt. 3- LTM EBITDA "after lease payments", disregarding payment of principal and interest related to financial leasings.

The Company closed 1Q20 with gross debt of R$4,643 million, excluding the recognition of liabilities for leases, including towers and its land, circuits, offices, stores and commercial properties, as required by IFRS 16. The reduction in gross debt was related to the settlement of loans and financing in the period. The Company has no debt denominated in foreign currency.

Excluding the effect of IFRS 16, the Company recorded net cash of R$1,337 million at the end 1Q20. Net debt fell R$2,616 million y-o-y in 1Q20, mainly thanks to increased cash generation in the period. Considering the impact of IFRS 16, net debt totaled R$7,402 million at the end of the period.

11

1Q20 Results

Telefônica Brasil S.A.

OWNERSHIP STRUCTURE

03/31/2020

Common

Preferred

Total

Controlling Company Shareholders

540,033,264

704,207,855

1,244,241,119

94.47%

62.91%

73.58%

Minority Shareholders

29,320,789

415,131,868

444,452,657

5.13%

37.09%

26.28%

Treasury

2,290,164

983

2,291,147

0.40%

0.00%

0.14%

Total Number of Shares

571,644,217

1,119,340,706

1,690,984,923

Book Value per Share:

R$ 42.17

Subscribed/Paid-in Capital:

R$ 63,571.4

million

CAPITAL MARKET

The Company's common (VIVT3) and preferred (VIVT4) shares closed 1Q20 at R$ 50.60 and R$ 49.45, respectively, recording an appreciation of 3.2% and 14.7%, respectively, over the closing price at the end of 2019. In the same period, the daily trading volume of VIVT3 and VIVT4 averaged R$4,451 thousand and R$144,031 thousand respectively.

The ADRs (VIV) traded on the NYSE closed 1Q20 at US$9.50, down 33.7% over the closing price at the end of 2019. In the same period, the daily trading volume of ADRs averaged US$24,107 thousand.

The chart below shows the Company's stock performance:

12

1Q20 Results

Telefônica Brasil S.A.

DIVIDENDS AND INTEREST ON EQUITY

In the meetings held on February 14, 2020 and March 19, 2020, the Board of Directors approved the deliberation of interest on equity related to the fiscal year of 2020, totaling the gross amount of R$420 million, reaffirming, once again, the Company's commitment to maximizing the return to shareholders. This interest will be considered as part of the mandatory minimum dividends for the fiscal year 2020, ad referendum of the Shareholders' Meeting to be held in 2021. The payment will be made in 2021, to the holders of ON and PN shares registered in the Company's records on the dates shown in the table below, where the amounts per share to be distributed are also informed:

2020

Deliberation

Shareholding Gross Amount

Net Amount

Share Class

Gross Amount

Net Amount

Payment Date

Position

(BRL million)

(BRL million)

(BRL)

(BRL)

IOC

03/19/2020

03/31/2020

150

128

Common

0.083304

0.070809

Up to

(based on Feb-20)

Preferred

0.091635

0.077890

12/31/2021

IOC

14/02/2020

28/02/2020

270

230

Common

0.149948

0.127456

Up to

(based on Jan-20)

Preferred

0.164942

0.140201

12/31/2021

2019

Deliberation

Shareholding Gross Amount

Net Amount

Share Class

Gross Amount

Net Amount

Payment Date

Position

(BRL million)

(BRL million)

(BRL)

(BRL)

Dividends

to be deliberated

28/05/2020

2,196

2,196

Common

1.219332

1.219332

December/20

(based on Dec-19)

in 05/28/20201

Preferred

1.341265

1.341265

Dividends

12/19/2019

12/30/2019

1,000

1,000

Common

0.555362

0.555362

August/20

(based on Nov-19)

Preferred

0.610898

0.610898

IOC

12/19/2019

12/30/2019

350

298

Common

0.194377

0.165220

August/20

(based on Nov-19)

Preferred

0.213814

0.181742

IOC

06/17/2019

06/28/2019

968

823

Common

0.537590

0.456952

August/20

(based on 2019)

Preferred

0.591349

0.502647

IOC

04/17/2019

04/30/2019

570

485

Common

0.316556

0.269073

August/20

(based on Mar-19)

Preferred

0.348212

0.295980

IOC

02/15/2019

02/28/2019

700

595

Common

0.388753

0.330440

August/20

(based on 2019)

Preferred

0.427629

0.363484

1 - Dividends proposed by the Board of Directors to be deliberated in the General Shareholders Meeting, to be held in May 28, 2020.

13

1Q20 Results

Telefônica Brasil S.A.

INCOME STATEMENT

Consolidated in R$ million

1Q20

1Q19

∆% YoY

GROSS OPERATING REVENUE

15,804

16,683

(5.3)

Gross Operating Mobile Revenue

10,149

10,845

(6.4)

Gross Operating Fixed Revenue

5,654

5,837

(3.1)

NET OPERATING REVENUE

10,825

10,975

(1.4)

Net Operating Mobile Revenue

7,070

7,081

(0.1)

Net Operating Fixed Revenue

3,754

3,894

(3.6)

OPERATING COSTS

(6,318)

(6,614)

(4.5)

Personnel

(988)

(904)

9.4

Costs of Services Rendered

(2,471)

(2,450)

0.9

Interconnection

(314)

(305)

2.9

Taxes and Contributions

(426)

(409)

4.2

Third-party Services

(1,374)

(1,379)

(0.4)

Others

(357)

(356)

0.2

Cost of Goods Sold

(627)

(754)

(16.8)

Commercial Expenses

(2,004)

(2,216)

(9.6)

Provision for Bad Debt

(455)

(426)

6.7

Third-party Services

(1,502)

(1,724)

(12.8)

Others

(47)

(66)

(29.5)

General and Administrative Expenses

(305)

(306)

(0.3)

Other Net Operating Revenue (Expenses)

77

15

416.0

EBITDA

4,507

4,360

3.4

EBITDA Margin %

41.6%

39.7%

1.9 p.p.

DEPRECIATION AND AMORTIZATION

(2,745)

(2,588)

6.0

EBIT

1,762

1,772

(0.6)

FINANCIAL RESULT

(195)

(90)

117.1

GAIN (LOSS) ON INVESTMENTS

1

(0)

n.a.

TAXES

(415)

(340)

21.9

NET INCOME

1,153

1,342

(14.1)

14

1Q20 Results

Telefônica Brasil S.A.

BALANCE SHEET

Consolidated in R$ million

03/31/2020

12/31/2019

∆% YoY

ASSETS

109,815

108,290

1.4

Current Assets

21,144

18,645

13.4

Cash and Cash Equivalents

5,479

3,393

61.5

Accounts Receivable from Customers

10,359

10,263

0.9

Provision for Doubtful Accounts

(1,631)

(1,543)

5.7

Inventories

724

578

25.3

Recoverable Income Tax and Social Contribution

429

412

4.3

Recoverable Taxes, Fees and Contributions

3,573

4,176

(14.5)

Escrow Deposits and Frozen Assets

273

278

(1.8)

Derivative Financial Instruments

14

19

(30.1)

Prepaid Expenses

1,567

687

128.3

Other Assets

358

383

(6.5)

Non-Current Assets

88,671

89,645

(1.1)

Accounts Receivable from Customers

522

542

(3.7)

Provision for Doubtful Accounts

(114)

(101)

11.9

Financial Investments

68

64

6.3

Recoverable Taxes, Fees and Contributions

839

841

(0.2)

Deferred Income Tax and Social Contribution

163

171

(4.9)

Escrow Deposits and Frozen Assets

3,454

3,393

1.8

Derivative Financial Instruments

43

53

(18.0)

Prepaid Expenses

199

220

(9.6)

Other Assets

224

236

(5.0)

Investments

129

104

24.1

Property, Plant and Equipment, Net

42,047

42,847

(1.9)

Intangible Assets, Net

41,096

41,275

(0.4)

LIABILITIES AND SHAREHOLDERS' EQUITY

109,815

108,290

1.4

LIABILITIES

38,601

37,834

2.0

Current Liabilities

19,168

17,732

8.1

Payroll and Related Charges

594

752

(21.0)

Suppliers and Accounts Payable

6,331

6,872

(7.9)

Income Tax and Social Contribution

8

7

27.3

Taxes, Fees and Contributions

2,201

1,140

93.1

Loans, Financing, Debentures and Leasing

4,913

4,127

19.0

Interest on Capital and Dividends

3,946

3,587

10.0

Provisions and Contingencies

365

375

(2.7)

Derivative Financial Instruments

1

2

(26.3)

Deferred Revenues

449

506

(11.4)

Other Liabilities

361

365

(1.0)

Non-Current Liabilities

19,433

20,102

(3.3)

Payroll and Related Charges

50

36

37.8

Taxes, Fees and Contributions

298

285

4.6

Income Tax and Social Contribution

87

87

0.0

Deferred Income Tax and Social Contribution

3,530

3,146

12.2

Loans, Financing, Debentures and Leasing

8,470

9,698

(12.7)

Provisions and Contingencies

5,225

5,161

1.2

Derivative Financial Instruments

55

54

1.1

Deferred Revenues

273

212

29.0

Other Liabilities

1,445

1,423

1.6

SHAREHOLDERS' EQUITY

71,214

70,456

1.1

Capital Stock

63,571

63,571

0.0

Capital Reserve

1,166

1,166

0.0

Profit Reserve

3,497

3,492

0.1

Additional Proposed Dividends

2,196

2,196

0.0

Other Comprehensive Income

55

31

80.1

Accumulated Profits

729

0

n.a.

15

1Q20 Results

Telefônica Brasil S.A.

CONFERENCE CALL

English

Date: May 6, 2020 (Wednesday)

Time: 11:30 a.m. (Brasilia) and 10:30 a.m. (New York - EST)

Telephones:

  • Brazil: (+55 11)3181-8565 or (+55 11) 4210-1803
  • USA: (+1 412)717-9627
  • United Kingdom: (+44 20)3795-9972
  • Spain: (+34 91)038-9593

HD Web Phone: click here

Access code: Telefônica Brasil

Click hereto access the webcast.

A replay of the conference call will be available one hour after the event through May 13, 2020 at (+55 11) 3193-1012 (Code: 8446086#)

TELEFÔNICA BRASIL

Investor Relations

Christian Gebara

David Melcon

Luis Plaster

João Pedro Carneiro

Av. Eng. Luis Carlos Berrini, 1376 - 17º Andar - Cidade Monções - SP - 04571-000

Telephone: (+55 11) 3430-3687

E-mail:ir.br@telefonica.com

Information available on the website: http://www.telefonica.com.br/ri

This document may contain forward-looking statements. Such statements do not constitute historical facts and merely reflect the expectations of the Company's management. Such terms as "anticipate", "believe", "estimate", "expect", "foresee", "intend", "plan", "project", "target" and similar are intended to identify such statements, which evidently involve risks and uncertainties, both foreseen and unforeseen by the Company. Consequently, the Company's future operating results may differ from present expectations and readers should not place undue reliance on the information contained herein. These forward-looking statements express opinions formed solely on the date on which they were issued, and the Company is under no obligation to update them in line with new information or future developments.

16

Disclaimer

Telefônica Brasil SA published this content on 04 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2020 10:23:01 UTC


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Sales 2020 42 966 M 8 088 M 8 088 M
Net income 2020 4 828 M 909 M 909 M
Net Debt 2020 8 835 M 1 663 M 1 663 M
P/E ratio 2020 15,2x
Yield 2020 7,16%
Capitalization 75 461 M 14 142 M 14 204 M
EV / Sales 2020 1,96x
EV / Sales 2021 1,92x
Nbr of Employees 32 793
Free-Float 49,1%
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Telefônica Brasil S.A. Technical Analysis Chart | VIVT4 | BRVIVTACNPR7 | MarketScreener
Technical analysis trends TELEFÔNICA BRASIL S.A.
Short TermMid-TermLong Term
TrendsBullishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 2
Average target price 59,00 BRL
Last Close Price 43,40 BRL
Spread / Highest target 42,9%
Spread / Average Target 35,9%
Spread / Lowest Target 29,0%
EPS Revisions
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NameTitle
Christian Mauad Gebara Chief Executive Officer & Director
Eduardo Navarro de Carvalho Chairman
David Melcon Sanchez-Friera Chief Financial & Investor Relations Officer
Francisco Javier de Paz Mancho Director
Luiz Fernando Furlán Director
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