Vivo has a 9.3% rise in profit and registers R$1.4 billion in the 3rd quarter


Press release

By Telefónica Brasil

Sao Paulo, October 25, 2022 – Vivo today (25) reports its third-quarter results, highlighting net profit of R$1.4 billion, an increase of 9.3% compared to the same period of the previous year. Total net sales were R$12.2 billion, an increase of 10.6%; for the year, the value reached R$35.4 billion, up 8.8%. Ebitda (earnings before interest, taxes, depreciation and amortization) reached R$5 billion, up 12.3% in the annual comparison, with a margin of 40.6%.

Vivo’s financial performance in the quarter is the result of a strategy focused on the core activities – consisting of fiber, mobile and digital services, handsets and accessories – representing 92% of the company’s total revenue, with growth of 13.8%. The company also highlights its customer base, with 112 million hits, an increase of 14.6%. The investments made amounted to an expressive R$2.6 billion, an increase of 20.2%, aimed at strengthening the mobile network, with an emphasis on the activation of 5G in capital cities, in addition to investments in the expansion of the fiber network.

“This quarter, we continued to grow and progress across all businesses, with consistent results in sales, earnings, Ebitda and excellent cash generation. The effectiveness of our management has increased investment in fiber, which currently covers more than 22 million households, and has accelerated the expansion of the mobile network, with the activation of 5G in all capitals,” explains Vivo’s president, Christian Gebara. “With key connectivity technologies, we have paved the way for more efficient operation of our service platform, expanding and developing new digital solutions for people and businesses,” adds Gebara.

Total mobile revenue reached R$8.5 billion, up 14.7%. The postpaid segment continues to be in the spotlight, with revenues of R$6.2 billion, up 12% year-on-year. The company ended the quarter with a postpaid base of 57 million accesses, an increase of 19.5% compared to the same period last year. The prepaid base reached nearly 40 million accesses and revenues of R$1.5 billion, up 21.5%. Sales of 5G-enabled smartphones and the expanded range of accessories contributed to a 25.9% increase in mobile phone sales.

In the fixed network, revenues continue to grow, recording R$3.7 billion, up 2.1%, driven by the expansion of the FTTH network – technology that brings fiber to the customer’s home – from which revenues increased by more than 20% in the annual comparison. In the past 12 months, Vivo has expanded this network to 71 new cities, connecting nearly 1 million homes and businesses and accumulating 5.3 million connected homes. Vivo’s FTTH infrastructure is considered the largest in Latin America, serving 22.3 million homes and businesses in 380 Brazilian cities.

Financial management

Vivo’s strong operational performance and efficient financial management continue to support the company’s sustainable growth, which ended the nine months of 2022 with cash generation of R$6.5 billion.

When we talk about shareholder compensation, Vivo also stands out. Over the past 12 months, the gross value of declared earnings was R$3.40 per share, representing a dividend payment of 113% and a dividend yield of 9.2% for the year, taking into account share buybacks. The company bought back BRL 144 million in shares in the third quarter through the Share Buyback Program, which is in effect until February 22, 2023. In the year, this compensation already amounted to BRL 3.8 billion.

“Vivo’s strong business performance, combined with efficiency initiatives, led to higher profitability, reflecting the strength of our business model. Our expressive cash generation enables us to continuously invest in digital services, fiber and 5G expansion, differentiating the company’s assets and value proposition,” said David Melcon, Chief Financial Officer (CFO) of Vivo.

digital business

Vivo has strengthened itself as a platform for the distribution of digital products and services in various segments such as financial, education, health, entertainment, smart home and business markets.

The highlight in the quarter was Vivo Money, a personal credit service for postpaid and checking customers, which ended September with approximately R$160 million in credit since launch. Monthly credit extended by 8.3 times and the monthly number of new business grew by 5.5 times compared to the same quarter of the previous year.

In the business segment, digital services – such as cloud, cybersecurity, IoT, big data, messaging, sales and rental of IT equipment – generated about BRL 2.5 billion in revenue in the last 12 months, an increase of 33% compared to of the same period last year.

Recently, Vivo announced the acquisition of Vita IT, a solutions integrator for businesses of all sizes, providing professional and managed networks services, with solutions that improve network performance and reliability, as well as the resale of hardware and software . The operation strengthens the company’s digital ecosystem and advances the combination of Vivo’s resources and capabilities with Vita IT’s experience and strategic positioning with customers and suppliers, creating initiatives at scale and in a sustainable manner, in addition to enabling revenue growth and growth. improve the operating margin. The initiative consolidates Vivo as a national reference in managed services and professional services for the B2B segment.

Vivo Ventures, a Corporate Venture Capital fund, made its first investment in Klavi for US$3 million. The company invested in is a fintech that offers Open finance solutions through one SaaS ( software as a service ) platform, using data intelligence that enables customers to develop financial products and services faster and more accurately.

ESG performance

Vivo presents an ESG (Environmental, Social and Governance) strategy aimed at ensuring the commitment to grow in a sustainable way with ethics and integrity.

In the environmental field, Vivo reaffirmed its efforts in favor of the environment by joining the “Brazilian Business Commitment to Biodiversity”, an initiative proposed by the Brazilian Business Council for Sustainable Development (CEBDS) with the aim of preserving and sustainable use of natural sources. In energy, the company achieved ISO 50001 (Energy Management System) recertification and in its Distributed Generation Program ended the quarter with 42 plants in operation, out of 85 planned by 2023.

In the social field, the company highlights the Day of the Volunteer, which took place in September in partnership with Fundação Telefônica Vivo, mobilizing 8,000 employees in actions carried out in 61 entities, benefiting approximately 37,600 people in 49 Brazilian cities. Education was the main goal, in line with the Foundation’s commitment to supporting the digitization of public education. In Diversity, the company has opened registrations for the Trainee Program 2023, which will have at least 30 job openings for São Paulo, 50% of which will be for black people.

In the area of ​​Governance, the new long-term incentive plan was announced, which also includes the company’s phantom shares (VIVT3) in executive compensation. In this way, the incentive is linked to the creation of value for shareholders and the sustainable achievement of strategic objectives based on indicators such as Total shareholder return (TSR), Free money flow (FCF) and Neutralization and reduction of CO2 emissions.

Vivo consolidated its ESG performance, reaching 86 points in the Global assessment of corporate sustainability (CSA), performed by S&P and reference for the composition of the Dow Jones Sustainability Index, 2022 edition , ranked among the ten most sustainable in the sector. The company also adhered to the UN Brazil Global Compact’s Ambition 2030, an initiative to increase corporate engagement in implementing the Sustainable Development Goals (SDGs).

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