TIM S.A.

Good morning, ladies and gentlemen. Welcome to TeamSA 2023 first quarter results conference call. We'd like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After TeamSA remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given. We highlight that statements that may be made regarding the prospects, projections, and goals of Team SA constitute the beliefs and assumptions of the company's board of executive officers. Future considerations are not performance warranties. They involve risks, uncertainties, and assumptions as they refer to events that may or may not occur. Investors should understand that internal and external factors to Team SA may affect their performance and lead to different results than those planned. Should any participant need assistance during this call, please press star zero to reach the operator. Now I'll turn the conference over to the CEO, Mr. Alberto Griselli, CEO of Team SA, and to Ms. Andrea Viegas, Chief Financial Officer to present the main messages for the first quarter of 2023. Please, Mr. Alberto, you may proceed.

Good morning and thanks for attending our results conference call. I'm pleased to welcome here today Andrea Viegas, our chief financial officer, who was recently promoted to this position from within our ranks. Her extensive knowledge of the team and the industry will be a great asset to our C-suite. And in her debut as CFO, we are presenting a set of sound numbers to the market. This first quarter was again a reaffirmation of the new moment of the company with outstanding achievements due to the sharp execution of our strategic plan. We have completed 100% of the M&A integration process while overcoming many obstacles related to macroeconomic deterioration and dealing with the uncertainties of a noisy political environment. Our top line rose more than 20% year over year, with EBITDA growing 23%. This combination led to a margin expansion and operating free cash flow to double versus the first quarter of 2022. During the quarter, we closed a partnership with Way Brazil to cover 600 kilometers of highways in the country's Midwest, This type of agreement makes sense economically and transforms people's lives in a perfect integration with our ESG strategy. Our coverage will benefit nearly 300,000 people, more than 100 public schools and over 40 health centers. We are also well positioned to reach our goals in the commissioning process with more than 1.5K sites dismantled since November 22. Going over the details of our business performance, I want to highlight our revenue dynamics. In the first quarter, total service revenues grew more than 20% year on year, with a relevant contribution for mobile services that expanded beyond 21%. With a rational competitive environment and the end of the necessary post-M&A adjustment to our mobile customer base, ARPU is back to positive growth, reaching nearly 28 reais per month. Analyzing the mobile segments individually, post-paid revenues presented robust growth, up by more than 21% year-over-year, with an ARPU excluding machine-to-machine lines of 48 reais in the first quarter. Prepaid revenues expanded soundly at a pace of more than 27% versus the first quarter of 2022, pointing to an ARPU of close to 14 reais. And mentioned earlier, ARPUs in postpaid and prepaid are starting to recover after the dilution created by OIS for McClain's arrival and after the cleanup of silent lines. We also reclassified lines from postpaid to prepaid in March to correctly manage those customers. Since I'm talking about OiAssets impact, it is worth giving additional details of the integration completion. In March, we concluded 100% of all the network integration steps. We are using the acquired spectrum and clients are benefiting from the additional capacity. The non-overlap sites were integrated into our network, helping to expand coverage and improve customer experience. As for the client migration, we completed all the activities regarding those clients in April, executing the major cleanups and reclassification necessary to have a coherent and healthy customer base. Having finalized those actions, we are starting to see more and more of the benefits of these transactions. Synergies are becoming more apparent in our results, with the exception of the commissioning process, which is still in the early stages. Although we had physically decommissioned more than 1.5 thousand sites by March 23, the financial impact of this dismantling process will amount to a relevant size towards the end of the second half. Still immobile, our 5G strategy is paying off. we are being able to combine positioning and efficiency to build our solid leadership in this technology. TEAM has the highest availability 5G technology as a consequence of defining the most relevant markets and ensuring we have a large and meaningful coverage in them. This leadership was achieved with almost twice the number of 5G sites than our competitors. additionally 5g successful rollout is allowing us to reduce capex related to 4g capacity as traffic offloads from the older network to the new technology as we advance from our from volume to value strategy we keep improving our clients customers experience we still have a long journey ahead of us but we are achieving relevant milestones The number of complaints is reducing steadily and we are the least complaint operator in Sao Paulo Consumer Protection Agency with a 50% reduction year-on-year in the last survey and the least complaint in prepaid at Anatel. Additionally, we are by far the best performing operator in resolving clients' issues. We've been leading the Anatel Complaints Resolution Ranking for More than a year now, more recently, we achieved the fourth position in resolution ranking across all sectors in all Procons, the consumer protection agencies. In this resolution ranking of Reclame a Key Portal, we rank number two among all companies in Brazil and the only recommended among operators. In the fixed services, the growth driver remained in ultra-fibra with solid performance. Fixed broadband revenues presented a high single digit expansion. Broadband ARPU grew year over year for the 17th consecutive quarter, reaching almost 93 reais. Our broadband continues to be driven by the successful migration from FTTC to FTTH, Nonetheless, during the first quarter, we also saw net additions to pick up after the launch of the pilots to expand coverage in Parana and Santa Catarina states. We closed the quarter with a client base beyond 730,000 connections, and we are now present in more than 70 cities. This expansion is being achieved without losing the quality and focus on customer experience. For the sixth year, Team Ultrafibra was appointed the best fixed broadband in the country by the tech portal Canaltech. I will now pass the floor to Andrea to review the financial results.

Thank you, Alberto. I'm grateful for the opportunity to serve as the new CFO of TIM in Brazil. I'm very excited to work with you and the rest of the leadership team to drive this company to success. I also look forward to building a strong and lasting relationship with the financial community. Without further delays, let's talk about numbers. As Alberto explained as well, the first quarter signals a robust performance in all relevant lines of our results. The country's macroeconomic challenge and the uncertainties have not impacted us, at least yet. Our performance continues to be driven by the M&A integration and the organic growth. Despite the inflationary pressure, our OPEX line is starting to decelerate as we are reaching the end of the integration process of OI mobile assets. As a consequence of this, in revenue-robust space, our EBITDA is rising more than 20% year-over-year, reaching R$2.6 billion. Under this scenario, the EBITDA margin is returning to expansion. After a year of contraction due to the additional costs related to the M&A transaction and comparison-based issues, the margin rose to 46%, an expansion of 100 base points versus the first quarter of 2022. Regarding those two elements, this is the first quarter we have a fair comparison base for fiberless mild rental. On the other hand, the negative impact of the temporary service agreement with OEI was still present in first quarter 2023. The contract ended only in April. From now on, as present in our guidance, we believe TEAM will deliver margins above the 2022 levels. This excellent EBITDA performance is driving that income back to grow, despite all the transitory impacts we have presented and explained to you in the recent past. We closed the first quarter with profits summing almost 440 million reais, growing above 4% year-over-year. Those transitory elements are still present, During the quarter, more than R$ 207 million were added between depreciation and interest related to the leasing contracts we got from OEI. Additionally, during first quarter 23, we saw negative impacts from a provision updated for civil contingents. We did not announce IOC. We declared their first transfer only last month. But the on-deposit side, we had elements such as the renegotiation of tower contracts and the usable life of assets that helped our performance. As mentioned last quarter, net income performance is still volatile. So, a better way to understand our evolution is to use operation free cash flow metrics. EBITDA of the Lease Mineral Capital grew more than two times, reaching more than R$530 million. Under this circumstance, we maintained a solid financial position and leverage level. The net debt to EBITDA ratio stood at 1.4 times, with a total net debt including leases of R$ 15.1 billion. Again, this sustainable trend leaves us comfortable in a scenario of high interest rates. Now, I hand the call back to Alberto to complete the discussion related to the first quarter.