TIM S.A.

Good morning ladies and gentlemen and welcome to TNSA 2025 Third Quarter Results Video Conference call. We would 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 TNSA remarks are completed, there will be a Q&A session for participants. At that time, further instructions will be given.

Hello everyone and welcome to our earnings conference for the third quarter of 2025. I'm Vicente Ferreira, Investor Relations Officer of Team Brazil. This video highlights our recent financial and operational performance, as well as the initiatives that support our strategic plan. Following the highlights, we will have a live Q&A with our CEO Alberto Grizzelli and CFO Andrea Viegas. Please note that management may make forward-looking statements. and this presentation may contain them. Refer to the disclaimer on the screen or on our investor relations website. Now let's review our results.

Hello everyone, I'm Alberto Griselli, CEO of Team Brazil. Today we'll explore how our commitment to innovation, customer experience and operational excellence is driving sustainable growth and value creation. Let's dive into the highlights and key achievements that are shaping our journey this year. We've achieved a 5.2% year-over-year increase in service revenues for the first nine months of 2025. A sustainable growth pace that, combined with our robust cash conversion machine, is fueling solid value creation. We keep evolving our B2B to expand new revenue streams, The Team Smart Mining solution is gaining traction with a new partnership with Vale, the mining company. Additionally, a bid rose 6.7% year-over-year with a 50.3% margin and net income up 42.2% year-over-year. Our disciplined approach to CAPEX has kept investment efficiency and operational cash flow reached 4.5 billion riyals. Notably, we announced 1.8 billion in interest on capital and repurchased 369 million in shares, reinforcing our commitment to shareholder remuneration. Once more, we stood out in ESG practices, being reached the top 10 of the FTSE Russell Diversity and Inclusion Index, being the only Brazilian company and the only telco to appear on the list. As I pointed out, our net service revenues continues to grow at a solid pace, driven by the mobile segment. Postpaid expansion remains a key contributor, supporting overall growth. The more-for-more strategy is helping ARCO evolution, and mobile service revenues increased 5.6% annually over nine months and 5.2% in the third quarter. This quarter, we added 415,000 postpaid lines, with prepaid to postpaid migrations up by double digits. Postpaid monthly churn remains low at 0.8%, reflecting efficient customer base management. Our more for more approach optimizes the cost benefit equation by balancing offer attractiveness and revenue growth. Exclusive Black Friday offers, including iPhone 16e and PlayStation 5, are enhancing our value proposition and we expect them to help maintaining a solid trend in postpaid. In prepaid, we are seeing first signs of stabilization, supported by targeted offers and improved customer experience. Team Ultrafiba is also showing operational improvements with broadband ARPO at 94 reais in the third quarter. Stable ARPO and the client-based presuming growth at 3.7% year-over-year, marked 8 consecutive months of positive net-adds, should reduce the negative dilution from broadband to our numbers. Team is reinforcing its leadership in network with 5G now available in 1,000 cities across Brazil. We have the broadest 4G and 5G coverage in the country. São Paulo's network modernization case is setting the pace for next-generation connectivity. The project's risk is completion with 100% of sites upgraded this November. We are now leaders in download speed in all rankings that measure throughput. We expanded our leadership in consistent quality indicator, leaving the second player even farther down the scale. On top of that, we are seeing the first sign of operational improvement with sure link to network reasons reducing by one quarter. All in all, our modernization efforts are successfully supporting customer-based management and delivering superior network quality, and we are expanding this project to other cities. Completing our three Bs approach, let's talk about service. Providing excellent service is at the heart of our strategy. The Revamp My Team app is transforming the customer experience and selling journey. With over 17.7 million unique users and 33% penetration, the app is driving digital engagement and e-commerce growth. We are the first telco to integrate with Apple Pay and Google Pay, enabling secure, direct recharges for prepaid customers, simplifying the journey and encouraging recurring transactions. Digital service net promoting scores for postpaid and prepaid are on the rise, signaling that we are on the right path to elevating the experience with our service. Our more than 60 million customers are the team's most valuable asset. Having this thing in mind, we are always trying to improve our relationship with clients and better monetize this asset. TeamEyes is our enhanced loyalty program offering more benefits, experiences and convenience. Since its launch at the beginning of the year, we have seen over 2 million monthly active users enjoy the program's benefits. We have distributed 120,000 movie tickets and 20,000 Uber rides gift cards. The program NPS is over 80 points and reflects strong customer satisfaction. In parallel, we are accelerating base monetization with mobile ads. We reach over 1,000 campaigns and 270 advertisers by September. Through the combination of our own inventory with Google and Meta, we are boosting digital engagement and expanding revenue streams beyond connectivity. Mobile apps revenues close the quarter, growing in double digits versus last year. B2B is a key aspect of our strategic plan and another way to diversify our revenue base. Since we have little legacy, the evolution of connectivity through coverage as a service is the main driver for expanding our presence. B2B IT solutions now cover with 4G and NB-IoT 23.5 million hectares, over 7.6 thousand kilometers of highways, and we have sold almost 400,000 smart lighting spots, generating 435 million in contracted revenues since Q1 2024. The mining vertical is gaining traction and now we have another anchor customer. Vale is joining our portfolio of clients and will be able to enjoy the benefits of PIN smart mining solutions. We offer 5G, 4G, IoT, and artificial intelligence solutions to create safer, more efficient, and more sustainable environments for our customers. Team Smart Mining can be a key enabler of automation and reduce environmental impact in the mining industry. With that, I'll hand it over to Andrea Viegas, our CFO, who will walk you through the foundations.

Hello, everyone. I'm Andrea Viegas, CFO of Team. This quarter we delivered another chapter of consistent and disciplined execution. We've stayed focused on what matters most, sustainable growth, productivity gains, and creative value for our shareholders. Our efficiency program remains one of the bases of our strategy. Thanks to effort across all areas, we kept cost growth at just 1.8%, well below inflation. This discipline translated into a 7.2% increase in EBITDA, with margin reaching 51.7%. EBITDA after lease also advanced 8.3% year-over-year, with robust margin expansion, a direct result of our industrial costs optimization strategy. which we've been executing across three fronts. Our make model, contract renegotiations and network sharing agreements. Also, CADE approved the expansion of our own sharing agreement with Vivo two weeks ago. These initiatives are helping us to keep lease costs stable and margin expanding, even in a challenging environment. Our net income rose by a solid double digit in the quarter, reaching R$ 1.2 billion and bringing the year-to-date figure to almost R$ 3 billion. This performance enabled us to distribute R$ 1.8 billion in interest on capital and repurchase R$ 369 million in shares, reaffirming our commitment to create value for shareholders. Building on this momentum, our operational cash flow, measured as EBITDA after lease minus CAPEX, reached R$ 1.7 billion in the quarter, up 8.1% year-over-year, supported by a resilient financial structure. In 9 months, this metric is up by double digits, reaching R$ 4.5 billion. With a strong balance sheet, we are well positioned to sustain growth and deliver long-term value. Now back to Roberto.

Thank you, Andrea. As we close, I want to reinforce that PIM Brazil is on track to achieve its 2025 goals and set the stage for 2026 of continuous evolution. We are delivering on our full year guidance across Service Revenue, EBITDA, CAPEX and Shareholder Remuneration. With results on the right track, we are confident we can finish the year successfully and continue delivering value through the following drivers. 1. Our mobile postpaid and B2B segments to keep performing strongly. 2. Prepaid and broadband to continue recovering. 3. Efficiency are keeping costs and leases under control. And lastly, the buyback program is accelerating and we are maintaining strong momentum in short order returns. Thank you for your attention. Now let's move to the live Q&A session.

Thank you. We are now going to start the Q&A session. If you wish to ask a question, please use the raise hand button or type it down on the Q&A field. Our first question comes from Bernardo Goodman from XP. Please, Mr. Goodman, your microphone is open.

Hi, good morning everyone. Congrats on the solid results again. My question is about mobile service revenues. We saw a slight deceleration this quarter. How much of that comes from competition versus the natural normalization of growth after the strong cycle we had over the last years? And if I may, I have a second one. There has been a lot of market talk around potential moves and M&As in the fiber space.

how do you see this environment could this wave of consolidation change your strategy or timing around your fiber business thank you hi bernardo thank you for the question so let's start with the first one so when you look at the mobile service revenues i think that we anticipated in the previous quarter this sort of dynamics and it's pretty consistent with what you see in other years as well. So we have a curve whereby we are at a higher growth at the beginning of the year when we do our price adjustment, and then it tends to disaccelerate going forward. I think that in this quarter, looking at the revenue dynamics on our side, we have a pretty favorable trend. outcome in terms of maintaining our postpaid engine growth, double digit, whereby reducing the deceleration of prepaid. And this is a trend that we are going to expect in the coming quarters whereby we are likely to balance a bit the growth with postpaid maintaining the growth momentum And prepaid, we're working to decelerate less year over year. So I would say that it's less dependent on the competitive dynamics that remain rational and more related to our own strategy and seasonal patterns. This is for the revenues, okay? And when we look at the M&A, I think that we always say that the Brazilian market, being hyper-fragmented, is a market that is not attractive at this point in time because of the pressure that we have on ARPU and churn, and therefore we are looking to optimize our capital allocation in terms of how we allocate capital to broadband. So we got our specific strategy that is dependent on our specific situation whereby broadband for us is a limited revenue line. So the broadband is something that the market has been expecting for many years. Given the number of players, it's going to be a process that will take some time. And we have our own strategy, organic and inorganic, towards this space and it is unchanged. versus what we discussed in the previous calls. What has changed a bit is the results that we are having on broadband, because as you see now, we have a quite better operating momentum in terms of net additions, ARPU is still under pressure, we posted still a negative revenue growth this quarter on broadband, But given the fact that on the net additions we are on a positive territory, or we have been on a positive territory for eight months now, we are likely to see improvements on the top line as well as we move forward.

That's okay, Bernardo? Yes, very clear, Alberto. Thank you.

Thank you, Bernardo.

Our next question comes from Marcelo Santos from J.P. Morgan. Please, Mr. Santos, your microphone is open.

Hi, good morning. Thanks for the opportunity to ask questions. The first is, if you could just paint a bit, what's the competitive environment on mobile? And the second, do you see room to increase pure post-paid prices? Maybe this year, maybe the next. This year may be already over, so maybe in the next. Thank you.

Okay, yes, Marcello. So when you look at the competitive environment, I would say that the competitive environment on mobile remains positive in our views. Of course, there are promotions here and there, but overall, I think that the price adjustment this year went through quite nicely. And we are coding in our system, so to speak, the price adjustment they were planning to execute the back book prices for next year. The market dynamics remain favorable. Of course, you have the smaller players that are a bit more aggressive, but all in all, they're not disrupting the national market dynamics in terms of pricing. And when you look at pure postpaid, I think we have an opportunity to adjust it. Now we are on a promotional campaign because we just launched the break Friday promotions. So from now to the end of the year, it's unlikely that we are considering an adjustment. But it's something that we are certainly assessing for the beginning of next year.

Thank you very much.

Our next question comes from Leonardo Olmos from UBS. Please, Mr. Olmos, your microphone is open.

Hi, good morning, everyone. Can you give us more color on the lease efficiency plan, especially in terms of timing of the expected impacts coming from the partnership with IHS and rent sharing agreement and leasing contract renegotiations? Thank you.

Good morning, Leonardo. Related to the RLE's efficiency, as we mentioned, we are in a continual discussion with all the partners that we have. Specific about the agreement that we made with HHS was we wanted the option to make And we made this agreement with someone who has the knowledge and the people to construct sites for us. So this kind of site is for some specific customers, like agro-business or mining, and we will fund our financial and they will build for us the sites. What we expect in the lease is our goal for these years, as we mentioned before, is to have the leases growing related to the inflation, although we have an increase in the number of sites for our increasing coverage of 5G. But our goal is to increase just the inflation tax this year. I don't know if I answered your question.

Yeah, thank you. You mentioned about IHS and the overall goal. I was just wondering if, I don't know, maybe you could talk a little bit about the run sharing and maybe if it's not too delicate about the renegotiations.

Yes, sorry, you mentioned about run sharing. Run share card just allowed us to continue. We changed a little bit the cities that we have before with Vivo, so we will continue our plan to make the run shares special for the 3G and 4G. And we are continuing to discuss, we are continuing to renegotiate with all our partners on the Towers Company to achieve our plan that is to not reduce the lease, because we can't, but grow the lease only related to inflation. We have another agreement, but we are not now can disclose it. But as soon as we achieve our new agreements, we will disclose for you.

Okay. Okay. Sounds great. And you have been delivering quite excellent development on that front. Congratulations. Thank you very much. Have a good day.

Thank you.

Our next question comes from Victor Tolmita from Goldman Sachs. Please, Mr. Tolmita, your microphone is open.

Hello, good morning, all, and thanks for taking our questions. Two main questions from my side. One is a quick follow-up on the fiber business. Just if you have an update on the organic side on what has been supporting those improving net additions, if it's the same initiatives as you had in place before, such as focusing more on higher-end customers, higher-value customers to curb churn, or if there is anything new that's interesting on the strategy there. The other question is a bit of a follow-up on what people were asking about the competitive environment. Very specifically, there has been some noise in markets in October due to new banks, new selling, you know, increasing commercial outreach in some areas, promotions to some extent. Was that noticeable at all from the standpoint of your commercial teams or something more minor or just noise? Thank you.

Sorry, Victor, I had my mic switched off. So going to the fiber business. So what happened on the fiber business are primarily a number of things, primarily related to the quality of the acquisitions and the management of the customer lifecycle. So when you go into the quality of the acquisitions, it's primarily related to optimization on our credit scoring of the customer base and local targeting and the commercial channel footprint. So there are some channels that are naturally, that provides naturally more quality, whereby other channels provide less quality. And so we change over time the mix of our acquisition and we targeted better high value segments within the footprint. So this is for the entrance of customers. On the other side, there's been a lot of improvements on the chain management side. And this is partly related to the first question because if you get more quality at the beginning, you lose less customers because of bad debt and delinquency rates. And at the same time, we improve the quality of the service as a whole. So these are the two main areas when we had some relevant progress that moved us into net growth. When you go to the competitive environment, you're right that over the last quarter, since the launch, NuCell has been increasing progressively their allowances to their customers. So they started with three plants with a specific allowance, and then over time, this is I think the third time, where they're increasing their allowance, so more gigabytes per price. and to some extent I think they reduced the price in some plans on some BTL offer, to our knowledge. I would say that playing the gigabyte per revenue side is something that we can respond quickly because it's our network, you know, we are deployment 5G, we've got full of spare capacity. We didn't do so yet. because so far what we see, it doesn't request an answer on our side. So we keep monitoring the progress in terms of losing customers or potentially losing customers to them. So far, no need to respond.

Very clear. Thank you very much.

Is that fine? Okay.

To you. Our next question comes from Maria Clara Infantosi from Itaú BBA. Please Mrs. Maria Clara, your microphone is open.

Good morning, everyone. Thanks for taking my questions. I would like to ask, please, how do you see the growth opportunities coming from B2B and IoT? You have been vocal about the monetization coming from those markets. So just want to ask you about how do you see the size of the opportunity, their long-term goals, and how you see the evolution of those revenues in the short term? Thank you.

I'm not sure that Maria understood correctly your question. I will try to rephrase it and basically if I understood correctly is how we are going to maintain the growth in the BIOT segment. What is the question?

Yeah, actually, I asked you to please explore more how you see the long-term goals coming from B2B as you have been vocal about the monetization opportunities. And if you could please comment how short-term and long-term goals are perceived by you and where are the opportunities, would be great. Thank you.

Okay. So, Maria, just to be clear, it's just B2B or it's in general?

B2B and IoT, which is... Okay, B2B and IoT.

Okay, got you. Got. Okay. So, Maria, basically, the way we're... As you know, our legacy on B2B is pretty small. So, if you compare us to other players in the market, we don't have a legacy. And, therefore, we put together a strategy that is specific to our DNA. So, we selected some verticals, and the verticals we selected for the time being are agro-business, this is the first one that we launched, infrastructure was the second one, we got utilities that it's quite promising in Brazil, and mining, and we selected these verticals because we think they got a larger fit with our technological, let's say, DNA, let's put it this way. and the way we look at this is that we started organically now and we got quite traction on these four verticals on a concept that we call coverage as a service primarily and this has been driving as we speak the growth in these verticals when you look more at the medium term We have the ambition to increase our portfolio of solutions, to include security, to include cloud, that we can cross upsell to our services, and possibly to expand the number of verticals we are servicing. As an example, the one that we are working is manufacturing. And these competencies and capabilities, we can grow them internally and we are working on that already, we've been working on that already, but we are also looking at ICT inorganic moves that would provide us the ability at a faster pace to win a larger share of wallet of our customers. So this is not something that, so we moved, it's something new within our strategy. It's been launched a few years ago. We almost reached one billion of contractor revenues over these years. We are recognizing as leading partners in the verticals where we operate. If you look at the clients we have there, we've been successful commercially. And now we have, in the coming years, the objective is to consolidate our positioning and expand the portfolio of service in the relationship with our customers. And therefore, if you look more on the medium term, it's going to be a mix of organic and inorganic growth.

Very clear. Thank you.

Thank you, Mario.

Our next question comes from Fanny Canemuri from Santander. Please, Mr. Canemuri, your microphone is open.

Hi, so I have a couple of questions here. The first one is on your operating cash flow after lease. In the first nine months, it has a growth rate of 0.8% but trending slightly lower than the 14 to 16% for this year. So, what is driving that? And the second one is looking at the competitive situation now, how confident are you on your three-year plan in terms of revenue guidance and others? Thank you.

Let me take the first one and I will pass the second one to Andrea. I will repeat it just to be sure that we understand it correctly. So the first one in terms of competitive environment, we, as I mentioned, I think to Bernardo in the first question, we, the overall, at least on mobile, not on broadband, but on mobile, the competitive environment remains rational. and therefore we are in the position to basically to keep growing the top line according to the guidance that we shared with you last year. Of course as every year in February next year we're going to upgrade it and therefore when you look at the overall mobile environment I would say that it didn't change versus the picture that we presented when we shared our guidance in February. And, therefore, everything is confirmed. Of course, there are the nuances whereby we see postpaid, immobile driving the growth and a potential improving situation in the prepaid environment. When you look at the second question, if I understood correctly, it's the operating free cash flow dynamics, 11.8% versus our guidance of 14, 16%. Was that the question? Fanny?

That's the question I want to ask.

Yeah, that's the question. Basically, if you look at our dynamics, we are confirming our guidance, and we believe that when you look at how revenue growth, EBITDA expansion, EBITDA after lease expansion, and CAPEX will combine in the next quarter, this will put our operating free cash flow expansion within the range of our guidance. Now, since we are at the end of the year, basically you can easily do the calculation, see what this will imply in our numbers, but I leave this to you, but we are confirming our guidance for the full year.

Perfect. Thank you.

Next question comes from David Lopez from New Street Research. Please, Mr. Lopez, your microphone is open.

Hi, thank you for the opportunity. Just a couple of follow-ups. On the price increase you did in Tier 3, I was wondering if you could give a bit more color, like maybe the magnitude and what's the percentage of the base affected. And now that prepaid trends are easing, I was wondering if next year, do you have a possibility to do a price increase next year on prepaid or is it still too early? And the second question is on B2B. I was wondering if you could give any color on margins you're getting from B2B. Is it dilutive to your margins or not? Thank you.

Okay, David, I've got the last two questions that we'll address. I lost the first one. So on the second one, it's a prepaid price increase. Just an overall comment. Basically, when you look at the more formal strategies, this is the way we implement it. So generally, it's a price adjustment that always comes with some extra benefits for our customer base. And on prepaid, given the construct of the offer, it's a bit trickier to change the price. As today, we're basically marketing one real per day, so it's deeply linked in the offer construct as a sort of easy to deconstruct. I would say that we are exploring as a way to monetize our customer base, the prepaid to control migration, and that's a way that we found very effective to monetize our customer base. We'll keep doing it. And the other thing we're looking at is the way we balance the benefits between prepaid and control to make sure that the immigration makes sense as we increase prices. And so, therefore, not entering into a lot of details into how we're going to do this. We can explore this in the one-to-one section, but we've got some plans there as well. When you look at the marginality of B2B, so the marginality of B2B, generally speaking, when you look, we got 50 plus EBITDA margin, the B2B offering goes below typically this number, but when you look at what really matters, which is cash flow generation, they are accretive. So they generally tends to be dilutive on the EBITDA margin, but tends to be accretive on the bottom line. And that's it. The first question, I'm not sure I got it. There was a first question, or was these two questions, David?

It was just on the, if you could comment on the magnitude of the price increase you did and what percentage of the base. Did you do the price increase just to hybrid or some pure post-paid customers?

This year, there are two types of price adjustment. We classify front book and back book adjustment. On the back book adjustment, we impacted both control and purpose paid. We did it already. And it's not 100% of the customer base because we personalize this depending on a number of things in order to minimize attrition and share management. But we did the back book price adjustment at the beginning of the year for both control and pure postpaid. When you go to the front book price adjustment, we did those adjustments in mid-year for control, and we didn't do it for pure postpaid. And I think that was the question from a colleague of yours before. And basically what we're looking at is to make these adjustments. We are assessing. We didn't decide yet, but within that space to adjust them. Not now because we are in a promotional, in a seasonal period of the year with a Black Friday and a Christmas campaign. So it's something that is probably going to happen in the first quarter of next year.

Very clear. Thank you.

To you.

Once again, if you wish to ask a question, please use the raise hand button or type it down on the Q&A field. Wait while we pull 4 questions. Ladies and gentlemen, without any more questions, I'll return the floor back to Mr. Alberto Grizzelli for his final remarks. Please, Mr. Alberto, you may proceed.

So, thank you all for joining today's video call. We are arriving at the end of the year with strong momentum. We are executing our strategy with discipline and consistency. Despite being just two months away from 2026, we still have a lot to accomplish in 2025. This year-end will be very exciting and we expect to deliver on the promises we made to the market. I really want to thank you, the entire team, for that commitment and relentless drive. Thank you. And I look forward to catching up with you guys in the one-to-one session. Lastly, a final message to our sales team. We put together a special Black Friday offer for our customers. Let's go for it. Ciao.

Yes, we conclude the third quarter of 2025 conference call of Chin and Say. For further information and details of the company, please access our website, chin.com.br.ir. You can connect from now on, and thank you once again.