Telefonica Brasil S.A.

Good morning, ladies and gentlemen. Welcome to Vivo's third quarter 2022 earnings call. This conference is being recorded and the replay will be available at the company's website at ritelefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select Mute Original Audio for a better experience. Para acessar nossa conferência em português, clique no ícone do globo localizado no canto inferior direito da sua tela Zoom e selecione a opção Portuguese Room. Ao acessar a nova sala, certifique-se de silenciar o áudio original. We would like to inform you that all attendees will only be listening to the conference during the presentation, and then we will start the question and answer section when further instructions will be provided. Before proceeding, we would like to clarify that any statement that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depends on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Presented at this conference, we have Mr. Christian Gebara, CEO of the company, Mr. Davi Malcolm, CFO and Investor Relations Officer, and Mr. João Pedro Carneiro, IR Director. Now, I'll turn the conference over to Mr. João Pedro Carneiro, Investor Relations Director of Vivo. Please, Mr. Carneiro, you may begin your conference.

Good morning, everyone, and welcome to Telefónica Brasil's conference call to present the third quarter 2022 results. The call will start with our CEO, Christian Gebara, commenting Vivo's operating and financial highlights, followed by an update on the progress of our digital ecosystems and ESG initiatives. Then our CFO, David Melcon, will go through our cost and CapEx evolution, net income, shareholder remuneration, and free cash flow. I now hand it over to Christian.

Thank you, João. Good morning and thank you for joining our running calls. To start on slide three, with the highlights of the third quarter of 2022, in the period we were able to reach double digital growth rates in access, revenues, and EBITDA, leading to an overall improvement of our business profitability. Our total access grew 14.6% year-over-year to 112 million subs, of which 57.5 million users in postpaid and 5.3 million in FTTH. Contributing for total revenues to increase 10.6% in the quarter, as mobile and fixed expanded to the tune of 14.7% and 2.1%, respectively. Our strong operating momentum coupled with efficiency initiatives that helped our cost of operations to grow below inflation, led to an EBITDA expansion of 12.3% year-over-year with a margin of 40.6%. The result drove improved bottom-line performances as net income reached R$1.4 billion in the quarter, up 9.3% year-over-year. In line with the enhanced profitability and robustness of our business model, which can be attested by the R$ 6.5 billion in the free cash flow generated over the first nine months of 2022, we already deliberated the distribution of R$ 3.4 billion as dividends and interest on capital, complemented by almost 500 million investors in the buyback of our shares. We remain fully committed to maintaining a healthy level of shareholder remuneration while also striving to create value and improve returns by investing to further differentiate people's assets and value proposition. Moving ahead to slide four, our revenues grew well above inflation in the quarter, expanding double digits for the second quarter in a row. This performance has been driven by the service relabel score that already represent 92% of our top line and grew 13.8% year-over-year. As we reduce our exposure to non-core legacy operations and increase the weight of revenues coming from services that have been proven to be essential, with a greater lifetime value, the resilience of our business model can only improve. On slide 5, you can see the detailed results of our main services. On the mobile side, service revenue grew 13.8% year-over-year, with strong displays from both postpaid and prepaid that reached growth rates of 12% and 21.5% respectively. We are seeing early signs of benefits coming from mobile consolidation in the form of improved user quality and experience that turns into higher consumptions and market rationality. Moving to the fixed side of our core business, revenue expanded 11.2% year-over-year, again driven by the FTTH and corporate data and ICT, both of which have been spearheading the transformation of our total fixed business. To further enhance our corporate data and ICT presence, this month we concluded the acquisition of Vita IT, now called Vivo Vita, for up to R$ 120 million. Vivo Vita already generates over R$ 100 million of annual revenues and it allows us to increase our capabilities in network management and equipment solutions. Moving to slide six, once again, we are pleased to present very solid operating results on mobile and fiber that are direct consequence of our competitive advantage of being the only player capable of providing connectivity service over the best technologies available in both segments. Our mobile base expanded 18% during the year, reaching 97.3 million subs. Quarter over quarter, we saw a reduction of 1.9 million lines because of 3 million access coming from oil that were disconnected in September as they were considered inactive according to our criteria. Excluding the effect of this cleanup, we are able to further improve the already very strong level of human post-pain deaths posted in the second quarter of 2022. with 987,000 new subs being incorporated over the past three months. Portability remains on the rise while we keep on migrating prepaid customers to our hybrid offers and maintaining healthy churn rates. On fiber, during the quarter, we expanded our FTTH network to 1.2 million new premises, reaching 22.3 million home paths. Our accelerated footprint expansion coupled with the fully converged Vivo total offer that already accounts for 40% of our gross ads led our FTTH customer base to expand 21.1% year-over-year to 5.3 million access. Moreover, we recently launched our 1GB speed offer that will keep in further differentiating Vivo from our broadband providers and increase the average speed of our customer base. On slide 7, we update you on the evolution of our digital services initiatives, starting with B2B. A year ago, in the third quarter of 2021, we disclosed for the first time the amount of revenues coming from digital B2B products, such as cloud, cybersecurity, IoT, and digital solutions, which back then totaled R$1.9 billion. A year later, the same pool of revenues grew 33% to R$2.5 billion, Thank you very much. In September, we reached R$ 160 million of credit considered since inception, almost doubling in size quarter over quarter. We have very ambitious plans for financial services, and we continue to expand our portfolio and volume. Moreover, Vivo Ventures, our corporate venture capital fund, made its first movement during the quarter, committing to invest $3 million in Klavi, a fintech focused on providing open finance solutions. Going to slide 8, we are pleased to announce Vivo was ranked by S&P Global as one of the top 10 most sustainable telcos in the world according to the Global Sustainability Corporate Assessment evaluation after increasing our score versus last year. Now moving to recent developments on the environmental front, we now expect to have 85 green power plants in operation during next year, of which 42 are already functional, extending our commitment to use renewable energy in our operations. Moving to the social front, as part of our effort to reflect Brazil's diversity in our workforce, we launched a Vivo training program in which 50% of roles will be filled by Black people. In governance, yesterday we announced the inclusion of Vivo's share as part of our executive variable compensation, further strengthening management's alignment with our shareholders. ESG is a core pillar of our strategy, as such as we continue to work very hard to improve and increase the number of initiatives taken to build a more sustainable business model. Now, Davi will take us through the financial highlights of the quarter.