Telefonica Brasil S.A.

Good morning, ladies and gentlemen. Welcome to Vivo's fourth quarter 2023 earnings call. This conference is being recorded and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. To access, you can press on the globe icon located 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. To access our conference in Portuguese, click on the globe icon located in the lower right corner of your Zoom screen and select the Portuguese Room option. When accessing the new room, make sure to mute the original audio for a better experience. 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 Q&A session when further instructions will be provided. Before proceeding, we would like to clarify that any statements 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's 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. Present at this conference, we have Mr. Christian Jabara, CEO of the company, Mr. David Malcolm, CFO and Investor Relations Officer, and Mr. João Pedro Soares Carneiro, IR Director. Now, I'll turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Please, Mr. Carneiro, you may begin your conference.

Good morning, everyone, and welcome to Vivo's fourth quarter and full year 2023 earnings call. Christian Gimara, our CEO, will walk us through Vivo's operational and financial performance, followed by an update on our digital ecosystem and ESG evolution. Then, David Melcon, our CFO, will go through our cost and CapEx management, free cash flow generation, and outlook for shareholder remuneration. With that, I turn the call over to Christian.

Thank you, João. Good morning, everyone. I hope you all had a great start to 2024. Firstly, I would like to invite you all to join us for our Vivo Day that will be held during the morning of March 5th at Teatro Vivo in São Paulo. The event will be an excellent opportunity to hear from Vivo's top executives about our strategy for the next few years. We look forward to seeing you there. Now moving to the results, we close out the year with another record-breaking quarterly performance. Our customer base totalled 113 million access, one of the largest among all Brazilian companies. With Postpaid and Fibre continuing to expand allowing for sustained real top-line growth. Total revenue increased by 6.9% year-over-year in the fourth quarter and 8.4% in the full year. Looking at mobile service revenue, the performance was even better, up 8.7% in the last quarter and 10.8% in the year. We are able once again to combine growth with improved profitability. EBITDA grew 9.9% year-over-year in the quarter, thus closing the year up 10.6% versus 2022. As a result of EBITDA expansion and CapEx intensity reduction, cooperating cash flow accelerated to R$12.4 billion in 2023, while free cash flow generation expanded double-digit on an annual comparison to R$8.1 billion. Bottom line performance was also a highlight, as net income hit R$5 billion in 2023, up 23%. This strong result gives us further confidence to maintain a robust level of shareholder remuneration, as the view will detail later. On slide 4, we show our consistent revenue expansion. In the mobile segment, that represented over 70% of total revenue in the quarter, we saw an increase of 8.4% year-over-year as Vibo is in the best position to meet customers' ever-growing needs for connectivity and tech products. Fixed revenues fueled by fiber continue to show a positive evolution. As we outpace the market in connecting homes and businesses with FTTH and offer the broadest portfolio of digital services, we see a clear path to maintain this trend going forward. Moving to slide five, you can see the enhancement of two key mobile KPIs, churn and ARPU. Postpaid churn reached its lowest historical level, 0.97% per month, demonstrating the results of offering the best-in-class value proposition. At the same time, Postpaid continues to gain relevance within the overall mix, and we have increased the penetration of digital services across our customer base, resulting in an ARPU growth of 8% year-over-year, reaching its highest level in the last four years. The accelerated adoption of 5G will be another driver supporting further demand for mobile connectivity. During the fourth quarter of 2023, 5G ready device represented 89% of all smartphones sold by Vivo and more than 30% of pure prospect customers already had a 5G ready smartphone. We expect this ramp up to continue in 2024 with more and more customers having access to the benefits of this technology. Turning to slide 6, we comment on Vivo's fiber operation. We have the largest and fastest growing FTTH footprint, which is available to 26.2 million homes and businesses throughout Brazil. By the end of the year 2024, our target is to reach 29 million homes past. During 2023, we led the market in ad additions, connecting almost 700,000 fiber customers while improving FTTH ARPO evolution as well. Moreover, Vivo Total, our convergent offer that combines fiber and mobile post-paid services, totalled 1.3 million customers, more than double than previous year. This unique value proposition puts Vivo in a privileged position to address the opportunities around convergence, and the recent demand for this product is a positive indicator of its potential going forward. Moving to slide seven, we showed that digital B2B services summed up to 3.4 billion reais in 2023, up 25% year over year. During the last three years, these services increased this relevance over Veebus total revenues from 3.3% in 2020 to 6.5% in 2023. We see room for this to continue as Vivo has the best B2B sales team and portfolio of solutions to help Brazilian companies of different sizes and sectors in their digitalization process. recently the brazilian mobile industry launched three anti-fraud network services and became a pioneer of open gateway with a global initiative led by the telecom sector in collaboration of gsma aimed at transforming telcos network into programmable platforms through standardized apis the apis launched by bibo and our peers are focused on combating on combating digital fraud in financial institutions such as banks and fintechs through number verification, swim swap and device location. The GSMA Open Gateway ecosystem in Brazil will experience significant improvements throughout 2024 with new partners joining the initiative. Moving to slide eight, we bring an update of some of the key new sources of revenues in B2C. Financial services revenues totaled 403 million reais in 2023, which represented 0.8% of Vivo's total revenue, up 36% year-over-year. One of the highlights was Vivo Money that finished the year with a portfolio of R$358 million in personal loans, doubling versus the previous year. There was also an expansion of the smartphone insurance customer base that grew 20% year-over-year and now offers coverage for over 300,000 devices. The distribution of video and music OTTs through our invoices generated 563 million reais in revenues during this year, corresponding to 1.1% of Vivo's total revenues. These partnerships with the main content providers keep on contributing to differentiate our offer, increase our share of wallet and decrease churn. Throughout 2023, we expanded our consumer electronics portfolio beyond smartphones, comprising of six different categories. Accessories, smart homes, games, wellness, audios and notebooks. This complete portfolio boosted our Black Friday sales and was the main driver for the 52% revenue growth. If we sum up revenues from financial services, OTTs and consumer electronics, they totaled R$1.3 billion or 2.6% of Vivo's total revenues in 2023. We are confident about the evolution of these initiatives and we'll give you more details at our upcoming Vivo Day. Turning to slide nine, I'm proud to share more important recognitions of our commitment to ESG in the year that marked our 25th listing anniversary in B3 and New York Stock Exchange. Vivo was considered the most sustainable company in Brazil by B3, Corporate Sustainability Index. We were also ranked as one of the most sustainable companies in the world by the SAP Sectorial Ranking and by Corporate Knights. on the environmental front people reduced emissions from its operation scope one and two by ninety percent since 2015 reaching the first target of our net zero plan as a result during cop 28 people received the climate guardian award Moreover, we were successful in making our team a better reflection of Brazil's diversity, with 37% of executive leadership positions occupied by women and 42% of employees self-declared Black. Now Davi will comment on our financial performance.