Telefonica Brasil S.A.

Good morning ladies and gentlemen, welcome to Vivo's third quarter 2024 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 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. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela zoom e selecione a opção Portuguese Room. Ao acessar a nova sala, certifique-se de mutar o áudio original. We would like to inform that all attendees will only be listening the conference during the presentation, and then we will start the question and answer 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 depend 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. Cristian Gebara, CEO of the company, Mr. Davi Malcolm, CFO and Investor Relations Officer, and Mr. João Pedro Soares Carneiro, IR Director. Now, I will turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Mr. Carneiro, you may begin your conference.

Good morning, everyone, and welcome to Vivo's third quarter 2024 earnings call. Ana will walk us through Vivo's performance in connectivity and digital services by business segment, B2C and B2B. as well as present our ESG advances and recognitions. Then our CFO, David Melcon, will give more details on cost and CapEx management, free cash flow generation, followed by an update on shareholder remuneration for 2024. With that, let me turn the call over to Christian.

Thank you, João. Good morning, everyone, and thank you all for joining us today. It is with great pleasure that I present the results for the third quarter of 2024. This period has been marked by a robust performance, with all key lines posting real growth, a trend that's here to stay. Our leadership position in the market remains untouched, reflecting the trust our customers place in our high-quality services and the effectiveness of our commercial strategy. In post-paid, our customer base increased 7.6%, which shows our ability to upsell our mobile products while capturing new customers. In fiber, our homes connected with FTTH grew 12.5% this quarter. Total revenues were up 7.1%, mostly due to the mobile service revenues, which grew 8.8% this quarter. Our robust sales coupled with lean costs resulted in a strong EBITDA, which increased 7.4% year-over-year in the quarter, a growth higher than last quarter's. By maintaining our capex practically flat, we were able to reach R$10 billion in operating cash flow since the beginning of the year with a double-digit growth of 12%, expanding our margin to 24.2% of revenues while accumulating R$7.1 billion in free cash flow in the period. Likewise, our year-to-date net income reached a double-digit expansion of 10.4% year-over-year, a result that will be entirely distributed to our shareholders. On slide 4, we zoom in on our revenue evolution that continues to grow in real terms, backed by the differential provided by a unique brand and diversified portfolio of services and solutions. Mobile service revenues, comprising two-thirds of total revenue in the quarter, kept last quarter's fast-paced growth at 8.8%, as postpaid reached double-digit growth of 10.4%, while prepaid continued to be in the positive territory, even with customers continuously trading up to hybrid. Our fixed services positive performance was once again driven by the expansion in fiber and data, ICT and digital services revenues, as both lines together already represent 73% of this segment's results. B2B digital services, summed with B2C new businesses, already represent 10% of Vivo's total revenues, which shows the importance of different value proposition for both our B2C and B2B customers. This performance is driven by our ability to provide high-quality services and the growing demand for digital transformation. Moving to our mobile operations on slide 5. Our customer base continues to grow at the same time we improve its profile with postpaid access up by 7.6% year-over-year, increasing our exposure to customers that spend more and stay longer with us. We registered almost 1 million hybrid plus per phosphate net ads in the quarter, growing 77% year over year, being the highest organic expansion we ever had in a single quarter, reinforcing our leading position in the segment. Looking at the post-pay churn, we can see that it still remains around 1% mark, boosting the lifetime value this unique customer base will deliver us. The combination of our steady upselling activity and the strength of our totalization strategy led to our highest mobile ARP ever, at 30.3 highs. Moving on to the next slide, we want to give you more color on Vivo's recent developments and superior performance in 5G. We recently received the 5G Global Winner Award presented by OpenSignal being rewarded for having the fastest 5G download speed in the world among all operators located in large landmass countries, thus providing the very best 5G experience to our customers. Since third quarter 2023, 5G access in vivo more than doubled, reaching 13.8 million and already representing 70% of our mobile access, including machine-to-machine and dongles. This important expansion has been enabled by the acceleration of our coverage as our 5G network is already available in almost 400 cities that comprise 57% of Brazil's population. As a result, our market share continues to increase, nearing 40% of all 5G access in the country, reflecting customers' preferences of being connected through Vivo as we empower them through innovation. Now moving to our fiber operation. In September, we reached 28.3 million homes passed with Vibus FTTH, up 12.7% year-over-year, already delivering 98% of our goal of reaching 29 million premises by the end of the year. Along with our accelerated footprint expansion, we have been able to keep our homes connected growing consistently at 12.5%. This quarter, we reached 6.7 million users after adding 192,000 new access during third quarter 24, representing a network penetration of 24% countrywide. In addition to our rapid customer base growth, we maintain our FTTH ARPU at R$90, growing 1.2% year-over-year. Our convergent offer, Vivo Total, maintains its excellent performance. In September, we surpassed 2 million fiber customers, growing 92.2% over the year. VivoTotal provides us with a product with a lower churn than fiber and mobile separately. Specifically compared to standalone fiber, VivoTotal's churn is one percentage point lower. In addition to that, currently 83% of FTTH sales in our own stores are with the convergent plan. and we see that we still have space to grow, given that, for example, there are 42% of our convergent customers that are still not in Vivo's total base. Now moving to B2C revenues on slide eight. In the last 12 months, This segment represented around 77% of Vivo's total top line and grew 7.5% in the period by combining our core services with our new businesses, which amounted to 1.6 billion reais in the last 12 months and grew 30.2% year-over-year with important recent developments in verticals such as financial services and health and wellness. This broad and unique B2C ecosystem enables us to capture more value from our customers and assets. The 57 million individuals that currently are Vivo's B2C customers generate an average monthly revenue of R$61.5. This customer-centric approach emphasizes the multitude of products that we offer and solidifies our customer lifetime value with Vivo. On slide 9, we can see the B2B performance, a segment that represents 21% of our total revenue, growing 6.5% year-over-year. This was mainly driven by our B2B digital services, which generated R$ 3.8 billion in revenues and grew 17% over the last 12 months. Looking forward, we see a promising scenario for our B2B services since only 15% of our 1.7 million B2B customers acquire digital services and solutions through Vivo, meaning that we have significant space to grow and capture our captive addressable market. We're always looking to expand our presence, and in this sense, during this quarter, I would like to highlight results related to our agribusiness vertical Vivo Agro. We had a 112% year-over-year increase in the number of sites sold to agro customers, enabling digitalization in the sector. Moreover, through Vivo Ventures, we invested $1.5 million in AgroLand, a fintech that provides credit to small and medium rural producers across Brazil. Moving on to our ESG actions, it's important to highlight the advances with our supply chain partners. By the end of the quarter, we were able to engage 87% of our suppliers on climate-related activities, seeing an increase of 23 percentage points in carbon-intensive suppliers that implemented emission reduction targets since the beginning of our net zero program. We also launched the plural partner program, Programa Parceiro Plural, with the goal of developing the best ESG practice of our business partners. On the people side, our employee engagement continues to be a key aspect of our culture. We are ranked by Great Place to Work as one of the top three best companies to work in Brazil, a recognition that make us very proud. We were also included in the top 100 FTSE Diversity Inclusion Index, being considered one of the public traded companies around the globe with the most inclusive and diverse workplace. On that matter, During the quarter, we opened more than 50 vacancies in the Women of Fiber program and more than 250 vacancies in the Youth Apprentice program, with 50% reserved for Black talent. Thank you, and now the view will comment on our financial performance.