TIM SA Q4 FY2024 earnings call

• Strong cash generation: 2024 saw powerful cash generation due to solid financial and operational results. Service revenue grew 6.4% at the top of the guidance range. • Mobile services: Postpaid grew close to 9% with an expanding customer base and low churn of 0.7%. 5G coverage expanded across Brazil, with 5G traffic more than doubling year-over-year. • Network development: Focus on expanding 5G coverage and maintaining network quality leadership. • Digital ecosystem: Progress in health (Cartao de Todos with over 160,000 families enrolled), education (Descomplica on track for 800,000 enrollments), and B2B IoT (contracted revenues over BRL 700 million with growth in agribusiness, logistics, and utilities). • ESG initiatives: Transformed Favela Marte into a 5G community and integrated social responsibility into core strategy.

In 2024, service revenue grew 6.4%, with mobile services expanding 6.6% year-over-year. Postpaid grew close to 9% year-over-year with a low churn of 0.7%. EBITDA increased by 8% compared to 2023. Mobile services were a key revenue driver, contributing significantly to the overall financial performance.

• Updated 3-year guidance focusing on sustainable growth, with revenue and EBITDA progress and margin expansion. • Stable CapEx despite exchange rate fluctuations while maintaining network leadership. • Cash generated to be returned to shareholders via dividends and interest on equity, with targets increased. • Focus on mobile core evolution, new revenue streams, and efficiency efforts.

• Macroeconomic uncertainties impacting guidance projections. • Competitive pressures from mature peers and new entrants. • Challenges in prepaid performance due to tough comparative bases and competitive dynamics. • Uncertainties in fiber operations and market competitiveness.

Q: What are the main macroeconomic assumptions embedded in the guidance and outlook for prepaid?

A: Guidance was elaborated with initial assumptions, but updated considering current inflation trends. Prepaid faces challenges from tough comparative bases and competitive dynamics, with efforts underway to revamp prepaid through new offers, communication, and channel strategies.

Q: How is CapEx sustainable considering exchange rates and what's the appetite for fiber operations?

A: CapEx efficiency achieved through lower TCO from vendor negotiations and assertive investment allocation. Fiber operations are a small business, dilutive to free cash flow, with openness to various options including selling depending on market conditions.

Q: Impact of C6 partnership on dividends and leasing details?

A: Monetization from C6 partnership is positive for cash flow, contributing to increased shareholder remuneration. Leasing contracts are negotiated with EPCA being a major inflation factor, with ongoing negotiations.

Q: Drivers for further margin expansion and receivables dynamics?

A: Margin expansion driven by productivity, zero-based approach, and digitalization. Receivables increase due to seasonality and dynamics in B2B IoT revenues.

Q: Revenue growth drivers and competitive scenario impact?

A: Revenue growth driven by postpaid growth, customer platform initiatives, and B2B IoT. Market is rational, with no immediate plans for aggressive pricing but balanced growth considering quantity and price.

Q: Revenue growth from price increases and C6 partnership timing?

A: Revenue growth from balanced price adjustments and intra plan migration. C6 partnership settlement completed, with analysis of future financial services opportunities but no specific timing on proceeds disclosed yet.

Q: Impact of new bank on TIM and mobile revenue growth outlook?

A: No immediate impact from new bank on TIM. Mobile revenue growth outlook considers prepaid market shrinkage and focus on customer platform and B2B IoT for sustainable growth.

Q: Impact of inflation on revenue growth and selling/marketing expenses?

A: Inflation impacts price adjustments, with similar intensity to last year. Selling/marketing expenses decreased due to digitalization efforts like PIX adoption and new app development.