Acceleration of Data Revenues and efficiency in Costs and Investments drives substantial EBITDA growth and robust cash generation for VIVO in 2017

SAO PAULO, Feb. 21, 2018 /PRNewswire/ --

Mobile Market share expansion, reaching 31.7% in December 2017 (+1.5 p.p. y-o-y).

Mobile ARPU recorded y-o-y growth of 2.2% in 4Q17, fueled by a higher share of postpaid clients in the mix and increased data usage. Data ARPU grew 23.1% y-o-y in 4Q17, corresponding to 75.0% of total ARPU.

Broadband accesses totaled 7.5 million customers in 4Q17 (+1.9% y-o-y), with FTTx¹ connections already accounting for 61.1% of the base after a y-o-y growth of 9.5%. Broadband ARPU increased 20.5% in 4Q17 over 4Q16, influenced by the evolution of the ultra-broadband customer base.

Net Operating Service Revenues grew 1.3% in 4Q17 over 4Q16 (3.5% up y-o-y excluding regulatory effects). In 2017, Net Operating Service Revenues climbed 2.0% y-o-y.

Mobile Service Revenues rose 3.8% y-o-y in 4Q17. Excluding the effect from MTR reductions in 2017, this line would have increased 6.7% over 4Q16. Data and Digital Service Revenues increased 25.0% y-o-y in 4Q17, accounting for 75.0% of Mobile Service Revenues.

Recurring Operating Costs fell 1.5% in 4Q17 versus 4Q16 (LTM IPCA +2.9%), demonstrating the continued efforts and focus on the pursuit of efficiencies and end-to-end digitalization.

Recurring EBITDA totaled R$3.9 billion in 4Q17, 7.3% up on 4Q16, yielding an EBITDA margin of 35.8% (+2.0 p.p. y-o-y), fueled by the acceleration of Mobile Service Revenues and efficiency measures adopted by the Company. In 2017, recurring EBITDA totaled R$14.7 billion (+7.3% y-o-y), accompanied by a recurring EBITDA margin of 33.9%.

CAPEX amounted to R$2.7 billion in 4Q17. In 2017, the Company invested R$8.0 billion, mainly focused on the expansion of network capacity and 4G coverage (totaling 2,600 municipalities in 2017; 84.5% of the population), introduction of FTTH technology in new cities (16 new cities covered in the year), increase of FTTx penetration and IT, supporting the Company's digitalization process.

EBITDA – Capex (ex. licenses) grew 46.3% in 4Q17 over 4Q16, reaching R$1.3 billion. In 2017, it reached R$6.7 billion (+17.8% y-o-y).

Net income totaled R$1.5 billion in 4Q17 (+24.9 y-o-y). In 2017, net income reached R$4.6 billion (+12.8% y-o-y) while Interest on Equity and Dividends came to R$4.6 billion (+12.8% y-o-y) in the period, resulting in a Payout of 100% over Adjusted Net Income.

To download the complete version of the Company's earnings release, please visit our website: http://www.telefonica.com.br/ir

¹ FTTx includes FTTH (Fiber to the home), FTTC (Fiber to the cabinet) and cable customers

SOURCE Telefonica Brasil S.A.

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http://www.telefonica.com.br/ir