Zeinal Bava
Okay, thank you very much. Good afternoon ladies and gentlemen. Thank you for being on this call (inaudible) EBITDA stood at about €2.269 million, our margin reached 34.4% and it was underpinned by the solid margin of the Portuguese telecom businesses, which stood at 45.5%. In 2012 fully and proportionally consolidated international assets represented 58.4%, I repeat 58.4% of our international assets contribution and 50.4% of EBITDA respectively. So as part of the diversification process of our company, we continue to see the contribution of international assets increased both in terms of revenues and also in terms of EBITDA. Net income amounted to €230 million and this is equivalent to earnings per share of about €0.27. In 2012, our CapEx amounted to €1.317 million that’s roughly 20% of revenues. Needless to say that we are investing in Brazil but with regard to Portugal, our CapEx in Portugal was down 14.1% as we begin to reach the end of the modernization process of our infrastructure and networks. My CFO, Luís Pacheco de Melo who is here with me now will take you through the financials later on. Let me now just focus on the business performance of our businesses not just in Portugal but internationally as well. I will keep it to much shorter than the very long presentation that my IR put on its site this morning, but I will use that as a reference. We are a geographically diversified company, we focused mainly in Portugal and Brazil. We have investments also in Africa. We have gone above the €100 million customer target that we had, and I repeat, we are not just diversified in terms of revenues and EBITDA, but also when it comes to geography, our key focus is Portuguese-speaking countries namely Portugal and Brazil. We continue to see solid customer growth, in Portugal very much driven by the investments we have made in TV, namely in triple-play, and of course, very strong growth in our international businesses as well. Worth highlighting that in Portugal, despite a severe macroeconomic environment, our number of customers increased 3.4% in 2012. We pretty much did not lose many fixed lines, broadband saw substantial growth 10.8%, televisions are substantial growth 17.4%, if you think in terms of triple-play, where triple-play customers were up 22.6%, if you think about our FTTH customers our FTTH customers were up almost 50% in 2012. Mobile also posted growth in Brazil, again very happy to report particularly when it comes to residential, we saw growth of 3% in terms of customers when it comes to mobile 7%, and when it comes to business and corporate 14.3%. Other international businesses, particularly, Africa and East Timor, where we have a very solid business, our number of customers were up about 16%. In terms of financial highlights, what we have seen is the operating revenues were down about 1.2% on a like-for-like basis they were down 0.9%. EBITDA was down 3.8% and if you look at CapEx, CapEx was also down what highlighting is that when it comes to financial performance clearly, we’re seeing growth in Brazil and we are seeing stabilizing trends on that a bit later on in my presentation. Let me start now with Portugal in more detail. We continue to believe that investment in innovation will differentiate our product offering in Portugal, and will allow us to continue to grow our market share of subs and revenues without necessarily having to compete solely based on price. We wish to be always competitive on price, but we would like our customers to see in Portugal Telecom the best value offer in our market independent of the segment that we are talking about. In terms of business priorities, if we think about B2C, residential, and if you like, personal mobility, clearly the strategic priorities for us are convergence and the cloud. Let me start with residential. We, in the fourth quarter of this year continue to see growth. Having said that, and I saw some comments from analysts that the number of net adds came in slightly lower than the previous quarters, but that has a lot to do with the fact that we, ourselves, took the deliberate decision to become a lot less, if you like, aggressive in terms of the promotions that we did, especially taking into account, if you like, the current economic environment. We believe that this is a time when we ought to be slightly more conservative, configuring also the costs that we have in connecting customers every time we have one, and we like to see customers pay our bills at the end of the month. Notwithstanding the fact that we have seen substantial growth in pay-TV in Portugal, we continue to believe that this is one particular area where Portugal will continue to see increased penetration. Worth mentioning that this is a market where you have three free-to-air channels, and if you want any zapping experience, you would want to subscribe to a pay-TV service. Meo is our leading brand. When it comes to triple-play, it is the number one retail brand in top of mind when you think about triple-play, but let me tell you, when it comes to retail segment in general, it’s the second-most notorious brand in the Portuguese market. Our market share is about 39.1% now. Having said that as you know, we are not in the business of selling TV only. We like to sell triple play. And therefore for us a lot more critical is to look at the market share of Portugal Telecom as a triple play operator as opposed to a single sort of a TV operator. Let me just add in a couple of comments on FTTH. We invested in FTTH started in 2008. As you know most of modernization investments in Portugal Telecom are pretty much complete. When I see a lot of our peer group companies now discussing whether to invest in fiber or not, or announcing major fiber investments, I would like to bring to your attention that most of our investments are pretty much done. We have 1.6 million homes with fiber that pretty much covers the homes that represents the largest GDP per capita in Portugal and we ‘re very pleased to say that the penetration is now well above 20%. We have, as you no doubt saw more than 300,000 customers with FTTH, 328,000 to be more exact, and we continue to see significant benefits of having invested in the future-proof network, which allows us to provide to all our customers better quality of service. As a result, if you think about quality of service, OpEx associated with delivering services to this customer, this is clearly underpinning the improvements that you’re seeing in costs in Portugal Telecom. Furthermore, if you also worth mentioning is that FTTH is one of the key drivers of choice of Meo in Portugal Telecom for your triple offer and in the future quadruple play offer. On the back of the significant progress we have made in pay TV, you saw land lines grow, and most importantly worth mentioning is that the residential customer mix is significantly better than it used to be three, five years ago. More than 40% of all customers are now triple play. We are now, obviously now are working to up-sell to 22.4% of our customers that have double play, and we believe the potential to continue to grow that, it’s pretty significant in the future. Notwithstanding a difficult economic environment, we posted in the fourth quarter of this year in the residential segment, 4.9% growth in service revenues. We’re very pleased with this performance and we continue to believe that’s notwithstanding the fact that we will be rationale in the way that we position ourselves by way of promotion in the future. We can continue to deliver growth in the residential segment in the next of few quarters, for sure. Turning now to mobility, challenging macro-economic conditions are obviously leading to changes in consumer behavior. Double SIM card penetration in Portugal was very high also because the opportunity cost of you having a second SIM card was pretty low. Needless to say that in this environment, you’re seeing declining number of double SIM cards and that has a lot to do with the fact that private consumption is coming down and the confidence levels both of people and businesses in general is pretty low, albeit that it seems that it may recover in the next of few quarters. Moreover and as some of you have already pointed out, we’re seeing commoditization of mobile voice in Portugal and pretty much everywhere in Europe. The ability in these markets for you to command a premium for superior quality of service is much more limited than for example the U.S market. Having said that we believe that going forward especially for those companies that have invested in LTE and in fiber back-hauling, we should be able to command some kind of premium in the future. But for that we need to see some improvements in the economic conditions so that people can actually afford to pay a bit more for more data services, more reliability, better speeds and so on and so forth. So the focus for us when it comes to mobility has been to reposition ourselves in the Youth segment. No doubt you will have seen in the presentation, we put out that we have significantly improved our positioning in the Youth segment and when you look at the Youth segment, in terms of net-adds market share, 1525 peers we now actually getting about 49% of those adds. Needless to say that social media is again one of those areas that we are very strong as a company in terms of promoting our services and postioning with this very important segment for us but I think these early signs are very encouraging and most importantly our Moche brand for the Youth segment is beginning to gain significant traction. In terms of the financial performance, you saw sequential improvement in customer revenues, obviously we are not happy with the decline in customer revenues, we’ll continue to see to what extent quadruple play will pave the way for us to reposition our mobility offer and hopefully in the future, reverse these secular trends which appear to subsist in the mobile sector not just in Portugal but in Europe. We also would like to point out to you the percentage of customers that are on flat fees. That for us, is very important, because it ensures that these customers remain loyal and most importantly they have a lower churn as well. Data, significant work to be done as well, accounts for about 34.2% of our revenues right now. We continue to push penetration of smartphones in the Portuguese market. We’ve also come out with a B2C cloud offer and B2C cloud offer in our view will allow us to take advantage of the mobility that we are beginning to offer in this market, not just in terms of pictures and so on but also in terms of content. I mentioned to you earlier, Meo. Meo is not only your triple play service at home, but we also have a service called Meo GO, which is 60 channels on the move available, and, again, and therefore we believe that as a result of that, plus the smartphone push we’re making we should be able to continue to grow data revenues in the future. On one of the slides that we put out, I think slide 20, we also wanted to show to you the negative impact of regulation in terms of performance of mobile companies in Portugal. We have one of the lowest MTRs in Europe right now. Supposedly, other European companies were meant to follow this glide path as a result of the European Union pressure, but it didn’t necessarily happened material overhang when it comes to termination rates and its impact in our financial performance. When it comes to B2C, as you no doubt we’ll have seen from the announcements we put out, starting January, 11 of January of this year the key focus for us is quadruple play. Having done extensive studies in Portugal, we believe that there is appetite for convergence offers in Portugal, quad play offers, and we also found that Meo, our brand, is the brand of choice for quadruple play. So on slide 22, 23, you will have some additional information in that regard. Meo for 31% of the customers that we spoke to would be the operator that they would like to receive a quadruple play offer from. We launched our M4O offer, which I actually borrowed this inconvenient term from one of the analyst reports that I saw, M4O is the inconvenient convergent offer right now in our sector very successful why because it gives people what they want. They give, it gives people simplicity, it gives people quality of experience and value for money. We’ve priced it at €8 including VAT, and it includes, also two SIM cards that give you unlimited calls to all operators, and in our view the combination of a simple tariff plan, excellent quality of experience, and if you like savings is responsible very much for the success that we are beginning to see in this market, notwithstanding the fact that the offer was only launched about seven weeks ago. The marketing campaign started on the 11th of Jan, and on slide 26, you will have seen that we have once again been able to command a significant percentage of top-of-mind recall, and some of the key attributes that, in my view will pave the way for us to continue to enhance our leadership in the future are coming through. So innovation attribute by far the highest ever in our brand and trendsetter, as well. I will not share with you a lot of details, for obvious reasons. We’ve launched the service only six weeks ago, and also, for commercial reasons, at this stage I prefer to keep the cards very close to my chest but all I’ll say, it’s all going actually better than planned, and as far as we are concerned if other offers are launched in this market to copy what Portugal Telecom has done, if anything we’ll educate customers on the advantages of owning quadruple play, and then I’ve no doubt in my mind that they will prefer to buy our service, because it is the best service in this market. Let me now turn over to enterprises, focus is on value added services and clearly quality of service three things very important for corporate customers reliability, speed, and, from that standpoint, we believe and coverage. So, on those three points we believe that with investments we’ve made in our network, we are unique not just whether you’re talking about FTTH, LTE, 3G, 2G, HSPA+, you get to choose. With regard to SMEs the big change we have made, and I think that is beginning to have significant impact in terms of market share gains for us, is that we’ve simplified our offer. So, if you think about SoHo customers, we are basically using our residential customer, plus a service level agreement, and a separate, if you like portfolio of smartphones as well. So that has given significant momentum to our sales force, because it’s simplified our offer, and I hope that in the next few quarters I should be able to share with you substantial market share gains that we believe we should be able to make as a result of this positioning. If you think about, this is on Page 29, if you think about small enterprises and corporate customers, again were comprehensive offers integrated vertically segmented, and clearly what we are trying to do here is to broaden the scope of services that we offer, so that we can make these relationships a lot more loyal. So from a customer lifetime value standpoint, clearly reduce churn, increase the revenue per subscriber, in this case, per enterprise customer, and we believe as a result of this, we should be able to generate shareholder value. Cloud, if we’ve done significant improvements and, if you like progress in pushing our B2C cloud, Cloud PT, and we’re doing the same in the enterprise segment as well. And here we have important partnerships with leading companies in the world, Oracle, SAP, Cisco, Fujitsu, EMC, and so on and so forth. So therefore, here Portugal Telecom is not alone. We have an ecosystem of partnerships that is working alongside us to make Portugal Telecom and Portugal a better country for take up of cloud services, so that we can give, if you like our business customers more agility, higher savings, or if you like, allow them and assist them in improving their efficiency by using technology and obviously in the process, save them cost costs as well. New services and these new models that we’re deploying are clearly transforming the revenue mix, and this is not just in the enterprise segment, it's overall for Portugal Telecom. I’m very happy to report, report to you that in page slide 33 that 52% of revenues of Portugal Telecom are now non-voice revenues, I think this basically vouches in favor of the fact that we’re more resilient, we’re more predictable, and we continue to deliver on the vision and on the strategy that we laid out for you a few years ago. You will have seen, no doubt in our press release that wholesale is a business that is under pressure and clearly, we like the cell capacity but on the other hand, if wholesale revenues come down, it’s also because our competition doesn’t seem to be doing so well. So, from that standpoint, you will have seen that the wholesale revenues and others were down about 20% and like I said, the reverse side of that coin is that we continue to do well in the other segments. So, we continue to deliver on our strategy, and we will continue to work towards transforming our business model so that we have, if you like a business model that is sustainable then, as and when we get some tailwind, we should be able to take off and produce substantial higher substantially higher growth than we have been reporting in some of these segments. And with this of kind declines in top-line, which again, as we’ve seen in the context of the macro environment that we’re seeing, we remain very cost disciplined. We will take you through a lot of the initiatives that we are doing and you have my commitment that Portugal Telecom will again this year continue to focus in ensuring that we have one of the highest financial and cost discipline in our sector, and that we continue to surprise you by mitigating some of this, if you like, top-line pressure that we have as a result of the environment that we are in with substantial cost savings. Let me now turn over to Brazil, Oi has already reported its results. We have included a number of slides in our presentations also to show to you that we at Portugal Telecom and one of the controlling shareholders and technological partner to Oi, we are fully committed and behind what the company’s turnaround in the fourth quarter what you saw in the results that we put out, is you saw declining loss, and you saw broadband and pay-TV growth. Pay-TV, although we are starting from a low base, we added 153,000 net adds. It is embryonic. We believe we can do a lot better in the future. Bear in mind that Brazil has 55 million households. So pay-TV penetration remains very low in that market, 23%, and broadband penetration is also very low, about 30%. We have no doubts in our mind. That’s somewhat the structural changes that we have seen in terms of adoption of new technologies in other markets you will also see the similar trend in the Brazilian market. So good to report page slide 37, that we continued to post good pickup of broadband 127,000 in the fourth quarter. We mitigated, if you like, fixed-line net adds. And pay-TV net adds are growing although we believe, we can do a lot of that in the future. Turning now to slide 38, this is just to basically give you some information as to where the penetration of broadband and pay-TV is, so that you can have if you like, a sense for the growth opportunity that we believe we have in-depth market and with the right investments and with the right efficiency that we can obtain from those investments, we should be able to translate these opportunities into the top line and good EBITDA performance in the future. Slide 39, you saw improving revenue trends at Oi. Residential revenues were up. ARPU was up 6.8% and of course, this was underpinned also by a better net add performance, when it comes to mobility, we are investing in building out the 3G network to support the postpaid focus that Oi has had in the last few quarters. Albeit that the mobile sector in brazil continues to be very competitive and we believe that the fact that Oi has been able to beef up its distribution network, pretty substantially in the last 12 months, which was if you like our Achilles heel. We should just on the back of that be able to sustain a premium growth to the sector in Brazil when it comes to mobile, 3G footprint is growing that is clearly one area of investments, 72% of brazils population is now covered with 3G, albeit we believe that we will have to continue to invest in order to live up to our strategy of continuing to grow postpaid in the future. So one area of CapEx is clearly at 3G mobility, when it comes to own stores network very happy with the network that we have so that is likely to some extent remain where it is right now simply because we believe we now have the right, if you like distribution presence in that market not just with own stores, but also which franchises, agents and also door-to-door sales which is making clearly Oi a sales machine in that market. When it comes to the postpaid you will no doubt have seen in slide 41 Oi posted significant market share gains, this is what underpinned the 14% revenue growth in the fourth quarter of 2012. when it comes to data, there’s clearly, when it comes to enterprises, significant opportunities just to grow on the back of value-added services and data, so it’s pretty much bread and butter, but the demand is that and clearly with investments that we’re doing to beef up our transmission network and our last mile, whether we’re talking about fixed or mobile it should be able to help us sustain the progress we are making in this segment in the future, when it comes to ICT projects this is one typical area where Portugal telecom and Oi will collaborate expensively, so when I was referring earlier to cloud efforts that we are making in Portugal when the enterprise segment it is on the back of those same cloud efforts that we hope that we can also start telling those services in Brazil. Improving KPIs, revenue trends supported by investment in growth areas and infrastructure that was a story of Oi in 2012. And it is likely to be the story in Oi in 2013, Oi management they will guidance, new service revenues will grow 1.4% in 2013, EBITDA will be between 9 and $9.8, $8.8 billion those reported in 2012, that included about 200 plus of non-recurrence. So basically when you look at the $9.8 if you take the low end of that EBITDA guidance, that is clearly on the back of 3% to 5% growth of the recurrent EBITDA of 2012, CapEx will stay roughly $6 billion, and revenue generating units will continue to grow and therefore we expect to it’s $75 to $76.5 million in Oi our view into 2013, but regard to an international just, which will be flat, which will be flat 46 revenues, if you look at the proportional revenues they were up 22.8%, proportional EBITDA was plus 20% so all of these business that we have in various part of Africa and in Macau and in East Timor, as well, they’re all cash positive, they all generating cash flow and they all seem to be doing pretty again the backdrop where clearly in huge demand in those geographies. So let me now hand it over to my CFO, Pacheco de Melo, who can give you a lot more details in the financial performance of Portugal Telecom. Thank you.
