CFO

1. TIM Brasil Day in NY
Nov 13, 2017
Chief Financial Officer
Adrian Calaza

2. TIM DAY in NY 2017
CFO – Adrian Calaza
2017 2018 2019
~90%
>0.1
~0.25
>0.1
~0.5
Efficiency Plan: Strong Execution
2
Execution until 3Q17
Normalized Opex Evolution
(R$Bln)
11.8
10.4
11.8
2015a 2016a 2017e 2018e 2019e
Rationalization of Discretionary and
Support Costs’
Optimization and Process
reengineering
Zero Leased Lines Project
Optimization of IT and Network Costs
Sales Channels Redesign
2017
Updated
Estimate
Detailing 9M17 Efficiency
(R$ bln)
Efficiency Plan
(R$ bln)
1.7 1.2
0.5
0.6
1.1
2017 Monitoring
(R$ bln)
5,2
>0.2 >0.2 ~0.2 ~0.5
5.3
Main Actions

3. TIM DAY in NY 2017
CFO – Adrian Calaza
8%
8%
16%
68%
IT
Other
Commercial
Products
Network
~4.7
~1.0
~0.7
~2.6
~0.5
TOP 5 Suppliers
1 ERICSSON
3 NOKIA
2 HUAWEI
4 SAMSUNG
5 MOTOROLA
¹opex spending accounts for a portion of total reported opex
Total Spending (Opex¹ + Capex)
(R$ bln; Sep 17 YTD)
Total Savings by Type
(%; Sep 17 YTD)
Leveraging Partnerships to Deliver Savings and Strategic
Advantages
3
 Total Savings 2016 ~R$ 600 mln R$ (9%)
against LBO
 Additional savings Sep 17 YTD of >R$500
mln (10%)
 Contracts of RAN 700Mhz, IMS, UDC, DWDM,
IP RAN, and Fiber deployment between most
significant savings totalizing more than R$1
Billion for a three years period

4. TIM DAY in NY 2017
CFO – Adrian Calaza
Enterprise System Transformation
4
Vendor
Portal
Compliance
Tax
IFRS 15-16
Obligation
Planning &
Control
Legal
Process
Optimiz.
Asset
Managmt.
Sales & VAS
commiss.
Inventory
Clean up
Unique and reliable
environment for both
actual and planning,
economics and KPI
information
Increase the quality and the
accuracy and opportunity of
fiscal obligations
Automatization of
Providers’ invoice
registration process
Automation of the
charge creation
process and VAS
revenue share
calculation
System automation
and integration of
legal processes
System Implementation of
the new accounting
principles
Automation of the
asset management
process, from
requirement to
accounting and fiscal
treatment
Complete Network
Inventory, granting
accuracy and physical
vs. accounting
alignment
System Evolution
Process Enhancement
Mandatory Development
DIGITALIZATION
• Efficiency
• Accuracy
• Reliability
From manually based processes to Automation
> 11k invoices/month
already automatized
70% in time saving
of tax monthly
routine
Average timing for payments
processing from 23 to 4 days
Significant increase in
fiscal credits utilization
(R$ 100 mln/year)
Overall revision of Asset Acquisition cycle: reduction in
WBS (>85%) and invoices (>25%) by 2H18
RFID tagging process for assets: safe and reliable
tracing
IFRS 15/16 accounting standards implementation by
YE17

5. TIM DAY in NY 2017
CFO – Adrian Calaza
Telecom Italia
Finance
TIM Brasil
TIM Part
TIM S.A.
(new denomination of Intelig)
Telecom Italia
Finance
TIM Brasil
TIM Part
TIM Celular Intelig
Abroad
Brazil
Minorities Minorities
Generating operational and financial synergies through
restructuring process
From: To:
INTEREST OVER EQUITY
R$190 mln via IOE
o Anticipation of 2017 results distribution
o Fiscal efficiency
o Minority saving perception of +9.75%
(34%-15%-9.25% = 9.75%)
o Process optimization, system integration, simplification of billing, commissioning,
BI and control systems
o Unification of fixed and mobile services facilitating bids and convergent services
o Elimination of intercompany transactions inefficiencies
Addressing Other Types of Efficiencies
5

6. TIM DAY in NY 2017
CFO – Adrian Calaza
737 859
15 590
155
146 113
NFP
Act'16
OFCF
(ex-clean up)
License/
Clean up
Tower
Sales
Net Financial
Expenses
Cash
Taxes
Dividend
Payments
Other NFP
9M'17
2,721
3,832
-886
-97
-528
2013a 2014a 2015a 2016a 2017e
1,006
955 2
737
EBITDA CAPEX ∆WC Other OFCF
OFCF in Detail – YTD
(R$ Mln)
NFP Evolution
(R$ mln)
DYoY +511 +320 +213 +26 +1.1bln
Free Cash Flow and NFP Evolution
6
Net Cash Flow before Dividends
(R$ mln)
4,180
2,487
 Turning back to positive NCF before Dividends after
four years even after license clean up payment
 “Warming up” with IoE distribution
 Almost 100% of the gross debt in local currency, with
avg life > 2 years
 88% of FX exposure issued invoices covered by
bandwidth protection included in contracts
 Reviewing agreements with BNDes due to strong
FCF projections

7. TIM DAY in NY 2017
CFO – Adrian Calaza 7