Telefônica Brasil - ((B3: VIVT3, NYSE:VIV), announces its results for 2Q23.

Strong Net Revenue growth combined with cost discipline leads to a double-digit EBITDA expansion

SÃO PAULO, July 25, 2023 /PRNewswire/ --

*R$ million*	2Q23	2Q22	% Y-o-Y	6M23	6M22	% Y-o-Y

Net Operating Revenues	12,733	11,831	7.6	25,454	23,183	9.8
Core Revenue	11,913	10,839	9.9	23,785	21,124	12.6
Mobile Revenue	8,927	8,110	10.1	17,746	15,691	13.1
Fixed Core Revenue	2,986	2,729	9.4	6,039	5,433	11.2
Non-Core Revenue	820	992	(17.4)	1,668	2,059	(19.0)
Total Costs	(7,648)	(7,253)	5.4	(15,426)	(14,093)	9.5
EBITDA	5,085	4,578	11.1	10,027	9,090	10.3
EBITDA Margin	39.9 %	38.7 %	1.2 p.p	39.4 %	39.2 %	0.2 p.p
Net Income (Consolidated)	1,121	746	50.3	1,956	1,496	30.8
Net (Income)/Loss of non-controlling shareholders	2	17	(91.2)	2	23	(93.1)
Net Income Controlling Shareholders	1,123	763	47.2	1,957	1,519	28.9

Capex \| Ex- IFRS 16 and Licenses	2,353	2,575	(8.6)	4,039	4,455	(9.3)
Operating Cash Flow (OpCF)	2,732	2,003	36.4	5,988	4,634	29.2
OpCF/Net Revenue Margin	21.5 %	16.9 %	4.5 p.p	23.5 %	20.0 %	3.5 p.p
Free Cash Flow	2,508	2,157	16.3	5,638	4,634	21.7

Total Subscribers (thousand)	111,940	113,706	(1.6)	111,940	113,706	(1.6)
Core Subscribers	104,767	105,821	(1.0)	104,767	105,821	(1.0)
Non-Core Subscribers	7,173	7,885	(9.0)	7,173	7,885	(9.0)

Net Revenue grew +7.6%, led by Mobile Service Revenue, which had a double-digit growth (+10.4% YoY). Postpaid Revenue increased +13.3% on an annual comparison, positively impacted by the expansion of the customer base, annual price readjustments and churn at historic low levels, at 1.00%. In July 2023, there was the launch of three Vivo Hybrid plans with entertainment and healthcare options.

Core Fixed Revenue rose by +9.4% year-on-year, driven by FTTH Revenue (+14.3% YoY) and Corporate Data, ICT and Other revenue (+15.1% YoY). Vivo's FTTH network reached 24.7 million homes passed (+17.2% YoY) and 5.8 million homes connected (+15.1% YoY). Vivo Total, the fiber and postpaid convergent offer, represented 80% of our fiber gross adds in Vivo's stores and registered a monthly churn rate of 0.39%.

EBITDA totaled R$5,085 million, a double-digit increase (+11.1% YoY) in 2Q23 with a margin of 39.9% (+1.2 p.p. YoY) due to the strong mobile service performance. Total Costs growth decelerated in the quarter (+5.4% YoY) mainly due to operational efficiency and ongoing digitalization initiatives. Operating Cash Flow grew +36.4% YoY, highlighting the lower Capex (-8.6% YoY), maintaining its guided level of below R$9 billion for 2023.

Shareholder remuneration declared up to July 2023 hit R$2,161 million, of which R$1,121 million were in interest on capital, R$827 million in dividends and R$213 million in share buybacks, reaffirming the Company's commitment to maximizing shareholder's return.

Net income attributable to controlling shareholders had a strong growth of +47.2% compared to the same period of last year, reaching R$1,123 million in 2Q23, due to the strong evolution of EBIT and lower financial expenses.

CONTACT: David Melcon Sanchez-Friera, CFO and Investor Relations Officer, Telephone: +55 11 3430-3687, Email: ir.br@telefonica.com

To download the complete version of the Company's earnings release, please visit our website: https://ri.telefonica.com.br/en

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SOURCE Telefônica Brasil S.A.

2Q23 Results: Telefônica Brasil S.A.