3Q22 RESULTS CONFERENCE

TIM S.A.

NOVEMBER 8th, 2022

Operator - Good morning ladies and gentlemen, welcome to TIM S.A. 2022 3Q Results conference call.

We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the Company's presentation. There will be a replay for this call on the Company's website.

After TIM SA remarks are completed, there will be a question and answer session for participants. At that time further instructions will be given.

We highlight that statements that may be made regarding the prospects, projections and goals of TIM SA constitute the beliefs and assumptions of the Company's Board of Executive Officers. Future considerations are not performance warranties. They involve risks, uncertainties and assumptions, as they refer to events that may or may not occur. Investors should understand that internal and external factors to TIM SA may affect their performance and lead to different results than those planned.

Should any participant need assistance during this call, please press *0 to reach the operator.

Now, I will turn the conference over to the CEO Mr. Alberto Griselli, CEO of TIM SA and to Ms. Camille Faria, Chief Financial Officer and Investor Relations Officer, to present the main messages for 3Q22. Please Mr. Alberto, you may proceed.

Alberto Griselli - TIM S.A. - Chief Executive Officer

Alberto Griselli (CEO) - Good morning everyone and thanks for attending our results conference call. I am pleased to say that we had another great quarter. We are presenting strong numbers in all lines. We are growing solidly and maintaining our high level of profitability, while delivering all the transformational initiatives we 1

planned for 2022. TIM is now a bigger and better company. Although the next generation TIM path is just beginning we move with great strides towards our goals.

In 3Q our topline grew more than 24% YoY. Our EBITDA also presented great momentum accelerating to nearly 25% yearly growth, which led our margin to exceed 48%.

For YTD figures EBITDA-Capex rose 25%, with a cash flow margin above 25%. Until September we are now close to 1 billion BRL in interest on capital, and we are very comfortable to fulfill our remuneration guidance of 2 billion BRL.

Strategic initiatives are advancing according to plans. On 5G our smart rollout approach is giving us leadership in coverage, where it matters the most to TIM. Oi integration process is evolving rapidly, and we are already benefiting from it in multiple forms. Essential phases of the integration have already been completed.

The ESG front presented other relevant accomplishment in 3Q. Refinitiv recognized TIM Brasil as the world's most diverse and inclusive telecom operator. TIM, as an employer, was awarded as a Great Place to Work, while our clients also gave us great scorings in Reclame Aqui Web Portal for excellence in customer service. Additionally, we are using the power of technology to help developing communities under a partnership with the NGO Gerando Falcões. So, when we say ESG is embedded in our strategy and everyday action, it is not just a claim.

Getting into additional detail in our revenue dynamics, we saw mobile service revenues grow close to 26% YoY, while fixed service was up by more than 8%, consolidating our service revenues at an expansion of 25% YoY. Once again, it is a chance here to highlight that this revenue performance was driven by more than just the Oi assets acquisition. Our organic performance continues to be helped by the positive net effect of price ups, benign macro environment and rational competition.

Postpaid revenues continued with a solid expansion, up almost 26% YoY with an ARPU of 36 BRL/client/month; prepaid revenues rose more than 30% versus last year, pointing to an ARPU of close 13 BRL. As expected, the average revenue per sub is being diluted by the acquired customer base, with a lower ticket in both segments. With this, mobile-branded ARPU stood at 24.9 BRL. This metrics will show some quarters of volatility, as we have not started to clean up the acquired base. We expect to begin in November and the process should take months to complete.

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Although much of our attention is focused on the integration process, we continue to innovate. As this is a fundamental part of our positioning and company DNA, we continue to bring novelties to our existing and new clients. During the quarter TIM launched a partnership with LATAM and Gol Airlines to offer in-flight connectivity embedded in our postpaid TIM Black plans. We will also expand our partnership with Amazon to provide content for prepaid and postpaid customers.

TIM Mobile, and as I mentioned earlier the 5G launch is a success. The smart coverage approach and an assertive device strategy are delivering competitive differentiation and customer experience improvements. Our 5G coverage arrived in all State capitals, with a particular focus on crucial markets like Curitiba, São Paulo, and Rio de Janeiro.

Today we have more than our peers' combined number of antennas, giving TIM and edge over competitions. Well, we sum this up with the acceleration of 5G devices penetration driven by TIM and big retailers, and we already see 10% of the traffic offload in major state capitals. The importance of this accelerated adoption comes from the potential saving in 4G Capex and in better customer experience. It is early, but in the first measurements 5G users have twice the NPS of customers using the older technology.

Let us now move and go deeper into the integration of Oi assets. As I mentioned earlier, integration is on track with network implementation proceeding at a solid pace, while client migration is starting to accelerate. On the network the first two phases, roaming like and frequency availability were completed, while full integration should be achieved in early 2023. The migration of the acquired base to our system is occurring in waves to ensure we do it properly and minimum impact on clients. Until September we migrated 2.5 million customers, and due to the complexity of the process we should take the entire 12 months we plan to complete the entire process.

On a separate initiative, the site decommission process is starting this month, following an accessory system implementation that allows us to consolidate ERP functions for the acquired assets. We plan to decommission 400 sites in two months. In 2023 an additional 3000 sites will be shut down, leaving approximately 1.3 thousand until December 2024.

Lastly, on the M&A topic, as you probably saw in our communication during the quarter, we, together with the other two buyers, entered into a litigation process

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with Oi related to adjustments to the closing price and indemnitees. The total amount under discussion is 3.2 billion BRL.

The situation is developing on two fronts: one in legal courts, where the judicial recovery judge determined the buyers to deposit the withheld amount of 1.5 billion BRL in an escrow account, which has been done a couple of weeks ago; the other in the arbitration court of B3. The buyers initiated this path.

The following topic is an update on B2B. As we discussed during our Investor Day in May, we are focusing on selected verticals to offer connectivity and tech solutions for Brazil's industry leaders. Three of these verticals are already showing promising opportunities.

In agribusiness, the vertical we have been working in for longer, we offer solutions to increase productivity covering millions of hectares of crops and fields, doubling our coverage in the last 12 months. We started with solutions based on 4G technology, but we already closed a few deals to develop 5G with groups like São Martinho.

In logistics we can positively impact lead times and freight management, taking transportation efficiency to the next level. Again, we almost doubled the number of kilometers connected with IoT projects and we are starting a 5G initiative with BTP in Santos port, the largest in Brazil.

With the utilities sector we can collaborate for smart lightning solutions, improving distribution and increasing automation. Over the last quarters TIM increased the number of public smart lighting points ninefold, with Engie being one of the major partners in such initiatives.

Changing gears to fixed service, TIM Live had another solid quarter amid its transition to a new operational model, using I-Systems as its network growth platform. We grew revenues at around 12%, taking 3Q revenues to more than 200 million BRL. Fiber users represent more than 70% of the entire base, and the FTTC to FTTH migration is helping churn to reduce materially. Voluntary churn declined by 1.5 p.p. since 1Q.

As a result of our efforts to grow sustainably with high-value service and portfolio, we maintained a strong FTTH ARPU level of close to 98 BRL, despite competitive pressure. We resumed our footprint expansion in 1H and in October we added a new regional cluster centered in Campinas, an important city in the countryside of São Paulo state.

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Now I will pass the floor to Camille, our CFO, to review the financial results.

Camille Loyo Faria - TIM S.A. - Chief Financial Officer

Camille Faria (CFO) - Thank you Alberto and good morning everyone. As Alberto explained earlier, 3Q was marked by improvements in all lines of our results. Our Opex, although still pressured by the same elements we saw in the previous quarter, presented a deceleration when compared to 2Q, 24% versus 25% YoY. This trend reflects a larger company following the M&A transaction, but all cost lines remain under control.

With revenues growing faster than in 2Q and Opex expanding slower, EBITDA dynamics accelerated. EBITDA for the quarter increased by 24.5% versus 3Q 21, with a stable margin of 48%. Net of I-Systems costs we would have had more than 28% of EBITDA growth with a margin of 49.5%. Of course, this record high EBITDA was driven by service revenue growth, from organic performance, and M&A amid an environment of costs under pressure and carrying a lot of transitory effects.

Looking ahead, it is always important to remember that we are carrying the burden of the temporary service agreement with Oi that will end in April of next year. We expect a much cleaner Opex dynamic in 2023, as both impacts from the TSA and I-Systems will start to disappear.

Last quarter some of you became a bit worried about our bottom line dynamic, and as we explained there were many transitory and temporary effects. In 3Q some of these impacts already started to ease, but some will remain until we finish the asset integration and site decommissioning. Site leases continue to impact G&A through financial results significantly, and in spite starting the decommissioning in 4Q we will only benefit from it later in 2023 and 2024.

As a result, net income came in line with 3Q 21 at 473 million BRL, and we feel very comfortable to fulfill our 2 billion BRL guidance of shareholder remuneration. Until December we will announce a portion of the remaining 1 billion BRL in interest on capital, and the rest will be proposed as a dividend. If the I-Systems deal negatively impacts our costs, it benefits us even more on the Capex side, positively affecting free cash flow. The saved Capex is compensating for a good portion of our 5G rollout. YTD EBITDA-Capex is growing close to 25% and the free cash flow margin is exceeding 25%. Our cash position remains solid, even after the payment for Oi's assets. We closed the quarter with approximately 3.7 billion BRL in cash.

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TIM SA published this content on 08 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 December 2022 22:25:02 UTC.