Telefonica Sa · BME:TEF
Telefonica Sa — Telefonica S A — Q1 2009 Earnings Presentation
22 slides from Telefonica Sa's earnings presentation, May 13, 2009
Slide 1: Investor Relations May 13th, 2009
Investor Relations May 13th, 2009
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward looking statements about the Company including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations.. These statements appear in a number of places in this do
Slide 3: Delivering 2009 Group priorities: Q1 09 results key highlights
Delivering 2009 Group priorities Q1 09 results key highlights Capturing growth opportunities in expanding businesses: Superior organic(1) revenue and OIBDA growth rates, leveraging our highly diversified portfolio Strong performance in T. Latam and solid results from T. Europe outstrip a lower contr
Slide 4: Solid Group performance leveraging diversified portfolio
Solid Group performance leveraging diversified portfolio GROUP FINANCIALS Jan-Mar 2009 Revenues Operating Income (OI) Change Q1 09/Q1 08 Net income - -1.4% +2.9% € in millions Operating Income before D&A (OIBDA) - -0.4% +9.8% +2.4% OIBDA Margin +0.4 p.p. Change organic(1) Q1 09/Q1 08 +2.8% +2.5% - -
Slide 5: Double digit EPS and FCFS growth
GROUP FINANCIALS Double digit EPS and FCFS growth +12.9% Q1 08 EPS (in €) 0.33 0.37 Q1 09 FCFS (in €) +56.9% 0.18 0.28 € in millions (% change y-o-y) Q1 09 OI Associates Financial results Taxes Minorities Q1 09 Net Income D&A Q1 09 OIBDA 5 (c.s.) - -731 (-4.7%) - -744 +1.1% - -31 (-46.1%) 3,190 1,69
Slide 6: Fully on track to meet 2009 guidance
Fully on track to meet 2009 guidance GROUP FINANCIALS Full year 2008 adjusted figures for guidance exclude Sogecable capital gain (€ 143 m), the application of provisions made in T. Europe in respect of potential contingencies deriving from the past disposal of shareholdings, once these risks had di
Slide 7: Delivering our priorities
Delivering our priorities GROUP FINANCIALS Organic growth: Assumes constant exchange rates and includes the consolidation of Telemig in January-March 2008. OpCF: OIBDA-CapEx. Excludes impact on revenues (Wireline: € 75.3 m) and OIBDA (Wireline: € 45.6 m; Wireless: €-23.9 m) of USO in Q1 09, as well
Slide 8: OpEx & CapEx discipline & flexibility to ensure OpCF generation
OpEx & CapEx discipline & flexibility to ensure OpCF generation 4.3% organic decrease in total commercial costs: Cuts in handset subsidies, advertising and billing costs Interconnection costs reduction (-1.5% organic y-o-y) due to lower MTRs and usage in Spain Other costs (organic): Higher operating
Slide 9: T.Espana: Successfully managing OpEx and CapEx to maximize OpCF
CapEx growth and CapEx over revenues; (comparable(1)) OIBDA growth and OIBDA margin (comparable (1) y-o-y change) T.Espana: Successfully managing OpEx and CapEx to maximize OpCF TELEFONICA ESPANA Excludes impact on revenues (Wireline: € 75.3 m) and OIBDA (Wireline: € 45.6 m; Wireless: € -23.9 m) of
Slide 10: Revenue performance impacted by worse trading conditions
Revenue performance impacted by worse trading conditions TELEFONICA ESPANA POSITIVES NEGATIVES Strong IT revenue growth (+24.5% y-o-y) on sound evolution of wireline data revenues (+3.6% y-o-y) Sustained healthy wireless connectivity revenues (+50.4% y-o-y), driving total mobile data revenues up 7.0
Slide 11: KPIs performance
KPIs performance TELEFONICA ESPANA Strong leadership in a slowing down retail wireline Internet Broadband market: Market share higher than 56% T. Espana wireline BB accesses: +9.4% y-o- y Effective BB ARPU: -7.2% y-o-y Strong uptake of mobile BB: 6.9 m 3G devices in 2008 (1.6x vs. Mar-08) >1.0k flat
Slide 12: OpEx & CapEx discipline to preserve OpCF generation
OpEx & CapEx discipline to preserve OpCF generation TELEFONICA ESPANA Efficiency ratio (OpEx+CapEx) /Revenues(1) 12 month rolling Mar-08 Mar-09 61.1% 62.5% - -1.3 p.p. ([OpEx+CapEx-Internal exp. Capitalized in fixed assets]/Revenues) Handset subsidies, commissions to dealers and advertising CapEx Q1
Slide 13: T.Latam: sustained strong results combining growth & enhanced efficiency
TELEFONICA LATAM T.Latam: sustained strong results combining growth & enhanced efficiency Healthy customer growth across businesses: total accesses up 12.6%(4) y-o-y driven by mobile (+15.8%(4)) and BB (+18.6%) Strong y-o-y organic revenue growth driven by robust mobile and Internet & TV revenue gro
Slide 14: Wireless business: Robust customer growth fully flowing into financials
Wireless business: Robust customer growth fully flowing into financials TELEFONICA LATAM Assumes constant exchange rates and includes Telemig in Jan-Mar 2008. Very healthy mobile access growth despite higher penetration Average penetration in the region: 83% (+12 p.p. vs. Mar-08) 1.3m net adds in Q1
Slide 15: Wireline business: Sustained business transformation
TELEFONICA LATAM Outstanding BB accesses growth to surpass 6.2m: Strong push in bundles 2P&3P/BB: +14 p.p. y-o-y Total bundles/fixed lines: +5 p.p. y-o-y 142k net adds in Q1 09 Targeting new segments through innovative propositions (Prepay broadband in Chile, Residential workstations in Chile and Pe
Slide 16: Solid performance across major operations
Solid performance across major operations TELEFONICA LATAM Includes 50% of Vivo. Includes Telemig in January-March 2008. Excludes Medianetworks in 2008. Total revenu e BB & TV revenue Mobile service revenue Total OIBDA Mobile OIBDA Q1 09 y-o-y growth (in local currency) Total Wireline revenue Wireli
Slide 17: T. Europe: Delivering on cash flow generation through a more rebalanced portfolio
T. Europe: Delivering on cash flow generation through a more rebalanced portfolio while maintaining momentum TELEFONICA EUROPE Solid Q1 09 performance across markets in an increasingly tough trading environment +9.0% y-o-y increase in total customer base Increasing value through product innovation a
Slide 18: Telefonica Europe: Keeping momentum, driving growth
TELEFONICA EUROPE Keeping momentum, driving growth: Lowest contract churn in the market at 1.2% (-0.2 p.p. vs. Q1 08) Contract: 42.6% of mobile base (+2.3 p.p. vs. Mar-08) Leading customer satisfaction across all segments Innovative propositions: top up surprises, new Simplicity tariffs, prepay ipho
Slide 19: Telefonica Europe: Sustained mobile and fixed BB performances
TELEFONICA EUROPE Sustained mobile and fixed BB performances to reach 3.6% revenue growth Q1 09: Handy Flat Rate and mobile BB driving growth on Q408 new commercial approach From Q2 09 (May, 5th): Innovative propositions to reinforce our mobile voice & data portfolio ("O2 o" and new bundles) Profita
Slide 20: Group financial expenses and debt: Steady financial profile
20 GROUP FINANCIAL EXPENSES AND DEBT Steady financial profile Calculated based on Q1 09 OIBDA figure annualized excluding results on the sale of fixed assets. € 7.4 Bn financing in Q1 09: € 3 Bn bond issuance & € 4 Bn facility extension to 2012 & 2013 Leverage target, including commitments, kept in
Slide 21: Conclusions
Conclusions Capturing growth opportunities in expanding businesses Increasing OpCF in an economic downturn Growing DPS Full commitment to maintain our track record of delivering Group guidance: 2009&2010 guidance reiterated Delivering 2009 Group priorities Sound EPS growth: +12.9% y-o-y + + Strong f
Slide 22: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Telefónica, S.A. Date: May 13 th , 2009 By: /s/ Santiago Fernández Valbuena Name: Santiago Fernández Va