Slide 1: Results January - September 2013
Results January - September 2013 Investor RelationsTelefonica, S.A.
Slide 2: Forward-looking statements disclaimer
This document contains statements that constitute forward looking statements about Telefonica Group (going forward, "the Company" or Telefonica) including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations which may refer, am
Slide 3: Q3 Highlights: Revenue growth acceleration
Revenue growth acceleration Second consecutive quarter of organic growth (+2.1% y-o-y)Positive revenue growth in 9M (+0.4% y-o-y organic) Q3 Highlights: Reaching FY 13 targets in advance TELEFONICA Revenue growth flowing towards OIBDA stabilisation (-0.4% y-o-y organic in 9M; -0.3% in Q3)Limited mar
Slide 4: Reported figures negatively impacted by forex and changes in perimeter
Reported figures negatively impacted by forex & changes in perimeter Depreciated FX rates, mainly BRL, VEB, and ARS drained y-o-y:-9.8 p.p. to revenue growth in Q3 (-7.0 p.p. in 9M)-9.7 p.p. to OIBDA growth in Q3 (-6.9 p.p. in 9M) Changes in the perimeter (Atento) also deducted y-o-y ~-2 p.p. and ~-
Slide 5: Enhancing cash flow generation across the year
Enhancing cash flow generation across the year FCF 2013 (€ in millions) (CHART) FCF 2013 (€/share) (CHART) EPS 2013 (€/share) (CHART) Stable FCF 2013 ex-spectrum payments (y-o-y) TELEFONICA DPS 13€0.75 (CHART) (0.4%) 5 LTE spectrum already acquired in main markets
Slide 6: Successfully acquiring and retaining high value customers
Successfully acquiring and retaining high value customers Mobile contract accesses (y-o-y) Continued progress on quality growth 35% of mobile base in contract (+2 p.p. vs. Sep-12)Mobile contract net adds: +57% vs. Q3 12 (+79% in T. Latam)Booming smartphone adoption (penetration: +8 p.p. vs. Sep-12;
Slide 7: Accelerated revenue growth translating into OIBDA
(CHART) Accelerated revenue growth translating into OIBDA TELEFONICA Revenue growth (organic y-o-y) Improvement at all levels in Q3:10 countries accelerating organic performance y-o-y vs. Q2T. Latam ramping-up its y-o-y organic increase to 10.9%Continued gradual recovery at T. Europe (-7.1% y-o-y or
Slide 8: T. Global Resources: Capturing value from our scale
Average Savings ~6-7% (depending of each global category) Best prices & best conditions achieving long term sustainable efficiencies T. Global Resources: Capturing value from our scale TELEFONICA Best in-class networks; focus in efficiency and quality Devices: Towards vendors map and OS rebalancing
Slide 9: Building New Digital Services
Accomplishments in Q1 13 TELEFONICA Continuous leading position in new Digital P&S in high growth markets. Key contracts won and new partnerships created: Building New Digital Services M2M Smart Metering contract awarded to deliver smart meter communications services in the UKThe industry's largest
Slide 10: T. Latam: Revenue & OIBDA growth acceleration
(CHART) T. Latam: Revenue & OIBDA growth acceleration Net Adds ('000) T.LATAM +16% +7% +2% Q3 13 Q3 12 Accesses y-o-y OIBDA (organic y-o-y) Revenues (organic y-o-y) -2.3 p.p. OIBDA margin organic y-o-y Strong commercial activity in the most valuable segments 7 countries posting better organic y-o-y
Slide 11: Brazil: Strengthening leadership on high-value customers
+23% +20% +17% (CHART) (CHART) Brazil: Strengthening leadership on high-value customers Outstanding performance in high-value segments Continued improvement on fixed services Fixed Services Net Adds ('000) T.LATAM Record high contract net adds in Q3, capturing 64% of the market to reach 39% of marke
Slide 12: Brazil: Strong commercial effort for a sustainable growth
32.3% 32.1% 28.9% (1.5 p.p.) (0.4 p.p.) (0.9 p.p.) (0.3 p.p.) Q1 13 Q2 13 CommercialActivity1 Content Non-StrategicTowerSales Tower Sales Others Q3 13 Brazil: Strong commercial effort for a sustainable growth OIBDA Margin Revenue growth (organic y-o-y) T.LATAM Higher commercial activity driving OIBD
Slide 13: T. Latam: Widespread revenue acceleration (I/II)
T. Latam: Widespread revenue acceleration (I/II) Best ever mobile net adds (x2 y-o-y)Strong revenue increase, with OIBDA growth on easier costs comps y-o-y Revenue & OIBDA organic growth recovery consolidated on enhanced commercial trend Argentina Chile Peru Peru Record high in contract gross adds f
Slide 14: T. Latam: Widespread revenue acceleration (II/II)
T. Latam: Widespread revenue acceleration (II/II) Mexico Venezuela Peru Colombia Revenues & OIBDA (Organic y-o-y) % out of Group revenues T.LATAM Net Adds ('000) 3.0% 2.8% 5.7% Net Adds ('000) Net Adds ('000) Revenues & OIBDA (Organic y-o-y) Revenues & OIBDA (Organic y-o-y) New commercial offers pro
Slide 15: T. Europe: Transforming to lead a changing market
Enhanced competitive profile amid intense competitionCompelling data-centric offer gradually away from subsidiesLTE services in all footprint after launch in UK & Spain in Q3Smartphone solid growth (40% penetration Sep-13; +8 p.p. y-o-y) T. Europe: Transforming to lead a changing market Revenues (y-
Slide 16: Spain: Focusing on premium quality and convergence
Spain: Focusing on premium quality and convergence Fiber: a long term structural differentiation Fiber traction sustains FBB market shareFBB churn at record lows (1.5% in Q3, -0.4 p.p. y-o-y) T.EUROPE Movistar Fusion, year one Enhanced offer to increase competitiveness Higher value for the same pric
Slide 17: Spain: Improved revenue trend, record levels of profitability
Spain: Improved revenue trend, record levels of profitability Fixed revenue improvement on the back of Fusion commercial tractionStrong impact from last MTR cut of glide-path (-60% on 1st July)Lower y-o-y decline in mobile handset sales on easier y-o-y comps due to new commercial model of Mar-12 (Q3
Slide 18: UK: Maintained momentum in a very dynamic market
(CHART) "O2 Refresh" gaining traction Available in all direct channels since July53% of contract commercial activity on "Refresh"Successful launch of LTE on August 29th Available in 11 cities by nowOutstanding customer experienceEncouraging results in terms of data consumptionContract base up 9% (54
Slide 19: Germany: Building the fundamentals of data monetisation
Germany: Building the fundamentals of data monetisation Smartphone penetration 30% (+6 p.p. y-o-y)55% of devices sold were LTE enabled in Q3 (40% in Q2)Data usage of LTE smartphone 3x higher vs. non-LTE LTE coverage in 10 metropolitan urban areasDoubling CapEx in LTE Contract churn down 0.1 p.p. y-o
Slide 20: Leverage and net debt targets achieved
(CHART) TELEFONICA Leverage and net debt targets achieved € in millions Net Financial Debt/OIBDA2.30x Net Financial Debt (CHART) € in millions Shareholder remuneration/ Treasury Share transactions Net Financial Investments Net Fin. DebtDec-12 FCF FX Venezuelan Devaluation Net Fin. DebtDec-12 after V
Slide 21: Outstanding liquidity while reducing interest costs
(CHART) (CHART) € in billions Over €10bn 2013 YTD long term financing Effective interest cost at guidance bottom (12 month rolling) 6% 5% € Bonds at Holding(8.5yr. Av. maturity) Syndicated Loans(4&5yrs) CHF Bonds at Holding (7yrs) & Latam USD Bonds at Holding (5&10yrs) TELEFONICA Guidance (CHART) Ne
Slide 22: Conclusion
Conclusion TELEFONICA Net Financial Debt at € 46 Bn as of September; leverage ratio: 2.30x€ 14 Bn net debt reduction since Jun-12 including post-closing events to € 45 bnActive portfolio management fostering in market consolidation and improving growth potential Recovering Growth & Stabilising margi
Slide 23: Table of Contents
Table of Contents 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: November 8, 2013 By: /s/ Miguel Escrig Meliá Name: Miguel Escr