Slide 1: Form 6-K Telefónica, S.A.
Table of Contents FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of February, 2015 Commission File Number: 001-09531 Telefónica, S.A. (Translation of registrant
Slide 2: Table of Contents
Table of Contents Telefónica, S.A. TABLE OF CONTENTS Sequential Page Item Number 1. Telefónica Group: Presentation on quarterly results January-December 2014 3
Slide 3: Results 2014 & Outlook 2015-2016: Back to profitable growth
Table of Contents Results Back Telefónica, Investor to 2014 profitable Relations S.A. & Outlook growth2015-2016
Slide 4: Disclaimer
Table of Contents THIS Disclaimer THE ANY INFORMATION amended, thereof. statements markets; our where Such looking limited services; international authorizations customers_ provide electromagnetic liability outcome Analysts reliance Except circumstances This available Finally, of Investor Telefónica
Slide 5: Return to sustainable profitable growth
Table of Contents Our 2012-14 TRANSFORMING FY Investor Telefónica, 2 “ü UPGRADING Accelerate Investing Monetising Growing Simplifying Extracting Proactively Focusing Recovering De-risking Displaying Monetise Invest Deliver Continue Maintain Grow 14 journey GUIDANCE cash further Relations 2015-16E sy
Slide 6: Proof points of transformation
Table of Contents Clear 1 T 2 L 4 S 5 Balance Investor Telefónica, “(y-o-y F 3 (1.5%) +16.2% 7.6m 10.5k Q4 €300m Growth (11.9%) Dec-13 €31.7bn 45.4 echnological tabilising trengthening Y aying ean Avg. Digital FTTH LTE OpEx Revenue Net1345.1 operating 14.7m financial proof >20k (sites) Q4 FY organic
Slide 7: Consistent revenue and access growth acceleration
Table of Contents Consistent acceleration, Revenue 2.6% 0.7% FY (0.8%) +3.0% Access Growth Avg. (6.4%) (y-o-y Investor Telefónica, 12Back 5.0% 2.8% FY organic) +2.5% (1.5%) Relations (y-o-y 13 to improvement 1.5% S.A. with growth FY +2.0% +0.3% organic) 414 1.3% a strong Q1 revenue/access 14 inperfo
Slide 8: OIBDA and EPS trends
Table of Contents &while OIBDA 0.25 0.27 Q1 0.93 FY Investor Telefónica, 14 12(3.9%) 0.22 Q2 FY improving (y-o-y Relations 0.2% 14 13S.A. Q3 FY organic) 0.18 514OIBDA Q4 0.0% 14 Underlying & EPS trends EPS (€/share)
Slide 9: 2014 guidance met and proposed dividend
Table of Contents 2014 Guidance P O -0.8 C ü €43.9bn Reported €45.1bn Mid-term 2.15x 02 0.75 €0.40 DPS Cash Investor €0.45/share Telefónica, 0.93 €/sh. FCFS 55% ositive apEx/Sales: IBDA UKp.p. €0.35 0.83 cash Cash/Scrip guidance dividend cash Underlying sale margin revenue pre-VZ post-VZ Relations p
Slide 10: 2015 outlook and beyond
Table of Contents 2015 R 1 F 2 C 3 D 4 S “5 Investor Telefónica, uelling ustainable Accelerating Additional eturning ontinued Strong Positive Key Higher Monetising Capturing Steady Continue Germany: Brazil: Delivering elivering and differentiation Relations data macroeconomic >€4.7bn roll-out data b
Slide 11: External factors and macro environment
Table of Contents External [Graphic ü Investments Mexico LatAm (1) Real Based Risk FX Improved “Consolidation Investor Telefónica, Asymmetry At Around Telecoms Venezuela To Digital Glide Consolidation Competitive Sustainable From Internal support: least anormalised GDP(1) perception quality inastron
Slide 12: Driving digital confidence and fair competition
Table of Contents Driving Recognition OPEN PORTABLE LEVEL “LAYERS Investor Telefónica, Transparency Security Privacy eSIMS Internet INTERNET aPLAYING Relations DIGITAL Encryption fair COMPETITION S.A. of DIGITAL policy investment 9 FIELD AND CONFIDENCE framework LIFE risk ANDin the USER_S digital ec
Slide 13: Capital allocation and financial flexibility
Table of Contents Capital Robust €3bn Growing ND/OIBDA Support (1) Investor Telefónica, “Attractive Tactical Financial Ratings Capital Balance Organic Inorganic Sustainable PostBalance discipline: proposed sustainable Relations cash increase stabilisation buybacks growth sheet shareholder Flexibilit
Slide 14: Guidance 2015-2016E and shareholder remuneration
Table of Contents Base 2015 (Constant >5% CAGR Limited 32.6% (to Revert 16.7% -2 vs Net €0.75/sh. UK “scrip Share 1.5% Rights (treasury) Up Investor GVT Telefónica, €0.35/sh. €0.40/sh. p.p. 2016E allow to Debt/OIBDA sale 42,853 Q4 2014 guidance Guidance in 1.5% €3bn buyback: OIBDA CapEx/Sales issue
Slide 15: 2014 Results
Table of Contents 1. 2014 Results Investor Telefónica, Relations S.A. 12
Slide 16: 2014 highlights
Table of Contents 2014: 1 momentum 2 „“3 4 Investor Telefónica, [Graphic Active Inflection Recovered Monetising Integrated Simplify Robust CapEx Consistent Solid Net Inorganic BuiltDebt Enhanced Superior Delivered Highlights aFCF Relations in-market intensity; solid Appears profitability; asset the
Slide 17: Financial results summary
Table of Contents Financial 2014 Reported € Revenue 7,361 EPS Underlying FCF “„Q4 Investor Telefónica, Adjustment Asset Venezuela Telco Restructuring inresults millions 0.61 3,817 Q4 (32.5%) sales value Relations 14 50,377 Organic summary (38.1%) strongly (29.2%) S.A. EPS contribution (+€179m Report
Slide 18: Reported to underlying results bridge
Table of Contents Forex VEF, (6.0 VEF: (23.9 FX 644 (179) OIBDA Investor Telefónica, Perimeter: C. Q1 1.6 E-Plus Perimeter (3.7p. Q4 26 Net 152 399RepublicIreland 1,239 results 14 non-recurrent p.p. movements: effect Income 4,570 p.p) ARS, p.p) (2.3 (21.3 impact p. Q2 (3.1 Reported Relations )(11.7
Slide 19: Revenue and OIBDA trends
Table of Contents Consistent Revenues 5.0% OIBDA 0.5% Q1 -0.7% 0.0% Organic FY Higher (0.2 Strong Churn „“Towards Co Investor Telefónica, [Graphic Focused Mobile High-class Robust Progressive Positive Revenue FY Gaining + 14 13 p.p.) OpEx data 2.8% 0.8% Q2 FY stable top commercial (organic OIBDA Rel
Slide 20: Mobile data monetisation
Table of Contents Strong Smartphone O2 1,040 65% 891 LTE (10% FY 73% Non-SMS 38% +23.9% Mobile (1) Investor Telefónica, Booming „“Monetising The Traffic Huge LTE 13m Strong Spain: Breaking Monetising _Bundle Plenty ~1/3 LTE brand 13 Mar-14 traffic 65% 41% of sweet 55% as LTE FY of and opportunities
Slide 21: CapEx and network transformation
Table of Contents Capital Organic 1,294 8,154 +16.9% Ex-spectrum Deep CapEx 79% 81% 30% 15% Benefits “Fiber +6 Transformation: Investor Telefónica, Addressing Stimulate Built Developing Global Savings p.p. “TV 19% 15% network 9,448 Better differential ex-spectrum 2014 y-o-y intensity growth Relation
Slide 22: Spain: commercial performance
Table of Contents 24% Spain: Net 2013 Pay Ex-disconnection 1.2 57 723 63 (689) _Fusión_ Consumer Dec-14 73% +12 +8 FTTH Total 5.2 10.3 FY Investor Telefónica, Gaining Enhanced „“Leading Becoming 1.9m 1m Mobile Portability Churn Differential Improved 3.7m Highly Longer Q4 Seasonal FTTH LTE 800 1.8m 7
Slide 23: Spain: financial performance
Table of Contents Spain: Revenue (6.6%) (4.9%) (8.2%) (11.9%) _ (13.6%) OIBDA y-o-y Q4 50.2% Ex-tower (1.4 Positioned demand “„Top Investor Telefónica, Consistent Revenue Quarterly Structural Commercial Cost Efficiencies Q4 14.0% last 13 line p.p.) OIBDA 14: 4Qs organic Q1 control Improved 46.9% FY
Slide 24: Germany results
Table of Contents Germany: Contract revenue Ex 18.8m 318 (1.8x Q1 78 New MSR €8Bn 14% OIBDA 69% Ex-restructuring 19.4% (E-Plus 18.0% Q4 Trading Stabilised „“Commercial Investor Telefónica, Total Balanced LTE Smartphone MSR Better Q4 Strong Restructuring Integration: Cross 428k 14OIBDA y-o-y) Handset
Slide 25: UK results
Table of Contents 14% UK: 291 ARPU Mobile MSR Q1 OIBDA 24.5% FY Investor Solid (58% „“Robust 22 Mobile Strongest Sustained Improved Successful Revenue Ongoing Handset FY _O2 14 13 209 Strong of OIBDA trading MSR outdoor Refresh_ Q2 FY 24.7% Refresh set contract Service Group margin 199 Relations bas
Slide 26: Brazil: commercial performance
Table of Contents 22% Brazil: Mobile Dec-13 35% 41% +77% Smartphones Total 2.2 4.1 1.0 Investor % 50% 56% FY Increasing (higher FTTH churn) 53 +86% IPTV 17 +50% 49 y-o-y Q4 Strengthening 23 „“Transformation [Graphic New Contract LTE 375k Strong Growing Reshaped Contract +58% +49% 14 13 1.9 of 31% pr
Slide 27: Brazil: financial performance
Table of Contents 22% Brazil: Revenue Fixed 4.8% (3.1%) 0.2% (6.1%) OIBDA Ex 5.3% Q1 (3.6%) 1.6% Consistent „(ICMS “Increased Investor Telefónica, Outperforming MSR Data Steady Fixed Negative Strong €58m 14of 4.8% 4.0% Mobile Q2 revenues: OIBDA (3.0%) (4.8%) tax accelerating Group revenue (organic R
Slide 28: Hispam results
Table of Contents Hispam: Mobile y-o-y 13.4 Revenue 18.2% 10.8% 8.9% Hispam 15.0% 20.1% Q1 OIBDA (organic Ex-Venezuela Investor Commercial 25 (+10.6% „“Improved and Accesses Voice Mobile Higher Data Non-SMS FY Increased 14 Chile +32% organic Smartphones Q2 traffic revenues 14.8% 10.0% 17.8% gross tr
Slide 29: Mexico results
Table of Contents Mexico: Mobile Q1 3.2 +37% +65% 2012 Revenue 9.5% Commercial 0.3% OIBDA 96.8% (34.8%) Investor „“Q4 26 Mobile Record-high Commercial New Steady Highest Increased Full Q2 13 OIBDA 2.62013 10.6% effect Q3 Federal 50.6% Q3 2.6 gross (organic Relations Increasing top-line (organic acce
Slide 30: Rest of Hispam by country
Table of Contents Rest Revenue 23.9% 46.6% 27.4% Q3 25.3% 10.5% Colombia (0.6%) OIBDA Q4 Increased „“(39.0% quality Investor Telefónica, Argentina: Venezuela Colombia: Mobile Peru: Revenue Commercial Chile: Focus Strong 14of+4.4 Q4 22.2% 25.3% 7.6% differentiation. Hispam: in on (organic margin Rela
Slide 31: Strong free cash flow and net debt reduction
Table of Contents Strong € Net Debt/OIBDA 2.36x 2.52x 45,381 2,176 Dividends 31,705 commitments Hybrid 2,107 3,817 (1,294) 5,110 (641) (1,187) OpCF Investor charge Telefónica, in Financial millions 2.74x 2.15x (3,493) 9,468 post pre FCF (3,817) &Relations VZ Restructuring & Dividend S.A. and (2,530)
Slide 32: Robust liquidity and debt maturities
Table of Contents Robust Long-term Hybrids: Mandatory TEF €14.7Bn Liquidity 19.4 Undrawn excluding Euro Dec-14 T. Private Net € Guidance 9.1 6% 2015 Average Investor Telefónica, inDeutchland +0.47% debt billions Syndicated D Bond: toRights placements: liquidity 2016 Relations debt maturities long-te
Slide 33: 2015-16: Back to profitable growth
Table of Contents 2. 2015-16 Investor Telefónica, Relations Back S.A. 30 to profitable growth
Slide 34: Transforming the portfolio and business mix
Table of Contents Continue 26% 2014 Growing 33% 2016 Equipment Access Transforming Improving Spain, Germany Investor Telefónica, 10% From Brazil &Relations Average transforming Markets voice 52% 43% position & selling S.A. and other the 28% 33% Services 31 “portfolio: business Revenue operations min
Slide 35: Monetising data growth
Table of Contents Monetising H 1 2 L 3 C 4 V 5 “Penetration „CAGR Non-SMS Investor Telefónica, everage Accelerate ideo ontinued onnecting Connecting Lower Increase Extra Integrated Optimise Larger Shared Customer FTTH Multi-device, Increased igheratLTE 14-16E data & Relations entry screen the data h
Slide 36: Transformation and network targets
Table of Contents TGR: Major UBB All 4G >85% >25% LTE % 2014: >35% 2016E: (1) Investor Telefónica, Executing 4k (-430 17k (-13% 55 (-5 46% (+11% 2014 Total 33 CAGR Fixed >+40% >+35% Fiber (+30 ~45% vs + “2016E Applications Application Automated Virtualisation Physical Data Online 360º Big Simplifica
Slide 37: Leaner structure and simplification savings
Table of Contents Leaner transformation „(from “Gross Simplification Additional 0.3 0.7 [Graphic Run-rate synergies €0.6Bn Investor 2017E 2016E 2015E 2014 Telefónica, Structure SG&A Outsourcing Provision Q4 Restructuring Personnel Offer Customer Efficiencies Demand Network Germany 0.3 14 gross regio
Slide 38: Spain: strategy and targets
Table of Contents Spain: “Up “Spain, „unparalleled A Co. “value (1) simplification) Investor Telefónica, FTTH 13-18(1) LTE >85% _Fusión_ Mid-single ARPU CAGR Dec-13 Expanded European _Fusión_, _Fusión Recovering Digital more profitable „focused Subject to Coverage 100% „58% premises Strengthening _F
Slide 39: Priorities by region and digital services
Table of Contents Every Digital Germany: Brazil: HispAm: Investor (Cloud, Service 2016E) „Optimal “Differential LTE 36 Accelerating Annual Driving Financial Confirmed Setting Leading Commercial Fiber Strong LTE Further Mobile Bundling coverage Coverage business available Strengthening Services: lead
Slide 40: Closing remarks
Table of Contents Closing REINFORCED 1 2 3 4 5 Investor Telefónica, Solid platform Exciting Focused Committed Focus remarks on Relations operations digital improving S.A. to financial INVESTMENT 37 built; revolution following shareholders_ Ground discipline ahead toportfolio CASE; support ofreturns
Slide 41: For further information: Investor Relations
Table of Contents For further Investor Tel. www.telefonica.com/investors ir@telefonica.com +34 Relations 91 information: 482 87 00
Slide 42: Signatures
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: February 25th , 2015 By: /s/ Miguel Escrig Meliá Name: Miguel E