Slide 1: Results January - March 2016
Results - January — March 2016 ©
Slide 2: Disclaimer
Disclaimer This docament andthe contarencrcall webcast (nclung the CRA sason) may conan frwarloking satan Infenration terete, he “Sateronte) ring to the Tlna Group (ete, the "Company of Tb or ese Statements may include financial Toro {nd estimates sed on assmpins of sateen rani pins ciincves and exp
Slide 3: Q1 2016 Highlights
O 1 © 21 16 Highiights Mr. José Maria Alvarez-Pallete Chairman & CEO Vv Felefinica
Slide 4: Q1 Highlights: a good start
Q1 16 Highlights; a good start + 43.% organic Revenue growth © Ceargamno rner cats manetation (sbi ats revenues: 19.9) Accelerating, r Continued progress with value customers (ber, smortphones TE, Pay TY) © Emnarcngatptl exseierce aa ayy * Accelerating organic growth in O1BDA to 45.59% ond OpCF 0 3.
Slide 5: Financial summary
Financial summary ‘Organic yoy edeeres tacaset ‘OzuKinanis. aver icone a er 788 sspp. 4200. cory 8899 & Revenue 1808 Revere O18. O1BDA cape Investor Relations Wie Tones FeéAie op. Tetons vy es Ker Felefinica
Slide 6: Q1 performance in line with year-end targets
Q1 performance in line with year-end targets 2016 Guidance (Constant Mz a Guidance 2016 a6 Revenue 7% 18.0% ‘1BDA margin Stablising vs. 2018 10.4 pp. capen/sates Around 17% 14.2% "Net Financial DebL/OIBDA (adjusted for 02 UKsale) 235% Dividend (2016 ful cash subject tothe receipt of 02 UK proceeds)
Slide 7: Best quality customer base
Best quality customer base Growth engines ‘eer anen ibn) Strong commercial progress on high-quality se + eepanding services 2.2m smatshones added basen fn Mr 6 api adoption of LE; 15% penetration (5.9m net ads) Pay TV reach the 8.4m mark fostering video adoption © Outstanding er performance (378k ne
Slide 8: OIBDA growth across the board
OIBDA growth across the board sen ieys ovr store SPAM consistent revenue growth (129 ain arom) ame + bhi etd ee aa owe + ongoing transformation sales mix towards Onife Teo = © BB Connectivity & SoC: 47% o/total; growing double digit - —— Ts ropeuneinnate estate * cron eon amie (0259) ml ret fratoom
Slide 9: Further advances in data monetisation
Further advances in data monetisation Mobie data trafic yo) LTE: Key ever on mobile data ssi 5% Ure trate (v.03) [e=>) © Lretratc: 25% of mobile data trafic (4 pp. v.04 15) © Glave ge peramatoone 3% ro (80 Minot) irewmseunit) Goon) © QRLTE shipments 73% + cone cnecnytn cs es @ Dae cere aauie bees ea
Slide 10: Digital Services: monetising beyond connectivity
Digital Services: monetising beyond connectivity Video: traffic & ARPU growth + 63% ofoighal Services rev. fay rene + tame ttn peer ga: Cm pomaanen aus at 6 ° landed Uagy, Stade, aa Stemi cota Ri, more comes [csosen] + ownsredutunin spe ‘© Ofgnal conten & exclusive channels (Movistar #07) Maeas Digi
Slide 11: TGR: Adding value through technology evolution
TGR: Adding value through technology evolution : uae ——— ‘+ Maintained Record If Service Delivery @® + Continued siplifetion & vituaiation Network Transformation + AP Arttectur: © VOLTE deployment in Peru and Colombia + cuatny: 1 New Sig ata project monitor & inprove customer experience) + nmovaton:
Slide 12: Q1 Results
O 2 © Q1 16 Results Mr. Angel Vild CSFO Vv ‘Felefinica
Slide 13: Spain: Focus on growing customer value
Spain: Focus on growing customer value ves 2 id . 7 hides »s erases ee al eo oe rc ¢C H ¢ © Fixed telephony net adds recovering = i As LA successful results of TV promo in H2 15. n a) am © Promos for new estomers launched in 2 consome Fos 0 "ar Superior proposal makes the difference ca © rt Fin ane
Slide 14: Spain: Revenue & OIBDA growing including DTS
Spain: Revenue & OIBDA growing including DTS Revenue oranie 0%) Fist quartery topline yor increase after OTS consolidation + agouupi & customer expansion diving consumer + Fusion” Business, he goth engines (026% 8 19% 05) = © ax service Revenue (58) €3009m;+1.0% yoy organi © Consumer 56% SR HL pony
Slide 15: Germany: Continued data monetisation
Germany: Continued data monetisation Contract net a0) contract ross aes mic “eaneson mS Customer base focus drives momentum 98 a Further TE deployment ©. Mile data tafe up 2% 0-y (ideo and musi streaming) ©. Average LTE data usage wp SOK yy © Continued LE upside penetration a 21% = © Cowerase at 763
Slide 16: Germany: Progressing in integration
Germany: Progressing in integration (1 16 financas Foveanemoersemat 160% 62% ore pcr em 73m nas 10s OnE ‘margin margin fuse upp. Investor Relations Teleéniea, SA vy Synergy evolution * Reostionng of he 02 brand tomer tse maton, neck tegration an ta © Qkintegration ettorts wth parle work streams © Re
Slide 17: Brazil: Focus on profitable growth
Brazil: Focus on profitable growth penetration PU 01 16 09) rer Data-centric strategy driving ARPU acceleration © contact marketshare 2.2% (038 pp.y-o¥) oe _ os perenne nner Es tae mob eve coming oon 96860) sweater = oe! oe oe spo. |[o7pe. |[ ate. | ‘Smart bundling to support long-term strategy * 16
Slide 18: Brazil: Best-in-class profitability
Brazil: Best-in-class profitability Serve Revene orinie 0) Ba! WE cxentin Outperforming the market 23% © MSR 10.8% yory (3.8% exrequltion) 2 a ras 835 nis © towerhandsetsies(04 pp. ve) Franca (roy organi) Ortspmyyerme 2% ‘Synergies and efficiencies initiatives a * Sequential improvement in Opx trend
Slide 19: HispAm: Growing adoption of high-value services
HispAm: Growing adoption of high-value services Contract cesar oy BF coama/tasintie respi © Further pushin contact (net adds 38-09), © Smartphone penetration +9 pp.yovt026% © FOB& Pay TV penetration pp. yoy + aegenina: © ‘Strong LE deployment coverage of 5%) © Mainaining tow chur eves in contact and
Slide 20: HispAm: Financial performance
span 180A (orrnievo9) = Investor Relations TelteienS 197% em Om Gi eeR fd 102% A A au ba0006 Focus on quality flowing into revenues ‘Accelerating top line growth ‘Revenue improvement despite lower handset aes 45% 09) © MEX: Soi performance despite stone ARPM reduction © COL: Continued data evenue gr
Slide 21: UK: Market benchmark performance
UK: Market benchmark performance contrat neta (200) — Sustained market leading contract churn <1% 79 LL + obit bse 25m + customer experience leadership (7 years in sro) Busines seni) aus ras aus © Penetration: 39% (+39. 26) © BP cutdoor coverage a sea Saeed Promeab ty roa Strong financials: Ramp-up
Slide 22: Leverage impacted by Q1 seasonal effects
Leverage impacted by Q1 seasonal effects ‘Net Financial Debt 187 o Pr 5 (539) @5n00 ‘oBPrK re Shareolder tet retements remuneration finaneiat aia commitments "“linbrd™” investments Sthew ‘upon 4.203) (883) a ei 7 once wring et te rep ‘others rr cexspectum “spit Interest tacontnves _ i ‘erations Inve
Slide 23: Strong liquidity to face upcoming maturities
Strong liquidity to face upcoming maturities itectve interest cont: 39 bp lower yo¥y (049%) os = MarsS—LewereatotOtercets Mune auty Bonds Other bank Tet ° Unteaeod fee fname erence Ugulty postion Net debt maturities ar36) ata ean ot seg A ts as 199 rose ove 2o18t endo
Slide 24: Telxius: a leading telecom infrastructure company
Telxius: a leading telecom Created with selected assets from TEF. infrastructure Co. Europeand the America * Sector ins wends ond evenses vii everedby longterm contractual relationships optic cables (-31,000km are exned) eo ‘recurrent maintenance CapEx Substantial and profitable Financial highlights
Slide 25: Conclusion
Conclusion Growth accelerating; organic OIBDA +5.5% OIBDA increasing across the board ‘Spain growing in revenues & OIBDA; stabi ing OpCF ‘Strong execution in fiber, LTE and Pay TV * Deliv a differentiated network experience ‘Synergies and simplification efficiencies drive margin stability * oper jit
Slide 26: 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: April 29, 2016 By: /s/ Miguel Escrig Meliá Name: Miguel Escrig Meliá Title: Chie