Telefonica Sa · BME:TEF
Telefonica Sa — Non-Deal Roadshow (May 2011)
25 slides from Telefonica Sa's roadshow presentation, May 31, 2011
Slide 1: Leading growth and profitability
Leading growth and profitability New York/Boston May 31- June 1, 2011
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward looking statements about Telefónica Group (going forward, “the Company” or Telefónica) including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations which re
Slide 3: Index
Index 01 Leading growth and profitability in a dynamic industry 02 Solid start to 2011 03 Conclusions Telefónica, S.A 2 Investor Relations
Slide 4: Strengthened position to lead a growing industry
Strengthened position to lead a growing industry We have reinforced our asset base in an industry where scale and spectrum are key … 290 m accesses (+6% organic y-o-y) … strategic & Through organic industrial growth … #5 on worldwide accesses ranking (Dec-10) alliances … In-market Spectrum Incre
Slide 5: We have a clear strategy to capture the opportunities ahead of us
We have a clear strategy to capture the opportunities ahead of us Profitable mobile data growth monetisation Development of applications and new services Tiered pricing Broaden our portfolio of apps and MBB new services Serv. beyond ARPU management Revenues connectivity CAGR 10-13E: Leverage
Slide 6: Profitable mobile data monetisation is our key strategic priority
Profitable mobile data monetisation is our key strategic priority Focus on customer experience Profitability Innovation Innovative network services and specialized Short term: customer care Significant ARPU uplift due to Balanced and affordable range of devices higher data usage from early a
Slide 7: Beyond connectivity we are reinforcing our service ecosystem
Beyond connectivity we are reinforcing our service ecosystem Verticals Companies Video & DH Jajah Unified communications Applications Tuenti Social network Financial services Terra Media content and services eHealth Rumbo eTravel Security TIS Security M2M TLS eLearning Cloud T Solutions Enterprise s
Slide 8: Our transformation strategy to enable growth and maximize efficiency
Our transformation strategy to enable growth and maximize efficiency Best in class Leveraging fixed and mobile technologies to meet customer demands Networks Managing efficiently coverage and traffic growth Continuous IT as a key Highly resilient 6 Global Data Centers transformation focus on a
Slide 9: We are expanding our value oriented customer base to deliver a solid long term guidance
We are expanding our value oriented customer base to deliver a solid long term guidance Accesses 2013E (million) > 340 Revenues CAGR 10-13E ~+6% +1/4% CAGR 10/13E MBB +50% OIBDA margin Upper 30s Limited erosion, 2011 – 2013E from 2010 FBB +7% CapEx Mobile +5% < €27 bn Cumulative 2011 – 2013E Fixed -
Slide 10: Solid business and financial trends supporting shareholders returns and solvency
Solid business and financial trends supporting shareholders returns and solvency Not to be € 1.6 DPS for FY 2011E (14.3% y-o-y) paid with Shareholder debt remuneration € 1.75 DPS minimum target for FY 2012E €1.75 minimum annual shareholder remuneration beyond 2012 Solvency Net debt + cash co
Slide 11: FCF exceeding dividend payments
FCF exceeding dividend payments € in billions Sustained OIBDA growth trend 2010 FCF Regions with positive organic growth in FY 2010 offset Spain decrease Pre-spectrum: 10.2 Spain Latam Europe 9.6 € -0.8 € +0.8 € +0.1 bn bn bn 2.4 7.2 Additional FCF from VIVO acquisition: € 0.2 bn1 No critical relian
Slide 12: Index
Index 01 Leading growth and profitability in a dynamic industry 02 Solid start to 2011 03 Conclusions Telefónica, S.A 11 Investor Relations
Slide 13: Financial Summary
Financial Summary Jan-Mar Change Organic € in millions 2011 y-o-y change Revenues 15,435 +10.8% +1.4% Broad diversification OIBDA 5,574 +9.0% -1.0% 45% ( +2.4 p.p. ) T. Latam 45% ( +2.1 p.p. ) OIBDA Margin 36.1% -0.6 p.p. -0.9 p.p. 28% ( -1.8 p.p. ) Operating Income 3,057 +4.3% -1.3% T. España (OI)
Slide 14: Smartphone adoption driving mobile data growth
Smartphone adoption driving mobile data growth MBB penetration in our mobile base (Mar-11) Q1 11 Mobile data revenue growth (organic y-o-y ) 27% • 18% in Venezuela • 7% in Chile +36.5% 21% • 6% in Brazil 12% +18.6% 6% Telefónica T. Europe T. España T. Latam Total Non-P2P SMS Mobile data Enlarged a
Slide 15: Q1 11 performance in-line with year-end targets
Q1 11 performance in-line with year-end targets 2011 Guidance Q1 11 Revenues Up to 2% 1.4% OIBDA Margin Upper 30s Limited erosion y-o-y 35.6% (-0.9 p.p) CapEx ~ 9,000 1,412 Growth to accelerate throughout the year Figures according to guidance criteria. Telefónica, S.A 14 Investor Relations
Slide 16: T. España: Continued weakness, slightly better top line performance
T. España: Continued weakness, slightly better T. ESPAÑA top line performance Mobile Fixed Total Sequential improvement across businesses Revenues (y-o-y change) -5.3% Value oriented commercial strategy -5.5% -5.6% among tough price competition: -6.1% -7.5% -9.8% • Focused on MBB and contract Q4
Slide 17: T. España: Solid momentum on data across businesses
T. ESPAÑA Solid momentum on data across businesses MSR (Q1 11 y-o-y) Wireline Revenues +21.4% Data Voice & Internet Subsi- +1.3 p.p. due to Q4 10 & IT Access & BB diaries Q1 11 applications sale +10.0% -2.6 p.p. mainly due to lower USO, impacting voice/access +0.6 p.p. +3.8 p.p. -0.6 p.p. -5.3% +0.7
Slide 18: T.Latam: Strong growth, sustained healthy profitability
T. LATAM T.Latam: Strong growth, sustained healthy profitability x2 +15% Accesses (Mar-11 +10% +10% +8% organic +24% in y-o-y growth) contract -1% Total Fixed TV Mobile MBB FBB Solid commercial momentum Healthy revenue & OIBDA growth: • Outstanding performance in Brazil +3.0p.p. +0.0p.p. +5.7% R
Slide 19: Brazil: Outperforming market peers
T. LATAM Brazil: Outperforming market peers Improved operational & financial performance Synergies on track after the acquisition of 50% of Brasilcel Revenue Breakdown (y-o-y organic growth) Q1 11 Synergies NPV (€ bn) Minimum FY 10 target +62.3% +12.9% 3.3/4.2 +14.6% +47.0% 1/1.5 +11.4% +7.4% 0.5/0.
Slide 20: T. UK: value growth, benchmark financial performance
T. EUROPE T. UK: value growth, benchmark financial performance Mobile customer KPIs (y-o-y growth) Customers (Mar-11 y-o-y) Contract upgrades +9% Selective approach to a competitive market: +0% Q1 11 • Best in class contract churn at 1.1% +4% Q4 10 • Contract base is 48% over total (+2 p.p. y-o-y)
Slide 21: T. Germany: Growth acceleration, leveraging integration
T. EUROPE T. Germany: Growth acceleration, leveraging integration Customer KPIs (y-o-y growth) % Contract net adds Contract Mobile Net Adds (y-o-y) • Total customer base up 9% y-o-y to 24 million +31% +34% • Strong contract net adds and lower churn (-0.1 p.p. y-o-y) 43% 67% • Sustained push in MBB p
Slide 22: Solid liquidity position to manage debt maturities
Solid liquidity position to manage debt maturities Unused committed lines (Mar-11) Maturity profile (Mar-11) Includes undrawn amount on new syndicated to cover pending payments on Brasilcel acquisition (€ 2 bn) 4bn on syndicated facility recently extended to 2014 and € in billions 11.0 2016 € in bil
Slide 23: Index
Index 01 Leading growth and profitability in a dynamic industry 02 Solid start to 2011 03 Conclusions Telefónica, S.A 22 Investor Relations
Slide 24: Conclusions
Conclusions We are better positioned to lead our growing industry: the right scale, capabilities and strategy We are focused on value growth and on capturing new services opportunities We continue transforming our company to enable growth and maximize efficiency We maintain a solid financial
Slide 25: Telefónica
‘Jelefonica