Telefonica Sa · BME:TEF
Telefonica Sa — Telefonica S A — H1 2009 Earnings Presentation
22 slides from Telefonica Sa's earnings presentation, Jul 30, 2009
Slide 1: Investor Relations July 30th, 2009
Investor Relations July 30th, 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 doc
Slide 3: H1 09 results key highlights
H1 09 results key highlights GROUP FINANCIALS Solid set of results, Q2 09 trends in line with Q1 09 performance Positive organic revenue growth capitalizing on our diversification Robust profitability and ramp-up in organic OpCF generation driven by OpEx&CapEx discipline and economies of scale Doubl
Slide 4: Solid performance across the board
Solid performance across the board GROUP FINANCIALS Jan-Jun 2009 Revenues Operating Income (OI) Change H1 09/H1 08 Net income - -2.0% - -0.8% € in millions Operating Income before D&A (OIBDA) - -1.7% +0.7% +6.3% OIBDA Margin +0.1p.p. Change organic(1) H1 09/H1 08 +1.4% +3.0% +0.6p.p. +4.2% OpCF (OIB
Slide 5: Pushing underlying EPS up by almost 14%
GROUP FINANCIALS Pushing underlying EPS up by almost 14% FCFS (€) H1 08 +6.9% 0.73 0.78 H1 09 € in millions (% change y-o-y) Excludes the impact derived from Airwave and Sogecable disposals registered in 2008. EPS (€) H1 09 Underlying(1) y-o-y growth 0.79 +13.7% +3.4% Reported y-o-y growth H1 09 OI
Slide 6: H1 performance in-line with year-end targets
H1 09 performance in-line with year-end targets 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 r
Slide 7: Generating healthy OpCF with a benchmark profitability
Generating healthy OpCF with a benchmark profitability GROUP FINANCIALS Organic growth: Assumes constant exchange rates and includes the consolidation of Telemig in January-March 2008. OIBDA figure does not include the impact of capital gains registered in the second quarter of 2008 from the sale of
Slide 8: Managing OpEx & CapEx to maximize OpCF generation
Managing OpEx & CapEx to maximize OpCF generation - -6.2% organic(1) decrease in total commercial costs: Cuts in handset subsidies mainly in T. Latam, advertising in the 3 regions and commissions costs in T. Latam and T. Espana Interconnection costs reduction (-2.1% organic(1) y-o-y) due to lower MT
Slide 9: T. España: Focus on OpEx and CapEx to maximize OpCF
CapEx and CapEx over revenues; (comparable(2)) OIBDA and OIBDA margin (comparable (2) y-o-y change) T.Espana: Focus on OpEx and CapEx to maximize OpCF TELEFONICA ESPANA Ex PUT in Q4 08, ex USO in Q1 09 and seasonality in Q2 09. Excludes impact of USO in Q1 09 on revenues (Wireline: € 75 m) and OIBDA
Slide 10: KPIs: improved performance q-o-q in most services
KPIs: improved performance q-o-q in most services TELEFONICA ESPANA Sustained leadership in the wireline Broadband market: Market share at 56% Effective BB ARPU: -6.6% y-o-y in H1 09 86% of retail BB accesses with 2P/3P Continued momentum in mobile BB take-up Back to positive net adds in Pay TV: 4.7
Slide 11: Q2 revenue performance shows similar trends to previous quarter
Q2 revenue performance shows similar trends to previous quarter TELEFONICA ESPANA Q2 09 H1 09 Solid growth of wireline data revenues +7.1% +5.4% Sustained healthy IT revenue growth, despite seasonality +4.8% +13.5% Robust wireless data connectivity revenues +56.6% +53.6% Stabilization of y-o-y decli
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 June-08 June-09 60.6% 62.2% - -1.6p.p. Efficiency ratio: Defined as last 12 months ([OpEx+CapEx-Internal exp. Capitalized in fixed assets-other non-recurring expenses]/Re
Slide 13: T. Latam: Solid top line growth and strong profitability
TELEFONICA LATAM T.Latam: Solid top line growth and strong profitability High single digit accesses growth (+8.7% y-o-y) underpinned by mobile (+11.1%) and BB (+15.0%) Robust organic revenue y-o-y performance driven by mobile and Internet & TV sales Sustained OIBDA margin expansion led by enhanced p
Slide 14: Wireless business: Healthy operating performance drives revenue growth
Wireless business: Healthy operating performance drives revenue growth TELEFONICA LATAM Assumes constant exchange rates and includes Telemig in Jan-Mar 2008. On a comparable basis. Mobile revenue growth (y-o-y organic(1)) Data +36.6% Penetration E (%) 73 62 99 114 91 83 99 Data Rev. Growth (%) H1 09
Slide 15: Robust BB accesses growth, leveraging strong push in bundles
TELEFONICA LATAM Robust BB accesses growth, leveraging strong push in bundles Sustained net adds in Q2 09: 143k 2P&3P/BB: +10p.p. y-o-y Total bundles/fixed lines: +4p.p. y-o-y Increasing weight of Internet & Pay TV revenue to 20.7% of total wireline revenues Solid expansion in Pay TV accesses Flatti
Slide 16: Sustained healthy performance in most markets
Sustained healthy performance in most markets 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 H1 09 y-o-y growth (in local currency) Total Wireline revenue Wi
Slide 17: T. Europe: strong performance in key markets, driving efficiency higher
T. Europe: strong performance in key markets, driving efficiency higher TELEFONICA EUROPE Maintaining momentum across markets 85.0% of H1 09 mobile net additions in contract Lower y-o-y churn Steady mobile BB expansion Revenue growth despite challenging economic backdrop and regulation Ongoing optim
Slide 18: Strengthening our leadership in the declining UK mobile market
TELEFONICA EUROPE Strengthening our leadership in the declining UK mobile market Sustained outperformance in contract segment leveraging best churn rate in the market (1.2%) Further improving customer satisfaction gap vs. competitors Ongoing usage optimization driving voice ARPU down 6.6% y-o-y in l
Slide 19: Continued mobile customer growth, leveraging differential voice & broadband propositions
TELEFONICA EUROPE Continued mobile customer growth, leveraging differential voice & broadband propositions "O2 o" progressing well, gaining traction in the market 0.3 p.p. churn reduction over Q1 09 Fastest UMTS network in Germany(1) Improved y-o-y financial performance on solid foundations and focu
Slide 20: Longer maturity profile at a lower cost
GROUP FINANCIAL EXPENSES AND DEBT Longer maturity profile at a lower cost Calculation based on H1 09 OIBDA figure annualized excluding results on the sale of fixed assets. Combining improvement of liquidity profile and debt cost reduction Leverage target, including commitments, kept in the low part
Slide 21: Closing remarks
Closing remarks Solid set of results, Q2 09 trends in line with Q1 09 performance Positive organic revenue growth capitalizing on our diversification Robust profitability and ramp-up in organic OpCF generation driven by OpEx&CapEx discipline and economies of scale Double digit underlying increase in
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: July 30 th , 2009 By: /s/ Santiago Fernández Valbuena Name: Santiago Fernández V