Telefonica Deutschland Holding AG · LS:A1J5RX
Telefonica Deutschland — Q4 2016 Earnings Presentation
25 slides from Telefonica Deutschland's earnings presentation, Feb 22, 2017
Slide 1: Q4 2016 preliminary results
Q4 2016 preliminary results Telefónica Deutschland Razón social Investor Relations 00.00.2015 22 February 2017 Public – Nicht vertraulich
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward-looking statements and expectations about Telefónica Deutschland Holding AG (in the following “the Company” or “Telefónica Deutschland”) that reflect the current views and assumptions of Telefónica Deutschland's management with res
Slide 3: FY 2016 results in line with outlook; upgrade of synergy case
FY 2016 results in line with outlook; upgrade of synergy case MSR • MSR incl. MTR & roaming effects -1.7% y-o-y, in line with full-year outlook -1.1% y-o-y • Customer migration & brand restructuring completed; O2 Free well received (excl. regulatory effects) • Market remains dynamic yet rational; fu
Slide 4: Commercial update: Focus on products, data growth and final brand portfolio
Commercial update: Focus on products, data growth and final brand portfolio Premium Premium: Enhanced services • O2 Free extremely well received, early indications positive • Data traffic 1.5x vs. O2 Blue All-in portfolio • Successful cross- and upselling into Non-premium: Own secondary brands base
Slide 5: O2 Free and Sky Deutschland: Exclusive partnership for O2 customers
O2 Free and Sky Deutschland: Exclusive partnership for O2 customers O2 Free – Offline portfolio Sky proposition - Details XL • Exclusive partnership with Sky for O2 L LTE Max customers LTE Max 8 GB M • EUR 4.99 Supersport day tickets S 4 GB €54.99 LTE Max includes Bundesliga, UEFA Champions LTE Max
Slide 6: Network update: Significant progress with decommissioning and consolidation
Network update: Significant progress with decommissioning and consolidation Network integration timeline 2016-2019 • Decommissioning of 14k sites • Roll-out of 30k LTE elements • Utilisation of new licenses 3G national roaming for all Deal to transfer of 7,700 Sale of towers to Consolidation and rol
Slide 7: From MIT to M+T: Focus on Momentum and Transformation
From MIT to M+T: Focus on Momentum and Transformation Achievements 2015 & 2016 Focus 2017 and beyond • Maintained momentum Keep the • Relaunch of major brands Momentum • Major integration workstreams completed, e.g. customer migration Keep the • Restructuring in line with Momentum expectations Integ
Slide 8: Telefónica Opportunities in data and connectivity
Telefónica Opportunities in data and connectivity Innovative solutions for a connected, digital world B2B: Key focus areas ADA and IoT Target groups Target communication to your customers: Place your offers Advertisers, media Smart Media at the right time, at the right place agencies Understand your
Slide 9: Q4 2016: Strong operating momentum & synergy capture; meeting full-year outlook
Q4 2016: Strong operating momentum & synergy capture; meeting full-year outlook • MSR -2.1% year-on-year, underlying trends stable versus prior quarter MSR -0.9% y-o-y • Significant impact from MTR cuts and roaming legislation (ex reg effects) • Continued headwinds from retail to wholesale shift Net
Slide 10: Customer migration completed & brand portfolio finalised; strong partner trading
Customer migration completed & brand portfolio finalised; strong partner trading Partner trading remains strong Maintaining retention focus PO gross adds (abs) GA partner brands GA retail brands PO churn Churn retail brands O2 PO churn (%) 1.6% 1.4% 1.4% 1.4% 1.3% 1.5% 1.3% 1.3% 1.2% 43% 45% 53% 59%
Slide 11: Continued growth in data traffic and LTE customer base support momentum
Continued growth in data traffic and LTE customer base support momentum Data traffic growth continues strong Significant growth in LTE customer base Traffic (TB/quarter) LTE customers (million) +10% 7.9m 8.7m 9.4m 10.6m 12.1m +20% +20% +14% +2% +12% +62% +8% +10% +53% 81,641 Q4 ’15 Q1 ’16 Q2 ’16 Q3
Slide 12: Underlying MSR trajectory stable sequentially
Underlying MSR trajectory stable sequentially Revenue structure (in EUR m) Partner share of postpaid MSR with stable trend Fixed Hardware MSR MSR from partner business (in EUR m) y-o-y Share of -6.0% performance postpaid ~17% ~17% ~18% ~19% ~20% revenue 2,059 1,936 266 -10.3% +8% +1% 238 +12% 413 -1
Slide 13: OIBDA driven by successful synergy capture; incremental savings in fourth quarter
OIBDA driven by successful synergy capture; incremental savings in fourth quarter Structure of OIBDA for January to December 2016 (in EUR m) -4.9% +3.8% +14.7% y-o-y y-o-y y-o-y 7,503 150 24.4% 27.6% margin margin -2,452 -599 -2,772 1,828 2,069 -89 352 -23 Revenue Other income Supplies Personnel Oth
Slide 14: FCF driven by tower sale cash
FCF driven by tower sale cash Evolution of Free Cash Flow1 YTD as of December 2016 (in EUR m) FCF1 excl. tower 821 (352) Working capital movements & adjustments: sale effect EUR 237 million (1,102) 587 (31) 2,069 0 88 (75) 224 1,408 OIBDA Tower sale CapEx2 Capex & Restructuring Other working Tower s
Slide 15: Updating synergy case to EUR 900 million in 2019
Updating synergy case to EUR 900 million in 2019 Synergy case 2015 - 2019 (EUR m) Integration workstreams CapEx synergies Remaining synergies (2018/9): OpEx & rev. synergies Ca. EUR 230 million 2015 2016 2017 2018 (~60% Opex & ~40% Capex) 1300 FTEs (~80% of target) Leaver programme 400 shops 100%
Slide 16: Outlook 2017
Outlook 2017 Actual Outlook 2016 Actual 2016 Outlook 2017 2015 (year-on-year) (EUR m / y-o-y pct. change) (y-o-y pct. change) (EUR m) MSR 5,532 Slightly negative 5,437 / -1.7% Slightly negative to flat 3 Excluding the impact from regulatory effects OIBDA 1,760 Low to mid single-digit % growth 1 1,
Slide 17: Main takeaways
Main takeaways • Q4/FY results in line with outlook 2016 • Strong operating momentum with underlying MSR trajectory stable vs prior quarter • Successful launch of O2 Free tariff portfolio with focus on more4more and stimulating data usage • Completion of customer migration and brand restructuring •
Slide 18: Q&A session
Telefónica Deutschland Q4 2016 preliminary results – Q&A session 18 Public – Nicht vertraulich
Slide 19: Appendix – KPIs
Appendix – KPIs 19 Public – Nicht vertraulich
Slide 20: Mobile KPIs
Mobile KPIs Postpay net adds (‘000) Prepay net adds (‘000) 503 426 237 231 339 336 71 -87 -24 -89 201 169 198 181 141 -236 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ´161 Q1 ’16 Q2 ’16 Q3 ´162 Q4 ’16 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ’15 Q1 ’16 Q2 ’16 Q3 ´162 Q4 ’16 1 Excluding an impact from a business customer base harmonisat
Slide 21: Mobile KPIs
Mobile KPIs Postpay ARPU (EUR) Prepay ARPU (EUR) -0.5% -5.5% 17.2 17.2 17.4 6.0 5.9 16.9 5.9 16.6 16.6 16.6 5.8 5.7 5.7 5.7 5.6 16.0 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ’15 Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ’15 Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Smartphone penetration (%)1 Smartphone penetration O2 c
Slide 22: Fixed-line KPIs
Fixed-line KPIs Retail broadband net adds (‘000) Fixed accesses (‘000) Therof DSL Therof VDSL Retail DSL thereof VDSL 3 2 2 2,128 2,115 2,103 2,098 2,101 2,104 2,102 2,104 66 58 64 73 76 76 63 74 -71 -77 -77 -73 -74 -65 -71 732 806 -81 593 669 380 444 517 322 -13 -2 -16 -13 -5 Q1 ’15 Q2 ’15 Q3 ’15 Q
Slide 23: P&L
P&L Revenue structure (EUR m) OIBDA (post GF, pre except / EUR m)1 Fixed Handset MSR Other revenues OIBDA margin 19.9% 23.3% 22.9% 23.1% 21.6% 25.0% 24.9% 25.9% 1,979 2,059 1,901 1,949 1,858 1,876 1,936 266 1,834 501 261 260 256 238 453 454 476 459 467 253 245 245 282 303 301 413 227 341 401 267 226
Slide 24: Financials
Financials Net debt and leverage Net financial debt Leverage ratio 0.7x 1.2x 0.9x 0.7x 0.7x 0.8x 0.7x 0.4x 1,778 1,225 1,415 1,225 1,266 1,356 1,195 798 Q1 ’15 Q2 ’15 Q3 ’15 Q4 ’15 Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Free cash flow1 (YTD) Free Cash Flow 1.408 832 951 599 372 105 125 -20 Q1 ’15 Q2 ’15 Q3 ’15
Slide 25: Telefónica Deutschland
‘Telefonica Deutschland WE CHOOSE IT ALL_
Telefónica Deutschland Holding — Q4 2016 Earnings Presentation on 6ix