Slide 1: Results
Results
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward looking statements about Telefonica Group (going forward, "the Company" or Telefonica) including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations which re
Slide 3: Q1 11 Results Highlights: Distinctive profile
TELEFONICA Solid start to 2011, in line with Company expectations Continued strength in revenue growth, sustained Industry leading profitability T. Latam driving organic growth, already at 45% of consolidated revenues & OIBDA Monetisation of accelerating MBB penetration boosts mobile data sales (+19
Slide 4: Financial Summary
Financial Summary Revenues and OIBDA nominal growth rates impacted by: Changes in consolidation added around 6 p.p. Forex added around 3 p.p. Jan-Mar 2011 Revenues Operating Income (OI) Change y-o-y Net income +10.8% € in millions OIBDA OIBDA Margin Organic change OpCF (OIBDA-CapEx) 15,435 +1.4% Jan
Slide 5: Bottom line strongly impacted by higher D&A
T. Espana (21% of total): +6.1% y-o-y T.Latam (46% of total): +24.6% y-o-y driven by Vivo (100% in Q1 11 + PPA: € 86 m) T.Europe (32% of total): + 9.4% y-o-y Total PPAs: € 324 m (+12.9% y-o-y) Bottom line strongly impacted by higher D&A Q1 11 EPS: € 0.36 (€ 0.41ex PPAs) 4 January-March 2011 € in mil
Slide 6: Top line growth underpinned by Latam and broadband
Total Accesses Revenue mix by regions Top line growth underpinned by Latam and broadband 5 290 m (+6% organic y-o-y) Mar-11 y-o-y organic growth +71% MBB FBB Pay TV +14% Mobile Contract +9% +10% 71 m 27 m 17 m 3 m "Value" over "volume" commercial strategy, focused on quality & new services: Q1 net a
Slide 7: Smartphone adoption driving mobile data growth
Smartphone adoption driving mobile data growth Enlarged and increasingly affordable range of devices Focused commercial actions Tiered pricing across operations drives profitable mobile data monetisation MBB penetration: MBB accesses with data attached rate/Total mobile customer base. Aggregate figu
Slide 8: Balancing growth and profitability
Balancing growth and profitability 7 Q1 11 OIBDA margin Reporte d Organic 36.1% 35.6% -0.9p.p. y-o-y -0.6p.p. y-o-y Contained OIBDA margin erosion compatible with: Strong smartphone adoption Higher commercial costs (+4% organic y-o-y) Increase in network & IT expenses (up 7% organic y-o-y) Weak perf
Slide 9: Q1 performance in-line with year-end targets
Q1 11 performance in-line with year-end targets Figures according to guidance criteria. 8 Revenues 2011 Guidance ? 1.4% Upper 30s Limited erosion y-o-y 35.6% (-0.9 p.p) 1,412 Up to 2% ~ 9,000 ? ? Growth to accelerate throughout the year OIBDA Margin CapEx Q1 11 TELEFONICA
Slide 10: T. España: Continued weakness, slightly better top line performance
T. Espana: Continued weakness, slightly better top line performance Q1 11 OpEx breakdow n (y-o-y change) Q1 11 CapEx Sequential improvement across businesses Value oriented commercial strategy among tough price competition: Focused on MBB and contract FBB retail market share at 53% T. ESPANA Cost li
Slide 11: Solid momentum on data across businesses
Solid momentum on data across businesses 10 Mobile ARPU Voice ARPU -10.7% -13.5% Voice: Ongoing price competition with no elasticity Data ARPU growth getting traction Retail FBB ARPU -10.7% -12.7% Revenues -2.1% -4.2% No change in market dynamics: Strong price competition MSR (Q1 11 y-o-y) Sound dat
Slide 12: T.Latam: Strong growth, sustained healthy profitability
T. LATAM T.Latam: Strong growth, sustained healthy profitability Organic growth: assumes average constant exchange rates as of Q1 10 and excludes changes in the consolidation perimeter and hyperinflation accounting in Venezuela in both years. Solid commercial momentum Healthy revenue & OIBDA growth:
Slide 13: T.Latam: Solid top line across businesses
T.Latam: Solid top line across businesses 12 y-o-y organic growth Data services driving growth in both businesses Mobile voice keeps growing Sequential acceleration in wireline revenue growth +3% +10% Wireless 62% Wireline 38% +3% +10% Revenue Mix Wireless Revenue (y-o-y organic growth) % Data Rev/M
Slide 14: Brazil: Outperforming market peers
Brazil: Outperforming market peers 13 Revenue (y-o-y organic growth) +6.2% +3.6% FY 10 Q1 11 9M 10 H1 10 Q1 10 +2.7% +1.5% +0.3% Accesses (Mar-11 y-o-y growth) Total +12% Mobile +15% x 2 Fixed Pay TV FBB MBB MBB penetration +21% -0.2% +8% 27% Contract y-o-y Improved operational & financial performan
Slide 15: Sound momentum in key operations
Sound momentum in key operations Growth rates in financials are given in local currency. In Venezuela, excludes also hyperinflation accounting in both years. Contribution to Telefonica Revenue Mexico Strengthened MBB positioning: MBB accesses (x4 y-o- y) Weak MSR on decreasing revenues in prepaid se
Slide 16: T.Europe: driving market dynamics, delivering growth
T.Europe: driving market dynamics, delivering growth T. EUROPE Continued customer growth, focusing on value, MBB and new business areas: Strong contract net adds at 446 k (+2% y-o-y) Sustained low level contract churn 67% Q1 contract handsets sales were smartphones MBB penetration at 27% (+3 p.p. vs
Slide 17: T. UK: value growth, benchmark financial performance
T. UK: value growth, benchmark financial performance Focus on customer lifetime value along with smart market investment: Lower upgrades in the quarter and interconnection cost benefit CapEx evolution (-3.2% y-o-y) mainly benefiting from spectrum refarming Progressing well with the restructuring pro
Slide 18: T. Germany: Growth acceleration, leveraging integration
Total customer base up 9% y-o-y to 24 million Strong contract net adds and lower churn (-0.1 p.p. y-o-y) Sustained push in MBB penetration to 22% of our mobile base Further expansion in prepay segment (+11% y-o-y) Cross-selling opportunities ahead as HanseNet integration finalised Revenues up 1.9% y
Slide 19: Net financial debt reduced by €1.4 bn
Net financial debt reduced by € 1.4 bn while leverage target, including commitments, kept within target range (2.42x) Above € 7.5 bn balanced refinancing and average maturity restored above 6 years, in line with our target Existing forward starting swaps for fixing rates in the long-term and expecte
Slide 20: Closing remarks
Closing remarks Solid start to year driven by strong execution Commercial push focus on value and MBB Steady revenue growth, benefiting from our diversification Sustained industry-leading profitability Robust cash flow generation 2011 outlook confirmed Distinctive profile 19 TELEFONICA
Slide 21: 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: May 13 th , 2011 By: /s/ Santiago Fernández Valbuena Name: Santiago Fernández Va