Telefonica Sa · BME:TEF
Telefonica Sa — Telefonica S A — Investor Day (April 2011)
30 slides from Telefonica Sa's investor day presentation, Apr 14, 2011
Slide 1: Focus on profitable leadership
Focus on profitable leadership Guillermo Ansaldo Chairman and Chief Executive Officer, Telefónica España
Slide 2: Disclaimer
Disclaimer This presentation contains statements that constitute forward-looking statements about the Company, within the general meaning of the term and within the meaning of applicable securities laws, including financial projections and estimates and their underlying assumptions, statements regar
Slide 3: Index
Index Resilience and flexibility in a difficult environment Our strategy ‘Focus on profitable leadership’ Closing remarks
Slide 4: Resilience and flexibility in a difficult environment
Resilience and flexibility in a difficult environment
Slide 5: Since our last Investor Day, we have faced a tough market environment
Since our last Investor Day, we have faced a tough market environment y-o-y variation Real GDP 1 var. y-o-y Retail service communication market revenue variation 2 0.9% Difficult macro -0.1% conditions -4.4% -3.7% -4.0% FY 2008 FY 2009 FY 2010 Mobile ARPM decline accelerating Increased competitive p
Slide 6: Our performance has been affected...
Our performance has been affected... Our performance has been affected...
Slide 7: ... though we have been resilient in core value parameters
... though we have been resilient in core value parameters 1 Retail communication (fixed & mobile) revenue market share. Source: CMT and internal estimates 2 Comparable terms include Tuenti in the period Aug/Dec-09 and exclude the following effects: USO, real estate capital gains, Medi Telecom dispo
Slide 8: Going forward, we maintain our confidence in macro recovery
Going forward, we maintain our confidence in macro recovery The worst is over and the Spanish economy is expected to grow Reforms are firmly on track There are some uncertainties on the timing of the recovery
Slide 9: Competitive pressure is not expected to increase much further
Competitive pressure is not expected to increase much further Competitive situation Competitors likely to focus on service as macro improves Revenue market share 1 Fixed & Mobile Telefónica España 1 Retail communication (fixed & mobile) revenue market share. Source: CMT and internal estimates
Slide 10: The regulatory framework is more predictable
The regulatory framework is more predictable Strict traditional business regulation _____ Critical future issues mostly defined ULL prices: CMT has recently raised prices to € 8.32 (~+7%), below European Union average (~ € 9) CMT decision represents a new regulatory path for ULL prices going forward
Slide 11: New opportunities are arising in the market
New opportunities are arising in the market 1 Source: Internal estimates. Retail FBB: Include FO (Fiber Optic), DSL, cable modem and satellite. 2 Source: Internal estimates. Includes Corporate market for desktops, hosting, security and other applications. 3 Source: Internal estimates 4 Source: IDC
Slide 12: We are focused on profitable leadership to successfully manage this scenario
We are focused on profitable leadership to successfully manage this scenario Core principles Strategic priorities
Slide 13: Our strategy 'Focus on profitable leadership'
Our strategy ‘Focus on profitable leadership’
Slide 14: Our strategy 'Focus on profitable leadership'
Our strategy ‘Focus on profitable leadership’ Smart focus on value Reshaping of our cost base Optimized use of capital
Slide 15: We are handling our diverse customer base through a customized strategy
We are handling our diverse customer base through a customized strategy Service revenue split 1 T. España % 1 Excludes fixed & mobile handset sales, subsidiaries and others 2 Others include USO 3 BB (retail and wholesale FBB connectivity, MBB, fixed and mobile devices (PCMCIAs and Dongle) and fixed
Slide 16: A smart focus on value is key to capture recovery and ensure competitiveness
A smart focus on value is key to capture recovery and ensure competitiveness A differentiated customer experience
Slide 17: Customer experience remains a crucial differentiating factor
Customer experience remains a crucial differentiating factor Attack root causes for dissatisfaction (e.g. claims)
Slide 18: We are adapting our product portfolio to the needs and value of each segment
We are adapting our product portfolio to the needs and value of each segment Developing best practices in the corporate space... Leading the corporate space...
Slide 19: In MBB our priority is to actively develop the market in a profitable way
In MBB our priority is to actively develop the market in a profitable way 1 Figure as of Q410 2 Complementarity rate defined as the share of Mobile Connectivity users that have an additional Fixed Broadband connection 3 Substitution defined as current customers moving from FBB to MBB over total new
Slide 20: Services beyond Connectivity will continue to be developed enriching our portfolio
Services beyond Connectivity will continue to be developed enriching our portfolio Pay TV evolution: · OTT model 1 (Video Club Movistar) >90% coverage over FBB lines · Improved quality and content
Slide 21: Our smart focus on value will enhance and diversify our revenue profile
Our smart focus on value will enhance and diversify our revenue profile Revenue mix evolution T. España %
Slide 22: Our strategy 'Focus on profitable leadership'
Our strategy ‘Focus on profitable leadership’ Smart focus on value Reshaping of our cost base Optimized use of capital
Slide 23: There is further room to improve our efficiency and continue delivering a benchmark OIBDA margin
There is further room to improve our efficiency and continue delivering a benchmark OIBDA margin Benefit from our commercial focus on value (vs. volume) and manage direct costs ... Gradually balancing SAC to SRC, acquisition vs. retention
Slide 24: Additional measures to gain more flexibility and compensate for potential recovery delays
Additional measures to gain more flexibility and compensate for potential recovery delays Current initiatives ...
Slide 25: Our strategy 'Focus on profitable leadership'
Our strategy ‘Focus on profitable leadership’ Smart focus on value Reshaping of our cost base Optimized use of capital
Slide 26: We will optimize the use of capital by adjusting our asset base...
We will optimize the use of capital by adjusting our asset base... Ongoing processes... · Sale of IT applications · Real estate ... and other programs
Slide 27: ... and follow a "smart" investment policy to capture growth
... and follow a “smart” investment policy to capture growth Premium speed and quality We will remain flexible and adapt to market conditions
Slide 28: Closing remarks
O3 Closing remarks
Slide 29: Focus on profitable leadership will balance short term results and long term sustainability and growth
Focus on profitable leadership will balance short term results and long term sustainability and growth Core principles 1 Retail communication (fixed & mobile) revenue market share. Source: CMT and internal estimates 2 Revenue increase from FY 2010-2013E. Includes Services beyond Connectivity and MBB
Slide 30: telefu
telefu 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 14 th , 2011 By: /s/ Ramiro Sánchez de Lerín García-Ovies Name: Ram