Telefonica Sa · BME:TEF
Telefonica Sa — Telefonica S A — Merger or Acquisition (May 2020)
12 slides from Telefonica Sa's merger presentation, May 7, 2020
Slide 1: Combination of Telefonica UK and Virgin Media UK: Creating a leading communications provider in the UK
Combination of Telefonica UK and Virgin Media UK: Creating a leading communications provider in the UK 7th May 2020
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words
Slide 3: Transaction Summary
Transaction Summary ▪ Telefónica and Liberty Global have agreed to combine their telecom assets in the UK (Telefónica UK and Virgin Media UK) ‒ 50/50 JV creates UK leading convergent player with complementary strengths in mobile, broadband, video and B2B ‒ Stronger, larger, more diversified; combine
Slide 4: Transaction Structure and Key Terms
Transaction Structure and Key Terms Key Terms Telefónica Liberty Global Pre- Transaction 100%Pre-Transaction Structure 100% ▪ Based on the enterprise value of each business, and Structure after deducting Virgin Media UK’s £11.3bn net debt, Telefónica UK(1) Virgin Media UK(2) Liberty Global will make
Slide 5: Stronger, larger and more sustainable player
Stronger, larger and more sustainable player 46,5 46,3 Accesses 22,7 20,2 (m; 2019) 11,6 9,0 (7) 13,5 (1) 11,3 9,4 5,5 2,4 1,6 Revenue (2) (£bn; 2019) (4) (3) (5) (6) Margin 31% 37% 26% 21% 30% 12% (%) 4,2 (1) 4,1 2,5 OIBDA Pre-IFRS 16 1,2 0,7 0,2 (£bn; 2019) (2) (4) (3) (5) (6) Margin (8) (%) 19% 1
Slide 6: Compelling and differentiated value proposition
Compelling and differentiated value proposition • Broadband speeds up to 1GBps by 2021 Fastest broadband Customer Rich content centric mobile offering • Industry leader in NPS proposition • Only UK operator offering Netflix, • Sector leading loyalty Premium brands Amazon & all sports Complete Cyber
Slide 7: National Connectivity Champion
National Connectivity Champion Telefonica UK network: Highly competitive and Virgin Media UK network: High performance & Ultrafast cost-effective 5G ready mobile infrastructure Today and Future proof for tomorrow ◼ 99% population 4G coverage and ◼ 100% of VMED UK homes DOCSIS 3.1 hardware ready cons
Slide 8: Identified synergies of c.£6.25bn NPV, with c.80% related to cost and capex synergies
Identified synergies of c.£6.25bn NPV, with c.80% of full potential related to cost and capex synergies Identified synergies of c.£6.25bn(1) Run-rate operating and revenue synergies of c.£540m £6.25bn NPV Cash positive from 2023 £540m run-rate ▪ Cross-selling and bundling opportunities c.20% Revenue
Slide 9: Transaction fully consistent with TEF's strategy
Transaction fully consistent with TEF’s strategy Creates a leading and fully integrated champion in one of the ✓ 4 core markets for TEF Partnering ✓ with VMED Significant value creation through synergies UK is the Transaction most consistent compelling with TEF’s option for global strategy Telefonic
Slide 10: Governance, Exit and timetable
Governance, Exit and timetable ▪ The JV Board of Directors will consist of eight members, four from each of Liberty Global and Telefonica ▪ Governance / Certain matters will require unanimous approval of both companies’ representatives Shareholders ▪ The position of Chairman of the JV will be held f
Slide 11: Closing Remarks
Closing Remarks ▪ Creating a leading integrated player with significant cross-selling opportunities in the second largest European market, improving market positioning, group profile and business sustainability ▪ Combining Telefonica UK’s leading mobile operations and Virgin Media UK’s extensive bro
Slide 12: 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 7, 2020 By: /s/ Pablo de Carvajal González Name: Pablo de Carvajal González