Telefonica Sa · BME:TEF
Telefonica Sa — Telefonica S A — Investor Day (October 2009)
41 slides from Telefonica Sa's investor day presentation, Oct 9, 2009
Slide 1: Delivering Sustainable Growth
delivering sustainable growth cesar alierta exective chairman and chief executive officer 9 october 2009
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 regard
Slide 3: Index
Index 1Telecoms: A steady growth industry 2Telefonica, a differential growth track Our current strengths Our growth strategy Our new guidance & shareholders’ return policy
Slide 4: The digital revolution is happening regardless the economic cycle
01 The digital revolution is happening regardless the economic cycle Cost control* More focus on value for money Telecom spend sheltered with lower price*More onhne sensitiveness More outsourcing opportunities _____ .. Focus on access market. Increased market share by weakest playersconsolidation __
Slide 5: People are willing to adopt new services to improve the way they live and work
People are willing to adopt new services to improve the way they live and work Time to reach the first 150 million users
Slide 6: We are becoming digital with Telecoms covering an increasing number of people's needs
We are becoming digital with Telecoms covering an increasing number of people’s needs,... 444m _____ Broadband world4,075 m _____ Mobile subscribersusers fe. Sjrct: ‘far -JK. May 09B Source: Pant T-ap-c. y2 D9-j.;k 1 668 m _____ Online world64% US teens have created75% Of 50+US citizens populationco
Slide 7: ...while improving business productivity and competitiveness...
...while improving business* productivity and competitiveness...
Slide 8: ...and becoming an essential pillar for governments to promote a renewed world economic model
...and becoming an essential pillar for governments to promote a renewed world economic model US Broadband Technology Opportunities Program The program approved in February 2009 focuses on expanding broadband services to enhance broadband capacity at public computer centers, stimulate the economy an
Slide 9: Our industry will continue to be a continuous source of growth
Our industry will continue to be a continuous source of growth... 7.2 bn total accesses by 2012E1 413 bn accesses since 2008 FBB accesses Xl. 5 x MBB accesses X42 FTTHX33 Mobile data market US$ 350 bn bv 2012E2 Total traffic volume X4 from 2008 to 2012E4 Towards an “a I ways-on-world” User generated
Slide 10: ...with other multiple applications new business arising towards Total Digital Life
...with other multiple applications new business arising towards an eventual Total Digital Life
Slide 11: Index
Index 1Telecoms: A steady growth industry 2Telefonica, a differential growth track Our current strengths Our growth strategy Our new guidance & shareholders’ return policy
Slide 12: What makes us a differential player in this growth industry? Our current strengths
02 What makes us a differential player in this growth industry? Our current strengths Guidence & Shareholders’ return policy our focused growth strategy
Slide 13: Our current strengths
02 Our current strengths A differential scale with a value creating diversification and an optimum risk profile _____ A consistent growth company Trusted and strong brands _____ An excellent execution track record An experienced and committed team Best in class efficiency with room for further impro
Slide 14: A differential scale with a value creating diversification and an optimum risk profile
A differential scale with a value creating diversification and an optimum risk profile Globalby number of“Investment Grade” GLOBLEMobie:201m accessescountries Broadband: 13 m Pay TV: 2m Regional Access market share of 30% in Latin America 3 and 20% in Europe4 ILocal #1or#2 in our markets5 Customer-c
Slide 15: A consistent growth company
02 A consistent growth company 1.Accesses data Jun-09 over Dec-00 2.OpCF: OIBDA — CapEx. Fy2000 CapEx excluding UMTS related countries
Slide 16: Trusted and strong brands
02 Trusted and strong brands Institutional Commercial top of Mind brand #1 or #2 in 90% of our markets
Slide 17: An excellent execution track record (1/2)
02 An excellent execution track record which makes us highly predictable and thus a lower risk choice (l/2) Revenues OIBDA Consistent delivery
Slide 18: An excellent execution track record (2/2)
02 An excellent execution track record which makes us highly predictable and thus a lower risk choice (2/2) Source: Morgan Stanley based an public company Fillings
Slide 19: An experienced and committed team
02 An experienced and committed team Cesar Alierta — Executive Chairman & CEO Telefonica _____ since Jul-0010.2 m call options since 1970 Julio Linares-COO Telefonica _____ c.p. since Dec-07253K shares Santiago FernandezValbuena — CFO Telefonica _____ c.p. since Jul-02323 k shares Since Feb-99 Jose
Slide 20: Best in class efficiency with room for further improvements
02 Best in class efficiency with room for further improvements IB5 Jc Source: Morga n Stanley. Internal data for TelefiSnlca. (Operating eapenses 4 CapEx — Internal expenses capitalized to fixed assetsJ/Reuenue. CapEx figure endudei Real Estate Efficiency Program of T.Etpa na and spectrum licenses
Slide 21: We benefit from a strong balance sheet and generate substantial cash-flow
02 We benefit from a strong balance sheet and generate substantial cash-flow.. iHiLHjllKIT Net financial Outlook upgrade from stable to positive by Moody’s last Feb-09,following the upgrades performed by Fitch, S&P and JCR to A or A- at the end of 2008 1.Calculated baiEd an 2QQ7 DIBDA figure excludi
Slide 22: Best-in-class shareholders' return among our peers
02 ...that allows us to offer the best-in-class shareholders’ return among our peers Source: B’Twri’Serg
Slide 23: Capturing significant value by leveraging our global scale and our alliances
02 We are capturing significant value by leveraging our global scale and our alliances Combined customer base: 368 m (Jun-09) Economies of scale in European footprint, joint developments and implementation of commercial and operational best practices Synergies: On track to meet synergies targets Com
Slide 24: Outperforming on Corporate Sustainability
02 Outperforming on Corporate Sustainability Dow Jones Sustainability Indexes Himhif rew,’lQ DJSI: “Corporate Sustainability is a business approach to create long term shareholder value by embracing opportunities and managing risks deriving from economic,environmental and social developments”
Slide 25: All these strengths allow Telefonica to fulfill our stakeholders' expectations
02 All these strengths allow Telefonica tofullfill our stakeholders’ expectations
Slide 26: What makes us a differential player in this growth industry?
02 What makes us a differential player in this growth industry?
Slide 27: Our main strategic challenges
02 Our main strategic challenges fully capturing revenue growth potential transformation to keep growing profitaly
Slide 28: A growth industry still ahead
A growth industry still ahead
Slide 29: Customer focus and consistency will drive our strategic actions
Customer focus and consistency will drive our strategic actions
Slide 30: We will fully capture revenue growth potential
We will fully capture revenue growth potential... 1 1% of revenues from subtsidances and other companies not shown.- the graph i.Accessi Bevdce:faed ir: nobilE icoau Jtvaoe (JM5 induc-Edl.fasd ire Tiobilef: fmerrt,naTawbanc itemstandM2M revenue 3. HB connectivity ‘ff,BB StFBBJ. USE connectivity (DSL
Slide 31: Transformation will reinforce profitable and sustainable growth
and transformation will reinforce profitable and sustainable growth
Slide 32: Operating targets to become the best Company in the digital world
Operating targets to become the best Company in the digital world FY 2012E Operational Targets CSI leaders across footprint by 2012 * Outperforming the industry in market share Churn improvement to 1.9% (-0.3 p.p. from 2008 to 2012E) Efficiency ratio1 improvement of ~ 4 p.p vs 2008
Slide 33: What makes us a differential player in this growth industry?
What makes us a differential player in this growth industry?
Slide 34: Guidance will lead to sustainable growth and an even lower risk profile
Guidance will lead to a sustainable growth and an even lower risk profile...
Slide 35: Improving our capacity to turn growth into cash
while improving our capacity to turn growth into CASH 1. Assuming constant exchange rates as of 2008 and excludes changes in consolidation. Croup CapEx excludes Real State efficiency Program of T.Espana and spectrum licenses 2. OpCF: 0’ ED.-CapEx. 2008 adjusted figures for guidance exclude gecable c
Slide 36: With this Plan, Telefonica will become a company more...
With this Plan,Telefonica will become a company more... 1. Includes V. Espana and T. Europe 2. Assum ing constant exchange ‘ate* at of 2MB (average FKOfi) and excludes changes in consolidation. K of revenues ‘rom subsidiaries and other companies not shown in the graph 3. Mobil e. voice and access. S
Slide 37: Turning organic growth into earnings
We will continue with a great track record of turning organic growth into EARNINGS...
Slide 38: and into cash: reassurance of growing DPS policy
and into cash Reassurance of growing DPS policy
Slide 39: A company that will continue offering outstanding shareholders' returns
A company that wi I continue offering outstanding shareholders’returns Tactical share buybacks to be considered for FCF excesses Recently announced sta ke increase in Chi na Unicom to be paid with treasury stock l.fCf availaoleto remunerate Telefonica’* shareholders,to pro-.cct so vcncy level* [fina
Slide 40: Main take-aways
Main take-a ways We a re one of the best positioned players to take advantage of this growth industry We have the right growth strategy We consistently deliver on our commitments thus we area lower risk investment case We have a committed management team for value creation We will continue to be a c
Slide 41: Telefonica
Telefonica 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: October 9 th , 2009 By: /s/ Santiago Fernández Valbuena Name: Santiag