Slide 1: Results January-September 2012
Results January-September 2012
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 ma
Slide 3: Highlights: Visible results from execution of our strategy
Highlights: Visible results from execution of our strategy TELEFONICA Over € 2.3 bn debt reduction in Q3 (-4% q-o-q) on the back of strong FCF generation and disposals Further leverage reduction in Q4 close to € 3.2 bn on fast execution of assets divestments and preferred share swap for treasury sha
Slide 4: Group financial results 9M 2012
OIBDA (97) (2,489) (97) (2,671) OI (826) (3,332) (334) (2,951) Net Income (959) (2,609) (216) (2,058) Workforce reduction plan in Spain & sale of stake in PT Reported Underlying growth: Reported figures excluding major exceptional items and spectrum acquisition. Q3 11: Workforce Reduction Plan in Sp
Slide 5: Second consecutive quarter of OIBDA growth and margin expansion q-o-q
Second consecutive quarter of OIBDA growth and margin expansion q-o-q TELEFONICA 2012 Underlying OIBDA and OIBDA Margin OIBDA (€ in millions) OIBDA Margin (2.8 p.p.) (1.9 p.p.) (0.5 p.p.) y-o-y TELEFONICA Consistent improvement in y-o-y trends, in line with internal estimates 5
Slide 6: Outstanding improvement in underlying EPS
Outstanding improvement in underlying EPS TELEFONICA 2012 Underlying EPS (Euros/share) 6 y-o-y
Slide 7: Well diversified operations, growing exposure to Latin America
Well diversified operations, growing exposure to Latin America OIBDA and OpCF are underlying. OpCF: OIBDA-CapEx ex-spectrum. Differences up to and over 100% are due to "Others & Eliminations". Rest T. Europe Rest T. Latam Rest T. Europe 9M 12 Revenue OIBDA OpCF TELEFONICA 7 Rest T. Europe
Slide 8: Continued revenue growth in strategic areas
Continued revenue growth in strategic areas TELEFONICA Solid expansion at T. Latam Double digit growth in mobile data revenues 1.1% consolidated revenue (y-o-y growth in 9M 12) ex-regulation Revenue growth acceleration in Latam in organic terms ex-regulation to 8.2% in Q3 12 y-o-y (+6.7% in Q2) Euro
Slide 9: Delivering targeted efficiency gains
Delivering targeted efficiency gains TELEFONICA One more quarter of strong hold on costs: Key transformational efficiency initiatives and scale benefits through T. Global resources already driving savings: lower subsidies, managing commissions, optimising advertising costs, overheads, outsourcing...
Slide 10: T. Global Resources contributing to capture the value of our global scale
TELEFONICA T. Global Resources contributing to capture the value of our global scale Global Sourcing Global Devices Network and Operations Increased savings from aggregation: +4pp in last 9 months to > 40% Full end-to-end global sourcing for 12 categories (~45% of total value) Already 2 rounds of gl
Slide 11: Latam: Diversified sources for revenue acceleration
Revenue growth ex-regulation by region (organic y-o-y) T.Latam Latam: Diversified sources for revenue acceleration T. LATAM Solid commercial activity Revenue improvement with solid growth across regions Net Adds ('000) Q2 12 Q3 12 Revenue growth ex-regulation (organic y-o-y) 5.0% 18.1% 8.4% Q3 y-o-y
Slide 12: Latam: Further OIBDA and margin expansion
Latam: Further OIBDA and margin expansion T. LATAM 12 Outstanding OIBDA margin performance Sustained OIBDA acceleration 2012 OIBDA (€ in millions) OIBDA y-o-y improvement on the back of: Easier comparable commercial costs basis in Q3 y-o-y Ongoing efficiency measures Regulation dragging OIBDA growth
Slide 13: Brazil: Focus on quality paying-off
Brazil: Focus on quality paying-off T. LATAM Expanding CSI lead and improved access performance on integration Mobile CSI (Gap vs competitors avg.) Fixed CSI (Gap vs competitors avg.) Increased gap in mobile CSI from selling ban to competitors VIVO rebranding fuelling fixed CSI turnaround Improved a
Slide 14: Brazil: Strong acceleration in revenue and OIBDA growth
Brazil: Strong acceleration in revenue and OIBDA growth T. LATAM 14 Yearly and quarterly improvement across businesses Regulation dragging 2.7 p.p. of revenue growth Consolidating best-in-class profitability Accelerating OIBDA y-o-y growth despite higher negative impact from regulation Revenue growt
Slide 15: Latam: Widespread improvement in OIBDA performance (i)
ARGENTINA: Sustained double digit revenue growth OIBDA margin in Q3 impacted by strong commercial momentum OIBDA margin Contribution to TEF 9M Revenue CHILE: Increased competition on number portability across businesses affecting revenue growth. OIBDA margin remains strong COLOMBIA: Significant OIBD
Slide 16: Latam: Widespread improvement in OIBDA performance (ii)
Organic growth: assumes average constant exchange rates and excludes changes in the consolidation perimeter and hyperinflation accounting in Venezuela in both years. T. LATAM VENEZUELA: Growth acceleration and margin expansion amid strong commercial activity MEXICO: Ongoing turnaround process to acc
Slide 17: T. Europe: Changes in business model delivering results
Excluding disconnections in Spain in Q1 12. T. Europe: Changes in business model delivering results T. EUROPE 17 Focus on higher quality customer base Sequential improvement in profitability Upgrades (y-o-y) Commercial performance driven by refreshed propositions Low churn sustains growth in mobile
Slide 18: Spain: OIBDA stabilisation driven by new business model
Spain: OIBDA stabilisation driven by new business model Savings in personnel costs on track (€ 183 m in 9M 12) CapEx savings in IT and services development due to simplification (~ € 90 m in 9M 12) Penetration of new tariffs in the residential segments. OIBDA, CapEx and OpCF y-o-y change excluding p
Slide 19: Spain: Recovering leadership in the market
Simple & transparent 3P/4P offer Single bill Convergent call centre attention Fixed telephony line (monthly fee included) Fixed broadband access 500 min. F-M weekends + 50 min. week-days 500 min. mobile traffic 1 GB mobile data 12 months contract commitment Fixed Voice Internet Mobile Voice+ Data TV
Slide 20: UK: Solid trading with customers delaying upgrades to Q4
T. EUROPE Solid trading with customers delaying upgrades to Q4 Sustained levels of benchmark contract churn Maintained commercial momentum Sustained sequential OIBDA and margin improvement Solid contract net adds ('000) OIBDA margin expansion on contained commercial expenses OIBDA positively impacte
Slide 21: Germany: Sustained outperformance, additional share gains
Continued strong commercial performance, capturing the mobile data opportunity Strong MSR growth, further OIBDA margin expansion Germany: Sustained outperformance, additional share gains T. EUROPE Sustained low contract churn OIBDA acceleration on further efficiencies OIBDA growth accelerates sequen
Slide 22: Further progress in our journey to become a Digital Telco
Further progress in our journey to become a Digital Telco TELEFONICA 22 As smart connectivity provider As digital service providers As an enabler/retailer of digital services New convergent offer in Spain launched in October First convergent tariffs in Colombia Mobile tiered pricing in all markets 3
Slide 23: Net financial debt evolution
Net financial debt/12 months rolling OIBDA. Excludes the provision for Workforce Reduction in Spain in Q3 11. Post closing events include € 934 m (Atento, Hispasat, Rumbo), € 1,449 m Telefonica Deutschland IPO and up to € 800 m Preferred shares swapped for treasury shares. Net Financial Debt and OIB
Slide 24: Strong financing activity YTD
Over € 13 bn long term diversified financing raised year-to-date TELEFONICA Strong financing activity YTD ... € Issuance Sep-12/ Oct-12 BRL, Chile & Colombia USD Issuances & Other LatAm Chinese ECA &TCR Loans H1 12 Financing activity YTD Financing activity Geographic split by banking financing 77% u
Slide 25: Net debt maturities and liquidity position
€ in billions Undrawn credit lines & syndicated RCF (Sep-12) Cash position excluding Venezuela(1) Sep-12 € 18 bn total liquidity Circa € 4 bn liquidity increase in Q3 (+28%) Maturities covered beyond 2014 Net debt maturities Sep-12 & Liquidity position Dramatically improved liquidity and interest co
Slide 26: Closing remarks
Closing remarks TELEFONICA Delivering visible results from continued execution of our strategy Consolidation of sequential improvement in underlying EPS leveraging growth in OIBDA q-o-q. Full year outlook and dividend reiterated Increased financial flexibility Further progress in our journey to beco
Slide 27: Notes on organic and underlying growth
Organic growth: In financial terms, it assumes constant average exchange rates as of January-September 2011, and excludes hyperinflation accounting in Venezuela. Therefore, in OIBDA and OI terms, the first nine months of 2011 exclude the positive impact of the partial sale of our stake in Portugal T