Telefonica Sa · BME:TEF
Telefonica Sa — 9M 2013 Earnings Presentation
23 slides from Telefonica Sa's earnings presentation, November 2013
Slide 1: Results January – September 2013
Results January – September 2013 Investor Relations Telefónica, S.A.
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward looking statements about Telefónica Group (going forward, “the Company” or Telefónica) including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations which ma
Slide 3: Q3 Highlights: Reaching FY 13 targets in advance
TELEFÓNICA Q3 Highlights: Reaching FY 13 targets in advance 1. Recovering Growth • Revenue growth acceleration Second consecutive quarter of organic growth (+2.1% y-o-y) Positive revenue growth in 9M (+0.4% y-o-y organic) 2. Stabilising organic OIBDA and OpCF • Revenue growth flowing towards OIB
Slide 4: Key financials
TELEFÓNICA Key financials 9M 13 Q3 13 Reported Organic Reported Organic € in millions Reported Reported y-o-y y-o-y y-o-y y-o-y Revenues 42,626 (8.4%) 0.4% 14,063 (9.5%) 2.1% OIBDA 14,100 (10.7%) (0.4%) 4,678 (12.6%) (0.3%) OIBDA 33.1% (0.8 p.p.) (0.2 p.p.) 33.3% (1.2 p.p.) (0.8 p.p.) Margin OpCF 9,
Slide 5: Enhancing cash flow generation across the year
TELEFÓNICA Enhancing cash flow generation across the year FCF 2013 (€ in millions) Stable FCF 2013 ex-spectrum payments (y-o-y) 4,706 3,401 1,908 1,949 2,169 2,144 (0.4%) 392 (457) Q1 Q2 Q3 9M Q1 Q2 Q3 9M • LTE spectrum already acquired in main markets FCF 2013 (€/share) 0.75 0.42 0.43 (0.10) Q1 Q2
Slide 6: Successfully acquiring and retaining high value customers
TELEFÓNICA Successfully acquiring and retaining high value customers Mobile contract accesses (y-o-y) Continued progress on quality growth • 35% of mobile base in contract (+2 p.p. vs. Sep-12) 9.0% 8.1% • Mobile contract net adds: +57% vs. Q3 12 (+79% in T. Latam) 7.6% • Booming smartphone adoption
Slide 7: Accelerated revenue growth translating into OIBDA
TELEFÓNICA Accelerated revenue growth translating into OIBDA Revenue growth (organic y-o-y) Enhanced top line trends throughout the year (+1.6 p.p. q-o-q) Telefónica T. Latam T. Europe • Improvement at all levels in Q3: 10 countries accelerating organic performance y-o-y vs. Q2 10.4% 10.9% 6.8%
Slide 8: T. Global Resources: Capturing value from our scale
TELEFÓNICA T. Global Resources: Capturing value from our scale Best in-class networks; focus in efficiency and quality • Enhancing Data Coverage and Capacity • Optimising and speeding up LTE roll-outs, with active sharing agreements Fiber HHPP (Sep-13) Sites with UBB Backhaul1 >2,300 sites, covering
Slide 9: T. Digital: Building up new services & capabilities
TELEFÓNICA T. Digital: Building up new services & capabilities Accomplishments in Q1 13 Building New Digital Services • Continuous leading position in new Digital P&S in high growth markets. Key contracts won and new partnerships created: M2M Smart Metering contract awarded to deliver smart meter
Slide 10: T. Latam: Revenue & OIBDA growth acceleration
T.LATAM T. Latam: Revenue & OIBDA growth acceleration Net Adds (‘000) Q3 12 Q3 13 Accesses y-o-y Strong commercial activity in the most valuable segments 2.0m • Record high contract mobile net adds, growing by 79% y-o-y in Q3 1.1m 179 • Smartphones almost doubling y-o-y to 20% penetration 155 137 14
Slide 11: Brazil: Strengthening leadership on high-value customers
T.LATAM Brazil: Strengthening leadership on high-value customers Contract Mobile Net Adds (million) Contract and smartphone penetration Outstanding performance in high-value segments Net additions market share Contract mobile accesses y-o-y 1.5 Smartphone Contract • Record high contract net adds in
Slide 12: Brazil: Strong commercial effort for a sustainable growth
T.LATAM Brazil: Strong commercial effort for a sustainable growth Revenue growth (organic y-o-y) Strong MSR growth Total MSR Fixed • MSR accelerating to 7.0% y-o-y on booming data and steady voice increase 7.0% 7.0% 5.4% • Revenue y-o-y deceleration in Q3 mainly due to lower handset sales growth 1.5
Slide 13: T. Latam: Widespread revenue acceleration (I/II)
T.LATAM T. Latam: Widespread revenue acceleration (I/II) % out of Group revenues Peru Peru 4.3% Argentina 6.5% Chile 4.4% Net Adds (‘000) Net Adds (‘000) Net Adds (‘000) Q3 12 Q3 13 Q3 12 Q3 13 Q3 12 Q3 13 281 21 1.2m 13 10 156 0.6m 43 28 202 44 30 96 (79) FBB Mobile FBB Mobile Mobile FBB Mobile Con
Slide 14: T. Latam: Widespread revenue acceleration (II/II)
T.LATAM T. Latam: Widespread revenue acceleration (II/II) % out of Group revenues Colombia Peru 3.0% Mexico 2.8% Venezuela 5.7% Net Adds (‘000) Net Adds (‘000) Net Adds (‘000) Q3 12 Q3 13 Q3 12 Q3 13 Q3 12 Q3 13 74 265 59 38 41 34 95 56 53 (82) (70) (58) FBB Mobile Mobile Mobile Mobile Mobile Contra
Slide 15: T. Europe: Transforming to lead a changing market
T.EUROPE T. Europe: Transforming to lead a changing market Mobile net adds (‘000) Total Contract 60% contract base Commercial portfolio adapted to more data-demanding customers 293 • Enhanced competitive profile amid intense competition 143 156 188 18 Compelling data-centric offer gradually away f
Slide 16: Spain: Focusing on premium quality and convergence
T.EUROPE Spain: Focusing on premium quality and convergence Movistar Fusión, year one Fiber: a long term structural differentiation Movistar Fusión Movistar Fusión Customers (‘000) % New services & upselling/Gross adds Homes connected (‘000) Homes passed (million) Including Fusion Mini Gross adds of
Slide 17: Spain: Improved revenue trend, record levels of profitability
T.EUROPE Spain: Improved revenue trend, record levels of profitability Revenue ex-handset sales (organic y-o-y) Revenue trend continues its recovery path Revenue ex-handset sales Revenue ex-handset sales ex-regulation • Fixed revenue improvement on the back of Fusión commercial traction Q3 12 Q4 12
Slide 18: UK: Maintained momentum in a very dynamic market
T.EUROPE UK: Maintained momentum in a very dynamic market Mobile net adds (‘000) Successful commercial proposition Total Contract • “O2 Refresh” gaining traction Available in all direct channels since July 303 251 214 292 219 53% of contract commercial activity on “Refresh” 46 • Successful launc
Slide 19: Germany: Building the fundamentals of data monetisation
T.EUROPE Germany: Building the fundamentals of data monetisation Mobile net adds (‘000) LTE gaining traction as a purchasing decision factor Total Contract • Smartphone penetration 30% (+6 p.p. y-o-y) 165 55% of devices sold were LTE enabled in Q3 (40% in Q2) 92 87 60 Data usage of LTE smartphon
Slide 20: Leverage and net debt targets achieved
TELEFÓNICA Leverage and net debt targets achieved Net Financial Debt -7.5 bn € in millions Net Financial Net Financial Debt/OIBDA Debt/OIBDA 2.30x 2.36x 873 52,132 51,259 46,101 547 (3,401) (447) 1,750 44,634 (24) (1,750) (957) (3,217) Net Fin. FX Net Fin. Debt FCF Shareholder Net Financial Hybrid F
Slide 21: Outstanding liquidity while reducing interest costs
TELEFÓNICA Outstanding liquidity while reducing interest costs Increased average debt life close to 7 years (1) (Sep-13) Outstanding liquidity (+€2.4bn vs. Jun-13) Net debt maturities (€ in billions) € in billions 24.0 14.7 5.2 5.3 €12.6bn LT Cash 9.4 exceeds maturities Cash position Undrawn credit
Slide 22: Conclusion
TELEFÓNICA Conclusion Recovering Growth & Stabilising margin and CF • Revenues growing & accelerating • Stabilising OIBDA and OIBDA margin • Virtually stable 9M OpCF (y-o-y organic) • Solid FCF generation in 9M (stable y-o-y ex-spectrum) Reducing Debt & Increasing Value Growth Potential • Net Financ
Slide 23: Selefonica
Selefonica