Telefonica Sa · BME:TEF

Telefonica Sa — 9M 2002 Earnings Presentation

21 slides from Telefonica Sa's earnings presentation, October 2002

  1. Slide 1: January - September 2002 Results

    January - September 2002 Results This presentation is being broadcast live on the Internet

  2. Slide 2: Safe Harbour

    SAFE HARBOUR This presentation to analysts contains statements that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent. belief

  3. Slide 3: Financial Highlights

    FINANCIAL HIGHLIGHTS... REVENUES EBITDA EBIT (€ in millions) (€ in millions) (€ in millions) 23.083.4 -7.0% -8.5% -7.4% 9.641.2 4.157.4 21.467.0 8.928.9 3,805.5 9M01 9M02 9M01 9M02 9M01 9M02 JANUARY-SEPTEMBER 2002 KEY DRIVERS 9 FOREX Fx drags close to 12.5 p.p. to revenues & EBITDA growth 9 FOCUS ON

  4. Slide 4: Affected by LatAm Forex and Argentina

    ...AFFECTED BY LATAM FOREX AND ARGENTINA ORGANIC GROWTH REVENUES BREAKDOWN EBITDA BREAKDOWN Organic Acquisitions & Forex Reported Organic Acquisitions & Forex Reported Growth Changes in growth Growth Changes in growth Consolidation Consolidation 4.4% +1.1 p.p. 4.0% +1.1 p.p. -7.0% -7.4% -12.5 p.p. -

  5. Slide 5: Strong Management of Cost Structures

    STRONG MANAGEMENT OF COST STRUCTURES... CONTROL OF OPEX... * ...AT ALL LEVELS *... 2001 vs 2000 9M02 vs 9M01 % Change % Change 1H02/1H01 9M02/9M01 12.4% TdE Group +3.9% +2.9% Nominal 8.2% Ex-Fx 5.0% Cell. Business +9.4% +8.2% T. LATAM -22.0% -26.5% T. Data -6.1% -12.3% Terra Lycos -20.6% -21.0% Admi

  6. Slide 6: ...and Capex Optimization

    ...AND CAPEX OPTIMIZATION... CONSOLIDATED CAPEX T.LATAM BREAKDOWN * % change Sep02 / Sep01 Local Currency € in Million % Change 9M02 9M02/9M01 Telesp Tasa CTC TdP TdE Group 1,146.5 -9.2% DRIVEN BY T.Móviles 661.8 -45.7% LATAM -27.9% T. LATAM 439.4 -77.9% -50.6% -55.3% T.Data 134.0 -66.7% -74.2% TOTA

  7. Slide 7: Leading to Cash Flow Generation

    ...LEADING TO CASH FLOW GENERATION OPERATING CASH FLOW (Million Euros) +44.3% 9,641.2 5,187.4 8,928.9 2,503.7 4,453.8 6,425.2 EBITDA 9M01 CAPEX 9M01 CF 9M01 EBITDA 9M02 CAPEX 9M02 CF 9M02 CONTRIBUTION TO 9M02 OPERATING CASH FLOW BY COUNTRY REST LATAM 10% ARGENTINA 4% BRAZIL 23% 2/3 COMING FROM SPAIN

  8. Slide 8: Contribution by Business Line

    CONTRIBUTION BY BUSINESS LINE REVENUES CONTRIBUTION TO (€ in millions) GROWTH* 660.8 23,083.4 14.3 2,171.5 Cell. Bus.:+ 2.1 p.p. 287.8 21,467.0 TdE: + 0.3 p.p. 65.0 61.1 281.6 T.Latam: - 8.9 p.p. REVENUES TdE Cell. Bus. T.Latam T.Data Terra Admira Others & REVENUES 9M01 Lycos Eliminations 9M02 EBITD

  9. Slide 9: Telefónica de España: Traditional and Broadband

    TELEFONICA DE ESPAÑA: TRADITIONAL AND BROADBAND TRADITIONAL REVENUES ACCESS TRAFFIC (Cumulative YoY variation) (lines in thousands) (million minutes) 5.7% 9M02 €5,838.1 Mill. 20,599.1 20,885.7 21,100.5 21,118.8 102,306 108,040 0,0% 27.7% 24.3% 32.5% -1,9% -1,9% -2,0% 16,320.1 16,118.3 15,937.9 15,62

  10. Slide 10: Telefónica de España: Group EBITDA Evolution

    TELEFONICA DE ESPAÑA : GROUP EBITDA EVOLUTION QUARTERLY EBITDA (euros in millions) TO REACH 2002 FLAT EBITDA (euros in millions) -10.3% -2.2% 4.0% 4,508.1 1,138.0 1,255.7 1,184.5 1,126.9 1,158.6 1,043,1 1,084.6 2001 3,370.1 9M02 1Q01 1Q02 2Q01 2Q02 3Q01 3Q02 EBITDA KEEPS IMPROVING YoY € 1,138.0 Mill

  11. Slide 11: T. LatAm: Wireline Performance

    T. LATAM: WIRELINE PERFORMANCE... T. LATAM REV / OPERATING REVENUES EBITDA % change Sep02 / Sep01 % change Sep02 / Sep01 EBITDA EX FOREX Local Currency Local Currency Revenues EBITDA Real 10.6% Real 9.4% -0.7% -4.1% N Sol 0.4% Arg. Peso Ch Peso N Sol Arg. Peso Ch Peso -7.3% -5.7% -9.4% -28.6% -31.7%

  12. Slide 12: With Telesp Keeping Its Solid Underlying Performance

    ...WITH TELESP KEEPING ITS SOLID UNDERLYING PERFORMANCE YoY change in REVENUES EBITDA EBITDA (mill. local currency (euros in millions) (euros in millions) YoY change in euros +10.6% +9.4% 3.273 -8.4% 2.998 -9.4% 1.702 1.541 9M01 9M01 9M01 9M01 MONTHLY NET ADDS (lines) 45.000 30.000 15.000 0 -15.000

  13. Slide 13: T. Móviles Group Shows Strong Results

    T. MOVILES GROUP SHOWS STRONG RESULTS... REVENUES EBITDA (€ in millions) (€ in millions) 500.4 133.3 302.6 20.3 6,829.1 34.8 376.7 366.2 944.2 2,838.9 5,028.1 2,607.2 Spain Brazil Mexico Rest Intercompany Total Spain Brazil Mexico Rest Intercompany Total of Latam & Others of Latam & Others 9 Major c

  14. Slide 14: With Spain Posting a Solid Underlying Performance

    ...WITH SPAIN POSTING A SOLID UNDERLYING PERFORMANCE A SOUND UNDERLYING BUSINESS... ARPU EVOLUTION SAC+SRC QUARTERLY EBITDA (€/month) (%) (%) -11% -5% 31 32 -28% 53.1% 52.5% 28 30 + = 1Q01 1Q02 3Q01 3Q02 9M01 9M02 2Q02 3Q02 -2% 3Q02 vs 3Q01, excluding Net adds: +63% 3Q02/2Q02 (+26% <10% of adjusted

  15. Slide 15: T. Data: More Focus and Steady Improvement

    T.DATA: MORE FOCUS AND STEADY IMPROVEMENT 3Q02 RESULTS AFFECTED BY CHANGES IN SHOWING OPERATIONAL EFFICIENCY CONSOLIDATION & FX EFFECTS THROUGHOUT 2002 9M02/9M01 Cum. EBITDA 3Q01 1Q02 2Q02 3Q02 Revenue Growth (%) Margin (%) T. Data Spain 21.7 20.6 22.3 24.0 Reported -5% Changes T. Data Brazil -2.6 6

  16. Slide 16: Net Financial Expenses

    NET FINANCIAL EXPENSES (*) Euros in millions Sep02 Sep01 % Change Debt financial expense (1,330.2) (1,490.4) (10.7%) Other financial expenses (32.6) (45.2) (27.9%) Financial Income 251.6 326.4 (22.9%) Net interest (1,111.2) (1,209.2) (8.1%) Financial provisions and net forex (1) (899.6) (137.6) n.m.

  17. Slide 17: Impact of Extraordinaries on Net Income

    IMPACT OF EXTRAORDINARIES ON NET INCOME 1.3 Bn. Euros of external net Azul Tv, ETI, 1.91% of share UMTS & debt in $US Onda Cero & capital valued Mediaways From 1.70 to 3.74 Peso/$US Lycos ventures at 7.54 € Reported Net Argentina Non core Treasury stock* Other Write-downs * Loss Exchange asset sales

  18. Slide 18: Telefónica Strong Credit Profile

    TELEFONICA STRONG CREDIT PROFILE... CONSISTENT DEBT REDUCTION AT THE GROUP LEVEL (CONSOLIDATED DEBT. € IN MM) Highest historic level 31.244 28.942 28.684 -15.1% -4.4 Bn.€ 25.789 24.575 June 01 2001 1Q02 2Q02 3Q02 COMPONENTS OF DEBT BREAKDOWN BY 2002 DEBT REDUCTION CURRENCY 28,942 3,162 2,585 206 24,

  19. Slide 19: With an Active Management of LatAm Exposure

    ...WITH AN ACTIVE MANAGEMENT OF LATAM EXPOSURE MANAGING LATAM EXPOSURE PROTECTING AGAINST EXCHANGE RATE DEPRECIATION $US in Millions (Data as of 09/30/02) DEBT EXTERNAL NET DEBT COUNTRY (LOCAL CURRENCY) * $US & OTHERS ** Brasil 1,186 -265 Chile 603 2 Peru 591 -149 TOTAL EXPOSURE FOR $US EXTERNAL DEB

  20. Slide 20: Conclusions

    CONCLUSIONS 9 Latin America continues to have a significant negative impact on Telefónica´s results 9 We are managing our exposure to the Latin American region prudently: ¹ protecting liquidity and cash flow at the operating level ¹ actively hedging debt positions at the financial level 9 Domestic b

  21. Slide 21: Slide 21

Telefónica — 9M 2002 Earnings Presentation on 6ix