Telefonica Sa · BME:TEF

Telefonica Sa — Q1 2008 Earnings Presentation

22 slides from Telefonica Sa's earnings presentation, May 14, 2008

  1. Slide 1: Quarterly Results January – March 2008

    Quarterly Results January – March 2008 TELEFONICA S.A. May 14th, 2008 TELEFONICA S.A. Investor Relations 1

  2. Slide 2: Disclaimer

    Disclaimer This document contains statements that constitute forward looking statements about the Company including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations. These statements appear in a number of places in this doc

  3. Slide 3: Q1 08 Results Highlights

    GROUP HIGHLIGHTS Q1 08 Results Highlights „ Solid performance across regions, on track to deliver 2008 guidance „ Continued fast customer growth, driven by mobile, broadband and TV „ Strong growth rates, crystallizing value from our diversification and integrated management model: „ 17th consecutive

  4. Slide 4: Robust growth profile from top to bottom

    GROUP FINANCIALS Robust growth profile from top to bottom Jan-Mar Change Change ex-forex(1) Change organic(2) € in millions 2008 Q1 08/Q1 07 Q1 08/Q1 07 Q1 08/Q1 07 Revenues 13,896 +1.1% +3.4% +7.0% Operating Income before D&A 5,376 +5.3% +6.6% +8.2% (OIBDA) OIBDA Margin 38.7% +1.5p.p. +0.4p.p. Oper

  5. Slide 5: Net income up by more than 20%

    GROUP FINANCIALS Net income up by more than 20% € in millions (% change y-o-y) +5.3% +14.4% +22.4% „ € 178 m (O2’s PPA) „ € 43 m (T. O2 CR´s PPA) 5,376 3,099 -1 -2,277 -767 1,538 (c.s.) (-5.0%) (-0.1%) -736 -57 (+12.2%) (-12.7%) Q1 08 OIBDA D&A Q1 08 OI Associates Financial results Taxes Minorities

  6. Slide 6: Fast customer growth, capturing bundling potential

    GROUP FINANCIALS Fast customer growth, capturing bundling potential Accesses (Mar-08/Mar-07) millions +64.4% +17.7% +12.9% +26.8% 137.7 1.9 +8.8% 233.5 10.9 +4.5% +16.3% 42.8 43.5 46.8 171.7 +0.2% T. España T. Europe T. Latam Total Mobile BB Pay TV Fixed ƒ 4.7 m net adds in Q1 08: +41.8% y-o-y ƒ 36%

  7. Slide 7: Distinctive top line performance

    GROUP FINANCIALS Distinctive top line performance Q1 08 Revenue growth by regions Q1 08 Revenue breakdown (Organic1 y-o-y growth) +12.6% Others & eliminations +7.0% 1% +6.4% T. Europe: 25% T. España: 37% (€ 3,472 m) (€ 5,131 m) +2.6% TEF T. España T. Europe T. Latam Group T. Latam: 37% Contribution

  8. Slide 8: Retaining benchmark profitability

    GROUP FINANCIALS Retaining benchmark profitability Q1 08 OIBDA growth by regions Q1 08 OIBDA breakdown (Organic1 y-o-y growth) +8.2% +11.8% +6.4% +5.3% T. Europe: 17% T. Latam: 35% (€ 912 m) (€ 1,877 m) TEF T. España T. Europe T. Latam Group Contribution T. España: 48% to Group growth +3.1 p.p. +0.9

  9. Slide 9: Telefónica España: Solid performance in Q1

    TELEFÓNICA ESPAÑA Telefónica España: Solid performance in Q1 +2.6% +2.7% Revenue +1.9% +2.0% growth „ Sustained revenue growth in wireline: (Q1 08 y-o-y +1.0% „ +9.8% growth in Internet & BB revenues change) „ Healthy trends in access and traditional voice services Including PUT effect „ 2% y-o-y gr

  10. Slide 10: Wireline Business: Expanding access base by upselling and getting new customers

    TELEFÓNICA ESPAÑA Wireline Business: Expanding access base by upselling and getting new customers +116.1 Q4 07 +132.2 Q1 07 +134.9 +113.5 +76.4 Q1 08 Naked „ Sustain expansion of fixed line market: -76.7 -21.4 shared net adds „ +1.9%E y-o-y (´000) „ Accelerated uptake of naked shared loops (included

  11. Slide 11: Wireless Business: Steady customer growth and continued push in data usage

    TELEFÓNICA ESPAÑA Wireless Business: Steady customer growth and continued push in data usage +11.3% „ Sound leadership despite new entrants, leveraging Customer market leading churn rate: 61% of growth +5.5% total „ 23.0 m accesses in a 112% penetration market (Mar-08 y-o-y customer base „ 305.2K co

  12. Slide 12: Telefónica Latinoamérica: Solid results in a high growth region

    TELEFÓNICA LATAM Telefónica Latinoamérica: Solid results in a high growth region 103.7 25.6 5.2 Mar-08 +23.0% +77.2% „ Accelerated customer expansion led by mobile Accesses +29.5% (in millions) +1.9% 1.2 businesses & fixed-line transformation: „ 137.7 m accesses, 17.7% up y-o-y Y-o-y change Mobile F

  13. Slide 13: Wireless Business: Fast customer growth & sound outgoing ARPU

    TELEFÓNICA LATAM Wireless Business: Fast customer growth & sound outgoing ARPU 34.3 13.8 13.3 „ Solid gross adds in most markets: Mar-08 +18% 9.3 8.8 8.7 9.1 „ Strong uptake in Brazil, leveraging GSM push mobile +18% +42% +13% 6.4 +28% customers +16% +56% „ Flat churn rate (2.7%) despite the high co

  14. Slide 14: Wireline business: Further advance in business transformation

    TELEFÓNICA LATAM Wireline business: Further advance in business transformation 2,168 „ Outstanding BB accesses growth (+29.5% y-o-y) to 885 reach 5.2 M Mar-08 648 594 „ Push in bundling offering Retail +28.2% +50.5% +22.7% +19.4% 238 „ Higher speeds in ADSL portfolio (Telesp, Chile) BB accesses (´00

  15. Slide 15: Sum-up: Capturing growth opportunities in our markets

    TELEFÓNICA LATAM Sum-up: Capturing growth opportunities in our markets Total BB & TV Mobile Total Mobile Q1 08 y-o-y growth Mobile outgoing revenue revenue service service revenue OIBDA OIBDA (in local currency) revenue Brazil1 +6.7% +32.8% +16.6% +20.2% (3.6%) +0.4% +16.3% Argentina +16.1% +32.7% +

  16. Slide 16: Telefónica Europe: Building scale across markets

    TELEFÓNICA EUROPE Telefónica Europe: Building scale across markets +12.6% +11.3% Revenue +6.4% growth „ Good customer growth to 42.8 m (+8.8% y-o-y) (Q1 08 y-o-y change) +1.6% „ Focus on quality growth: 89% of 564K mobile net +1.5% adds in contract (2x Q1 07) Ex- forex & Airwave Ex- forex -0.3% „ 13

  17. Slide 17: O2 UK: Continued momentum, managing growth/margin

    TELEFÓNICA EUROPE O2 UK: Continued momentum, managing growth/margin 206 Mobile 3x „ Focus on contract: 38.1% weight (+2.6 p.p.) contract 80 „ Robust contract net adds net adds (´000) „ Contract churn down to 1.5% from 2.0% Q1 07 Q1 08 „ Mature prepay market: „ Prepay to contract migrations (Simplici

  18. Slide 18: O2 Germany: First signs of turnaround

    TELEFÓNICA EUROPE O2 Germany: First signs of turnaround 536 „ Wireless customer growth increased to 16.3% y-o-y, 3x leveraging enlarged distribution & partners: Q1 08 206 „ 13.0 m mobile customers mobile net adds 2x „ DM for Fonic; new Debitel contract; Tchibo, Hansenet (´000) „ Segmented positionin

  19. Slide 19: De-leverage continuing with a comfortable liquidity position

    GROUP FINANCIAL EXPENSES AND DEBT De-leverage continuing with a comfortable liquidity position € in millions Q1 08 Net Financial Debt Evolution 2.3x OIBDA1 45,284 +569 2.1x +193 OIBDA1 -852 -55 44,423 -716 Net Fin. Debt FCF Commitments Share buy-back Net Financial Change in Net Fin. Debt Dec-07 Post

  20. Slide 20: Returning value to shareholders

    Returning value to shareholders DPS (in euros) 1.0 0.75 Growing path on DIVIDENDS shareholders returns 20071 20082 + „ Initial program announced in February 2008: Cash Yield3 5.7% 6.5% SHARE „ 2008- H1 09: 100 m shares 2007 2008E BUYBACKS „ New framework: „ 2008: 100 m shares „ Sensitive to cash flo

  21. Slide 21: Conclusions

    CONCLUSIONS Conclusions „ Solid performance across the P&L, on track to meet 2008 guidance „ Leveraging our diversification to consistently deliver sound organic growth: „ High single digit both in revenues and OIBDA „ Double digit in OI „ Double digit growth in EPS „ Continue focus on extract value

  22. Slide 22: TELEFONICA S.A. Investor Relations

    TELEFONICA S.A. Investor Relations 22

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