Telefonica Sa · BME:TEF
Telefonica Sa — 9M 2005 Earnings Presentation
23 slides from Telefonica Sa's earnings presentation, Nov 11, 2005
Slide 1: Quarterly Results January – September 2005
Quarterly Results January – September 2005 November 11th, 2005 Telefónica, S.A. Investor Relations This presentation is being broadcast live on the Internet
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward looking statements in its general meaning and within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this document and include statements regarding the intent, b
Slide 3: 9M05 Financial Highlights: Building an Attractive Growth Profile
9M05 Financial Highlights: Building an Attractive Growth Profile… € in Millions Quarterly Results (% change y-o-y) % Change % Change % Change Jan – Sep 2005 Jan-Sep Jan-Sep 9M05/9M04 9M05/9M04 1H05/1H04 2005 2004 ex- Český (1) Revenues 27,402.2 22,063.0 +24.2% +21.9% +20.0% Operating Expenses (2) (1
Slide 4: ...That Spreads From Top to Bottom with Non-Operating Results Managed Efficiently
...That Spreads From Top to Bottom with Non- Operating Results Managed Efficiently € in Millions (% change y-o-y) Quarterly Results Jan – Sep 2005 +16.2 p.p. +20.0% +24.5% +36.2% 10,944.5 +9.6 6,124.5 (c.s.) -4,820.0 (+14.6%) -1,129.2 (+7.7%) 3,253.3 -1,455.3 -296.2 (+26.7%) (+34.5%) 9M05 D&A 9M05 A
Slide 5: We Are Benefiting from Diversification
We Are Benefiting from Diversification... Contribution to Revenue Growth Contribution to OIBDA Growth Quarterly Results 2.1 p.p. 24.2 p.p. 4.5 p.p. 20.0 p.p. Jan – Sep 2005 16.1 p.p. 40% of 25% of growth growth 7.5 p.p. 5.2 p.p. 4.1 p.p. 1.9 p.p. 2.8 p.p. (1) (2) (1) (2) TdE T.Latam Cellular Other &
Slide 6: ...Having in this Year Positive Currency Environment
...Having in this Year Positive Currency Environment… Revenues: Constant vs Nominal OIBDA: Constant vs Nominal (€ in Millions) (€ in Millions) Quarterly Results +24.2% y-o-y growth rate +20.0% Jan – Sep 2005 +3.0 p.p. +3.0 p.p. +21.2% +17.0% 26,730.6 +671.6 27,402.2 10,672.0 +272.5 10,944.5 9M05 For
Slide 7: ...An Increasing Support to Capitalize on our Very Healthy Organic Growth
...An Increasing Support to Capitalize on our Very Healthy Organic Growth Organic Revenue Growth Evolution (1) Quarterly Results Jan – Sep 2005 % Change % Change % Change 1Q05/1Q04 1H05/1H04 9M05/9M04 TdE Group (2) +6.0% +5.4% +5.0% Cell. Business +17.5% +19.5% +18.0% T. Latam (2) +3.2% +6.2% +6.2%
Slide 8: The Drive on Revenues Pressures Costs and Margins Despite a Recovery in 3Q05
The Drive on Revenues Pressures Costs and Margins Despite a Recovery in 3Q05... Operating Costs Growth (1) Yearly Trend in OIBDA Margin Quarterly Results +1.8 p.p. Jan – Sep 2005 +5.0 p.p. +1.5 p.p. 41.2% 39.9% 39.8% +26.8% +24.7% 38.1% +23.2% +18.2% 1Q05 1H05 9M05 9M05 ex- 1Q05 1H05 9M05 9M05 ex- Č
Slide 9: ...With Cash Generation Remaining Healthy
…With Cash Generation Remaining Healthy Capital Expenditures OpCF (OIBDA-CapEx) (€ in Millions) (€ in Millions) 2005 guidance: Annual growth +28.8% 4,600 MM€ 1 Quarterly Results 7,613.9 Jan – Sep 2005 3.330,6 3.101,3 +13.4% 2.407,9 6,713.9 9M04 9M05 (constant 9M05 (nominal 9M04 9M05 currency terms)
Slide 10: Year-end Guidance Update
Year-end Guidance Update Group Revenues (€ in Millions) +19.0% 2005 target 2005 REVENUE GUIDANCE Quarterly Results +12%/+15% UPGRADED Jan – Sep 2005 27,402.2 26,252.0 FROM +12%/+15% 22,063.0 TO MORE THAN +15% 9M04 9M05 9M05 Reported Reported Adjusted for guidance MAINTAINED MAINTAINED Group OIBDA 20
Slide 11: Telefónica de España Group: Upgrading Revenue Guidance after Three Excellent Quarters of Growth
Telefónica de España Group: Upgrading Revenue Guidance after Three Excellent Quarters of Growth Defend traditional Drive broadband Lead Data & IT business growth opportunities Quarterly Results Jan – Sep 2005 Traditional Services Internet & Broadband Services IT & Data Services (€ in Millions) -0.1%
Slide 12: ...While Increased Supplies and Commercial Costs Lead us to Maintain OIBDA Guidance
… While Increased Supplies and Commercial Costs Lead us to MAINTAIN OIBDA GUIDANCE TdE Group OpEx Breakdown (€ in Millions) TdE Group OIBDA Margin (%) Quarterly Results Annual growth rate +7.5% +3.6% +12.6% Jan – Sep 2005 144.8 5,436.0 +9.1% 950.1 -0.7 p.p. +1.0 p.p. 2,242.8 +46.6% -5.2% +45.9% +39.
Slide 13: Telefónica de España Parent: Traditional Services
Telefónica de España Parent: Traditional Services Lines Evolution Pre-selected Lines Net Adds (Thousands) (Thousands) 3Q04 4Q04 1Q05 2Q05 3Q05 Quarterly Results 139.9 -52.5% 66.5 Jan – Sep 2005 Access lines 70.1 17.4 85.1 29.9 65.2 net losses (1) Full ULL 16.6 20.7 21.8 20.2 12.0 122.7 net adds 51.
Slide 14: Telefónica de España: Recovering BB Market Share Through a Leading Commercial Approach
Telefónica de España: Recovering BB Market Share Through a Leading Commercial Approach Retail BB Net Adds Market Share (1) Retail BB Market Share (1) 58.1% Quarterly Results 2P offers by Jan – Sep 2005 62.1% competitors 57.1% 55.5% 53.5% -2.6 p.p. 54.2% 54.3% 54.1% 44.0% 38.0% -1.3 p.p. -0.1 p.p. +0
Slide 15: Český Telecom: Progressing at All Levels in Just Three Months Since We Took Over
Český Telecom: Progressing at All Levels in Just Three Months Since We Took Over Quarterly Results Annual Revenue Growth Jan – Sep 2005 (Local currency) 1H05 3Q05 -1.1% -2.8% Annual OIBDA Growth OIBDA Margin Annual growth (Local currency) (%) +1.9 p.p. +2.8% +4.7 p.p. 1H05 49.7% 3Q05 45.0% -11.1% 1H
Slide 16: Telefónica Latinoamérica: Growing Solidly across Regions
Telefónica Latinoamérica: Growing Solidly across Regions... Revenues Revenue Growth Rate (€ in Millions) (% annual change, ex-Terra) Quarterly Results +17.1% 17.1% Jan – Sep 2005 y-o-y growth rate 2005 target(1) +6.5% 12.5% +4%/+7% 5,859.1 5,329.9 Terra adds 54.4 MM€ +529.2 to total revenues2 6.5% 6
Slide 17: ...By Leveraging on the Provision of Both Traditional and Broadband Services
...By Leveraging on the Provision of Both Traditional and Broadband Services... Traditional Accesses in Service Active Commercial Strategy Quarterly Results (thousands) Annual growth Jan – Sep 2005 Sep04 +0.8% Sep05 Promotion of Value Added Services 12,446.4 +3.8% 12,350.9 Prepay & usage control
Slide 18: ...While Keeping Profitability High in Our Way to Reinforce our Market Positions
...While Keeping Profitability High in Our Way to Reinforce our Market Positions Adjusted OIBDA (1) Group OIBDA margin (€ in Millions) Quarterly Results -0.05 p.p. Jan – Sep 2005 +19.0% y-o-y growth rate -7.3 p.p. 2005 target(1) +8.1% +6%/+9% 52.7% 2,650.8 45.5% 2,409.4 44.2% 44.2% +241.4 -853 b.p.
Slide 19: An Active Management of Liabilities to Limit the Impact of Higher Gearing
An Active Management of Liabilities to Limit the Impact of Higher Gearing Evolution of Financial Expenses Evolution of Average Total Debt (€ in Millions) (€ in Millions) Quarterly Results Average Effective Debt 29,080 Jan – Sep 2005 5.6% Service Rate (1) +16.1% 5.2% 1,129.2 25,040 +7.7% 1,048.4 9M04
Slide 20: Cash Flow & Debt Reconciliation
Cash Flow & Debt Reconciliation Adjusted FCF (€ in Millions) 502.9 262.7 4,517.9 Quarterly Results 4,277.7 Jan – Sep 2005 Net FCF Commitments Dividends FCF post after CapEx Amortization to Minorities (1) Minorities Net Financial Debt Reconciliation (€ in Millions) 2,211.1 28,676.1 4,770.4 502.9 23,6
Slide 21: Share Buyback Program Progress Report
Share Buyback Program Progress Report Evolution of Shares in Treasury Quarterly Results (in Millions) 1.8% of capital currently held in treasury Jan – Sep 2005 252.1 An additional 29 million shares in 29.7 246.1 options, expiring in 2006 87.4 23.6 Treasury stock Acquisition Distribution/Cancella
Slide 22: Conclusions
Conclusions Organic growth remains solid across the year, as the benefits of integrated management flow into our financials Quarterly Results Jan – Sep 2005 Strong results, that are building our confidence up for the remaining of the year, allow us to upgrade Group’s top line growth to “more tha
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