12 Nov 2009 10:21
TELEFÓNICA GROUP
Financial Highlights
The Company recorded a sharp rise in commercial activity in the third quarter of 2009 in its areas of operation. Of particular note were the 5.0 million wireless net adds, in line with the figure for the first half, driven by the marked improvement in Spain (2.5x the figure for the first half) and Latin America (1.2x the net adds for the first six months of the year).
Telefónica access base exceeded 268 million (+6.6% year-on-year), with a sharp rise in wireless (+8.9%), fixed broadband (+9.8%) and pay TV (+15.1%) accesses.
Revenues totalled 41,721 million euros (+0.1% in organic1 terms) while OIBDA climbed 1.8% year-on-year in organic terms1 to 16,647 million euros.
At the end of September the OIBDA margin stood at 39.9%, a 0.7 percentage point improvement in organic1 terms.
Operating cash flow (OIBDA-CapEx) stood at 12,270 million euros, representing solid year-on-year growth of 10.1% in organic terms1 thanks to the improved efficiency ratio2, which reached 73.9% (-2.2 percentage points year-on-year).
The Company reiterates its financial targets for 2009 and its commitment to propose a dividend payment of 1.15 euros per share against 2009 earnings (the first payment has already been made).
Telefónica Latinoamérica remains the growth driver of the Group with revenues up 5.8% year-on-year in organic terms3, ramping up to 13.5% and 31.4% in terms of OIBDA and operating cash-flow growth respectively.
Telefónica Europe posted solid results, reflecting the benefits of a larger scale and efficiency improvements. Revenues were up 1.4% year-on-year in organic terms4, OIBDA advanced 4.6% and operating cash flow jumped 16.1%. Of particular note in the third quarter was the acceleration in year-on-year increase in revenues in organic terms4, excluding the impact of lower mobile termination rates.
The businesses in Spain recorded a sharp increase in commercial activity in the third quarter of 2009, with significant improvements in all services (fixed telephony, fixed retail broadband, pay TV and wireless telephony), with a slight slowdown in the year-on-year decrease in revenues in the last three months. Initiatives taken to contain both operating expenses and CapEx helped lift revenue pressure (-6.4% year-on-year on a comparable basis5) on operating cash flow (-3.3% in comparable terms5).
Net income climbed 6.4% year-on-year to 5,610 million euros in the first nine months (basic earnings per share up 9.0%), excluding the impact derived from capital gains registered in 2008 from the sale of Airwave and Sogecable.
Reported revenues fell by 3.3% in January-September 2009, OIBDA was down 2.2% and OI slipped 2.0% while net income rose 0.3%, basically due to foreign exchange rate fluctuations. OIBDA, OI and net income were also affected by the impact derived from capital gains booked in 2008.
The ratio of net debt + commitments to OIBDA stood at 2.0x at the end of September, reflecting the Company's financial strength.
1 Assuming constant exchange rates and including the consolidation of Telemig in January-March 2008. OIBDA and OI figures do not include the impact of capital gains registered in the second quarter of 2008from the sale of Airwave and Sogecable.
2 Defined as last twelve months (OpEx+CapEx-Internal expenses capitalized in fixed assets)/Revenues. CapEx excludes the acquisition of spectrum and Efficiency Program at T. España.
3 Assuming constant exchange rates and including consolidation of Telemig in January-March 2008.
4 Assuming constant exchange rates and excluding the impact of capital gains registered in the second quarter of 2008 from the sale of Airwave.
5 Comparable basis, excluding: Universal Service: 183 million euros in revenue and 51 million euros in OIBDA in the third quarter of 2008 and 75 million euros in revenues and 22 million euros in OIBDA in the first quarter of 2009; sale of bad debt portfolios: 25 million euros in OIBDA in the first quarter of 2008; real estate capital gains: 0.5 million euros in OIBDA January-September 2009 and 73 million euros in OIBDA in the same period in 2008; revision of the estimates for the adjustment to workforce adaptation plans provided for in prior periods, which resulted in lower expenses of 90 million euros in the second quarter of 2009 and sale of applications rights: 48 million euros in revenue and OIBDA in the third quarter of 2009.
| TELEFÓNICA GROUP | ||||||
| SELECTED FINANCIAL DATA | ||||||
| Unaudited figures (Euros in millions) | ||||||
| January - September | % Chg | |||||
| 2009 | 2008 | Reported | Organic | Guidance Criteria | ||
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| Revenues | 41,721 | 43,141 | (3.3) | 0.1 | 0.3 | |
| Telefónica España (1) | 14,655 | 15,706 | (6.7) | (6.7) | ||
| Telefónica Latinoamérica | 16,616 | 16,311 | 1.9 | 5.8 | ||
| Telefónica Europe | 10,055 | 10,691 | (5.9) | 1.4 | ||
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| OIBDA (2)(3) | 16,647 | 17,026 | (2.2) | 1.8 | 1.9 | |
| Telefónica España (1) | 7,240 | 7,857 | (7.9) | (7.9) | ||
| Telefónica Latinoamérica | 6,636 | 6,029 | 10.1 | 13.5 | ||
| Telefónica Europe (2) | 2,878 | 3,072 | (6.3) | 4.6 | ||
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| OIBDA margin (2)(3) | 39.9% | 39.5% | 0.4 p.p. | 0.7 p.p. | ||
| Telefónica España | 49.4% | 50.0% | (0.6 p.p.) | (0.6 p.p.) | ||
| Telefónica Latinoamérica | 39.9% | 37.0% | 3.0 p.p. | 2.7 p.p. | ||
| Telefónica Europe (2) | 28.6% | 28.7% | (0.1 p.p.) | 0.9 p.p. | ||
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| Operating Income (OI) (2)(3) | 10,024 | 10,223 | (2.0) | 2.1 | ||
| Telefónica España | 5,642 | 6,168 | (8.5) | (8.5) | ||
| Telefónica Latinoamérica | 3,897 | 3,312 | 17.7 | 19.7 | ||
| Telefónica Europe (2) | 690 | 768 | (10.1) | 17.0 | ||
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| Net income (2)(3) | 5,610 | 5,596 | 0.3 |
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| Basic earnings per share (euros) (2)(3) | 1.23 | 1.20 | 2.7 |
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| Free Cash Flow per share (euros) | 1.48 | 1.35 | 9.9 |
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| OpCF (OIBDA-CapEx) (2) (3) | 12,270 | 11,621 | 5.6 | 10.1 | 10.3 | |
| Telefónica España (1) | 6,113 | 6,302 | (3.0) | (3.0) | ||
| Telefónica Latinoamérica | 4,668 | 3,626 | 28.7 | 31.4 | ||
| Telefónica Europe (2) | 1,687 | 1,693 | (0.3) | 16.1 | ||
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| - Reconciliation included in the excel spreadsheets. | ||||||
| (1) In comparable terms revenues of Telefónica España would decline by 6.4%, OIBDA would decrease by 8.2% and OpCF would drop 3.3%. Comparable terms exclude: Universal Service: 183 million euros in revenue and 51 million euros in OIBDA in the third quarter of 2008 and 75 million euros in revenues and 22 million euros in OIBDA in the first quarter of 2009; sale of bad debt portfolios: 25 million euros in OIBDA in the first quarter of 2008; real estate capital gains: 0.5 million euros in OIBDA January-September 2009 and 73 million euros in OIBDA in the same period in 2008 and revision of the estimates for the adjustment to workforce adaptation plans provided for in prior periods, which resulted in lower expenses of 90 million euros in the second quarter of 2009 and sale of applications rights: 48 million euros in revenue and OIBDA in the third quarter of 2009. | ||||||
| (2) The second quarter of 2008 includes a positive impact of 113 million euros derived from Airwave disposal. OIBDA and OI include 42 million euros from restructuring costs registered in 2009. | ||||||
| (3) Sogecable capital gain amounting 143 million euros is recorded in the second quarter of 2008. | ||||||
| Notes: | ||||||
| -OIBDA and OI are presented before brand fees and management fees. | ||||||
| -OIBDA margin calculated as OIBDA over revenues. | ||||||
| - Starting April 2008, Vivo consolidates Telemig. | ||||||
| - Organic criteria: Assumes constant exchange rates and includes the consolidation of Telemig in January-March 2008. OIBDA and OI figures do not include the impact of capital gains registered in 2008 from the sale of Airwave (€ 113 m) and Sogecable (€ 143 m). | ||||||
| - Guidance criteria: Full year 2008 adjusted figures for guidance exclude Sogecable capital gain (€ 143 m), the application of provisions made in T. Europe in respect of potential contingencies deriving from the past disposal of shareholdings, once these risks had dissipated or had not materialized (€ 174 m) and includes 9 months of consolidation of Telemig in T. Latam. 2009 figures for guidance assume 2008 constant FX (average FX in 2008). In terms of guidance calculation OIBDA exclude capital gains and losses from sale of companies and write-offs. Group CapEx excludes Real Estate Efficiency Program of T. España and spectrum licenses. | ||||||
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 which refer to the intent, belief or current prospects of the customer base, estimates regarding, among others, future growth in the different business lines and the global business, market share, financial results and other aspects of the activity and situation relating to the Company.
The forward-looking statements in this document can be identified, in some instances, by the use of words such as "expects", "anticipates", "intends", "believes", and similar language or the negative thereof or by forward-looking nature of discussions of strategy, plans or intentions.
Such forward-looking statements, by their nature, are not guarantees of future performance and involve risks and uncertainties, and other important factors that could cause actual developments or results to differ from those expressed in our forward looking statements. These risks and uncertainties include those discussed or identified in fuller disclosure documents filed by Telefónica with the relevant Securities Markets Regulators, and in particular, with the Spanish Market Regulator.
Analysts and investors, and any other person or entity that may need to take decisions, or prepare or release opinions about the securities issued by the Company, are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation. Except as required by applicable law, Telefónica undertakes no obligation to release publicly the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this presentation, including, without limitation, changes in Telefónica's business or acquisition strategy or to reflect the occurrence of unanticipated events.
Neither this presentation nor any of the information contained herein constitutes an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, or any advice or recommendation with respect to such securities.
Finally, this document may contain summarized information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information, including if it is necessary, any fuller disclosure document published by Telefónica.
For further information please refer to the information on 2009 third quarter financial results filed by the Company and also available on the Company's website: www.telefonica.com