29 Jul 2010 08:20
TELEFÓNICA GROUP
Financial Highlights
·; Consolidated revenue rose 5.4% year-on-year in the first half of 2010 to 29,053 million euros, with a significant acceleration during the second quarter (+1.7% to the end of March) and improvements across all regions:
o The solid revenue performance reflects the Company's priority to focus on capturing the growth opportunities in its markets.
o Organic growth in revenues was 2.0% (+0.9% in the first quarter), driven by the pickup in commercial activity in the last few quarters. Stripping out impacts from regulatory measures, organic revenue growth reached 3.3%.
·; Telefónica maintains its commercial momentum across all its markets, reaching 278 million accesses, 5.2% more than a year ago (+7.2% in organic terms):
o The growth in accesses accelerated compared to previous quarters (+6.1% organic growth in March).
o Total gross adds rose 16.2% year-on-year in the first half, while churn decreased year-on-year by 0.1 percentage points to 2.2%.
o Mobile telephony continued to post strong growth, with organic net adds (8.9 million customers) 1.8 times higher than in the first half of 2009. There was also a significant improvement in the quality of the new customers: 56% of organic total net adds were contract, compared to 46% in the first half of 2009.
o Total broadband accesses reached 38 million, with significant growth rates in both retail fixed broadband (+9.2% year-on-year organic growth; +25.2% reported) and in mobile broadband accesses (+84.6%).
·; OIBDA totalled 10,905 million euros in for the first six months, virtually flat on June 2009 (+0.04% year-on-year), after recording a growth of 4.0% in the second quarter of 2010. The OIBDA margin reached 37.5% in the first half, a sequential improvement of 0.8 percentage points:
o In organic terms, OIBDA grew in the second quarter of 2010, showing a clear improvement relative to the first three months of the year (-3.4% in the first quarter; -2.3% in the first half). The negative impact of regulatory measures and non-recurring items dragged 2.7 percentage points from year-on-year OIBDA growth in the first half.
·; The Group continues to diversify its operations, and now generates 67% of its revenues and 60% of its OIBDA outside Telefónica España, despite the sharp devaluation of the Venezuelan bolivar.
·; Cash generation remains strong, with operating cash flow (OIBDA-CapEx) reaching 7,989 million euros in the first six months excluding spectrum acquisition (-1.7% year-on-year):
o In organic terms, operating cash flow dropped 3.4%, but rose in Telefónica Latinoamérica (+6.3% year-on-year) and Telefónica Europe (+3.1% year-on-year).
o Telefónica strengthened its competitive position with the acquisition of spectrum in Germany (1,379 million euros).
·; Net income totalled 3,775 million euros in the first six months of the year (+9.4% year-on-year).
·; The ratio of net debt + commitments to OIBDA stood at 2.3x at the end of June, reflecting the Company's financial strength.
·; The Company reiterates all its financial targets for this year and through 2012, including dividends.
·; Telefónica España's revenues continue to recover gradually, thanks to increased commercial activity and improved traffic volumes. As a result, the year-on-year decrease in revenues slowed to 3.4% in comparable terms in the first half of the year.
·; In Latin America, revenues registered organic growth of 6.2% in the first six months, 0.8 percentage points more than in the first quarter, driven by the improved performance of both the wireline and wireless businesses, while OIBDA rose 3.9% in organic terms (+0.5 percentage points compared to the first three months of the year).
·; Telefónica Europe's year-on-year revenue growth ramped up to 6.5% in organic terms and excluding regulatory effects (+5.4% in the first quarter), with healthy growth in the UK and German markets driven by the growing contribution from the mobile internet business.
| TELEFÓNICA GROUP |
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| SELECTED FINANCIAL DATA |
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| Unaudited figures (Euros in millions) | January-June | January-June |
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| %Change |
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| 2010 | 2009 |
| Reported | Organic | Guidance Criteria |
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| Revenues (1) | 29,053 | 27,565 |
| 5.4 | 2.0 | 3.3 |
| Telefónica España (2) | 9,321 | 9,757 |
| (4.5) | (4.1) |
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| Telefónica Latinoamérica | 12,063 | 10,946 |
| 10.2 | 6.2 |
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| Telefónica Europe (1) | 7,278 | 6,571 |
| 10.8 | 3.2 |
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| OIBDA (1) | 10,905 | 10,900 |
| 0.0 | (2.3) | (1.2) |
| Telefónica España (2) | 4,377 | 4,838 |
| (9.5) | (9.5) |
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| Telefónica Latinoamérica | 4,490 | 4,233 |
| 6.1 | 3.9 |
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| Telefónica Europe (1) | 2,035 | 1,879 |
| 8.3 | (0.4) |
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| OIBDA margin (1) | 37.5% | 39.5% |
| (2.0 p.p.) | (1.7 p.p.) |
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| Telefónica España | 47.0% | 49.6% |
| (2.6 p.p.) | (2.8 p.p.) |
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| Telefónica Latinoamérica | 37.2% | 38.7% |
| (1.4 p.p.) | (0.9 p.p.) |
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| Telefónica Europe (1) | 28.0% | 28.6% |
| (0.6 p.p.) | (1.0 p.p.) |
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| Operating Income (OI) (1) | 6,456 | 6,493 |
| (0.6) | 0.2 |
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| Telefónica España | 3,388 | 3,771 |
| (10.2) | (10.1) |
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| Telefónica Latinoamérica | 2,586 | 2,409 |
| 7.4 | 12.5 |
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| Telefónica Europe (1) | 552 | 428 |
| 29.0 | 10.5 |
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| Net income | 3,775 | 3,452 |
| 9.4 |
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| Basic earnings per share (euros) | 0.83 | 0.76 |
| 10.1 |
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| OpCF (OIBDA-CapEx) (1)(3) | 6,610 | 8,125 |
| (18.6) | (3.4) |
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| Telefónica España (2) | 3,547 | 4,099 |
| (13.5) | (13.4) |
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| Telefónica Latinoamérica | 3,239 | 3,018 |
| 7.3 | 6.3 |
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| Telefónica Europe (1)(3) | (100) | 1,130 |
| c.s. | 3.1 |
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| - Reconciliation included in the excel spreadsheets. | ||||||
| (1) HanseNet and Jajah have been included in Telefónica Europe's consolidation perimeter since mid February 2010 and 1 January 2010 respectively. Additionally, OIBDA includes a capital gain of 61 million euros from the sale of Manx Telecom in the second quarter of 2010. | ||||||
| (2) In comparable terms revenues of Telefónica España would decline by 3.4%, OIBDA would decrease by 5.8% and OpCF would drop 9.2% in the first half of the year. The comparable basis excludes the following effects: Universal Service Obligation: 75 million euros in revenues and 22 million euros in OIBDA in the first quarter of 2009; property capital gains: 0.4 million euros in OIBDA in the first quarter of 2009, exit of Telyco Morocco from the consolidation perimeter: 17 million euros in revenues and 0.7 million euros in OIBDA in the first quarter of 2009 and 16 million euros in revenues and 0.6 million euros in OIBDA in the second quarter of 2009; revision of the estimates for the adjustment to workforce provision provided for in prior periods to 2009: 90 million euros in OIBDA in the second quarter of 2009, and TV tax: 38 million euros in OIBDA in the first quarter of 2010 and 35 million euros in the second quarter of 2010. | ||||||
| (3) Change in organic terms excludes 1,379 million euros from the acquisition of spectrum in Germany in the second quarter of 2010. | ||||||
| -OIBDA and OI are presented before brand fees and management fees. | ||||||
| -OIBDA margin calculated as OIBDA over revenues. | ||||||
| - 2009 and 2010 reported figures include the hyperinflationary adjustments in Venezuela in both years. | ||||||
| - Organic criteria: it assumes constant average exchange rates as of the same period of 2009 (average fx), excludes changes in consolidation and impacts from hyperinflationary accounting. OIBDA and OI exclude the impact of the capital gain made on the sale of Manx Telecom, which took place during the second quarter of 2010. CapEx excludes 1,379 million euros from the acquisition of spectrum in Germany in the second quarter. | ||||||
| - Guidance criteria: 2009 adjusted figures for guidance exclude Telyco Morocco results in T. España, capital gain from the sale of Medi Telecom and write-offs. 2010 guidance assumes constant exchange rates as of 2009 (average FX in 2009) and excludes hyperinflationary accounting in Venezuela in both years. It also includes the consolidation of Hansenet and Jajah in T. Europe. In terms of guidance calculation, OIBDA excludes write-offs. Group CapEx excludes Real Estate Efficiency Program of T. España and spectrum acquisitions. | ||||||
| - Since January 1st 2010, the perimeter of consolidation of Telefónica España excludes Telyco Morocco. | ||||||
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 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.
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