25 Jul 2012 18:27
FINANCIAL HIGHLIGHTS
·; Second quarter results showed an improvement vs. the first quarter, with a better performance across all metrics from OIBDA to net income in underlying terms.
·; OIBDA showed a significant improvement in the second quarter of the year in all regions and totalled 10,431 million euros in the first half of 2012, with an OIBDA margin of 33.7%:
o Secondquarter consolidated OIBDA (5,350 million euros) increased 5.3% vs. the first quarter. Consolidated OIBDA margin improved sequentially to 34.6% in the second quarter of 2012 in underlying terms (32.8% in the first quarter), reflecting cost containment measures.
o Telefónica España's OIBDA totalled 1,718 million euros in the second quarter of 2012, posting a 3.0% quarter-on-quarter growth, with a significant OIBDA margin expansion (45.0% in the second quarter vs. 42.8% in the first quarter).
·; Consolidated revenues totalled 30,980 million euros in the first half of the year (+0.3% year-on-year), with different realities across regions reflecting the benefits of diversification:
o Solid revenue growth in Latin America (+7.0% year-on-year) offset lower sales in Europe (-6.1%), strongly impacted by adverse economic and regulatory conditions.
o Excluding the impact of mobile termination rate cuts, revenues grew 1.5% year-on-year during the first half of 2012.
o Mobile data revenues continued to show strong dynamism, rising by 15.7% year-on-year to account for 34% of consolidated mobile service revenues
·; Telefónica reached 312 million accesses at the end of the first half of 2012, posting a 6% year-on-year growth:
o The strong expansion in mobile accesses (+7% year-on-year) remains the main growth driver of total accesses.
o Mobile broadband accesses maintained their solid growth rate (+51% year-on-year), already accounting for 18% of total mobile accesses, as a result of a massive smartphone adoption.
o Remarkable increased commercial activity in Latin America and churn contention in Europe, improving the commercial momentum in this region.
·; Net income stood at 1,327 million euros in the second quarter of 2012 (1,534 million euros in underlying terms) vs. 748 million euros in the previous quarter (1,284 million euros in underlying terms).
·; The Company confirms its guidance for 2012 in terms of OIBDA margin, CapEx/Sales and leverage ratio while restating its revenue target:
o Revenue growth flat to positive in current euros (previously > 1%)
o Lower OIBDA margin decline than in 2011.
o Similar CapEx/sales as in 2011, excluding spectrum.
o Net financial debt / OIBDA < 2.35x (equivalent to previous (Net Debt+Commitments) / OIBDA
< 2.5x).
·; The Board of Directors has decided that, under the criteria of prudent administration and extremely challenging conditions, it is in the best interest of all Telefónica's stakeholders that the dividend and share buyback program corresponding to 2012 be cancelled(including November 2012 and May 2013 cash and scrip payments, respectively) as a one-time exceptional measure. The Company will resume its shareholder remuneration in 2013 by paying a dividend of 0.75 euros per share, with the intention of paying it in two tranches: a first payment in the fourth quarter of 2013 and a second payment in the second quarter of 2014.
·; The proactive financing policy during the first half of the year and the adjustment in shareholder remuneration policy enable the Company to have debt maturities covered till the end of 2013
2012 operating guidance criteria: Assumes current exchange rates (2012 average FX of € 1: US: 1.32x; € 1: BRL 2.30; € 1: £ 0.85) and constant perimeter of consolidation. At the OIBDA level, excludes write-offs, capital gains/losses from companies' disposals and significant exceptionals. CapEx excludes spectrum licenses.
2011 bases for 2012 targets:
·; Net Financial Debt / OIBDA: 2.46 x.
·; Revenues: 62,837 million euros.
·; OIBDA Margin: 36.1%.
·; CapEx/Sales, ex spectrum: 14.2%.
TELEFÓNICA | |||||
SELECTED FINANCIAL DATA | |||||
Unaudited figures (Euros in millions) | |||||
2012 | 2011 | Reported | Organic | ||
Revenues | 30.980 | 30.886 | 0,3 | (0,5) | |
Telefónica Latinoamérica | 14.963 | 13.978 | 7,0 | 6,4 | |
Telefónica Europe | 15.076 | 16.063 | (6,1) | (7,1) | |
Other companies & eliminations | 941 | 845 | 11,3 | ||
OIBDA | 10.431 | 11.304 | (7,7) | (6,7) | |
Telefónica Latinoamérica | 5.212 | 5.172 | 0,8 | 0,8 | |
Telefónica Europe | 5.185 | 5.996 | (13,5) | (13,9) | |
Other companies & eliminations | 34 | 136 | (74,7) | ||
OIBDA margin | 33,7% | 36,6% | (2,9 p.p.) | (2,2 p.p.) | |
Telefónica Latinoamérica | 34,8% | 37,0% | (2,2 p.p.) | (2,0 p.p.) | |
Telefónica Europe | 34,4% | 37,3% | (2,9 p.p.) | (2,7 p.p.) | |
Operating Income (OI) | 5.300 | 6.348 | (16,5) | (13,9) | |
Telefónica Latinoamérica | 2.730 | 2.861 | (4,6) | (3,5) | |
Telefónica Europe | 2.691 | 3.492 | (22,9) | (23,1) | |
Other companies & eliminations | (122) | (5) | n.s. | ||
Net income | 2.075 | 3.162 | (34,4) | ||
Basic earnings per share (euros) | 0,46 | 0,69 | (33,3) | ||
CapEx | 3.658 | 3.838 | (4,7) | 9,2 | |
Telefónica Latinoamérica | 1.910 | 2.067 | (7,6) | 15,7 | |
Telefónica Europe | 1.562 | 1.603 | (2,6) | (3,7) | |
Other companies & eliminations | 186 | 167 | 11,1 | ||
OpCF (OIBDA-CapEx) | 6.774 | 7.466 | (9,3) | (13,4) | |
Telefónica Latinoamérica | 3.302 | 3.105 | 6,3 | (6,2) | |
Telefónica Europe | 3.623 | 4.393 | (17,5) | (17,7) | |
Other companies & eliminations | (151) | (31) | n.m. | ||
- Reconciliation included in the excel spreadsheets. | |||||
Notes: | |||||
- OIBDA and OI are presented before brand fees and management fees. | |||||
- OIBDA margin calculated as OIBDA over revenues. | |||||
- 2011 and 2012 reported figures include the hyperinflationary adjustments in Venezuela in both years. | |||||
- CapEx includes 6 million euros from the spectrum acquired out of which 5 correspond to Nicaragua in the first quarter of 2012, 355 in Brazil and 68 in Costa Rica in Q2 11. | |||||
- From January 1st, 2012, and due to the implementation of the new organization announced in September 2011, companies related to the digital world and global resources that were previously included in the consolidation perimeter of T.Latinoamérica (Terra, Medianetworks Perú, Wayra and the joint venture Wanda), T. España and T. Europe (TIWS, TNA, Jajah, Tuenti and Terra España) have been excluded from their consolidation perimeters and are included within "Other companies and eliminations". Additionally, from the beginning of the year, the perimeter of consolidation of T.Europe includes T.España. As a result, the results of T. Europe, T. Latinoamérica and "Other companies and eliminations" have been restated for the fiscal year 2011, to reflect the above mentioned new organization. As this is an intragroup change, Telefónica consolidated results for 2011 are not affected.
| |||||
- Organic criteria: In financial terms, it assumes constant average exchange rates as of January-June 2011, and excludes hyperinflation accounting in Venezuela. Therefore, in OIBDA and OI terms, the first half-year of 2011 excludes the positive impact of the partial sale of our stake in Portugal Telecom (+183 million euros). Telefónica's CapEx excludes spectrum investment and, in 2011, Real Estate commitments in relation to the new Telefónica headquarters in Barcelona. | |||||
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 may refer, among others, 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.
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.
Finally, it is stated that 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.
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