Resultados de Telefonica Del III Trimestre 2017
Resultados de Telefonica Del III Trimestre 2017
Resultados de Telefonica Del III Trimestre 2017
The Statements can be identified, in certain cases, through the use of words such as forecast, "expectation", "anticipation",
aspiration, "purpose", "belief" or similar expressions or variations of such expressions. These Statements reflect the current views of
Telefnica with respect to future events, do not represent, by their own nature, any guarantee of future fulfilment, and are subject to
risks and uncertainties that could cause the final developments and results to materially differ from those expressed or implied by such
Statements. These risks and uncertainties include those identified in the documents containing more comprehensive information filed by
Telefnica before the different supervisory authorities of the securities markets in which its shares are listed and, in particular, the
Spanish National Securities Market Commission.
Except as required by applicable laws, Telefnica does not assume any obligation to publicly update the Statements to adapt them to
events or circumstances taking place after the date hereof, including changes in the Company's business or business development
strategy or any other unexpected circumstance.
This document and the conference-call webcast (including the Q&A session) may contain summarized, non-audited or non-GAAP financial
information. The information contained herein and therein should therefore be considered as a whole and in conjunction with all the
public information regarding the Company available, including any other documents released by the Company that may contain more
detailed information.
In October 2015, the European Securities Markets Authority (ESMA) published guidelines on Alternative Performance Measures (APM),
applicable to regulated information published from July 3, 2016. Information and disclosure related to APM used in this presentation are
included in the Appendix. Recipients of this document are invited to read our condensed consolidated interim financial statements and
consolidated interim management report for 2017 submitted to the Spanish National Securities Market Commission.
Neither this document nor the conference-call webcast (including the Q&A session) nor any of their contents constitute an offer to
purchase, sale or exchange any securities, a solicitation of any offer to purchase, sale or exchange of any securities, or a recommendation
or advice regarding any security.
1
Investor Relations
Telefnica, S.A.
01 Q3 17 Highlights
Mr. ngel Vil
COO
Investor Relations
Telefnica, S.A.
Q3: Solid execution on key priorities
Growing strategic KPIs: fiber, LTE supporting customer lifetime value
o Ramping-up avg. rev per access to +4.3% y-o-y; churn control
Consistent and profitable
Revenue acceleration to +4.0% y-o-y; Spain back to service rev. growth
organic growth Continued OIBDA growth (+2.8% y-o-y); in spite of RLAH dragging -1.7 p.p.
9M EPS 0.44; +8.7% y-o-y
One more quarter of net debt reduction (-2.4Bn y-o-y) to 47.2Bn (Sep-17)
o Incl. sale of 40% Telxius: 45.9Bn; -3.6Bn (-7.4% y-o-y)
Reinforcing Balance Sheet
Strong 9M FCF: 3,226m; +39.2% y-o-y; Q3: 1,600; +6.7%
Positive bond refinancing: long-term and historical low levels
2
Investor Relations
Telefnica, S.A.
On track to deliver FY outlook
2017E Guidance
Guidance 2017E 9M 17
(Organic)
3
Investor Relations
Telefnica, S.A.
Summary: Financials
9M 17 Q3 17
Reported Organic Reported Organic
in millions Reported Reported
y-o-y y-o-y y-o-y y-o-y
Revenue 38,846 1.4% 2.9% 12,754 (2.5%) 4.0%
4
Investor Relations
Telefnica, S.A.
Bottom line increased by 10%, with EPS 0.44
9M 2017 (m)
+2.9%
reported
(6.6%) +9.6%
12,274 +7.1% reported
(7,131) 25% P&L Reported
reported
tax rate +9.5%
Underlying
5,143 5 (1,729)
(867)
(113) 2,439
(1) Q2: Capital loss in Mediaset Premium and CU; impairment in Prisa and net effect of VZ devaluation. Q3: Contingency in ARG
5
Investor Relations
Telefnica, S.A.
Progressive improvement in FCF
FCF (m) Strong FCF growth (y-o-y)
2016 2017 y-o-y
6
Investor Relations
Telefnica, S.A.
Growth fuelled by organic contribution
OIBDA: Organic growth & FX impact (m)
78 (51)
14
72
(85)
OIBDA CapEx Working Taxes + FCF
Capital Interest +
Others
7
Investor Relations
Telefnica, S.A.
Revenue trends ramped-up
Revenues (y-o-y organic)
+4.0%
Ex-reg.
4.0%
2.9%
3.1% Strong and quality top line
1.5%
1.7%
o Mobile data revs +16.3% y-o-y
9M BB Connectivity & SoC revs. gaining ground to 51% o/total
Robust commercial momentum
Q1 Q2 Q3 9M o Continued growth on high value base
(6.1%)
TEF T. Hispam Brazil UK Spain Germany
Contribution
y-o-y +3.4 p.p. +0.4 p.p. +0.2 p.p. +0.1 p.p. (0.8 p.p.)
8
Investor Relations
Telefnica, S.A.
Revenue growth based on successful data monetisation
LTE (Q3 y-o-y organic) Smartphones (Q3 y-o-y organic)
Penetration Penetration Several levers to foster data revenues
35% 62%
x3
(+12 p.p.) +10% ARPU uplift (+5 p.p.) 1.7 GB/ month
75% Prepaid recurrent plans in Latam boost ARPU growth
61%
55% 67% o High penetration: >50% Brazil, ~30% Hispam
9
Investor Relations
Telefnica, S.A.
Generating profitability and cash
OIBDA (y-o-y organic)
Margin
7.2%
Ex-reg
Ex-reg +5.3%
+5.2% Positive OIBDA: operating leverage increase
+0.3 p.p.
Well diversified 9M OIBDA growth; margin expanding
(0.9%)
Contribution +4.8 p.p. +1.2 p.p. +2.3 p.p. +1.4 p.p. (0.1 p.p.)
y-o-y
10
Investor Relations
Telefnica, S.A.
Upselling existing customer relationships
Cognitive Intelligence Qualitative leap in
cust. experience
Services
Beyond
Connectivity
TEF: Pioneering new relationship model
(talk to technology and get things done)
5%
M2M: Revs: +41.0% vs. Q3 16 o/9M Dig. Revs.
Other digital services (21% o/9M Dig. Revs.) include: Advertising, Applications and Financial Services
12
Investor Relations
Telefnica, S.A.
TGR: progressing on UBB & digitalisation
90%
18.6m FTTH (+13% y-o-y)
69% 62%
~43m FTTx/Cable +4 p.p.
Excellent 18.0m (+7%) LTE coverage
premises passed +11 p.p. +14 p.p.
(%pop)
connectivity
6.2m (+53%)
Total Europe Latam
All-IP Networks
Network OpEx reduction
Radical network virtualisation: UNICA
NFV/SDN CapEx optimisation
Using Big Data
Faster deployments
o Network deployment optimisation
o Network capacity planning
o E2E service quality management Flexible network management
15
Investor Relations
Telefnica, S.A.
Digitalisation bearing clear benefits in Spain
Transformation process started in 2012 towards building a leaner and more competitive Company
Simplification programmes and Full Stack have driven benchmark efficiency and business process enhancement
Tangible Benefits
Commercial Var 12-17E 2017E
Portfolio simplification Share of sales online +20 p.p. 24%
Channels optimisation (size /mix/ efficiency) Points of sale (63%) ---
Improved TTM
Automated processes (E2ED front and back) Unique digital users --- 41%
Improved CSI
Commercial costs
Fostering online experience Handset subsidies (97%) --- (-67% in 12-17E)
MORE TO COME
16
Investor Relations
Telefnica, S.A.
Digitalisation being gradually adopted group-wide
SELF-MANAGEMENT LEVEL, PROCESS AUTOMATION
BRAZIL EXAMPLE
FY 16 FY 17E FY 18E
FY 16 FY 17E FY 18E FY 16 FY 17E FY 18E
and supported by key TECHNOLOGICAL ENABLERS
17
Investor Relations
Telefnica, S.A.
02 Q3 17 Results
Ms. Laura Abasolo
CFCO
Investor Relations
Telefnica, S.A.
Spain: Recovered momentum; focus on value
Net adds 2017 (000)
Q2 Q3 Better trading on enhanced positioning
225
164
51
100
Positive volumes from new Fusin packs (launched in July)
26 27
o Q3 gross adds recovery: Fusin (+16% y-o-y), FBB (+13%)
Fusin mix 2017 (% base) Fusin ARPU 2017 () Clear focus on convergence upselling
Low Mid High y-o-y
+7.1%
21% 24% 26%
Value oriented strategy
+6.4%
87.6 o Segmentation of the offer; ARPU & loyalty increase
50% 49% 47%
81.6
84.8
Clear market-leadership in network & service quality
o LTE: 97% pop. cov.
29% 27% 27%
o 18.6m premises passed FTTH (>60% households)
Q1 Q2 Q3 Q1 Q2 Q3 o Exclusive TV content and functionalities
18
Investor Relations
Telefnica, S.A.
Spain: Improved revenue trends; strong OpCF
2017 Financials (y-o-y organic)
Service Revenues OIBDA ex-real estate sale Back to growth in Service Revenue
0.4%
(1.5%)
(0.8%)
(0.6%) Consumer revs. ramping-up (+1.0 p.p. q-o-q)
(2.4%) (2.1%) Business revs. (+0.2 p.p. q-o-q) affected by IT seasonality
54% 0.1%
(0.4%) (1.1%)
(1.3%)
27% (2.0%)
(5.1%)
19% (7.3%) High operating leverage, strong upside
Q1 Q2 Q3
+4.7% 910 914 Q3 OIBDA margin: 41.0%; -0.1 p.p. y-o-y ex-real estate sale
810
High visibility on CapEx reduction
Growing OpCF throughout the year
9M Q1 Q2 Q3
CapEx 11.7%
/sales 10.9% 11.8% 12.3%
(-1.8 p.p.)
19
Investor Relations
Telefnica, S.A.
Germany: Data monetisation opportunity ahead
MSR ex-regulation (y-o-y organic)
MSR Regulation Larger data buckets
Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
(0.1%) Stimulating data usage (mobile data traffic +49% vs Q3 16)
(0.4%) o Commercial activities O2 Free 15 & new O2 Free portf. (Sep.)
(0.6%)
(0.9%) (0.9%) o O2 Free 15 cust. data usage > 5GB; ARPU-up potential
(2.7 p.p.)
(3.4 p.p.)
(2.7 p.p.) (2.6 p.p.) Solid momentum: Contract (+4% y-o-y); 183k net adds
o LTE cust. (+48% y-o-y); penetration 36% (+11p.p.); cov. (81%)
(1.8%) (2.1%) (3.3%) (3.0%) (3.6%) o Resilient partner contribution (Q3: 53% of gross adds; 9M: 55%)
(0.9%)
Total revenue growth
658
+ Higher spend: subscription (larger data allowances) & out-of-bundle
Negative effect
3.9%
from RLAH +15.2% + Quality customer base growth
0.6%
242 Q3 OIBDA impacted by RLAH effect (48m)
CapEx +0.6% vs. 9M 16; LTE rollout investment
(4.7%)
Q1 Q2 Q3 Q3 9M
25.7%
(1.6 p.p.) 21
Investor Relations
Telefnica, S.A.
Brazil: Enhancing best-in-class value positioning
Contract net adds 2017 (000)
Expanding differentiation gap
981
858
Network quality widening
435 Highest contract
o 76% population 4G cov.; 1,919 cities already covered (700
net adds in last 7 Qs
MHz spectrum in 199 cities)
o 18.0m premises passed with FTTx; 4.5m connected
Q1 Q2 Q3
12 new cities in 2017: 40% already connected
o/premises passed & 82% m. share
Growing in strategic accesses (higher ARPU)
o Contract +10%; ARPU 4x vs prepay
FTTx net adds 2017 (000) IPTV TV net adds 2017 (000)
o 4G +73%
o FTTx +9%; ARPU 1.2x vs Copper
139
42 o IPTV +54%; ARPU 1.2x vs DTH
106
81 29 28 o New contract portfolio from October 23rd; unique and
innovating features aligned with M4M strategy
Outperforming the market
o Mobile: 42.3% contract m. share; ~46% net adds share in Jan-
Q1 Q2 Q3 Q1 Q2 Q3 Aug
o Fixed: 36.6% FBB>34 Mbps m. share
22
Investor Relations
Telefnica, S.A.
Brazil: Delivering growth; expanding profitability
2017 Service revenues (y-o-y organic)
2.3%
Data driving steady positive revs performance
2.1%
2.0%
1.7%
7.5%
7.0%
Expansion in OIBDA & OpCF margins
6.8%
6.0% 11.1%
23
Investor Relations
Telefnica, S.A.
HispAm: Improved commercial traction
Accesses (y-o-y)
Penetration; y-o-y
Focus on value
67% 69%
LTE cov. 56% (+8 p.p. y-o-y); 6.2m premises passed FTTx & Cable
(+2.1m LTM)
2%
o Record net adds in Q3 for LTE (2.8m; 9M 6.2m) &
LTE FTTx/Cable Pay TV FTTx/cable (249k; 9M 492k)
20%
+8 p.p.
29%
+12 p.p.
54%
+2 p.p.
ARGENTINA: Growing uptake of contract; LTE & fiber driving data
traffic up (9M: +76% mobile; +41% fixed)
CHILE: Back to positive net adds (contract 27k; LTE 331k; FTTx 12k;
Pay TV 13k)
PERU: Solid trading in fixed; record FTTx net adds (146k); reshaped
2017 ARPU (y-o-y local currency) commercial portfolio driving signs of recovery in mobile
FBB Pay TV Mobile
COLOMBIA: Robust commercial performance; fostering adoption
of FTTx (32k Q3 net adds) & LTE (538k)
26.3% MEXICO: Sound contract (+15%) and LTE (+55%) accesses growth
21.1% 17.7% & easing pricing pressure. Positive ARPU (Q3: +3.9% y-o-y)
15.4%
10.3% 12.1% 10.6%
7.6%
6.6% 9.4% 9.1%
Q1 Q2 Q3 Q3 9M
Revenue / Access
(y-o-y organic)
24
Investor Relations
Telefnica, S.A.
HispAm: Solid revenues & OIBDA; OpCF +26.8%
2017 Revenues (y-o-y organic)
Delivering growth
15.5% 16.1%
9.2
13.6% 9.4Bn
Solid MSR and fixed growth (Q3: +19.0% and +5.6%, respectively)
Reported o Mobile data revs. acceleration Q3: +38.2%; +3.5 p.p. q-o-q
+2.8% o Double-digit growth in FBB & new services (Q3:+10.0%
Q2:+7.3%) and pay TV (Q3: +11.1%; Q2: +13.4%)
Q1 Q2 Q3 9M 9M
Q3 OIBDA margin -1.8 p.p. y-o-y (inflation driven costs, higher
commercial efforts & tougher comparisons)
28.5% 14.1%
25
Investor Relations
Telefnica, S.A.
Telxius: Solid operational momentum
Revenue (y-o-y organic) OIBDA Margin
47.8%
Strong set of results
46.5%
8.0%
7.5% 9M financials; strong revenue growth and solid profitability
o Revenues: 547m
o OIBDA: 261m
o OpCF: 126m
Q3 9M Q3 9M Robust OIBDA margin across both businesses
o Sequential decline on seasonal taxes and hurricanes effect
Infrastructure; expanding the reach
Towers (# sites) Tenants (#) o Tenancy ratio improved +0.03x vs. Dec. 16 in Q3 17
o Argentina added 304 towers & 539 tenants to the perimeter
o Stimulating traffic demand and revenue growth in Cable
16,220 21,270 Developing the 2 new cables (to be active in 2018)
o MAREA (connecting US & Spain) wet plant deployment already
completed Sept. 17
15,897 15,907 20,617
20,403 o BRUSA (connecting Brazil, Puerto Rico & USA) construction as
planned
Q1 Q2 Q3 Q1 Q2 Q3
Tenancy ratio
1.28x 1.30x 1.31x
26
Investor Relations
Telefnica, S.A.
Deleverage on strong organic FCF and disposals
Net Financial Debt (m)
45,947
2.72x
6,815 (923)
(1,322)
(713)
(630)
3,226
4.7
4.0
Cash >
gross
maturities
USD Bonds Bonds Latam Total
2017E 2018E 2019E
Financing
12.5 18.5
(0.71 p.p.)
94% LT
3.94%
6.0 3.23%
(0.57%) (0.14%)
Cash position Undrawn credit Liquidity position Dec-16 Europe Latam Sep-17
ex-VZ lines & syndicated
credit facilities
28
Investor Relations
Telefnica, S.A.
Summary: executing on fundamentals
Delivering profitable organic growth
o Top line accelerating trends; sound OIBDA performance despite regulation, high-single digit OpCF growth in 9M (CapEx
peak is behind)
Focused on digitalisation, started with simplification and E2E task some years ago
o Proof points already reached. Big opportunity ahead (customer experience, new revenue streams, higher efficiencies)
29
Investor Relations
Telefnica, S.A.
For further information:
Investor Relations
Tel. +34 94 482 87 00
ir@telefonica.com
www.telefonica.com/investors