TIDMTDE
RNS Number : 8455V
Telefonica SA
26 July 2018
FINANCIAL HIGHLIGHTS
-- Acceleration in the growth of the main financial and operating metrics.
(R) Increased value accesses: LTE (+31% y-o-y), smartphones
(+6%), FTTx/Cable (+23%; record net additions in the quarter of
724k), mobile contract (+6%; 2.2m net additions, 7-year record),
Pay TV (+6%).
(R) Revenues (EUR12,144m; -6.3% y-o-y) accelerated their organic
growth to +2.0% in the quarter.
(R) April-June OIBDA (EUR4,237m; +1.9% y-o-y) increased by 4.1%
organic (+3.3% in the first quarter) and OIBDA margin expanded
(+2.8 p.p. y-o-y; +0.7 p.p. in organic terms).
(R) In the second quarter, net income (EUR902m) grew by 9.9%
y-o-y and by 11.0% per share (EUR0.16).
(R) Reported April-June results are affected by net positive
impacts in OIBDA (EUR225m) and negative impacts in net income
(-EUR60m), mainly associated with a favourable court ruling in
Brazil, and partial goodwill impairment and tax asset reversal in
Mexico.
-- Radical transformation of our networks.
(R) 47.3m premises passed with FTTx/cable (+15% y-o-y) and LTE coverage of 73% (+6 p.p.).
(R) Leaders in network virtualisation and in the creation of a
global customer-centric digital ecosystem.
-- Financial flexibility continued increasing.
(R) Free cash flow (EUR1,548m in January-June 2018) grew 32.7% y-o-y excluding spectrum.
(R) Net debt (EUR43,593m at June; -10.1% y-o-y) decreased for
the 5(th) consecutive quarter (-EUR382m).
-- The Company reiterates its guidance and the dividend announced for 2018.
-- T. España reinforced its positioning with the launch of O2
Brand and football content acquisition, whilst growing in revenues
(+0.3% y-o-y in organic terms) and OIBDA (+0.2%), with OIBDA margin
at 40.5% in April-June.
-- T. Brasil organic OIBDA growth accelerated y-o-y in the
quarter (+7.1%), with OIBDA margin expansion of 2.2 p.p. after
posting a new record in fibre connections and increasing contract
net additions y-o-y.
-- T. Deutschland improved its commercial activity in the second
quarter with the launch of O2 Free Boost and O2 Connect and grew in
mobile service revenues (ex-regulation +0.2% y-o-y organic), OIBDA
(+0.3%) and operating cash flow (+3.2% in the first half of the
year).
-- T. UK maintained in April-June its leading contract churn in
the market, and growth accelerated both in revenues (+5.6% y-o-y
organic) and OIBDA (+8.2%), while operating cash flow increased by
21.0% y-o-y in January-June.
-- T. Hispam Sur; solid increase in revenues and OIBDA y-o-y
organic growth in the quarter (+8.7% and +8.8% respectively)
posting net contract additions in all the countries and a gradual
progress in FTTx/Cable.
-- T. Hispam Norte; strong commercial activity focused on high
value. April-June revenues -0.4% y-o-y organic and OIBDA -2.8%.
However, excluding regulation growth trends accelerated (+1.5% and
+5.1% respectively).
Comments from José María Álvarez-Pallete, Executive
Chairman:
"Telefónica second quarter results showed an improvement in the
y-o-y organic growth trends of revenues, OIBDA and OIBDA margin
expansion. Moreover, net debt decreased for the fifth consecutive
quarter thanks to the strong free cash flow generation (EUR998
million), which grew by 55% excluding spectrum payment in the UK.
These results allow us to reiterate our guidance and dividends for
2018.
Our value offer to customers remains key, and we continue
investing and expanding our ultra broadband networks. As of June,
we have 47.3m premises passed with proprietary FTTx/cable network,
+15% y-o-y. LTE coverage grew by 6 p.p. to an average 73% in all
our footprint.
Lastly, we remain convinced that the key levers to a sustainable
digital future lie with our capacity to radically transform our
networks, create a customer-centric digital ecosystem, establish
digitalisation as the cornerstone for generating efficiencies and
remain at the vanguard of cognitive intelligence".
TELEFÓNICA
SELECTED FINANCIAL
DATA
Unaudited figures
(Euros in millions)
Jan-Jun %Chg Jan-Jun* April-Jun %Chg Apr-Jun*
2018 Reported Organic 2018 2018 Reported Organic 2018 (IAS
(IAS 18) 18)
Revenues 24,334 (6.7) 2.0 24,361 12,144 (6.3) 2.0 12,160
Telefónica
España 6,265 0.6 0.7 6,269 3,167 0.2 0.3 3,168
Telefónica
Deutschland 3,525 (0.5) (0.8) 3,514 1,758 (0.7) (1.2) 1,750
Telefónica UK 3,223 0.5 4.2 3,269 1,638 1.9 5.6 1,665
Telefónica
Brasil 5,227 (15.6) 0.8 5,219 2,522 (16.7) 0.5 2,521
Telefónica
Hispam Sur (1) 3,631 (13.7) 8.2 3,630 1,798 (14.0) 8.7 1,798
Telefónica
Hispam Norte (2)(3) 1,998 (9.7) (1.3) 1,999 1,027 (1.7) (0.4) 1,025
Other companies &
eliminations 464 (7.8) 0.8 461 234 (9.5) (2.0) 233
Telxius 366 (1.0) 4.0 363 186 2.2 6.1 184
----------------------
OIBDA 8,102 (0.9) 3.7 8,080 4,237 1.9 4.1 4,227
Telefónica
España 2,507 3.4 0.4 2,510 1,283 0.1 0.2 1,284
Telefónica
Deutschland 882 2.4 0.5 864 479 3.7 0.3 464
Telefónica UK 879 3.5 7.2 890 450 3.7 8.2 460
Telefónica
Brasil 2,257 5.5 5.8 2,245 1,275 23.3 7.1 1,270
Telefónica
Hispam Sur (1) 1,024 (13.4) 9.8 1,020 507 (15.2) 8.8 506
Telefónica
Hispam Norte (2)(3) 434 (29.2) (5.1) 435 176 (40.2) (2.8) 175
Other companies &
eliminations 119 8.4 24.8 117 68 21.1 30.6 67
Telxius 173 (3.2) 2.5 171 87 0.3 4.5 86
----------------------
0.5 0.7
OIBDA margin 33.3% 1.9 p.p. p.p. 34.9% 2.8 p.p. p.p.
Telefónica (0.1 (0.0 (0.0
España 40.0% 1.1 p.p. p.p.) 40.5% p.p.) p.p.)
Telefónica 0.3 0.4
Deutschland 25.0% 0.7 p.p. p.p. 27.2% 1.2 p.p. p.p.
0.8 0.7
Telefónica UK 27.3% 0.8 p.p. p.p. 27.5% 0.5 p.p. p.p.
Telefónica 1.7 16.4 2.2
Brasil 43.2% 8.6 p.p. p.p. 50.5% p.p. p.p.
Telefónica 0.4 (0.4 0.0
Hispam Sur (1) 28.2% 0.1 p.p. p.p. 28.2% p.p.) p.p.
Telefónica (6.0 (1.1 (11.0 (0.7
Hispam Norte (2)(3) 21.7% p.p.) p.p.) 17.1% p.p.) p.p.)
Other companies & 4.9 7.0
eliminations 25.6% 3.8 p.p. p.p. 29.1% 7.3 p.p. p.p.
(1.1 (0.7 (0.9 (0.7
Telxius 47.3% p.p.) p.p.) 47.0% p.p.) p.p.)
Operating Income (OI) 3,697 9.7 10.3 2,059 14.4 12.2
Net income
attributable to
equity holders of
the Parent 1,739 8.6 902 9.9
Basic and diluted
earnings per share
(euros) 0.29 (0.8) 0.16 11.0
CapEx 3,932 12.1 5.5 2,441 29.4 8.8
Telefónica
España 778 10.4 10.4 432 16.2 16.2
Telefónica
Deutschland 424 (2.5) (2.3) 228 0.5 0.7
Telefónica UK 987 n.m. (6.1) 804 n.m. 5.3
Telefónica
Brasil 892 (2.6) 17.2 504 (2.9) 17.6
Telefónica
Hispam Sur (1) 553 (14.3) 7.9 302 (13.5) 11.2
Telefónica
Hispam Norte (2)(3) 165 (40.6) (36.0) 111 (22.4) (20.4)
Other companies &
eliminations 134 39.4 51.1 61 (10.6) (6.4)
Telxius 98 73.6 92.9 41 (5.5) 0.6
----------------------
Spectrum 595 n.m. n.m. 588 n.m. n.m.
Telefónica - - - - - -
España
Telefónica - - - - - -
Deutschland
Telefónica UK 588 - - 588 - -
Telefónica - - - - - -
Brasil
Telefónica 6 - - - - -
Hispam Sur (1)
Telefónica 0 n.m. n.m. - - -
Hispam Norte (2)(3)
OpCF (OIBDA-CapEx) 4,170 (10.7) 2.4 1,796 (20.9) 0.3
Telefónica
España 1,729 0.5 (3.5) 852 (6.4) (6.3)
Telefónica
Deutschland 458 7.3 3.2 251 6.8 0.1
Telefónica UK (107) c.s. 21.0 (354) c.s. 11.0
Telefónica
Brasil 1.365 11.6 (2.6) 771 49.6 (3.2)
Telefónica
Hispam Sur (1) 471 (12.3) 12.0 205 (17.5) 5.5
Telefónica
Hispam Norte (2)(3) 269 (19.9) 20.4 64 (57.2) 13.7
Other companies &
eliminations (15) c.s. c.s. 7 c.s. c.s.
Telxius 75 (38.6) (39.1) 46 6.2 8.5
---------------------- -------- --------- -------- ---------- --------- --------
- Reconciliation
included in the
excel spreadsheets.
Notes:
- January-June and April-June 2018 results reported under
accounting standards IFRS 15 & 9,
effective since January 2018.
(*) For comparative purpose only, January-March 2018 results
reported under prior accounting
IAS 18.
- OIBDA and OI are presented before brand fees and
management fees.
(1) Telefónica Hispam Sur includes Argentina, Chile, Peru and Uruguay
(2) Telefónica Hispam Norte includes Colombia, Mexico, Venezuela, Central America and
Ecuador.
(3) Following the pre-payment of the debt derived from the operating agreement with PARAPAT
in Colombia and after taking over its subsidiaries Telebucaramanga, Metrotel and Optecom,
the consolidated results are included in the fixed business of T. Colombia from 1 October
2017. For organic comparative purposes, the results of these subsidiaries are included since
1 January 2017.
- 2018 Organic criteria assumes average constant foreign exchange rates of 2017, except for
Venezuela (2017 and 2018 results converted at the closing synthetic exchange rate for each
period). Considers constant perimeter of consolidation. Excludes the effects of the accounting
change to IFRS 15 in 2018, write-downs, capital gains/losses from the sale of companies, tower
sales, restructuring costs and material non-recurring impacts. CapEx excludes spectrum
investments.
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DISCLAIMER
This document may contain forward-looking statements and
information (hereinafter, the "Statements") relating to the
Telefónica Group (hereinafter, the "Company" or "Telefónica") or
otherwise. These Statements may include financial forecasts and
estimates based on assumptions or statements regarding plans,
objectives and expectations that make reference to different
matters, such as the customer base and its evolution, growth of the
different business lines and of the global business, market share,
possible acquisitions, divestitures or other transactions,
Company's results and other aspects related to the activity and
situation of the Company.
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 Telefónica 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 Telefónica 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 law, Telefónica 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, in its business
development strategy or any other unexpected circumstance. This
document may contain summarized, non-audited or non-GAAP financial
information. The information contained herein should therefore be
considered as a whole and in conjunction with all the public
information regarding the Company available, including, if 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 related to APM used in the present document are
included in the Appendix "Alternative performance measures", page
45 of this document. Moreover, recipients of this document are
invited to read our condensed consolidated interim financial
statements and consolidated interim management report for the
six-month period ended Jun 30, 2018 submitted to the Spanish
National Securities Market Commission (CNMV), in Note 2, page 9, of
the pdf filed. Neither this document nor any of its contents
constitute an offer to purchase, sale or exchange any security, a
solicitation of any offer to purchase, sale or exchange any
security, or a recommendation or advice regarding any security.
Investor Relations
Distrito Telefónica - Ronda
de la Comunicación, s/n
28050 Madrid (Spain)
Telephone: +34 91 482 87 00
Pablo Eguirón (pablo.eguiron@telefonica.com)
Isabel Beltrán (i.beltran@telefonica.com)
Adrián Zunzunegui (adrian.zunzunegui@telefonica.com)
Christian Kern (christian.kern@telefonica.com)
ir@telefonica.com
www.telefonica.com/accionistaseinversores
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END
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