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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of May, 2015
Commission File Number: 001-09531
Telefónica, S.A.
(Translation of registrant’s name into English)
Distrito Telefónica, Ronda de la Comunicación s/n,
28050 Madrid, Spain
3491-482 87 00
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ¨ No x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ¨ No x
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
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Telefónica, S.A.
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Table of Contents
Results January – March 2015 Telefónica, S.A. Investor Relations
Results
January – March 2015
Telefónica, S.A. Investor Relations
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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.
Investor Relations
Telefónica, S.A .
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Q1 15: 1st step of the new profitable growth cycle
1 Delivering on growth
Returning to growth across the board: Revenues (+12.6%), OIBDA (+7.7%), Net Income (+162%), EPS (+164%)
Robust organic top line growth (+3.3% y-o-y) and sustainable improvement in OIBDA (+2.4% y-o-y)
Organic revenue growth ex-VZ accelerated on the back of improved performance in Spain, Brazil and Germany
Strong commercial performance maintained; enhancing commercial propositions with refreshed offers
Building high-quality & value KPIs
Successfully monetising mobile data
Continuous efforts to contain costs; ongoing savings on leaner operating model
Investing further in networks & platforms (CapEx +21.5% y-o-y organic) is the foundation for the above
Building a differential future-proof network: Investments in growth & transformation are 76% of total
2 Deleveraging and strengthening the balance sheet
Net debt/OIBDA 2.13x including O2 UK sale; cost of debt declining to 5.27% (-18 b.p. y-o-y)
Strong FCF (+25.8% y-o-y) despite normal seasonality in Q1
Early signs of benefits from portfolio optimisation/in-market consolidation strategy
Focus on key markets (Spain, Brazil and Germany), with solid and improving performance in Q1
In-market consolidation: the first and boldest mover
Digital+ transaction closed on April 30th; One step further to becoming a Video Company
4 Q1 performance fully consistent with FY guidance
I nves tor Relations
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Key financials
Q1 15
Reported Organic
€ in millions Reported y-o-y y-o-y
Revenues 11,543 12.6% 3.3%
OIBDA 3,618 7.7% 2.4%
OIBDA Margin 31.3%(1.4 p.p.)(0.3 p.p.)
OpCF (ex-spectrum) 2,098(5.0%)(8.3%)
Net income 1,802 2.6x —
EPS 0.38 2.6x —
FCF 363 25.8% —
Net financial debt 45,627 3.8% —
ND/OIBDA (post O2 UK sale) 2.13x — —
Positive impacts from FX & changes in the perimeter
Most Latam currencies added y-o-y
Revenue: +3.2 p.p.; OIBDA
+2.5 p.p.
Consolidation perimeter contributed y -o-y
Revenue: +5.9 p.p.; OIBDA
+3.0 p.p.
2/3 of Revenues from Spain, Brazil and Germany
Spain 25%
32%
Hispam
Germany 16%
24%
Brazil
Investor Relations
Telefónica, S.A . 3
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Fully on track to meet 2015 outlook
2015 Guidance Guidance 2015E Q1 15
(Constant FX 2014; ex-UK; ex-VZ; incl. 12M E-Plus and 6M GVT)
Revenues >7% 8.8%
Limited margin erosion
around 1 p.p.
OIBDA margin(1.0 p.p)
(to allow for commercial
flexibility if needed)
CapEx/Sales Around 17% 13.3%
Net Debt/OIBDA (adjusted for O2 UK sale) <2.35x 2.13x
First Tranche:
€0.75/sh. €0.35/sh.
Dividend €0.35/sh. voluntary
scrip Q4 15 Voluntary scrip
€0.40/sh. Cash Q2 16 proposal to the
AGM (12th June)
Share buyback: % share capital cancelled (treasury) 1.5% Proposal to the
AGM (12th June)
Investor Relations
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Strong operating and financial performance
Building a quality platform
A c cesses (M ar- 15 y- o-y organic growth)
x5.1
111%
53%
29%
7%
LTE FTTH Pay TV Smartphones Mobile Contract
Q1 15 Revenue (y-o-y)
Organic
Reported
€11,543m
+3.3%
+12.6%
25% FX
28% Organic (+4.6%
ex-regulation)
47% Perimeter
Q1 15 Profitability (y-o-y organic)
€3,618m
31.3%
+2.4% -0.3pp
OIBDA OIBDA Margin
+7.7%
32% FX
31% Organic (+2.8%
ex-regulation)
36% Perimeter &
Tow ers
Strong increase in value base drives distinctive growth profile
Average Revenue/Access +0.8% y-o-y organic
Accesses +3% y-o-y organic
Lower churn: -0.2 p.p. y-o-y to 2.6%
Accelerating organic growth ex -VZ q-o-q
Sequential improvements in Brazil, Germany and Spain
Transformation of top line
CapEx effort made in recent years
Data monetisation key (data revenues +11.9% y-o-y organic)
Accelerating Digital Services: +33.7% y-o-y; Video +56.6% y-o-y
Continuation of improving trends in diversified OIBDA
Executing on OIBDA growth and stabilising margin (y-o-y
organic)
Synergies from simplification program on track; Synergies from
acquisitions to increase throughout the year
Focus on customer lifetime value along with market
investment (OpEx +4.0% y-o-y organic)
Commercial costs (+4.4% y-o-y); Net adds: 12.4m smartphones,
fiber 308k (x2 y-o-y); Pay TV 379k (>x3 y-o-y)
Network & systems costs up 7.4% y-o-y on traffic increase
Investor Relations
Telefónica, S.A . 5
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LTE and Prepay data: Main levers for data monetisation
Smartphone penetration
Blended
C ontract
P repay
59% 61%
53%
34% 38%
28%
22% 28%
17%
Mar-14 Dec-14 Mar-15
LTE penetration
LTE
Customers
2.8m 9.8m 14.1m
LTE: 52% of
shipments in Q1 6%
4%
1%
Mar-14 Dec-14 Mar-15
Q1 Mobile data revenue
Q1 14 Q1 15
77% 80%
36% 40%
Mobile Data/MSR Non-SMS/Mobile
Data
Q1 15 Non-SMS data rev:
(+19.1% y-o-y)
Encouraging data dynamics
Accelerating usage growth
Mobile data traffic: +52% y-o-y
Average usage per smartphone +25% y-o-y (512 MB/month)
LTE fostering growth (usage +60% vs 3G)
LTE traffic at 11% of total mobile data traffic (+9 p.p. y-o-y)
Prepay data upside in HispAm (21% prepay smartphone
penetration; +7 p.p. y-o-y)
Additional revenues coming from data
Monetising data beyond the allowance
Contribution of 1 p.p. to Q1 15 y-o-y revenue growth
“Bundle Breakage”: 25% customers; of which ~1/3 buy data snack
New commercial schemes to optimise revenues in Spain, Germany &
Brazil
LTE ARPU uplift: double digit
Investor Relations
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Digital services: a strong start to 2015
+31.8% +56.6%
Cloud: Value-added Video: Key pillar for
service growth
Cloud Storage (Corporates) 41% Pay TV / consumer FBB
Go to Cloud (SMEs) Differential content
Digital+; a game changer
+76.0% Digital
Security Innovation Devices: Opening up
Services Revenues the chain
SmartID (digital ID) €682m in Q1
SealSign (e- signature & Cyanogen investment
bio- authentication)(largest open source
FiLIP (smartwatch) +33.7% developer)
+24.5% +7.3%
M2M: Gaining scale Financial Services:
Steady growth
Global Partner Program in
LatAm Mobile-PoS launch
(>500 partners)(Ecuador)
Organic Revenue
y-o-y growth
Investor Relations
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TGR: Network and IT supporting business transformation
Differential technology for Best Network Experience
UBB Deployments (Mar-15)
Premises passed with fiber
16.1m
(x1.9 y-o-y)
LTE Coverage (%PoP)
65% 28%
LTE sites
~21k
2 carrier LTE-A
FTTH network supports 300MB offer
4G rollouts in new markets
Best Quality Excellent
Networks Operations
Network
All-IP Innovation
Addressing demand more efficiently
Customer Experience: global tool for enhanced self-care & fast diagnosis in call centers
Global platforms (Video, M2M, Cloud): leveraging scale and boosting performance
Trials for Technological excellence
3 carrier LTE-A
“LTE in a box” private netw orks
E2E 4G virtualised netw ork
VoLTEavailable, best-in-class QoS
Proactive migration of DSL customers w ithin fiber areas
IT: Execute business transformation + enable differential digital capabilities
+Customer experience +Efficiency
Progressing on Full Stack projects in Argentina, Chile, Peru & Mexico
Big Data (pilot in Spain)
Online Channel renovation in Spain: sales automation
DC consolidation through “Midrange” projects (Brazil + Spain)
+Simple and agile (y-o-y organic)
Applications -373
Physical Servers(12%)
Data Centers -5
Virtualisation +11p.p.
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Spain: Enhanced value mix in a better environment
25% of Group revenue
Mobile contract net adds („000)
A c cesses y- o-y
+1.8%
-4.0% 79 Q1 contract portability
loss reduced
-74% y-o-y
(102)
Q1 14 Q1 15
FTTH net adds („000) Fiber 100 in “Fusión”
A c cesses y- o-y P enetration
M ar- 1 4 M ar- 1 5
23%
x2 o/w 58% 16%
100 Mbps
244
108
Q1 14 Q1 15 Fiber 100
Pay TV net adds („000) Pay TV in “Fusión”
A c cesses y- o-y P enetration
M ar- 1 4 M ar- 1 5
50%
x3
255 17%
58
Q1 14 Q1 15 IPTV
Outstanding commercial performance
Access base back to growth: +1% y-o-y; Churn reduction across the board
FTTH base: 1.6 m (x2 y-o-y): 26% of FBB base
Fiber 100 Mb to 1.2m (10€ premium; lower churn vs DSL)
Strengthened Pay TV leadership: 2.1m (x3 y-o-y)
Upselling on differential Quad-Play offer
3.9m “Fusión” customers (+21% y-o-y); 1.4m mobile add-ons
“Fusión” KPIs in the right direction
ARPU virtually stable y-o-y at €69.6 Churn: 0.9% -0.3 p.p. y-o-y
Enhanced offer to increase premium quality
MBB data caps up ~25-36%; Fiber speed to 300 Mb
Spain: first place in FTTH coverage and connections in Europe
Strong investment effort with current regulatory conditions
T. España: 11.5m premises passed
LTE coverage to accelerate; 800 MHz available from April
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Spain: Another step ahead towards revenue growth
25% of Group revenue
Revenue (y-o-y)
Revenue ex- handset sales Revenue
Q3 14 Q4 14 Q1 15
(3.5%)
(4.9%)(3.8%)
(6.6%)(6.1%)
(8.2%)
+1.7 p.p. +1.1 p.p.
+2.2 p.p. +2.6 p.p.
OIBDA margin
O rganic y- o-y 46.9%
Ex- tower s ales 45.3% 44.5% 43.2%
-2.1 p.p.
Q1 14 Q1 15
Fiber 100 net adds 108 k 1.3x 142 k
TV net adds 58 k 4.4x 255 k
FBB net adds 14 k 3.1x 42 k
Mobile contract net
adds -102 k 79 k
y-o-y
Revenue to continue improving on solid fundamentals
Strong trading in high-end services & churn reduction
Increased value in customer mix (TV & Fiber)
Upselling & tariff update
High penetration of convergence
76% FBB & 59% mobile contract base in “Fusión” (consumer)
Improved market conditions
Handset sales softening y-o-y (Q1:-10.3% ;Q4 14: +14.7%)
Solid profitability despite improved commercial activity
Q1 OIBDA (-8.4% y-o-y organic) affected by:
Higher trading; Pension plan, Higher content costs
Efficiency progress
IT Simplification & distribution channel optimisation
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Germany: Executing on operations & key integration milestones
16% of Group revenue
Contract net adds („000) LTE driving growth
Ex- 428k c ustomer adjustment in E—Plus in Q 4% Gross Adds with >1GB (O2 consumer contract)
Contract Churn LTE customers (m)
32%
318
141 15% 5.1
1.9% 1.7%
Contract Q4 14 Q1 15 Q1 14 Q1 15
Gross Adds
(y -o-y +4%(10%)
organic)
30% of target synergy run-rate(1) in 2015 on track
Headcount restructuring
1,600 FTEs by 2018 (50% in 2015 from Q2)
Shop reduction
Planned by 1/3rd by year 5
Decommission of 14k mobile sites
Planned by year 5
(1) Run-rate: Approx. €800m run-rate OpCF sy nergies f rom y ear 5 of integration onwards
Focus on data monetisation in a more profitable environment
Mobile base: 42.2m (+2% y-o-y organic)
Stronger focus on customer base development
86% share of LTE-enabled Smartphones sold (O2 Premium) LTE coverage at 68% (62% at Dec-14); 75% target by year-end
Value approach to handset sales from the beginning of the year
VDSL uptake (66k net adds) improving retail fixed base
Synergy target on track (€250m in 2015; more biased to H2)
Staff negotiation process
Agreement with Workers Councils reached in February 2015 full-year goal well-advanced at the end of April
Distribution network consolidation
Drillisch to take 301 shops in H2 15; significant portion of LT target
3G National Roaming agreement from mid-April
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Germany: Solid financial performance
16% of Group revenue
Revenue (y-o-y organic) Revenue composition
Rev enue MSR MSR Handset Fixed
2.9% 14%
0.0% 15%
1.5%
(0.2%) 71%
Q4 14 Q1 15
OIBDA (y-o-y) OIBDA margin
O rganic ex non- recurrent items O rganic ex non- recurrent items
4.4%
20.5%
18.0%
(24.2%)—5 .7 p.p. +0 .3 p.p.
y- o- y y- o- y
Q4 14 Q1 15 Q4 14 Q1 15
Strong revenue performance driven by data centric strategy
Top line growing sequentially
MSR momentum; favorable customer mix in acquisition & retention o Data revs/MSR: 51% o Non-SMS data revs +7.3% y-o-y (71% of data revs) o SMS volume decline stabilisation Robust handset revenues y-o-y (Q1: +28.8%; Q4 14: +5.4%)
Profitability turnaround
Revenue flow-through
Efficient commercial approach
Customer base retention Value-based handset sales
OpEx synergies to accelerate from H2
OpCF at €187m (+6.4% y-o-y organic ex non-recurrent items)
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Brazil: Quality growth driving ARPU improvement
24% of Group revenue
Mobile accesses (Mar-15 y-o-y) ARPU (y-o-y)
3.3%
49%
0.4%
16%
(0.2%)
Smartphones Contract Q1 14 Q4 14 Q1 15
Fixed accesses (Mar-15 y-o-y) ARPU
x1.5
132%
82%
Fiber IPTV FBB Fiber
N et adds 54k 16k
Consistent growth in high value segments
Mobile data acceleration leading to y-o-y growth in ARPU
40% Smartphones penetration (+12 p.p. y-o-y); 5% LTE
penetration (+4 p.p. y-o-y)
Data traffic booming (+50% y-o-y) driven by LTE higher
usage on new data propositions
Strengthened leadership in mobile contract
Market share of 41.6% (+1.0 p.p. y-o-y)
Best customer satisfaction on best quality and network
coverage (141 cities covered with LTE)
Focus on most profitable services
FTTH premise s passed almost doubling y-o -y (4.3m at
Mar-15)
429k HH connected
Pay TV accesses : +23% y-o-y
EGM (May 28th) to close GVT transaction
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Brazil: Strong revenue growth acceleration
24% of Group revenue
Revenue (organic y-o-y)
Fixed Mobile Total
8.4%
4.3%
1.8% 1.9%
0.2%
(0.3%)
(3.1%)
(4.8%)(4.0%)
Q1 14 Q4 14 Q1 15
OIBDA (organic y-o-y)
0.9%
(1.3%)
(3.6%)
Q1 14 Q4 14 Q1 15
Best revenue growth in last 3 years
Strong MSR improvement in Q1 (+4.6 p.p. vs Q4 14)
leveraging data monetisation strategy
Data revenues/MSR: 39% (+7 p.p. y-o-y; +3 p.p. q-o-q); Non-
SMS revenues +42.0% y-o-y
8x higher adoption of data snacks since throttling elimination
Enhanced fixed revenue y-o-y trend; higher contribution from
Pay TV and fiber revenues
Negative impact of regulation (-3.2 p.p. in y-o-y revenue
growth)
Positive y-o-y OIBDA growth
OpEx (+4.9% y-o-y) once again below inflation:
Strong efficiency efforts (personnel and G&A expenses) and MTR
reduction
Offset higher subsidies (LTE adoption) and bad debt (more
difficult environment)
OIBDA margin stood at 30.1% (-1.0 p.p. y-o-y)
Investor Relations
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Hispam: Resuming reported & organic growth
32% of Group revenue
Accesses (Mar-15 y-o-y)
35%
16%
6%
4%
Mobile Smartphones FBB Pay TV
Revenue (organic y-o-y)
H is pam H is pam ex-Venezuela
18.2%
14.1%
11.3% 9.7%
10.0% 9.7% 8.9% 7.9%
Q2 14 Q3 14 Q4 14 Q1 15
OIBDA (organic y-o-y)
H is pam H is pam ex-Venezuela
20.1%
17.8%
16.8% 14.7%
15.1% 15.6% 14.5%
11.8%
Q2 14 Q3 14 Q4 14 Q1 15
O I BDA margin ex -VZ
(organic y- o-y) +0.5 p.p. +2.2 p.p. +2.3 p.p. +1.8 p.p.
Commercial momentum across services
3.1m Smartphone net adds (+62% vs. Q1 14)
Limited penetration (29% total; 21% prepay) provides significant upside
Record-high net adds in Pay TV (104k)
Volumes growing strongly y-o-y: Voice (+6%) & data traffic
(+52%)
Margin expansion for 5th consecutive Q (organic y-o-y and ex-VZ)
Positive impact from FX: all currencies but Colombian COP$ contributing positively y-o-y
Combination of access & ARPU growth fueling revenues
Data revenues 1/3 of total Q1 revenues
Non-SMS data +25.1% y-o-y
Margin improvement: y-o-y trend maintained
Main contributors: Mexico (+9.2 p.p.), Argentina (+3.3 p.p.) and Colombia (+3.0 p.p.)
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Mexico: Operational momentum fostering growth
4% of Group revenue
Accesses (Mar-15 y-o-y) Q1 Traffic (y-o-y)
>2x 77%
28%
17%
Accesses Smartphones Voice Data
Q1 Revenue & OIBDA (y-o-y organic)
+8.6% 69.8%
Ex-Regulation
OIBDA Margin
5.9% 24.5% (+9.2 p.p. y-o-y)
Revenue OIBDA
Strong commercial momentum
Strengthened market positioning boosting y-o-y accesses & traffic growth
Strong gross adds (Q1: 2.7m; +10% y-o-y); 2nd quarterly volume ever despite seasonality Record-high in Smartphones; Q1 net adds 2.0m; New LTE plans fostering adoption (820k accesses at Mar-15)
Larger scale bringing further profitability
Strong revenue growth y-o-y
Steady increase of both accesses & usage (MOU +18%) MTRs reduction dragging MSR growth by 3.2 p.p. in Q1
Increased profitability y-o-y
Strong access growth delivering economies of scale Successful implementation of efficiency plan Asymmetric interconnection tariff
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Rest of Hispam: Growth across the board
28% of Group revenue
Q1 Revenue (y-o-y)
O rganic Reported
55.5%
30.5%
17.7% 23.4% 25.2%
12.3%
4.1% 5.3% 4.6%
2.6%
Colombia Peru Argentina Chile VZ & CA
ex-reg ex-reg
Q1 OIBDA (y-o-y)
O rganic Reported
46.3%
38.3% 34.7%
10.8%
9.2% 9.3% 10.0% 17.8%
2.2%
-2.2%
Colombia Peru Argentina Chile VZ & CA
ex-reg ex-reg
Q1 OIBDA margin (organic y-o-y)
+3.0 p.p.(2.6 p.p.) +3.3 p.p.(0.8 p.p.)(1.7 p.p.)
Colombia Peru Argentina Chile VZ & CA
Solid start of the year
Colombia:
Strong organic OIBDA growth and margin expansion y-o-y Asymmetric regulation extended until 2017
Peru:
Solid growth in high-value accesses y-o-y: contract mobile +13%; Smartphones +31%; FBB +7%; Pay TV +15% OIBDA y-o-y organic decline impacted by more intense competition
Argentina:
Continued LTE deployment aiming to cover all provincial capitals by year end Strong margin increase on efficiency efforts and rationalisation of commercial costs
Chile:
Focus on quality of service: LTE (67% pop coverage) and FTTH (307k premises passed) Regulatory effects dragging revenues and OIBDA y-o-y (-4.2 p.p. and -4.3 p.p. respectively)
Venezuela & Central America:
4G services launched in Q1 in Venezuela & Panama Strong traffic volumes (voice +10% y-o-y; data +43% y-o-y)
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UK: Commercial momentum & robust financials
Consolidated as discontinued operation
Mobile contract net adds („000)
Mobile base 24.6m
291(+4% y-o-y)
135 133
Q1 14 Q4 14 Q1 15
CC ontract hurn 1.1% 1.0% 1.0%
Revenues (y-o-y ex “O2 Refresh“1)
Revenue M SR
5.4% 5.8%
2.9% 2.9%
(2.7%)
(6.3%)
Q1 14 Q4 14 Q1 15
OIBDA margin
24.5% 23.6% 24.5%
Q1 14 Q4 14 Q1 15
Q1 15 growth of new perimeter
Q1 14: €24m true-up commissions & €5m restructuring costs
Continued growth of customer base
Fastest growing mobile operator
Total net adds 138k (Q1 14:-73k)
Contract net adds reflect Q1 seasonality o Contract gross adds: +2% y-o-y on popularity on high-end devices o LTE penetration: 22%; 784k LTE net adds Prepay base grew in Q1 for first time in 7 years Continued LTE roll-out (66% outdoor coverage at Mar-15)
Customer loyalty remains at record levels
Highest customer satisfaction
Popular commercial propositions: “Big Bundles”, “O2 Refresh”
Sustained financial performance
Total revenue growth +1.1% y-o-y
Q1 OIBDA +1.1% y-o-y (+6.1% ex non-recurrent items2)
Continued efficiencies with savings in marketing and overheads “O2 Refresh” represents 0.7 p.p. of OIBDA margin
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Substantial deleverage following O2 UK sale
Net Financial Debt
€ in millions
Net Financial Net Financial
Debt/OIBDA Debt/OIBDA(1) Net Financial
2 .7 4 x 2 ..7 3 x Debt/OIBDA
2.13x
45,087(363) 493 140(456) 461 266 45,627(13,897)
31,730
N et Fin. FC F Dividends & SBB N et financ ial C olombia FX & O thers P re- retirements N et Fin. Debt O 2 U K s ale N et Fin. Debt
Debt & H ybrid c oupon inves tments hybrid c ommitments M ar- 1 5 M ar- 1 5 post
Dec—14 O 2 U K s ale
2,098(1.142)
-10.8%
y-o-y
+25.8%
(906) y-o-y
417 363
143(85)(161)
O pC F FC F FC F
c ontinued Working N et I nterest T ax Dividend to Spec trum dis c ontinued
operations c apital minorities & ac c rued operations
O thers
(1 ) O I BDA 1 2 month rolling, not c onsidering O 2 U K discontinuation, inc orporating E-Plus O IBDA c orresponding to A pril-
Sep 1 4 and exc luding the non-recurring impact from res tructuring c osts in 2 0 14.
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Telefónica, S.A .
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Substantial diversified financing reinforcing credit quality
Long-term financing (€10.8Bn YTD)
€ in billions
Other LatAm:0.3 Schuldschein: 0.3
Colombia hybrid: 0.5
Telefónica right issue: 3.0 Undrawn syndicated
credit facilities
T. Brasil minorities: 1.2 renewal: 5.5
Equity Debt
Net debt maturities(Mar-15)
€ in billions
9.0
5.4
2015 & 2016 2017
Average debt life at 6 years
Liquidity position (Mar-15)
€ in billions
16.9
11.2
Undrawn credit
lines &
syndicated
93% LT credit facilities
Cash position
5.7 excluding
Venezuela
Mar-15
Effective interest cost (12 month rolling)
Guidanc e
6%
5.45%
0.12% 5.27%
5%(0.30%)
Mar-14 Lower Higher Mar-15
European Latam
rates leverage
&
Others
18 b.p. reduction in effective interest cost
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Telefónica, S.A . 20
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Outstanding support for both capital increases
Initial structure Final structure
Telefónica Public Vivendi Telefónica Public Vivendi
O N : 9 4 .5% O N : 5 .5 % O N : 0 .0 %
100% P N : 5 7 .7% P N : 3 1 .0% P N : 1 1 .3%
T: 70.1% T: 22.4% T: 7.5%
O N : 9 2 % O N : 8 %
P N : 6 5 % P N : 3 5 %
T : 7 4 % T : 2 6 %
Telefónica THE BRAZILIAN LEADER
GVT
Brasil T. BRASIL+GVT
Telefónica Right issue
Offering size
€3Bn; issuance of new shares (281.2m)
Subscription price
€10.84: discount to TERP of 18.9%
T. Brasil follow-on offering
Offering size
BRL16.1Bn (~€4.7Bn)
Subscription price
BRL47/share for PN shares (-2.4% discount to last price)
Demand: 3.7x of the shares offered in the rights issue
Discount to TERP significantly lower than other European rights issues in the last 2 years (~10 p.p)
Largest equity transaction in LatAm in the last 4 years
First public registered offering in Brazil in the last 6 months
Market book oversubscribed
Lower discount than precedents
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Conclusion
SOLID START TO 2015; BEGINNING A NEW CYCLE OF PROFITABLE GROWTH
1 Strengthening growth in Revenue, OIBDA & EPS
2 Encouraging demand for LTE, Smartphones, Fiber and Pay TV. Enlarging differentiation
3 Early signs of portfolio optimisation/in market consolidation benefits
4 Sound balance sheet
5 2015 Guidance and 2016 ambition confirmed
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For further information:
Investor Relations
Tel. +34 91 482 87 00 ir@telefonica.com www.telefonica.com/investors
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Telefónica, S.A. | ||||
| Date: May 14th, 2015 | By: | /s/ Miguel Escrig Meliá | ||
| Name: Miguel Escrig Meliá | ||||
| Title: Chief Financial Officer | ||||