TIDMTDE
RNS Number : 2570M
Telefonica SA
27 July 2017
FINANCIAL HIGHLIGHTS
-- Growth acceleration across the board in main financials and KPIs.
(R) Customer base quality improvement: LTE (1.6x y-o-y),
smartphones (+19%), FTTx & cable (+19%) and mobile contract
(+5%).
(R) Revenues totaled EUR12,960m in the quarter (+1.9% y-o-y
reported) and increased 3.1% organic (+1.6 p.p. vs. the first
quarter), accelerating service revenue growth (+2.9%; +1.2 p.p.)
and handset sales (+5.2%; +6.8 p.p.).
(R) Double-digit growth in mobile data revenues continued (+17.8% y-o-y in organic terms).
(R) OIBDA (EUR4,158m; +6.1% y-o-y) growth accelerated to 7.2%
y-o-y organic vs. 1.3% in the first quarter. The OIBDA margin stood
at 32.1% (+1.2 p.p. y-o-y in organic terms).
(R) Underlying OIBDA in the quarter excluded EUR25m
restructuring costs (EUR4,183m; +5.5% y-o-y).
(R) Operating Cash Flow excluding spectrum (EUR2,273m) improved
its organic growth by 8.6 p.p. vs. the first quarter to reach 17.5%
year-on-year.
(R) Net income totaled EUR821m (+18.4% y-o-y) and earnings per
share EUR0.15 (+16.3%). In underlying terms, net income totaled
EUR1,092m (+23.6%) and earnings per share EUR0.20 (+21.9%).
-- Ongoing Company transformation.
(R) CapEx (EUR3,507m in January-June): mainly devoted to UBB network expansion, simplification, digitalisation and cognitive intelligence. As of June, 41.2m premises passed with FTTx & cable and LTE coverage of 68%.
-- Progress in de-leveraging.
(R) Free cash flow in first the half year reached EUR1,620m (2x y-o-y).
(R) Net debt stood at EUR48,487m at the end of June and decreased EUR3,706m vs. June 2016.
-- T. España improved service revenues (-0.8% y-o-y in organic
terms in the quarter; +0.8 p.p. vs. the first quarter) and OIBDA
(-1.5%; +0.9 p.p.); operating cash flow grew a solid 7.8%.
-- T. Brasil accelerated revenue growth in the quarter (+1.8%
y-o-y in organic terms) and maintained solid performance in OIBDA
(+7.0%) and operating cash flow (+11.6%), levered on margin
expansion.
-- T. Deutschland posted in April-June solid commercial
momentum, OIBDA growth acceleration (+3.8% y-o-y in organic terms)
and margin expansion (+1.9 p.p.).
-- T. UK; revenues and OIBDA accelerated their pace of growth in
April-June (+2.6% and +3.9% y-o-y in organic terms respectively)
and the operating cash flow returned to growth (+5.3%).
-- T. Hispanoamérica in the quarter reported strong growth
acceleration in revenues (+15.5% y-o-y in organic terms) and OIBDA
(+20.9%) and a significant operating cash flow evolution
(+71.8%).
-- The Company upgrades guidance and reiterates the dividend announced for 2017.
(R) Revenue guidance upgraded to growth >1.5% (vs. stable
previously), despite the negative impact from regulation
(approximately 1.2 p.p.).
(R) OIBDA margin guidance (y-o-y expansion up to 1 p.p.) and
CapEx/Sales excluding spectrum (around 16%) reiterated.
Comments from José María Álvarez-Pallete, Executive
Chairman:
"During the second quarter of the year we have accelerated
organic growth through the execution of our structural
quality-based strategy, which was reflected in the strong
competitive positioning in our main markets. Moreover, we continued
to make progress in our transformation towards becoming a platform
Company, with CapEx devoted to UBB networks, underpinning E2E
digitalization and cognitive intelligence, with a differential
value proposition for customers. All this, with a stronger balance
sheet, after doubling Free Cash Flow in the last twelve months and
reducing net debt by 5 billion euros, when considering the sale of
the stake in Telxius.
The strength and better business trends in the first half of the
year, as well as being well-positioned to continue capturing
sustainable growth in the coming quarters, allow us to upgrade our
guidance for 2017".
TELEFÓNICA
SELECTED FINANCIAL DATA
Unaudited figures (Euros in
millions)
January-June % Chg April-June % Chg
2017 Reported Organic 2017 Reported Organic
Revenues 26,091 3.4 2.3 12,960 1.9 3.1
Telefónica España 6,226 (2.3) (2.3) 3,160 (2.0) (1.9)
Telefónica Deutschland 3,542 (4.1) (4.1) 1,771 (3.4) (3.4)
Telefónica UK 3,208 (7.4) 2.3 1,607 (6.2) 2.6
Telefónica Brasil 6,193 21.8 1.7 3,028 14.1 1.8
Telefónica Hispanoamerica 6,419 6.7 12.3 3,134 5.9 15.5
Other companies & eliminations 504 (16.9) (8.5) 259 (23.5) (12.9)
Telxius 370 27.1 8.3 182 18.7 11.4
------------------------------------
OIBDA 8,179 5.5 4.3 4,158 6.1 7.2
Telefónica España 2,425 (5.0) (1.9) 1,282 (1.6) (1.5)
Telefónica Deutschland 861 2.1 2.7 461 2.2 3.8
Telefónica UK 849 (7.4) 2.2 433 (5.0) 3.9
Telefónica Brasil 2,138 30.1 7.2 1,034 23.3 7.0
Telefónica Hispanoamerica 1,796 5.7 13.5 892 6.9 20.9
Other companies & eliminations 110 10.2 (7.7) 56 55.4 108.5
Telxius 179 78.0 11.1 87 17.8 7.9
------------------------------------
OIBDA margin 31.3% 0.6 p.p. 0.6 p.p. 32.1% 1.3 p.p. 1.2 p.p.
Telefónica España 38.9% (1.1 p.p.) 0.1 p.p. 40.6% 0.2 p.p. 0.2 p.p.
Telefónica Deutschland 24.3% 1.5 p.p. 1.6 p.p. 26.1% 1.4 p.p. 1.9 p.p.
Telefónica UK 26.5% (0.0 p.p.) (0.0 p.p.) 27.0% 0.3 p.p. 0.3 p.p.
Telefónica Brasil 34.5% 2.2 p.p. 1.8 p.p. 34.1% 2.5 p.p. 1.7 p.p.
Telefónica Hispanoamerica 28.0% (0.3 p.p.) 0.3 p.p. 28.5% 0.3 p.p. 1.3 p.p.
Operating Income (OI) 3,370 9.3 12.2 1,800 14.9 19.0
Net income attributable to equity
holders of the Parent 1,600 28.9 821 18.4
Basic and diluted earnings per
share (euros) 0.29 30.3 0.15 16.3
CapEx 3,507 (4.0) (5.7) 1,886 (3.7) (3.3)
Telefónica España 704 (21.2) (20.6) 371 (19.8) (18.6)
Telefónica Deutschland 435 0.5 1.3 226 6.3 6.9
Telefónica UK 434 4.4 15.4 209 (6.5) 2.4
Telefónica Brasil 915 15.5 (3.6) 518 16.6 2.7
Telefónica Hispanoamerica 923 (9.4) (6.2) 493 (11.5) (3.9)
Other companies & eliminations 96 (5.7) (2.6) 68 17.4 22.4
Telxius 56 29.2 24.8 44 85.7 86.0
------------------------------------
Spectrum 4 (57.9) (56.3) 1 (93.8) (95.8)
Telefónica España - - - - - -
Telefónica Deutschland 1 (79.8) (79.8) 0 (78.7) (78.7)
Telefónica UK - - - - - -
Telefónica Brasil - - - - - -
Telefónica Hispanoamerica 4 n.m. n.m. 0 n.m. n.m.
OpCF (OIBDA-CapEx) 4,672 13.9 13.0 2,272 16.0 17.5
Telefónica España 1,720 3.7 8.0 910 8.5 7.8
Telefónica Deutschland 426 3.8 4.0 235 (1.4) 1.2
Telefónica UK 415 (17.3) (8.7) 224 (3.6) 5.3
Telefónica Brasil 1,223 43.7 17.0 515 30.9 11.6
Telefónica Hispanoamerica 873 28.2 43.2 399 44.0 71.8
Other companies & eliminations 14 c.s. (30.5) (12) (45.1) (71.5)
Telxius 123 115.5 5.7 43 (14.0) (23.9)
------------------------------------ ------------- ----------- ----------- ----------- --------- ---------
- Reconciliation included in the
excel spreadsheets.
Notes:
- 2016 and 2017 reported figures include hyperinflationary adjustments in Venezuela in both
years.
- OIBDA and OI are presented before brand fees and management fees.
- Telxius financials are fully reported in Other Companies & Eliminations in T. Group since
1 January, 2017, reflecting the final integration into Telxius of the mobile communications
towers transferred from T. España, T. Deutschland, T. Brasil and T. Hispanoamérica
segments and the international submarine fiber optic cable (which was already being reported
within Other Companies and Eliminations). As a consequence, 2017 reported figures for these
segments follow the same criteria. In addition, 2016 segment results have been revised to
reflect the different dates of asset integration into Telxius, affecting T. España (since
1 January, 2016), T. Deutschland (since 1 May, 2016), T. Brasil (since 1 April, 2016) and
T. Hispanoamérica (T. Perú since 1 April 2016 and T. Chile since 1 May 2016). Organic
y-o-y changes on segments reflect all the charges related to the towers transferred to Telxius
since 1 January 2016. The results of the segments do not include intra-group capital gains
resulting from the transfer of towers to Telxius in 2016.
- Organic criteria: Assumes constant exchange rates as of 2016 (average FX in 2016), excludes
the impact from hyperinflation in Venezuela in both years and considers constant perimeter
of consolidation. In OIBDA and OI terms, excludes write-downs, capital gains/losses from the
sale of companies, tower sales, material non-recurring impacts and restructuring costs. CapEx
also excludes investment in spectrum.
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DISCLAIMER
This document may contain forward-looking statements regarding
intentions, expectations or forecasts related to the Telefónica
Group (hereinafter, the "Company" or "Telefónica"). 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, the market share, possible
acquisitions, divestitures or other transactions, Company results
and other aspects related to the activity and situation of the
Company.
The forward-looking statements can be identified, in certain
cases, through the use of words such as "expectation",
"anticipation", "purpose", "belief" or similar expressions, or the
corresponding negative forms, or through the own predictive nature
of all issues referring to strategies, plans or intentions. These
forward-looking statements or forecasts 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 differ substantially from the ones put
forward through these intentions, expectations or forecasts. 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 laws, Telefónica does not
assume any obligation to publicly update these statements to adapt
them to events or circumstances taking place after this document,
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 the regulated information published from July
3, 2016. Information and disclosure related to APM used in the
present document are included in the Appendix. 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, 2017 submitted to the
Spanish National Securities Market Commission.
Finally, it is hereby stated that neither this document or any
of its contents constitutes an offer to purchase, sale or exchange
any securities, a solicitation of any offer to purchase, sale or
exchange of securities, 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)
Gonzalo Borja (gonzalo.borjadelsur@telefonica.com)
ir@telefonica.com
www.telefonica.com/accionistaseinversores
This information is provided by RNS
The company news service from the London Stock Exchange
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