REG - Telefonica SA - Quarterly results January-June 2018

Telefonica SAAnnouncement

26/07/2018 08:25

RNS Number : 8455V
Telefonica SA
26 July 2018
 


FINANCIAL HIGHLIGHTS
 
·        Acceleration in the growth of the main financial and operating metrics.
®     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%).
®     Revenues (€12,144m; -6.3% y-o-y) accelerated their organic growth to +2.0% in the quarter.
®     April-June OIBDA (€4,237m; +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).
®     In the second quarter, net income (€902m) grew by 9.9% y-o-y and by 11.0% per share (€0.16).
®     Reported April-June results are affected by net positive impacts in OIBDA (€225m) and negative impacts in net income (-€60m), mainly associated with a favourable court ruling in Brazil, and partial goodwill impairment and tax asset reversal in Mexico.
·        Radical transformation of our networks.
®     47.3m premises passed with FTTx/cable (+15% y-o-y) and LTE coverage of 73% (+6 p.p.).
®     Leaders in network virtualisation and in the creation of a global customer-centric digital ecosystem.
·        Financial flexibility continued increasing.
®     Free cash flow (€1,548m in January-June 2018) grew 32.7% y-o-y excluding spectrum.
®     Net debt (€43,593m at June; -10.1% y-o-y) decreased for the 5th consecutive quarter (-€382m).
·        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 (€998 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 (IAS 18) 


 


2018 


 


Reported 


Organic 


 


2018 (IAS 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 




 


 


 


 


 


 


 


 


 


 


 


 


 


 




OIBDA margin


33.3%


 


1.9 p.p.


0.5 p.p.


 


 


 


34.9%


 


2.8 p.p.


0.7 p.p.


 


 




Telefónica España


40.0%


 


1.1 p.p.


(0.1 p.p.)


 


 


 


40.5%


 


(0.0 p.p.)


(0.0 p.p.)


 


 




Telefónica Deutschland


25.0%


 


0.7 p.p.


0.3 p.p.


 


 


 


27.2%


 


1.2 p.p.


0.4 p.p.


 


 




Telefónica UK


27.3%


 


0.8 p.p.


0.8 p.p.


 


 


 


27.5%


 


0.5 p.p.


0.7 p.p.


 


 




Telefónica Brasil


43.2%


 


8.6 p.p.


1.7 p.p.


 


 


 


50.5%


 


16.4 p.p.


2.2 p.p.


 


 




Telefónica Hispam Sur (1)


28.2%


 


0.1 p.p.


0.4 p.p.


 


 


 


28.2%


 


(0.4 p.p.)


0.0 p.p.


 


 




Telefónica Hispam Norte (2)(3)


21.7%


 


(6.0 p.p.)


(1.1 p.p.)


 


 


 


17.1%


 


(11.0 p.p.)


(0.7 p.p.)


 


 




Other companies & eliminations


25.6%


 


3.8 p.p.


4.9 p.p.


 


 


 


29.1%


 


7.3 p.p.


7.0 p.p.


 


 




Telxius


47.3%


 


(1.1 p.p.)


(0.7 p.p.)


 


 


 


47.0%


 


(0.9 p.p.)


(0.7 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 Hispam Sur (1)


6 


 


- 


- 


 


 


 


- 


 


- 


- 


 


 




Telefónica Hispam Norte (2)(3)


0 


 


n.m. 


n.m. 


 


 


 


- 


 


- 


- 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 


 




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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