REG - Telefonica SA - TEF - Financial Highlights January-March 2016 <Origin Href="QuoteRef">TEF.MC</Origin>

Telefonica SAAnnouncement

29/04/2016 08:40

RNS Number : 7941W
Telefonica SA
29 April 2016
FINANCIAL HIGHLIGHTS
Continued progress in high-value customers: LTE (2.5x), smartphones (+26%), fibre + VDSL (2.8x) and pay TV (1.5x). 
Revenues (10,784 million euros) increased 3.4% organic vs. the first quarter of 2015 (-6.6% reported).
Improvement in mobile data (+19.9% year-on-year organic), leveraged on non-SMS data (+28.8%).
OIBDA growth acceleration to 5.5% organic (3,376 million euros; -6.7% reported). 
Solid margin at 31.3% (+0.6% p.p. year-on-year organic); focus on synergies and cost rationalisation.
CapEx (+7.8% organic year-on-year) devoted to reinforcing leadership position in differential platforms.
32.1 million premises passed with fibre (+17% year-on-year); LTE coverage of 50%.
Operating cash flow (OIBDA-CapEx) accelerated its growth rate (+3.6% organic). 
Net income reached 776 million euros and stood at 0.14 euros per share. 
Solid liquidity position (19.9 billion euros, following April bond issue), covering all maturities until December 2017 not including expected cash generation.
Telefnica reiterates the guidance for 2016 and the dividend. 
T. Espaa delivered simultaneous revenue and OIBDA growth for the first time since the third quarter of 2008 (+0.2% and +2.0% organic, respectively), on the back of strong value customers growth (fibre, TV and 4G), which continued underpinned by a differential quality offering, along with the Company transformation efficiencies, which allowed for operating cash flow year-on-year stabilization (-0.5% organic vs. -7.5% in previous quarter) despite higher CapEx.
T. Brasil's OIBDA growth accelerated to 8.2% year-on-year organic and OIBDA margin expanded 2.3 p.p. to 33.1%, reflecting the capture of integration synergies and efficiency measures. 
In Germany, OIBDA advanced steadily (+6.2% year-on-year excluding extraordinary impacts) following the progress made in integration projects and after executing succesfully the Company data monetisation strategy.
T. Hispanoamricaincreased commercial momentum in high-value customers translated into organic revenue growth acceleration to 11.3% year-on-year.
T. UK, reported as discontinued operation, experienced a strong operating cash-flow growth in organic terms(+16.0%), resulting fromrobust OIBDA performance (+5.5% year-on-year organic). Commercially, the Company continued to expand its high-value customer base, while maintaining the best contract churn in the market, reflecting the high satisfaction levelof the client base.
Comments from Jos Mara lvarez-Pallete, Executive Chairman:
"In a context of intense technological disruption and transformation around digitalisation, our first quarter results reflected a strengthening of the business across the board and the capacity of our platforms (networks and infrastructure), which is enabling us to reach more customers with higher value products and services. 
This was all reflected in the improved quality of our customer base, with average revenue per access increasing by 5.2%, which is the main source of organic revenue growth. 
This growth accelerated at OIBDA level, as a result of efficiencies and operational leverage. Particularly noteworthy this quarter is the return to OIBDA growth in Spain, growing for the first time in 8 years simultaneously with revenues. Additionally, OIBDA growth has been achieved across all the businesses. 
On the other hand, the performance of main financials (revenues, OIBDA) in the quarter was strongly affected by the depreciation of exchanges rates in 2015, although this impact was neutralised at a free cash flow generation level.
As a result, first quarter results are in line with our expectations for the year-end and enable us to reiterate our guidance and the 0.75 euros per share dividend for 2016."
TELEFNICA
SELECTED FINANCIAL DATA
Unaudited figures (Euros in millions) 
January - March
% Chg
2016 
Reported 
Organic 
Revenues
10,784 
(6.6) 
3.4 
Telefnica Espaa (1)
3,126 
8.6 
0.2 
Telefnica Deutschland
1,858 
(2.3) 
(2.3) 
Telefnica Brasil (2)
2,431 
(13.0) 
0.6 
Telefnica Hispanoamrica
3,054 
(16.7) 
11.3 
Other companies & eliminations
315 
3.4 
OIBDA
3,376 
(6.7) 
5.5 
Telefnica Espaa (1)
1,266 
(1.2) 
2.0 
Telefnica Deutschland
392 
(3.8) 
1.7 
Telefnica Brasil (2)
805 
(4.1) 
8.2 
Telefnica Hispanoamrica
866 
(23.2) 
0.8 
Other companies & eliminations
47 
c.s. 
OIBDA margin
31.3%
(0.0 p.p.) 
0.6 p.p. 
Telefnica Espaa (1)
40.5%
(4.0 p.p.) 
0.7 p.p. 
Telefnica Deutschland
21.1%
(0.3 p.p.) 
0.9 p.p. 
Telefnica Brasil (2)
33.1%
3.0 p.p. 
2.3 p.p. 
Telefnica Hispanoamrica
28.3%
(2.4 p.p.) 
(2.9 p.p.) 
Operating Income (OI)
1,340 
(11.3) 
11.4 
Net income
776 
(56.9) 
Basic earnings per share (euros)
0.14 
(60.9) 
Basic earnings per share from continuing operations (euros)
0.07 
(27.8) 
CapEx
1,503 
(10.6) 
7.8 
Telefnica Espaa (1)
427 
3.2 
7.3 
Telefnica Deutschland
220 
(0.5) 
(1.2) 
Telefnica Brasil (2)
348 
(11.9) 
(12.6) 
Telefnica Hispanoamrica
459 
(26.1) 
31.1 
Other companies & eliminations
49 
60.8 
Spectrum
2 
(99.1) 
(99.1)
Telefnica Espaa (1)
- 
- 
- 
Telefnica Deutschland
2 
- 
- 
Telefnica Brasil (2)
- 
- 
- 
Telefnica Hispanoamrica
- 
- 
- 
OpCF (OIBDA-CapEx)
1,873 
(3.3) 
3.6 
Telefnica Espaa (1)
840 
(3.3) 
(0.5) 
Telefnica Deutschland
173 
(7.8) 
5.1 
Telefnica Brasil (2)
457 
2.8 
32.1 
Telefnica Hispanoamrica
406 
(19.6) 
(21.6) 
Other companies & eliminations
(2) 
(96.5) 
- Reconciliation included in the excel spreadsheets.
Notes: 
- 2015 and 2016 reported figures include hyperinflationary adjustments in Venezuela in both years.
- The January-March 2016 consolidated financial information uses the exchange rate of the Venezuelan bolivar set at the denominated DICOM (273 Venezuelan bolivars fuertes per dollar at 31 March 2016).
- From the first quarter of 2015 Telefnica UK's operations are reported as discontinued operations within the Telefnica Group and their assets and liabilities are classified as "held for sale", in compliance with the IFRS, as a result of the signing of the definitive sale agreement of the company in March 2015. 
- Organic criteria: Assumes constant exchange rates as of 2015 (average FX in 2015) 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.
- OIBDA and OI are presented before brand fees and management fees.
- OIBDA margin calculated as OIBDA over revenues.
(1) DTS has been consolidated since 1 May 2015. 
(2) GVT has been consolidated since 1 May 2015. 
DISCLAIMER
This document may contain forward-looking statements regarding intentions, expectations or forecasts related to the Telefnica Group (hereinafter, the "Company" or "Telefnica"). 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 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 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 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.
The content of this document must be taken into account by any individual or entity who may have to purchase and sell, or elaborate or disseminate opinions related to any securities issued by the Company, and, in particular, by analysts and investors. Except as required by applicable laws, Telefnica 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 or non-audited financial information. The information contained herein should therefore be considered as a whole and in conjuction with all the public information regarding the Company available, including, if any, other documents released by the Company that may contain more detailed information.
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.
For further information please refer to the information on 2016 first quarter financial results filed by the Company and also available on the Company's website: www.telefonica.com 

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