Telefonica SA TDE Financial Highlights January-September 2012

  Telefonica SA (TDE) - Financial Highlights January-September 2012

RNS Number : 5157Q
Telefonica SA
07 November 2012




FINANCIAL HIGHLIGHTS

· Consolidation  of  sequential improvement  in  OIBDA which,  for  the 
second straight quarter, showed  quarter-on-quarter growth across all  regions 
and is reflected in higher margins:

o Third  quarter consolidated  OIBDA (5,351  million euros)  increased  1.8% 
sequentially in underlying terms and reached 15,782 million euros in the first
nine months of 2012.

o Underlying OIBDA  margin for  the third quarter  was 35.1%  (33.7% in  the 
first half), with a significant improvement in year-on-year trends (-0.5  p.p. 
in the quarter; -2.3 p.p. up to June).

o This performance reflects efficiency gains derived from the transformation
initiatives launched in the last 12 months.

· Inflection  point in  EPS, which  stood at  0.36 euros  in the  third 
quarter in  underlying  terms,  registering an  outstanding  improvement  both 
sequentially (+4.8%)  and  year-on-year  (+0.5%  vs.  declines  registered  in 
previous quarters). Underlying  net income in  the first nine  months of  2012 
amounted to 4,414 million euros (3,455 million euros in reported terms), while
underlying EPS reached 0.98 euros.

· Significant  improvement  in  financial  flexibility,  with  a  sharp 
reduction in net financial debt during the quarter (-2,304 million euros)  and 
a major  increase  in liquidity  following  the refinancing  of  nearly  5,400 
million euros from August to mid-October:

o Higher cash flow generation and asset disposals in the third quarter drove
a 4% reduction in net financial debt from the end of June.

o Post-closing of  the third  quarter, debt could  be cut  further by  3,183 
million euros  thanks  to the  rapid  execution  of asset  disposals  and  the 
preferred shares swap for treasury stock.

o The  Company's debt  maturities  are covered  beyond  2014 thanks  to  the 
proactive refinancing policy, which has enabled  it to raise more than  13,000 
million euros year to date, more than in full year 2011.

· Sustained growth in  main revenue drivers,  Latin America and  mobile 
data:

o Telefónica Latinoamérica's revenues continued posting strong  year-on-year 
growth  (+5.9%)  and  represented  49%  of  consolidated  revenues,  exceeding 
revenues from the European operations for the first time.

o Mobile data revenues  continued showing strong  dynamism, rising by  14.2% 
year-on-year to  account for  more  than 34%  of consolidated  mobile  service 
revenues.

o Consolidated revenues in the first nine months of the year (46,519 million
euros)  were  practically  flat   year-on-year  (-0.3%),  impacted  by   mixed 
performances in Europe  and regulation.  Excluding the  impact of  regulation, 
revenues increased by 1.1% year-on-year.

o Total accesses increased by 5% year-on-year to 314 million accesses at the
end of  September  2012,  underpinned  by solid  growth  in  mobile  broadband 
accesses (+40% year-on-year).

· The  Company  reiterates  its  guidance for  2012  and  the  dividend 
announced for 2013 (0.75 euros per share).





Comments from César Alierta, Executive Chairman:

"We have continued  executing our  strategy in recent  months, achieving  very 
visible progress in priority areas for the Company.

On the  results,  during the  third  quarter of  the  year there  has  been  a 
consolidation of the recovery trend initiated  in the second quarter, with  an 
outstanding sequential  improvement in  underlying earnings  per share,  which 
stood  at  0.36  euros  per  share  in  the  quarter,  returning  to  positive 
year-on-year   growth.    This   improvement    was   underpinned    by    the 
quarter-on-quarter  growth  in  OIBDA  across  all  regions,  thanks  to   the 
transformation initiatives to enhance our  efficiency and the benefits of  our 
scale.

On the financial side, we  have significantly improved our financial  position 
since the end of June, with a  net debt reduction of over 2,300 million  euros 
in the third quarter on the back of a strong improvement in free cash flow and
the execution of asset disposals. Post-third quarter, we have further  reduced 
our debt by an amount close to 3,200 million euros. At the same time, we  have 
proactively refinanced over 13,000 million  euros year to date, having  access 
to diversified financing sources,  which has led to  an important increase  in 
our liquidity.

And  from  a  strategic  standpoint,  we  continue  making  progress  in   our 
transformation into a "Digital  Telco", achieving significant milestones  such 
as the launch of the best convergent offer in Spain, the new IPTV platform  in 
Brazil and the rollout of new M2M services.

In conclusion, we are  making further progress  in our transformation  journey 
and the results achieved so  far make us feel  more positive about the  future 
despite tough conditions".

TELEFÓNICA
SELECTED FINANCIAL DATA
Unaudited figures
(Euros in millions)
                           January - September                 % Chg
                               2012        2011        Reported    Organic
Revenues                     46,519      46,672            (0.3)       (0.8)
Telefónica                   22,578      21,317             5.9        6.4
Latinoamérica
Telefónica Europe            22,512      24,045            (6.4)       (7.7)
Other companies &             1,429       1,310             9.1
eliminations
OIBDA                        15,782      14,251            10.7       (5.3)
Telefónica                    7,906       7,743             2.1        2.9
Latinoamérica
Telefónica Europe             7,950       6,463            23.0      (12.8)
Other companies &               (73)          45            c.s.
eliminations
OIBDA margin                   33.9%        30.5%         3.4 p.p.  (1.6 p.p.)
Telefónica                     35.0%        36.3%       (1.3 p.p.)  (1.2 p.p.)
Latinoamérica
Telefónica Europe              35.3%        26.9%         8.4 p.p.  (2.1 p.p.)
Operating Income (OI)         8,009       6,696            19.6      (11.2)
Telefónica                    4,136       4,187            (1.2)        0.7
Latinoamérica
Telefónica Europe             4,187       2,681            56.2      (20.9)
Other companies &              (314)        (171)            83.2
eliminations
Net income                    3,455       2,733            26.4
Basic earnings per             0.77        0.60            28.9
share (euros)
CapEx                         5,699       6,625           (14.0)        3.5
Telefónica                    2,986       3,197            (6.6)        6.7
Latinoamérica
Telefónica Europe             2,400       3,171           (24.3)       (5.5)
Other companies &               313         256            22.2
eliminations
OpCF (OIBDA-CapEx)           10,083       7,626            32.2       (9.5)
Telefónica                    4,920       4,545             8.2        0.8
Latinoamérica
Telefónica Europe             5,550       3,292            68.6      (15.6)
Other companies &              (386)        (211)            82.9
eliminations
- Reconciliation included in the excel spreadsheets.
Notes:
- OIBDA and OI are presented before brand fees and management fees.
- OIBDA margin calculated as OIBDA over revenues.
- 2011 and 2012 reported figures include the hyperinflationary adjustments  in 
Venezuela in both years.
-  CapEx  includes  38  million  euros  from  the  spectrum  acquired,  mainly 
corresponding to Venezuela (32) in the third quarter of 2012 and to  Nicaragua 
(5) in the first quarter of 2012. In 2011, it includes 423 million euros  from 
the spectrum acquired in Brazil (354), Costa  Rica (69) in Q2 11 and 669  from 
the spectrum acquired in Spain in Q3 11.
-  From  January  1st,  2012,  and  due  to  the  implementation  of  the  new 
organization announced in  September 2011,  companies related  to the  digital 
world and global resources that were previously included in the  consolidation 
perimeter of T.Latinoamérica (Terra, Medianetworks  Perú, Wayra and the  joint 
venture Wanda), T. España  and T. Europe (TIWS,  TNA, Jajah, Tuenti and  Terra 
España) have  been  excluded  from  their  consolidation  perimeters  and  are 
included within "Other  companies and eliminations".  Additionally, from  the 
beginning of the  year, the  perimeter of consolidation  of T.Europe  includes 
T.España. As a result, the results  of T. Europe, T. Latinoamérica and  "Other 
companies and eliminations" have  been restated for the  fiscal year 2011,  to 
reflect the above mentioned new organization. As this is an intragroup change,
Telefónica consolidated results for 2011 are not affected.
- Organic criteria: In financial  terms, it assumes constant average  exchange 
rates as of January-September 2011, and excludes hyperinflation accounting  in 
Venezuela. Therefore, in  OIBDA and OI  terms, the first  nine months of  2011 
exclude the  positive impact  of the  partial sale  of our  stake in  Portugal 
Telecom (+183 million euros), and the provisions for the redundancy program in
Spain (-2,671 million euros). In OIBDA and OI terms, the first nine months  of 
2012  exclude  the  capital  loss   of  China  Unicom  (-97  million   euros). 
Telefónica's CapEx  excludes spectrum  investment and,  in 2011,  real  estate 
commitments in relation to the new Telefónica headquarters in Barcelona.

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.



For further information please refer to the information on 2012 third quarter
financial results filed by the Company and also available on the Company's
website: www.telefonica.com

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


QRTGRBDBRUGBGDR -0- Nov/07/2012 08:01 GMT