Financial data

The highlights of the Telefónica Group's annual results for 2019 are as follows

  • Sustainable, profitable and responsible growth; long-term value creation.
    • Differential customer base (344.3m); LTE (+18% y-o-y); FTTx/Cable (+8%), average revenue per access (+4.3% in FY 19); stable churn; improved customer satisfaction (NPS 21%; +1 p.p. y-o-y).
    • Revenues in October-December (€12,400m; -4.0%) rose 2.0% y-o-y organic and the OIBDA for the quarter (€3,669m; +3.8% y-o-y) grew by 4.0% organically.
      • Underlying OIBDA of €4,370m, after excluding restructuring costs (-€266m), T. México's operating model transformation impacts following the agreement with AT&T (-€239m), as well as T. Argentina’s goodwill impairment (-€206m) and capital gains & other factors (+€10m).
    • In FY 19 Revenues amounted to €48,422m; -0.6% y-o-y; (+3.2% y-o-y organic; above the annual target of around 2%). OIBDA totalled €15,119m in FY 19; -2.9%; (+1.9% organic; in line with the annual target of around 2%). In underlying terms, OIBDA reached €16,982m, net income €3,574m and net income per share €0.65.

 

  • Digitalised networks and reference in efficiency; AI-based cognitive systems.
    • UBB coverage leadership (127.8m premises passed with FTTx/Cable; 55.7m proprietary, +10% y-o-y).
    • E2E digital transformation savings of >€420m in FY 19 (above >€340m target); >2/3 of >€1bn of the 2017-20 target already achieved.
    • CapEx/Sales of 15.0%, meeting the annual target of around 15%.
  • 11 consecutive quarters of debt reduction.
    • Net debt (€37,744m at 31st December; -8.1% y-o-y) reduced by €573m in the quarter (-€3,330m in the year). Including post-closing events, net debt would come down to ~€37bn.
    • Free cash flow for FY 19 totalled €5,912m, after posting a strong 20.6% y-o-y growth.
  • Decarbonise the economy with digital solutions and energy-efficient fibre networks.
    • CO2 emissions reduced by 18% in FY 19 and ~50% in the last four years.
    • 100% of the electricity in our core markets is from renewable sources.
  • T. España service revenues increased by 0.4% vs. Q4 18, organic OIBDA +3.1% with organic OIBDA margin at 39.9% (39.7% in FY 19). Significant increase of convergent fibre accesses with premium speed (+24%) and mobile contract (+5%), validating the quality of our assets and the high-value commercial proposition.
  • T. Brasil solid results in the quarter in a more rational competitive landscape, better commercial activity and sustainable organic growth of revenues (+2.6% y-o-y), driven by contract, the progressive improvement in prepaid and fibre. These, along with the saving from digitalisation, drove OIBDA growth to +8.3% (+4.7 p.p. vs. Q3).
  • T. Deutschland achieved "Good" rating in Germany's main network and customer experience tests (i.e. Chip, Computerbild and Connect); organic y-o-y revenue growth (Q4: +0.2%; mobile service revenues +0.8%); strong commercial traction (own brand and partners) and contract churn improvement (-0.3 p.p. vs. Q4 18).
  • T. UK revenue growth for 14 consecutive quarters (+1.3% organic y-o-y); confirmation of its market leading position (contract churn; favourite mobile network; innovative commercial propositions).
  • T. Hispam Sur solid organic growth vs. Q4 18 in revenues and OIBDA (+11.9% and +9.3% respectively) despite the challenging macro and competitive environment. Commercially, it is worth highlighting FTTx/Cable performance (+17.2%).
  • T. Hispam Norte Q4 organic revenues improved in Mexico (+1.7% y-o-y) and returned to positive growth in Colombia (+0.2%). OIBDA (Q4 reported) reflected capital gains from tower sales in Ecuador and Colombia (€99m) and impacts from T. Mexico’s model transformation (-€239m). In commercial terms, it is worth highlighting the focus on value accesses (contract +3% organic; FTTx +8%; FTTH +127%).
  • Telxius, Telefónica Infra’s primary asset posted solid y-o-y organic growth in the quarter, in both, revenues (+6.8%) and OIBDA (+5.3%); accelerated new towers construction pace (151 in Q4 to 18,348) and the tenancy ratio stood at 1.36x.
  • Telefónica confirms shareholder remuneration for 2019 and announces that for 2020:
    • The second tranche of the 2019 dividend (€0.20 per share) will be paid in June 2020.
    • 2020 dividend of €0.4 per share to be paid in December 2020 (€0.2 per share) and in June 2021 (€0.2 per share)1.
  • Telefónica announces for 20202 stable Revenues, OIBDA and (OIBDA-CapEx)/Revenues
  • Telefónica announces 2019-20222 financial targets, within the framework of the new action plan announced in November 2019:
    • Revenue growth.
    • More than €2bn additional revenues by 2022 generated by Telefónica Tech (cybersecurity, IoT/Big Data and cloud).
    • +2 p.p. (OIBDA-CapEx)/Revenues ratio.

1 The adoption of the corresponding corporate resolutions will be proposed in due course, announcing the specific payment dates.

2 2020 and 2019-2022 guidance

  • Assumes constant exchange rates of 2019 (average in 2019).
  • Exclude the contribution to growth from T. Argentina and T. Venezuela.
  • Exclude the results from Central America's operations.
  • Considers constant perimeter of consolidation.
  • Does not include write-offs, capital gains/losses from the sale of companies, material non-recurring impacts and restructuring costs.
  • CapEx excludes investments in spectrum.

2019 adjusted bases: Revenues (€47,875m), OIBDA (€16,762m), and (OIBDA-CapEx)/Revenues (19.9%).

  • Considering: average exchange rates in 2019 with the exception of Venezuela and Argentina (exchange rate of the end of the period). Excludes T. Centroamérica. IFRS 16.