2007January-December rslts P2
Telefonica SA
28 February 2008
PART 2.
RESULTS BY REGIONAL BUSINESS UNITS
Telefonica Europe
At the end of December 2007, Telefonica Europe's customer base reached 41.9
million accesses, compared with 38.6 million accesses at year end 2006 (+8.7%
year-on-year).
In 2007, Telefonica Europe revenue was 14,458 million euros, (+9.9%
year-on-year), while in the quarter declined 1.1% year-on-year, mainly due to a
weaker sterling/euro exchange rate and the exit of Airwave from the perimeter.
Operating income before depreciation and amortization (OIBDA) reached 4,977
million euros, 34.2% above 2006 figures1. 2007 OIBDA included personnel
reorganization and other non-recurring charges totaling 338 million euros
related to the UK, Ireland and German businesses, as well as the capital gain
from the sale of Airwave (1,296 million euros), booked in the second quarter.
Operating Income (OI) was 1,591 million euros in the January-December period,
mainly affected by the impact of higher assets amortizations derived from the
Purchasing Price Allocation (PPA) process, which also impacted negatively the
2006 OI figure (309 million euros).
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1 Telefonica Europe includes in 2006 Telefonica O2 Czech Republic
(January-December), T.Deutschland (January-December) and O2 Group
(February-December).
Telefonica Europe CapEx for the full year 2007 amounted to 2,125 million euros
(2,552 million euros in 2006 February-December period). The year-on-year decline
was largely due to O2 Germany (30.6% lower year-on-year) bringing forward
capital investment from 2007 into 2006 as part of the 3G network build.
Operating Cash Flow (OIBDA-CapEx) for the year amounted to 2,852 million euros
(1,156 million euros in 2006 February-December period).
Telefonica Europe 2007 financial targets2 have been achieved:
• 11.7% year-on-year growth in revenues (vs. guidance of 11% - 14%)
• 10.1% year-on-year growth in OIBDA (vs. guidance of 7% - 10%)
• CapEx of 2,095 million euros (vs. guidance of less than 2,200 million
euros)
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2 2006 base reported figures include eleven months of O2 Group (consolidated
since Feb.06), three months of start-up losses in Slovakia, and exclude Airwave
results. 2007 guidance assumes constant exchange rates as of 2006, and exclude
changes in consolidation. OIBDA excludes other exceptional revenues/expenses not
foreseeable in 2007. Personnel reorganization and Real Estate Programs are
included as operating revenues/expenses, except for those decided after guidance
was set at the beginning of the year (redundancies in O2 Group and Real Estate
Program in TEF O2 CR). For comparison, the equivalent other exceptional revenues
/expenses registered in 2006 are also deducted from reported figures.
Strategic and operational highlights:
• iPhone success. The iPhone is the fastest-ever selling product for O2 UK.
The ARPU of an iPhone customer is 30% higher than an average contract user
and it has helped O2 UK to gain high value customers in the market, as
approximately 60% of iPhone customers have migrated from other networks.
Customer satisfaction levels are the highest of any device that O2 UK has
sold, with the lowest ever rate of return. From 1 February 2008, the three
iPhone tariffs were upgraded as part of O2 UK's new and improved contract
tariff structure.
• iPhone to launch in Ireland. O2 Ireland will be the exclusive network
partner for the iPhone in Ireland. The iPhone will be available from March
14th.
• O2 Germany builds foundations for further growth. As part of the 3.5
billion euros investment program for 2007-2010 announced in October 2007, O2
Germany has already selected vendors to expand both its GSM and UMTS network
coverage. This will provide the business with a strong platform to capture
the significant growth opportunities in Germany, including the business
segment, leveraging the global reach of Telefonica to offer new propositions
to multinational corporations as well as in the areas of the country not
currently covered by the O2 network. In conjunction, the national roaming
agreement which allowed for roaming by O2 customers in Germany on the
T-Mobile 2G and 3G mobile networks was cancelled. Roaming minutes available
as part of the agreement can be used until the end of 2009. O2 Germany will
also double its store network to 1,000 over the next 2 years.
• Accolades for O2 Broadband in the UK. Since launch, O2 UK's broadband
service was rated above the major ISPs in the monthly 'thinkbroadband.com'
ISP comparison in November and December 2007, just two months after service
launch. O2 Broadband scored the highest out of all its main competitors in
all key satisfaction areas for customers, including speed, reliability and
customer service.
• New bundles launched in the Czech Republic. Telefonica O2 Czech Republic
launched new TRIO bundle, including DSL, calls and O2 TV.
• New data roaming tariffs announced. The O2 businesses and Telefonica
mobile business in Spain will launch a range of new data roaming tariffs
before summer 2008 (Telefonica in Spain already from February), aimed at
customers travelling within Europe, with important savings for customers.
O2 UK
Total revenues in the last quarter of 2007 were 1,877 million euros, an increase
of 7.8% year-on-year in local currency compared to the same period of last year.
For the full year, total revenues were 7,403 million euros, an increase of 18.7%
year-on-year in local currency compared to the 11 month period to 31 December
2006. On a like for like basis total revenue growth was 9.5% year-on-year.
Service revenue for the quarter was 1,702 million euros, an increase of 9.7%
year-on-year in local currency compared to the same period last year, driven by
continued strong customer and ARPU growth, while for the full year, service
revenue amounted to 6,790 million euros (+10.3% year-on-year in local currency
on a comparable basis).
Operating income before depreciation and amortization (OIBDA) for the quarter
was 503 million euros, a decrease of 4.9% year-on-year in local currency
compared to the same period of 2006. OIBDA included additional personnel
reorganization and other non recurring charges in the quarter of 20.5 million
euros, mostly related to the UK IT and Technology function to capture
efficiencies in the future. Excluding this charge in the quarter, OIBDA would
have been flat in local currency. OIBDA for the full year totalled 1,923 million
euros, an increase of 8.7% year-on-year in local currency compared to the 11
month period to 31 December 2006. On a like for like basis, OIBDA grew 1.0%
year-on-year in local currency. Excluding all personnel reorganization charges
for the year OIBDA was 10.7% ahead in local currency compared to the 11 month
period to 31 December 2006; on a like for like basis it was 2.8% ahead in local
currency.
In the UK, guidance3 for the full year 2007 has been accomplished, with growth
of 18.6% year-on-year in revenues (vs. guidance of 15% - 18%) and 10.6%
year-on-year growth in OIBDA (vs. guidance of 9% - 12%).
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3 2006 base reported figures include eleven months of O2 UK (consolidated since
Feb.06). 2007 guidance assumes constant exchange rates as of 2006, and exclude
changes in consolidation. OIBDA excludes other exceptional revenues/expenses not
foreseeable in 2007. Personnel reorganization and Real Estate Programs are
included as operating revenues/expenses, except for those decided after guidance
was set at the beginning of the year (redundancies in O2 UK). For comparison,
the equivalent other exceptional revenues/expenses registered in 2006 are also
deducted from reported figures.
OIBDA margin in the fourth quarter was 26.8% (27.8% excluding personnel
reorganization and non recurring charges), compared to 30.3% in the same quarter
in 2006. This margin dilution was due to costs associated with the launch of O2
Broadband, increased retention and reduced national roaming revenues from '3'.
OIBDA margin for the year was 26.0%, while excluding personnel reorganization
charges it was 26.4%.
The business once again outperformed the market, with gross additions in the
quarter around 22% higher than the same period in 2006. The market continues to
be competitive, especially in the prepay segment, with increasing prepay to
contract migration, where O2's 'Simplicity' tariff, offering a SIM only contract
tariff with a 30 day notice period has proved highly successful.
O2 UK added a total of 483,000 net mobile customers in the quarter (the highest
in the market), an increase of 63.8% year-on-year, and 749,000 customers in the
year (-54.7% year-on-year, reflecting the highly penetrated market), taking the
base to 18.4 million (excluding the Tesco Mobile customer base) representing
growth of 4.2% year-on-year.
A total of 276,000 net contract customers were added in the quarter, more than
double the figure for the fourth quarter 2006 and an all time record, reflecting
the success of the iPhone in addition to a strong underlying performance in
traditional handsets. For the full year 591,000 contract customers were added to
reach a base of 6.8 million (+9.5% year-on-year). At the end of the period
contract customers made up 37.0% of the total base, compared to 35.3% at the
same time last year. Quarterly monthly contract ARPU of 61.0 euros was up 1.2%
in local currency compared to the fourth quarter last year, due to increased MoU
and non-voice services, while the ARPU for the year was 63.2 euros (+1.1%
year-on-year in local currency). Average monthly contract churn fell to 1.5% in
the quarter, from 1.9% in the fourth quarter last year. The contract churn for
the year was 1.7%, from 1.9% in 2006.
The number of prepay customers increased by 207,000 during the quarter, while
for the year the prepay base grew by 158,000 to reach 11.6 million customers.
Quarterly monthly prepay ARPU of 18.0 euros was 4.1% higher in local currency
than the fourth quarter last year, while the ARPU for the year was 18.2 euros
(+4.0% year-on-year in local currency).
As a result, O2 UK's blended monthly ARPU of 33.9 euros was 4.4% higher than the
fourth quarter last year in local currency, while the ARPU for the year was 34.4
euros (+3.6% year-on-year), reflecting the increased proportion of contract
customers in the base, customer adoption of new products and services and the
continued growth in both data and voice ARPUs. On a customer level, elasticity
continues to be above 1.
Quarterly MoU was up 9.8% year-on-year at 197 minutes, driven by propositions
such as 'Call Freedom', while the MoU for the year was 190 minutes (+10.6%
year-on-year).
Quarterly data ARPU of 11.1 euros was 9.1% higher in local currency than the
fourth quarter last year, driven by growth in text messaging volumes, up 21.0%
in the quarter, as well as increasing usage of a range of non-SMS services. Data
ARPU for the year was 11.0 euros (+8.2% year-on-year in local currency). The new
'unlimited' data bolt-on proved successful with 59,000 customers taking this
product from launch in October until the end of the year.
O2 UK had rolled out ULL capabilities to 833 exchanges by the end of the
quarter, giving its broadband network a population coverage of 52%, with 71,000
broadband customers at the end of 2007. The base has since grown to over 100,000
to date.
O2 GERMANY
O2 Germany includes Telefonica Deutschland and comparable 2006 figures have been
restated on this basis. Total revenues in the fourth quarter were 929 million
euros, a decrease of 0.3% year-on-year compared to same period of 2006. For the
full year total revenues were 3,541 million euros, an increase of 6.7% compared
to the 11 month period to 31 December 2006. On a like for like basis, revenue
declined by 1.9%.
Mobile service revenue for the quarter was 725 million euros, down 6.5% compared
to the same period last year, reflecting the continued ARPU weakness in the
German market and the impact of the approx. 10% termination rate cut in November
2007, partly offset by growth of the customer base. The termination rate cut
reduced fourth quarter service revenue by 0.6%. Mobile service revenue for the
year was 2,901 million euros, and year-on-year decrease of 5.1%.
Operating income before depreciation and amortization (OIBDA) for the last
quarter of 2007 was 17 million euros, a decrease of 77.9% compared to the same
period in 2006. This included non recurrent charges totalling 151 million euros,
the majority of them reflecting the cessation of the national roaming contract
with T-Mobile, along with additional personnel reorganization charges to enable
future efficiency savings.
OIBDA for the full year totalled 473 million euros, a decline of 18.9% compared
to the 11 month period to 31 December 2006. On a like for like basis the decline
was 24.2%. Excluding all one-off charges during the year (which totalled 247
million euros), OIBDA for the 2007 would be 15.4% ahead of the same period last
year, and growth of 23.5% compared to the 11 month period to 31 December 2006.
O2 Germany guidance4 for the full year 2007 has been partially met, with 6.7%
year-on-year growth in revenues (vs. guidance of 7% - 10%) and 23.8%
year-on-year growth in OIBDA (vs. guidance of 21% - 25%).
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4 2006 base reported figures include eleven months of O2 Germany (consolidated
since Feb.06). 2007 guidance exclude changes in consolidation. OIBDA excludes
other exceptional revenues/expenses not foreseeable in 2007. Personnel
reorganization and Real Estate Programs are included as operating revenues/
expenses, except for those decided after guidance was set at the beginning of
the year (redundancies in O2 Group). For comparison, the equivalent other
exceptional revenues/expenses registered in 2006 are also deducted from reported
figures.
OIBDA margin in the fourth quarter was 1.8% and for the full year it was 13.3%,
while excluding the personnel reorganization and other charges it would have
been 18.1% and 20.3%, respectively.
The business traded well in the quarter, with gross additions up 63.3%
year-on-year. Net additions in the quarter reached 303,000 customers, while for
the full year they were 1.4 million, taking the mobile customer base to 12.5
million, 13.1% higher than at the same time last year. The Tchibo Mobile
customer base grew by 81,000 to 1.18 million by the end of the quarter, while
the Fonic brand added 129,000 customers to end the year with a base of 200,000.
O2 Germany added a total of 244,000 net contract customers in the quarter, with
756,000 for the full year. Quarterly monthly ARPU in the fourth quarter was 32.3
euros, 17.6% lower than the same quarter last year. For the year contract ARPU
was 34.1 euros, 13.7% lower than in 2006. This reflected the impact of the
approx. 10% termination rate cut in November 2007, the level of competition in
the German market and the migration of the existing customer base to new
customer offers. The Genion S/M/L base reached 2.14 million customers at the end
of the year.
A total of 369,000 prepay customers were added during the quarter, while 310,000
existing customers were also removed from the base after an analysis of the
contribution of prepay customers to revenue generation. This resulted in net
additions in the quarter of 59,000 customers, with 691.000 for the full year,
using the market's most stringent definition of customer activity. The prepay
base at the end of the year was 6.23 million customers.
Quarterly monthly prepay ARPU of 6.4 euros was 22.8% lower than the fourth
quarter last year, reflecting the market factors mentioned above, while the
prepay ARPU for the year was 6.7 euros, a decline of 23.5% compared to 2006.
Blended quarterly monthly ARPU in the fourth quarter was 19.4 euros, 17.9% lower
than the same quarter last year. Blended ARPU for the year was 20.4 euros, a
decline of 15.7% compared to 2006.
Blended quarterly MoU grew by 3.7% year-on-year to 134 minutes, driven by new
propositions such as Genion S/M/L/XL and new prepay offers. MoU for the year
were 131 minutes, an increase of 3.0% compared to last year.
Quarterly monthly data ARPU was 5.1 euros, 12.8% lower than the fourth quarter
last year due to the higher number of lower spending prepay users in the base
and a shift from SMS to voice usage with the introduction of flat rate voice
tariffs. Data ARPU for the year was 5.1 euros, 10.9% lower than 2006, although
total data revenues were flat year on year with a 12.8% increase in non-SMS
data.
O2 DSL had acquired 75,000 customers by the end of the quarter, with a strong
order book of circa 50,000 which were not reflected in the net additions number
for the quarter. Telefonica Deutschland reported 671,000 ULL lines in total at
the end of December, from around 187,000 lines at the end of the fourth quarter
in 2006. Equivalent ADSL lines in service reached 837,000 at the end of
December, from 619,000 at the end of December last year.
O2 IRELAND
Total revenues in the fourth quarter of the year were 250 million euros, an
increase of 1.4% compared to the same period last year. Revenue for the full
year 2007 was 991 million euros, an increase of 11.9% compared to the 11 month
period to 31 December 2006. On a like for like basis growth was 2.8%. Mobile
service revenue for the quarter was 231 million euros, an increase of 3.7%
compared to the same period last year, reflecting the growth of the customer
base and the increase in blended ARPU. The termination rate cut reduced fourth
quarter service revenue by just under 1%. Mobile service revenue for the year
was 935 million euros, a year-on-year increase of 4.0% over the previous year on
a comparable basis.
Operating income before depreciation and amortization (OIBDA) for the quarter
was 63 million euros, a decrease of 15.2% compared to the same period last year.
This included a charge of 13.4 million euros, related to costs to reorganize the
IT and networks division in order to capture future efficiency savings, as the
business has entered exclusive negotiations with IBM to supply and manage O2
Ireland's IT services. Excluding this charge OIBDA would have been 76 million
euros. OIBDA for the year was 316 million euros, 2.0% higher compared to the 11
month period to 31 December 2006 and 6.6% lower year-on-year on a comparable
basis, while excluding personnel reorganization charges (totalling 16.2 million
euros), OIBDA would have been 333 million euros, a decline of 1.8% year-on-year
on a comparable basis.
OIBDA margin in the fourth quarter was 25.1%; excluding the above-mentioned
charge it was 30.5%. OIBDA margin for the year was 31.9%, while excluding all
personnel reorganization charges it was 33.6%.
O2 Ireland traded well in the fourth quarter, with gross connections up 4.6%
compared to the same quarter last year. Net connections totalled 14,000 in the
fourth quarter. At the end of December the total customer base was 1.6 million
customers, 0.9% higher than at the same time last year. The number of mobile
broadband customers stood at 24,500 by the end of the year, after a successful
launch in July 2007.
O2 Ireland added a total of 22,000 net contract customers in the quarter, 26.8%
higher than the fourth quarter last year, and for the year total contract net
additions were 70,000, 24.2% higher than in 2006. Quarterly monthly contract
ARPU of 78.8 euros was 3.3% lower than the fourth quarter last year and for the
year contract ARPU was 82.3 euros, 3.1% lower than 2006 due to the introduction
of new offers and promotions.
Due to the impact of increased competitor activity, the prepay customer base
fell during the quarter by 8,000 customers. During the year the prepay base fell
by a total of 56,000 customers, compared to a loss of 26,000 in 2006, and ended
the year at 1.1 million customers, a decline of 4.9% year-on-year. Monthly
prepay ARPU was 29.0 euros, a decrease of 1.9% on the same period a year ago,
while ARPU for the year was 29.0 euros, a decline of 1.2% year-on-year.
Blended monthly ARPU in the fourth quarter of 45.7 euros was 1.6% higher than
the fourth quarter last year, mainly due to the higher proportion of contract
subscribers on the base. Blended ARPU for the year was 45.9 euros, growth of
1.6% year-on-year.
Blended MoU in the quarter increased by 2.5% year-on-year to 252 minutes, again
driven by the higher proportion of contract subscribers in the base. MoU for the
year were 248 minutes, with a year-on-year growth of 4.9%.
Quarterly monthly data ARPU was 12.4 euros, 23.5% higher than the fourth quarter
last year, driven by increased use of non-SMS services. Data ARPU for the year
was 11.7 euros (+19.6% year-on-year)
TELEFONICA O2 CZECH REPUBLIC
Total revenues for the fourth quarter amounted to 590 million euros, up 1.7%
year-on-year in local currency. For the full year, revenues reached 2,257
million euros, an increase of 2.9% year-on-year in local currency. In line with
the first nine months of the year, the Czech mobile business was the key driver
of this growth. Business revenues in the Czech fixed line segment were flat in
2007 compared to the previous year, confirming the trend seen since the first
quarter.
Operating income before depreciation and amortization (OIBDA) reached 247
million euros in the fourth quarter, up by 14.7% year-on-year in local currency,
while OIBDA in 2007 reached 1,010 million euros, up 0.5% year-on-year in local
currency.
Telefonica O2 Czech Republic guidance5 for the full year 2007 has been met, with
2.8% year-on-year growth in revenues (vs. guidance of 1% - 3%), 0.1%
year-on-year decrease in OIBDA (vs. guidance of -1% - 0%) and CapEx of 274
million euros (vs. guidance of approx. 310 million euros).
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5 2006 base reported figures include three months of start-up losses in
Slovakia. 2007 guidance assumes constant exchange rates as of 2006, and exclude
changes in consolidation. OIBDA excludes other exceptional revenues/expenses not
foreseeable in 2007. Personnel reorganization and Real Estate Programs are
included as operating revenues/expenses, except for those decided after guidance
was set at the beginning of the year (Real Estate Program in TEF O2 CR). For
comparison, the equivalent other exceptional revenues/expenses registered in
2006 are also deducted from reported figures.
OIBDA margin was 41.9% in the fourth quarter compared to 37.1% in the fourth
quarter of 2006, the difference largely due to the re-branding costs incurred in
2006. OIBDA margin for the full year was 44.8% compared to 45.8% for 2006. The
decrease in Group OIBDA margin in 2007 was mainly due to dilution by the Slovak
operation (approx. 2 percentage points).
The Czech mobile business continued focusing on development of attractive voice
and data packages, along with its policy of prepay to contract migration. Total
business revenues in the Czech mobile business for the full year were 1,173
million euros, an increase of 4.4% year-on-year in local currency, with an
increase of 1.7% in the fourth quarter in local currency. Mobile service revenue
amounted to 1,117 million euros, up 4.8% year-on-year in local currency, with an
increase of 1.9% in the fourth quarter.
The total number of mobile customers in the Czech Republic increased by 5.4%
year-on-year to reach 5.1 million at the end of December 2007, with net
additions for the full year up to 38.4% year-on-year.
The contract customer base reached 2.2 million, representing 19.7% growth
year-on-year, with net additions of 369,000 in 2007 (+12.1% year-on year), and
83,000 in the fourth quarter. Contract customers accounted for 43.8% of the
total base at the end of 2007, up from 38.5% at the end of 2006. Contract
quarterly monthly ARPU reached 34.5 euros, a year-on-year decline of 7.7% in
local currency, mainly due to the dilution caused by customer migration from the
prepay to contract segment. Contract ARPU for the year was 34.5 euros, a
year-on-year decrease of 8.3% in local currency.
The number of prepay customers decreased by 3.6% year-on-year to 2.9 million at
the end of 2007, with a net decrease in the year of 108,000 customers, but a net
increase in of 75,000 in the fourth quarter, mainly due to the continuing trend
of prepay to contract migrations. Prepay quarterly monthly ARPU was 9.7 euros,
up 2.8% year-on-year in local currency compared to the fourth quarter of 2006.
Prepay ARPU for the year was 9.4 euros, a year-on-year increase of 3.5% in local
currency.
Blended quarterly monthly ARPU reached 20.5 euros in the fourth quarter, up 2.3%
year-on-year in local currency, while blended ARPU for the year was 19.9 euros,
a year-on-year increase of 2.5% in local currency.
Blended quarterly MoU grew by 11.9% year-on-year to 122 minutes, mainly due to
the growing number of contract customers generating higher average traffic per
customer and tariffs designed to stimulate traffic. Blended MoU for the year
stood at 117 minutes, 14.7% above 2006 levels.
Due to the success of connectivity flat data services, based on GPRS/UMTS and
CDMA technologies, data ARPU improved by 2.8% year-on-year to 4.4 euros in 2007.
Non-SMS data ARPU represented 43% of total data ARPU in 2007 compared to 41% in
2006.
Activities in the Czech fixed line business continued to focus on the
development of broadband services and increasingly the ICT/Business Solutions
area. Total business revenues in the Czech fixed business for the full year fell
by 0.2% year-on-year in local currency to 1,068 million euros; while in the
fourth quarter, revenues fell by 1.1% year-on-year in local currency, despite
the healthy growth of revenues from broadband Internet services, value added
services and IT services.
The total number of fixed telephony accesses amounted to 2.1 million at the end
of 2007, down by 13.9% year-on-year, mainly as the result of the strong fixed to
mobile substitution. As a result of improving the number of gross adds and lower
number of disconnections following the Company's effort to enhance the quality
of fixed lines via broadband and bundled offers, the decline in fixed telephony
accesses decelerated during 2007. The net losses decreased to 65,000 in the
fourth quarter, from 135,000 in the fourth quarter 2006, limiting net losses in
2007 to 333,000 from 506,000 registered in 2006. Total number of customers
currently having a bundled product amounted to close to 100,000 at the end of
2007.
The total number of ADSL accesses (retail and wholesale) reached 570,000 at 31
December 2007, up 21.3% year-on-year. Net gain for the year was 100,000 (-49.0%
year-on-year), while fourth quarter's net gain stood at 25,000 (-42.5%
year-on-year). After the successful take up of bundled products, total number of
O2 TV's customers increased to 73,000 at the end of 2007, representing 20,000
net adds in the fourth quarter, up from 16,000 in the previous quarter.
In line with the previous quarters, during the fourth quarter Telefonica O2
Slovakia successfully continued in building its footprint in the Slovak market.
The key activities focused on marketing of company's prepaid and recently
introduced postpaid offer, customer care enhancement with the aim to further
expand the customer base and improve the customer mix via migration to postpaid
tariffs. This will lead to higher customer activity in terms of network usage
with a positive impact on ARPU and financial performance. By the end of 2007,
the total number of mobile registered customers in Slovakia amounted to 565,000,
of which the majority are prepaid customers. Although a significant proportion
of these customers use their O2 SIM as a second or third SIM, the market share
of active customers is more than 5%. Telefonica O2 Slovakia continued to focus
on further roll-out of its own network, which will allow for the gradual
migration of the traffic from national roaming with positive impact on margins.
By the end of the fourth quarter, the company had in operation around 550 Base
Stations, resulting in more than 60% of traffic captured over its own network.
The sales network comprised 14 own brand stores, 16 franchises and about 3,500
other points of sale.
TELEFONICA EUROPE
ACCESSES
Unaudited figures (thousands)
2006 2007
December March June September December % Chg
y-o-y
Final Clients Accesses 38,310.9 38,866.0 39,341.4 40,136.3 41,201.2 7.5
Fixed telephony accesses 2,462.9 2,347.8 2,267.2 2,194.9 2,130.0 (13.5)
(1)
Internet and data accesses 607.1 627.3 637.0 648.9 734.2 20.9
Narrowband 143.7 110.9 85.6 68.4 56.6 (60.6)
Broadband 451.9 505.2 540.5 572.8 670.3 48.3
Other 11.6 11.2 10.9 7.7 7.3 (36.7)
Mobile accesses 35,225.2 35,865.5 36,399.7 37,239.6 38,263.8 8.6
Contract 21,143.6 21,504.0 21,643.9 21,972.2 22,419.5 6.0
Pre-Pay 14,081.7 14,361.5 14,755.8 15,267.3 15,935.8 13.2
Pay TV 15.6 25.5 37.5 53.0 73.2 n.m.
Wholesale Accesses (2) 243.8 329.5 410.8 543.9 706.2 n.m.
Total Accesses 38,554.7 39,195.5 39,752.2 40,680.3 41,907.3 8.7
(1) PSTN (including Public Use Telephony) x1; ISDN Basic access x1; ISDN Primary
access; 2/6 Access x30. Company's accesses for internal use included.
(2) Includes Unbundled Lines by T.Deutschland.
Note: Mobile accesses, Fixed telephony accesses and Broadband accesses include
MANX customers.
TELEFONICA EUROPE
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - December October - December
2007 2006 % Chg 2007 2006 % Chg
Revenues 14,458 13,159 9.9 3,682 3,725 (1.1)
Internal exp capitalized in fixed 200 219 (8.5) 44 57 (22.3)
assets (1)
Operating expenses (10,987) (9,662) 13.7 (2,896) (2,868) 1.0
Other net operating income (expense) 14 9 52.2 2 3 (17.0)
Gain (loss) on sale of fixed assets 1,292 (8) c.s. (6) 1 c.s.
Impairment of goodwill and other (0) (9) (99.3) (0) (7) (93.8)
assets
Operating income before D&A (OIBDA) 4,977 3,708 34.2 826 910 (9.2)
(2)
Depreciation and amortization (3,386) (3,399) (0.4) (820) (937) (12.4)
Operating income (OI) 1,591 309 n.s. 6 (27) c.s.
Note: Figures are presented considering the Purchase Price Allocation of O2 as
of February 2006.
Note: 'Bad debt provisions' have been reclassified from 'Other net operating
income (expense)' to 'Operating expenses'.
Note: Telefonica Europe includes in 2006 Telefonica O2 Czech Republic (January-
December), T. Deutschland (January-December), O2 Group (February-December) and
O2 Germany (February-December).
(1) Including work in process.
(2) OIBDA figures exclude brand fee.
TELEFONICA EUROPE
ACCESSES BY COUNTRIES
Unaudited figures (Thousands)
2006 2007
December March June September December % Chg
y-o-y
UK
Final Clients Accesses 17,650.0 17,774.9 17,815.4 17,938.0 18,452.8 4.5
Internet and data 16.8 24.0 30.7 38.4 70.7 n.m.
accesses
Broadband 16.8 24.0 30.7 38.4 70.7 n.m.
Mobile accesses 17,633.2 17,750.9 17,784.7 17,899.6 18,382.1 4.2
Pre-Pay 11,415.1 11,452.9 11,410.7 11,366.4 11,573.4 1.4
Contract 6,218.1 6,298.0 6,374.1 6,533.2 6,808.7 9.5
Total Accesses 17,650.0 17,774.9 17,815.4 17,938.0 18,452.8 4.5
GERMANY
Final Clients Accesses 11,043.8 11,215.2 11,591.5 12,205.1 12,546.2 13.6
Internet and data 19.0 31.4 33.7 37.0 74.7 n.m.
accesses
Broadband 19.0 31.4 33.7 37.0 74.7 n.m.
Mobile accesses 11,024.8 11,183.8 11,557.8 12,168.1 12,471.5 13.1
Pre-Pay 5,544.1 5,609.6 5,792.4 6,175.4 6,235.0 12.5
Contract 5,480.7 5,574.2 5,765.4 5,992.7 6,236.6 13.8
Wholesale Accesses (1) 149.3 227.4 305.1 435.9 596.0 n.m.
Total Accesses 11,193.1 11,442.6 11,896.6 12,641.0 13,142.3 17.4
IRELAND
Mobile accesses 1,631.7 1,632.5 1,631.5 1,632.5 1,646.1 0.9
Pre-Pay 1,146.7 1,133.6 1,118.7 1,098.8 1,090.9 (4.9)
Contract 485.1 499.0 512.8 533.7 555.2 14.5
Total Accesses 1,631.7 1,632.5 1,631.5 1,632.5 1,646.1 0.9
CZECH REPUBLIC
Final Clients Accesses 7,842.9 7,712.3 7,698.1 7,714.6 7,841.0 (0.0)
Fixed telephony 2,402.5 2,287.5 2,207.2 2,134.6 2,069.2 (13.9)
accesses (2)
Internet and data 560.3 559.9 559.8 559.5 573.3 2.3
accesses
Narrowband 143.7 110.9 85.6 68.4 56.6 (60.6)
Broadband 405.1 437.9 463.3 483.5 509 25.7
Other 11.6 11.2 10.9 7.7 7.3 (36.7)
Mobile accesses 4,864.5 4,839.5 4,893.7 4,967.4 5,125.4 5.4
Pre-Pay 2,989.7 2,873.2 2,816.7 2,806.6 2,881.5 (3.6)
Contract 1,874.8 1,966.3 2,076.9 2,160.9 2,243.9 19.7
Pay TV 15.6 25.5 37.5 53.0 73.2 n.m.
Wholesale Accesses 94.5 102.1 105.7 108.0 110.2 16.6
Total Accesses 7,937.4 7,814.4 7,803.8 7,822.6 7,951.2 0.2
SLOVAKIA
Mobile accesses - 386.8 455.0 495.6 565.4 n.c.
Pre-Pay - 386.8 454.0 475.9 502.4 n.c.
Contract - 0.0 1.0 19.7 63.0 n.c.
Total Accesses - 386.8 455.0 495.6 565.4 n.c.
(1) Includes Unbundled Lines by T. Deutschland.
(2) PSTN (including Public Use Telephony) x1; ISDN Basic access x1; ISDN Primary
access; 2/6 Access x30. Company's accesses for internal use included.
TELEFONICA EUROPE
SELECTED OPERATING DATA MOBILE BUSINESS BY COUNTRIES
Unaudited figures
2006 2007
4Q 1Q 2Q 3Q 4Q % Chg y-o-y
Local Cur
O2 UK
MOU (minutes) 180 179 189 193 197 9.8
ARPU (EUR) 34.1 33.3 34.5 35.7 33.9 4.4
Pre-Pay 18.2 17.0 18.2 19.3 18.0 4.1
Contract 63.5 63.2 63.9 64.8 61.0 1.2
Data ARPU 10.7 11.0 11.0 11.1 11.1 9.1
%non-P2PSMS over data 12.5% 13.4% 14.2% 15.2% 15.9% 3.4 p.p
revenues
O2 GERMANY
MOU (minutes) 129 129 133 128 134 3.7
ARPU (EUR) 23.7 20.5 20.9 20.8 19.4 (17.9)
Pre-Pay 8.3 6.8 6.7 6.8 6.4 (22.8)
Contract 39.2 34.2 35.2 34.9 32.3 (17.6)
Data ARPU 5.9 5.1 5.1 5.2 5.1 (12.8)
%non-P2PSMS over data 22.6% 24.9% 25.0% 25.9% 25.7% 3.1 p.p.
revenues
O2 IRELAND
MOU (minutes) 246 240 249 250 252 2.5
ARPU (EUR) 45.0 44.2 46.7 47.0 45.7 1.6
Pre-Pay 29.6 28.0 30.0 29.2 29.0 (1.9)
Contract 81.4 82.0 83.8 84.9 78.8 (3.3)
Data ARPU 10.0 11.5 11.2 11.6 12.4 23.5
%non-P2PSMS over data 19.6% 19.9% 23.4% 26.5% 31.4% 11.8 p.p
revenues
T. O2 CZECH REPUBLIC (1)
MOU (minutes) 109 109 120 117 122 11.9
ARPU (EUR) 18.8 17.7 18.5 19.2 20.5 2.3
Pre-Pay 8.8 8.3 8.8 9.1 9.7 2.8
Contract 35.0 32.2 32.2 32.6 34.5 (7.7)
Data ARPU 4.0 3.8 3.9 4.0 4.4 1.8
%non-P2PSMS over data 40.0% 41.0% 42.0% 45.0% 42.0% 2.0 p.p
revenues
Note: MoU and ARPU calculated as monthly quarterly average.
(1) KPIs for Mobile business in Czech Republic do not include Slovakia.
TELEFONICA EUROPE
SELECTED FINANCIAL DATA
Unaudited figures (Euros in millions)
January - December
2007 2006 % Chg % Chg Local Cur
O2 UK (1) Revenues 7,403 6,265 18.2 18.7
OIBDA 1,923 1,777 8.2 8.7
OIBDA margin 26.0% 28.4% (2.4 p.p.)
CapEx 832 760 9.5 10.0
O2 GERMANY (2) Revenues 3,541 3,320 6.7 6.7
OIBDA 473 583 (18.9) (18.9)
OIBDA margin 13.3% 17.6% (4.2 p.p.)
CapEx 850 1,224 (30.6) (30.6)
O2 IRELAND (1) Revenues 991 885 11.9 11.9
OIBDA 316 310 2.0 2.0
OIBDA margin 31.9% 35.0% (3.1 p.p.)
CapEx 117 141 (17.1) (18.0)
TELEFONICA O2 CZECH REPUBLIC Revenues 2,257 2,148 5.1 2.9
OIBDA 1,010 985 2.6 0.5
OIBDA margin 44.8% 45.8% (1.1 p.p.)
CapEx 281 229 22.6 20.1
(*) OIBDA figures exclude brand fee
(1) In 2006 includes February-December period.
(2) In 2006 includes February-December period for O2 Germany and Telefonica
Deutschland.
RESULTS BY REGIONAL BUSINESS UNITS
Others Companies
Atento Group
The Atento Group performed well in 2007, consolidating year-on-year revenue and
OIBDA margin growth. This strong earnings performance was driven by the
implementation of the Group's strategy to differentiate itself from competitors.
For the fifth consecutive year Atento achieved profitable business growth,
diversified its customer portfolio and added customers from a range of sectors.
Revenues totalled 1,174 million euros at year-end 2007, up 14.4% from 2006.
Revenues were driven by the increase in the activity of its main customers and
new accounts in almost all the countries in which it operates, primarily Brazil,
Mexico, Peru, Argentina and Venezuela. The main customers driving this growth
were:
• In Brazil, more business with Telefonica (Atento ao Cliente services,
Speedy, Sera and Cobranzas) and growth in the financial sector (Itau, Banco
IBI, Bradesco, Unibanco, Redecard).
• In Mexico, expansion in tandem with BBVA, primarily mortgage, finance,
collections and insurance services.
• In Peru, growth in on-site sales services along with the expansion of
services outsourced from the Spanish market.
• In Argentina, growth in the multisector market both via current customers
(Alcatel, Nokia, Microsoft, YPF) and new customers (Lexmark, SAP, P&G. Lan,
Bosch), together with the expansion with Telefonica (Telefonica Moviles
Argentina and Telefonica de Argentina).
• In Venezuela, increase in activity with the CANTV Group and Movistar, and
the addition of Banesco.
These factors offset the fall in activity in Spain due to the delocalisation of
traffic from the Spanish market to Latin America and Morocco.
Atento's customer portfolio diversified further in 2007, with 50.1% of revenues
deriving from multisector customers (outside the Telefonica Group) compared with
47.0% in 2006. Brazil and Spain accounted for 44.2% and 12.3% of revenues
respectively. Atento Mexico's revenues rose sharply and accounted for 20.2% of
the total compared with 15.9% a year earlier.
Operating expenses grew 15.0% year-on-year to 1,017 million euros, although
growth slowed in the last quarter (+14.5% compared to. the fourth quarter of
2006) as a result of the delocalisation of services from the Spanish market to
Latin America (reducing personnel costs) and the change in mix arising from the
reduced role of Atento's Spanish business within the Group. These factors offset
the increase in structural costs relating to expenses booked from the leasing of
capacity associated with the growth of the business.
The Atento Group's Operating income before depreciation and amortisation (OIBDA)
amounted to 161 million euros, year-on-year growth of 13.9%, driven by the
increase in activity and the reining in of structural costs. The OIBDA margin
stood at 13.7%, in line with the margin posted at the end of 2006, showing an
improvement in the fourth quarter (OIBDA margin of 14.5% for the fourth quarter
of 2007).
Operating income (OI) in 2007 amounted to 131 million euros, representing
year-on-year growth of 15.5% and an OIBDA margin of 11.2%.
CapEx in 2007 amounted to 39 million euros, compared to 35 million euros in
2006, as a result of the higher investment need to support the business growth,
mainly in Brazil and Mexico.
Operating cash flow (OIBDA-Capex) improved significantly when compared to 2006,
rising by 15.1% to 122 million euros.
At operating level, the Atento Group ended 2007 with 53,239 positions in place,
marking a 13.6% year-on-year increase. The average number of occupied positions
for 2007 stands at 42,971.
ATENTO GROUP
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in
millions)
January - December October - December
2007 2006 % Chg 2007 2006 % Chg
Revenues 1,174 1,027 14.4 305 269 13.6
Internal exp 0 0 n.m. 0 0 n.m.
capitalized in fixed
assets (1)
Operating expenses (1,017) (885) 15.0 (261) (228) 14.5
Other net operating 2 (0) c.s. (0) (2) n.m.
income (expense)
Gain (loss) on sale of 2 (0) c.s. 0 0 c.s.
fixed assets
Impairment of goodwill 0 0 n.m. 0 0 n.m.
and other assets
Operating income 161 142 13.9 44 39 12.1
before D&A (OIBDA)
Depreciation and (30) (28) 7.8 (8) (7) 12.5
amortization
Operating income (OI) 131 113 15.5 36 32 12.0
(1) Including work in
process.
ADDENDA
Key Holdings of the Telefonica Group detailed by regional business units
TELEFONICA ESPAN TELEFONICA O2 EUROPE
% Part % Part
Telefonica Espan 100.00 O2 UK 100.00
Telefonica Moviles Espan 100.00 O2 Gemany (1) 100.00
Telyco 100.00 O2 Ireland 100.00
Telefonica Telecomunic. Publicas 100.00 Manx 100.00
T. Soluciones de Informatica y 100.00 Be 100.00
Comunicaciones de Espan Group 3G (Germany) (3) 100.00
Iberbanda 51.00 Telefonica O2 Czech Republic (1) 69.41
Medi Telecom 32.18 Telefonica O2 Slovakia (2) 100.00
(1) Company owned through Telefonica S.A.
(2) Company owned through Telefonica O2 Czech
Republic.
(2) Company owned through Telefonica O2 Germany
TELEFONICA LATINOAMERICA OTHER PARTICIPATIONS
% Part % Part
Telesp (1) 87.95 3G Mobile AG (Switzerland) 100.00
Telefonica del Peru 98.18 Atento Group 100.00
Telefonica de Argentina 98.04 Telefonica de Contenidos (Spain) 100.00
TLD Puerto Rico 98.00 Mobipay Internacional 50.00
Telefonica Chile 44.89 Telco SpA (Italy) (5) 42.30
Telefonica Telecom 52.03 Tempos 21 (1) 43.69
Telefonica USA 100.00 IPSE 2000 (Italy) (1) 39.92
T. Intern. Wholesale Serv. (TIWS) (2) 100.00 Lycos Europe 32.10
Brasilcel (3) 50.00 Sogecable (2) 16.79
T. Moviles Argentina 100.00 Mobipay Espan (1) 13.36
T. Moviles Peru 98.53 Hispasat 13.23
T. Moviles Mexico 100.00 Portugal Telecom (3) 8.21
Telefonica Moviles Chile (4) 100.00 China Netcom Group (4) 5.00
T. Moviles El Salvador 99.08 BBVA 0.97
T. Moviles Guatemala 100.00 Amper 6.10
Telcel (Venezuela) 100.00
T. Moviles Colombia 100.00
Otecel (Ecuador) 100.00 (1) Ownership directly or indirectly held by
Telefonica Moviles Espan.
T. Moviles Panama 100.00 (2) Telefonica de Contenidos, S.A. holds
15.63% and Telefonica, S.A. holds 1.20%.
T. Moviles Uruguay 100.00 (3) Telefonica's Group effective participation.
Telefonica Group participation would be
9.96% if we exclude the minority interests.
Taking into account the own shares held by
the Portuguese company and excluding the minority
interests, Telefonica's Group voting rights
reached 10.96%.
Telefonia Celular Nicaragua 100.00 (4) Ownership held by Telefonica Latinoamerica.
T. Moviles Soluciones y Aplicac. (Chile) 100.00 (5) Telefonica holds an indirect participation of the
ordinary share capital (with voting rights) of
Telecom Italia through Telco of approximately 10%.
If we take into account the saving shares (azioni
di risparmio), which do not have voting rights, the
indirect participation of Telefonica over Telecom
Italia would be 6.9%.
(1) Effective participation 88.01%.
(2) Telefonica, S.A. owns 92.51% and Telefonica
DataCorp owns 7.49%.
(3) Joint Venture which fully consolidates the
subsidiary Vivo, S.A., through participation at Vivo
Participacoes, S.A. (62.94%)
(4) Telefonica Moviles Chile made a capital increase
in the month of May. As a result it became the
unique shareholder of Telefonica Moviles de Chile,
that was disolved. This operation ended the 1st of
July.
ADDENDA
Significant Events
• Strengthening its commitment to shareholder value creation, the Board of
Directors of the Company, at its meeting held on February 27th,2008, has
announced the launching of a new share buy-back programme for a total amount
of 100 million shares, representing 2.095% of the Company's share capital,
which will be effective until the first half of 2009.
• At the meeting held on January 23th,2008, the Board of Directors of the
Company, was informed of and acknowledged the resignations tendered by Board
members Mr. Manuel Pizarro Moreno and Mr. Antonio Viana-Baptista from their
directorships. In view thereof, the Board of Directors has unanimously
resolved, at the proposal of the Nominating, Compensation and Corporate
Governance Committee, the interim appointment of Mrs. Eva Castillo Sanz and
Mr. Luiz Fernando Furlan as new members of the Board of Directors, both as
independent Directors.
• TELEFONICA, S.A., through its subsidiary TELEFONICA INTERNACIONAL,
S.A.U., reached on January 18th,2008, an agreement to acquire an additional
stake equal to approximately 2.22% of the share capital of the Chinese
telecommunications company CHINA NETCOM GROUP CORPORATION (HONG KONG)
LIMITED ('CNC'). The execution of this acquisition is subject to prior
attainment of the necessary regulatory approvals. After the acquisition, the
TELEFONICA group's stake in CNC would stand at approximately 7.22%. If
completed, the acquisition of the aforementioned stake in the equity in CNC
will involve a total investment of approximately 309 million euros
(depending on the exchange rate prevailing when the transaction is closed).
• At its ordinary meeting on December 19th,2007, Telefonica's board, with
the approval of the Nominating, Compensation and Corporate Governance
Committee, has named Julio Linares, General Manager for Coordination,
Business Development and Synergies, as the company's new Chief Operating
Officer. It also decided to appoint Guillermo Ansaldo as General Manager of
Telefonica Espan. Mr Ansaldo will replace Antonio Viana-Baptista, who leaves
the Company citing personal reasons. Meanwhile, Manuel Pizarro and Javier de
Paz will replace Enrique Used and Maximino Carpio as members of Telefonica's
board of directors. Both Manuel Pizarro, Javier de Paz and Alfonso Ferrari
will join as well the Executive Commission of the Company's board of
directors.
• On November 29th, 2007 Telefonica, S.A. announced Mr. Peter Erskine step
down as General Manager of Telefonica O2 Europe, retaining his position on
the Board of Directors of the Company and on its Executive Commission, as
nonexecutive Director. Mr. Matthew Key, former Chief Executive Officer of O2
UK plc., replaced him as General Manager of Telefonica O2 Europe and as
member of the Executive Committee of Telefonica, S.A.
• On November 28th, 2007, the Board of Directors of TELEFONICA, S.A., in
accordance with the 'Performance Share Plan 2006' authorised by the Annual
General Shareholders' Meeting of the Company held on June 21st, 2006 and
notified on November 13th, 2006 resolved, subject to the report of the
Nominating, Compensation, and Corporate Governance Committee, to allocate
the shares corresponding to the second cycle of that Plan to the Executive
Directors and Executives Officers of the Company.
ADDENDA
Changes to the Perimeter and Accounting Criteria of Consolidation
In 2007, the main changes have occurred in the consolidation perimeter were the
following:
TELEFONICA EUROPE
In December 20th, 2007, O2 Group transferred its legal ownership over its
business in Germany to Telefonica S.A. through a dividend in kind of 8,500
million euros.
In April 2007, Telefonica O2 Europe PLC, 100%-owned by Telefonica, S.A. and its
wholly owned subsidiary O2 Holdings LTD, sold for a total of 1,932 million
pounds (equivalent to 2,841 million euros in the date of the operation) 100% of
British firm Airwave O2 Ltd. which generated a capital gain of 1,296 million
euros. This company, which was consolidated in the Telefonica Group financial
statements using the full integration method, has been removed from the
perimeter of consolidation.
OTHER COMPANIES
• In December 2007 Telefonica, S.A. formed, as sole shareholder, the Spanish
company Atento Holding, Inversiones y Teleservicios, S.A. with an initial
share capital of 24 million euros and an additional paid-in capital reserve
of 138,37 million euros. The shares were fully subscribed and reimbursed in
the form of non-monetary contribution of all the shares of the Dutch company
Atento, N.V., of which Telefonica, S.A. was sole shareholder. The company
has been included in the consolidation scope using the full integration
method.
• In December 2007 Telefonica, S.A. sold 18,558,181 shares of the Portuguese
company Portugal Telecom, SGPS, S.A. (PT). Following this disposal,
Telefonica Group has reduced its shareholding in the capital of the
Portuguese company to 8.32%, 9.16% if the treasury stock of PT is taken into
consideration. This company is still included in the financial statements of
Telefonica Group under the equity method.
• In October 2007 a consortium formed by Telefonica, S.A. Assicurazioni
Generali, S.p.A., Intesa Sanpaolo, S.p.A. and Sintonia, S.A. acquired 100%
of the Olimpia, S.p.A. through the Italian company Telco, S.p.A. (in which
Telefonica holds a 42.3% of equity stake), which holds approximately 23.6%
of the Telecom Italia, S.p.A. voting capital. Telefonica's indirect
participation with voting rights in Telecom Italia S.p.A. stands at 9.98%
equivalent to 6,88% of the economic rights. This operation implied a payment
of 2.314 million euros. The company is included in the financial statements
of the Telefonica Group under the equity method.
• In August 2007 the Telefonica Group sold its 100% stake in Spanish company
Azeler Automocion, S.A. for 0.34 million euros. This company, which had been
fully consolidated in the Telefonica Group, was removed from the
consolidation perimeter.
• In June 2007, Atento Teleservicios Espan, S.A. of Spain incorporated US
company, Contact US Teleservices Inc., contributing 100% of the initial
share capital of 0.1 million US dollars. This company was added to the
Telefonica Group's consolidation perimeter and is fully consolidated. In
August this company took out a 0.55 million US dollar capital increase,
which was fully subscribed by Atento Teleservicios Espan, S.A.
• In June 2007, Telefonica, S.A. sold its entire 31.75% stake in Sistemas
Tecnicos de Loterias del Estado, S.A. This company, which had been accounted
for by the Telefonica Group under the equity method, was removed from the
perimeter of consolidation.
• In May 2007, Telefonica, S.A. agreed to sell its 99.7% stake in Dutch
company Endemol Investment Holding B.V. to a newly created consortium held
equally by Mediacinco Cartera S.L., a newly incorporated company owned by
Mediaset and its listed Spanish subsidiary Gestevision Telecinco, Cyrte Fund
II B.V. and G.S. Capital Partners VI Fund, L.P. The consortium paid 2,629
million euros, reaching the capital gain 1,368 million euros. The agreement
was executed on 3 July. This company, which had been fully consolidated in
the Telefonica Group, was removed from the consolidation perimeter.
• In April 2007, US firm Katalyx, Inc. sold its 54% stake in Brazilian
company Mercador, S.A. The company had been consolidated in the financial
statements of the Telefonica Group under the equity method and was thus
removed from the perimeter of consolidation.
• During the first quarter of 2007, the Telefonica Group sold shares in the
Italian company Ipse 2000 S.p.A. reducing its direct and indirect percentage
in the Italian company to 39.9%. The company continues to be incorporated in
the consolidated financial statements of the Telefonica Group using the
equity method.
• In February 2007 the company sold 100% of its stake in Endemol France to
the company Endemol, N.V., in which the Group has 75% participation, and
thus reducing its stake in the company to that percentage.
• The Spanish company Communicapital Gestion, S.A., has been liquidated. The
company, which was included in the financial statements of Telefonica Group
using the full integration method, has been removed from the perimeter of
consolidation.
DISCLAIMER
This document contains statements that constitute forward looking statements in
its general meaning and within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements appear in a number of places in this
document and include statements regarding the intent, belief or current
expectations of the customer base, estimates regarding 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 are not guarantees of future performance and
involve risks and uncertainties, and other important factors that could cause
actual developments or results to differ materially from those expressed in our
forward looking statements.
Analysts and investors are cautioned not to place undue reliance on those
forward looking statements which speak only as of the date of this presentation.
Telefonica 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 Telefonica's business or acquisition strategy or to
reflect the occurrence of unanticipated events. Analysts and investors are
encouraged to consult the Company's Annual Report as well as periodic filings
filed with the relevant Securities Markets Regulators, and in particular with
the Spanish Market Regulator.
The financial information contained in this document has been prepared under
International Financial Reporting Standards (IFRS). This financial information
is unaudited and, therefore, is subject to potential future modifications.
For additional information, please contact.
Investor Relations
Distrito C
Ronda de la Comunicacion s/n
28050 Madrid (Spain)
Phone number:
+34 91 482 87 00
Fax number:
+34 91 482 85 99
Email address:
Maria Garcia-Legaz
(maria.garcialegaz@telefonica.es)
Dolores Garcia (dgarcia@telefonica.es)
Isabel Beltran (i.beltran@telefonica.es)
ir@telefonica.es
www.telefonica.es/accionistaseinversores
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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