Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on TELEFONICA SA. We currently have 5 research reports from 1 professional analysts.
|01Dec16 04:57||RNS||TEF - Scrip Dividend Results|
|15Nov16 05:22||RNS||TEF - Sale of Telefé to Viacom International Inc|
|11Nov16 12:44||RNS||TEF - Scrip Dividend + Informative Document|
|08Nov16 07:00||RNS||TEF - Moodys Credit Rating of Telefónica|
|27Oct16 08:56||RNS||Doc re. Presentation on Quarterly Results|
|27Oct16 08:44||RNS||Scrip Dividend|
|27Oct16 08:19||RNS||2016 Third quarter financial results|
Frequency of research reports
Research reports on
Q3 slightly better than Q2 but dividend is cut by 25%
31 Oct 16
Q3 revenues were down organically by 0.2% yoy (at constant forex), exactly like in Q2 while they had grown by 3.4% yoy during Q1. The adjusted EBITDA which had increased by 5.5% in Q1 and grew by only 0.8% in Q2 was however up again by 3.1% yoy in Q3. Note that, this quarter, the currency impact was still strong in South America, except in… Brazil: South American revenues, which grew organically in current currencies by 4.1% yoy in Q3, were still down by 13.9% yoy in reported terms while Brazilian revenues which were up by a modest 1.1% (like in the previous quarters) were up by 7.9% in reported terms. Global Q3 revenues and EBITDA were down by respectively 6% and 1% yoy in reported terms. Telefonica has reiterated its guidance for 2016: - organic revenue growth which should be >4% yoy with an EBITDA margin stable vs 2015 (remember that this guidance assumes constant exchange rates as of 2015 and excludes Venezuela with its hyperinflationary adjustments and O2); - capex/sales should be at around 17%. This, however, enables Telefonica to have the most extensive ftth network in Spain (16.4m premises passed) and to reach 16.9m premises with fibre in Brazil, or an LTE penetration in Europe of 86% (> 90% in Spain and UK but only 77% in Germany) and 49% in Latin America; The key point of the release is that to recover money via its subsidiaries on the market (both its towers (Telxius) and O2 (UK mobile) could not be floated or sold at proper prices) in a tough context, the group has decided to modify the dividend to strengthen its balance sheet and intensify organic deleverage, maintaining however an attractive level of shareholder remuneration. The dividend should be €0.55 in 2016 (still a yield above the 5%) vs €0.75 in 2015.
A disappointing Q2
28 Jul 16
Q2 revenues were quite disappointing, down organically by 0.2% yoy (at constant change) while they have grown by 3.4% yoy during Q1. The adjusted EBITDA which had increased by 5.5% in Q1, grew by only 0.8% yoy. Note this quarter, the currency impact was still strong: the South American revenues, which grew organically in current currencies by only 2.3% yoy in Q2 (vs 7% during Q1!), were still down by 12.5% yoy in reported terms. And the value of Telefonica unfortunately follows the evolution of these currencies as the South American revenues weighed 50% of Telefonica’s global business. Global Q2 revenues and EBITDA were down by 7/8% yoy in reported terms. Telefonica has, however, reiterated its guidance for 2016: - organic revenue growth in line with our model which should be >4% yoy with an EBITDA margin stable vs 2015; - the capex/sales should be at around 17% vs 16% in our model. This, however, enables Telefonica to have in Spain the most extensive ftth network (15.7m premises passed) and to reach more than 17m premises with fibre in Brazil, or achieve an LTE penetration in Europe of 85% and 45% in Latin America; Note also, from Q2 16, Telefonica’s operations in the UK are no longer reported as discontinued operations within the Telefonica Group and all its assets and liabilities have ceased to be reported as “held for sale”, and have been reclassified back into full consolidation within Telefonica’s financial statements.
A not so bad Q1 at... constant change
02 May 16
Q1 revenues grew by 3.4% yoy organically and at constant change while the adjusted EBITDA increased by 5.5%. These results are quite similar to those in H2 2015 and were expected. But this quarter, in addition to the Brazilian real which has continued to fall vs the euro, the Argentine peso has affected the global revenues of Telefonica by 2.2% (the currency sank by 40% after the country lifted its currency controls at the end of 2015). The South American revenues, which grew organically in current currencies by 7% yoy during Q1, were indeed down by more than 15% yoy in reported terms. And the value of Telefonica unfortunately follows the evolution of these currencies as the South American revenues weighed for 50% of Telefonica’s global business. Global Q1 revenues and EBITDA were down by 6.5% yoy in reported terms. The new CEO José Maria Alvarez-Pallete said also that concerning the sale of O2 UK to Hutchison “a negative decision could not be disregarded”. The group would talk to other buyers if the deal were blocked by the European competition authorities. There were also a number of options for the business such as a full or partial sale or a flotation. Of course, it does not encourage buying the stock. Telefonica has also reiterated its guidance for 2016: - organic revenue growth in line with our model which should be >4% yoy with an EBITDA margin stable vs 2015; - the capex/sales should be at around 17% vs 16% in our model. This would however enable Telefonica to have in Spain the most extensive ftth network (14.3m premises passed) and to reach more than 17m premises with fibre in Brazil, or achieve an LTE penetration in Europe of 75% and 43% in Latin America; - the dividend for 2016 should be €0.75 per share.
A quite solid year excluding the forex impact
07 Mar 16
Q4 revenues grew by 4% yoy organically and at constant change while the adjusted EBITDA increased by 3.8%. These results are quite similar to those in Q3 and were expected. Note, however, that the Brazilian real has once again weighed on the Brazilian reported figures (with a 9.2% yoy revenue decline despite 3.5% organic growth in local currency). The reported Q4 EBITDA was also affected by an exceptional provision for restructuring of €3.15bn (of which €2.9bn in Spain). This corresponds to a Voluntary Employment Suspension Plan offered to Telefonica’s workers as an early retirement plan. “The estimated run rate of savings in direct expenses is approximately €370m from year two,” said the company. This announcement comes after the company revealed at the end of last year that it had reached a deal with Spanish trade unions for the period 2015-2017 encompassing all the units in Spain and affecting a total of around 26k of its employees. The agreement included the right to take up voluntary redundancy from the age of 53 and a guaranteed wage increase of 4% plus bonuses amounting to €1,000 over the next three years. Telefonica has also announced its guidance for 2016: - organic revenue growth in line with our model which should be >4% yoy with an EBITDA margin stable vs 2015 (vs a slight improvement in our model); - the capex/sales should be at around 17% vs 16% in our model. This would however enable Telefonica to have in Spain the most extensive ftth network (14.3m premises passed) and to reach more than 17m premises with fibre in Brazil, or achieve an LTE penetration in Europe of 75% and 43% in Latin America; - the dividend for 2016 should be €0.75 per share (but subject to the closing of the sale of O2 UK) while an amortisation of treasury stock for a total of 1.5% of the capital will be proposed at the 2016 AGM.
Growth in Spain for the first time in 7 years
06 Nov 15
Q3 revenues grew by 4.8% yoy organically and at constant change while the EBITDA increased by exactly the same number. Even though this was expected, it is a good performance. Note however that the Brazilian real has once again weighed on the Brazilian reported figures (with a 5.5% yoy decline despite a 5.2% organic growth in local currency).
Panmure Morning Note 05-12-16
05 Dec 16
Filtronic, the designer and manufacturer of microwave electronics for the wireless telco market, has provided a solid 1H17 trading update. As seen during 1Q17, demand for its new ultra-wide band integrated antennas has been driven by its key customer. Crucially the roll-out provides a reference client and adoption from other clients should be coming in due course. Having said that, programme roll-outs tend to be lumpy in nature and management expect activity to be slowing in the early part of 2H17 until customer concentration is remedied, meaning Filtronic will be exposed to short-term fluctuations in demand.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
N+1 Singer - Morning Song 06-12-2016
06 Dec 16
With FY16 volume and revenue already disclosed in the pre-close, the focus in today’s prelims is on PBT (£100.3m versus our £101m) and EPS (96.8p versus our 95.4p). No special dividend triggered this year (none forecast) and DPS is held at 46.8p (N1SE: 48.0p). On end markets, recent commentary is reiterated – the core business is growing, whilst consumer electronics will be subdued in the current year (competitive capacity from Solvay). On currency, there will be a material benefit in the current year (a little more than the £14m to £15m previously indicated), and a further tailwind next year if current rates are maintained (quantum TBC). There is also an investment of £10m today in a minority interest in Magma Global, Victrex’ oil and gas mega programme partner. Although the share price is now close to our TP of 1730p, we feel that there is enough in today’s announcement to retain a positive stance on medium term opportunities with strong cashflow and a special dividend potentially to look forward to in the current year.
Strategic focus at interims
30 Nov 16
KCOM’s interims show a focus on the continuing transformation of the business in cost and investment, under a single brand. The benefit of the cash injection from the network sale has led to the opportunity for significant investment both in the Hull & East Yorkshire division and the nationwide Enterprise division, to create a platform for growth. With a reiterated commitment to a minimum 6p dividend for FY17 and FY18, ongoing cost-saving initiatives, and proof of customer enthusiasm for the integrated platform which investment will further support, KCOM continues to deliver an attractive dividend in anticipation of its return to headline growth. Target 130p reiterated.
30 Nov 16
Abzena (ABZA): Interim results indicate happy customers (BUY) | Horizonte Minerals* (HZM): Fund raise completed (CORP) | SacOil* (SAC): Half-year trading statement (CORP) | Revolution Bars (RBG): New openings (BUY) | Amino Technologies* (AMO): Multi operator FUSION roll out (CORP)
N+1 Singer - Mobile Streams - Applying the model to India
06 Dec 16
MOS has proven its model for mobile content in a very tough market, Argentina. After monitoring and examining a number of other markets it has successfully tested India to prove its commerciality. Further to this, key agreements with telecom operators have been signed and the Company has announced a £2.2m equity raise to help fund working capital. The Indian market is vast (c25x the size of Argentina) meaning MOS has to only be slightly successful to surpass its previous record results. If MOS can build a business with similar penetration it will vastly surpass our high growth forecasts that already imply the stock is very cheap.