telefónica first investors conference march 2001, rio de janeiro. this presentation contains...
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Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation 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 activities and situation relating to the Company . Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward looking statements as a result of various factors. Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation. 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. Analysts and investors are encouraged to consult the Company´s Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securities and Exchange Commission.
Safe Harbour
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
• Introduction – Main highlights since floatation, value contribution
– Business model
– Group TPI international presence
• Growth strategy– Paper product
– Multimedia Platforms
– Geographical expansion
• Revenue and EBITDA projections
• Summary
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Introduction– Main highlights since floatation, value contribution
– Business model
– Group TPI international presence
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Core product revenues increase by 10% in 2000
Tripled traffic and revenues in the internet
Multiplied revenues 5x in Brazil and acquired control of biggest directory publisher in Chile
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
TPI is a Growth story that delivers value ...
IPO´s Value:
EUR1.8bn
June 23rd, 1999 2000
B2B MarketplaceBeta Version
B2B MarketplaceBeta Version
Verticals and Cityguideslaunched
Verticals and Cityguideslaunched
VirtualMall
launching
VirtualMall
launching
YPOL Re-launchedYPOL Re-launched
Expansioninto Sao
Paulo capital
Expansioninto Sao
Paulo capital
Publiguías acquisitionPubliguías acquisition
1999
EUR3bn GBP’spurchase
GBP’spurchase
TouristicGuides
launched
TouristicGuides
launched
March 2001
(2)Market capEUR 2.50 bn
(2)Market capEUR 2.50 bn
(1)SOPVEUR 3.16bn
(1)SOPVEUR 3.16bn
(1) Sum Of the parts Valuation based on latest analyst reports (Jan-Feb 01). Average targert price: EUR 8.58 (2) Average closing price Februrary 2001: EUR 6.78
EUR2bn
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
… and is well positioned to guarantee continuous growth based on core assets
Universal Brand Recognition
Universal Brand Recognition Largest Advertising Platform
Largest Advertising Platform Solid and Widespread Usage
Solid and Widespread Usage High Lead Purchases
High Lead Purchases
Experienced and Strong Sales force
Experienced and Strong Sales force Most Comprehensive Database
Most Comprehensive Database Strong Investment Capacity
Strong Investment Capacity
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
60%lead purchases
TPI is leader in connecting supply and demand...
More than 600,000 unique
customers
More than 50 million books
published
Over 50 million users
Increase Advertisers Base
Increase Usage
Purchase of Products and Services
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
… and expands its business model across the value chain
Information Choice Contact Transaction Delivery
Customer Satisfaction
Yellow PagesYellow Pages
Online ProductsOnline Products
Talking PagesTalking Pages
White PagesWhite Pages57.6m queries/month (1)
36.1m queries/month (1)
Over 117,000 calls/month (2)
More than 1.5m visits in December 2000 (3)
(1) Source: EMER monthly average as of year 2000(2) Source: TPI monthly average as of year 2000(3) Source: December 2000 figures audited by OJD (Oficina de Justificación de la Difusión)
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
•Market share: 84% •Directories revenues as a % of GDP: 0.06%
•Unique advertisers: + 480,000
•Nº Users: + 20.5 million
SPAINSPAIN
•Market share: 90% (2) •Directories revenues
as a % of GDP: 0.04%•Unique advertisers: + 66,800
ARGENTINA (1) ARGENTINA (1) •Market share: 93% •Directories revenues as a % of GDP: 0.10%
•Unique advertisers: + 47,900
CHILECHILE
•Market share (Sao Paulo capital): 16% (3)
•Directories revenues as a % of GDP: 0.06%
•Unique advertisers: + 9,900
BRAZILBRAZIL•Market share: 82% •Directories revenues as a % of GDP: 0.02%
•Unique advertisers: + 42,200
PERU (1) PERU (1)
… in a market with over 5 million companies and more than 289 million inhabitants
(1) Peru and Argentina still pending(2) In the area where it operates(Buenos Aires and South Argentina)(3) Expected in year 2001Directory revenues as % of GDP: Source Simba Cowles 1998
TPI GroupOver 600,000 clientsSales Force: over 1,800 people150 YP and WP Directories50 million circulation
TPI GroupOver 600,000 clientsSales Force: over 1,800 people150 YP and WP Directories50 million circulation
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Growth strategy– Paper product
– Multimedia Platforms
– Geographical expansion
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
TPI focuses its growth along three main lines
Growth Strategies
MultimediaDistribution Platforms
Sustained growth above peers
Diversify revenue streamsIncrease customers’ value addedExtend the reach and visibility of our
customers
Sustained incremental growth Possibility to exploit synergies & economies of scale Know how transfer - Cross fertilization
Paper Products
Geographical expansion
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
In Spain, the focus is to sustain growth above European peers ...
Promoting new advertising content - Colour
Cross-selling with Yellow Pages
Implementing new segmentation strategies
Facilitating migration from B&W ads, to Colour ads
Increasing Headings per advertiser and Multiple Book presence
Encouraging migration towards Bigger Size ads
Yellow Pages: Grow average revenue per advertiserYellow Pages: Grow average revenue per advertiser
White Pages: Increase advertising content
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
… whilst in LATAM the focus will be in exploiting synergies and transferring know how acquired in Spain
Review pricing strategy Improve content Reinforce advertising spending
Relaunch brand name Improve value added content and
products Reinforce advertising spending
Improve content Reinforce advertising spending Renegotiate key contracts Launch niche products
Argentina
Chile
Peru
Reinforce advertising spending Expand geographically
Brazil
Dominant Players Start-up
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Paper Revenues in Latam will grow faster than in Spain accounting for 43% of total revenue for year 2004
Total Proforma Paper revenues
CAGR20-22%
CAGR9-11%
2000 2004e
TPI Spain LATAM
2000 Pro forma
38%
43%
Growth estimates in constant Euros
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
TPI maximizes advertisers’ visibility, adapting contents to multiple platforms
“Extend the reach of our customers through alternative platforms”
“Extend the reach of our customers through alternative platforms”
Mobile(WAP, GRPS, UMTS)
Mobile(WAP, GRPS, UMTS)
Call CenterOperator Assisted
Yellow Pages
Call CenterOperator Assisted
Yellow Pages
InternetInternet
Digital TVDigital TV
TPI’s Contents
TPI’s Contents
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
For Online Product our strategy is a natural transition from paper to e-commerce
E-Commerce E-Commerce Online Advertising Online AdvertisingPaperPaper
Increased value throughTarget advertising
B2C - VIRTUAL MALLMore than 1,300 shops
in Spain
B2C - VIRTUAL MALLMore than 1,300 shops
in Spain
Dual strategy in E-Commerce
B2BMRO Marketplace
B2BMRO Marketplace
More than 63,000paying customersin Spain
More than 63,000paying customersin Spain
More than 600,000 1
Advertisersin Paper Products
More than 600,000 1
Advertisersin Paper Products
Biggest Advertising Platform
1Total aggregated unique customers as of Dec. 2000
Ability to leverage Brand Equity,Customer Base, Content and Sales
Force
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
YPOL shows a strong potential to convert traffic into revenues
* Visits and Page Views are audited by the OJD (January-September 2000)
7.4
2.6
1999 2000
Revenues x 2.9(Eur m)
Clients x 3.7
+ 17,000
+ 63,000
1999 2000
000´Page Views x 2.9
(1999-2000)232,192
78,428
40,074 50,666 59,52781,925
Total 1999 1Q 00 2Q 00 3Q 00 4Q 00Total 2000
000´Visits x 3.4(1999-2000)
11,270
4,4502,807
2,0711,9413,308
Total 19991Q 00 2Q 00 3Q 00 4Q 00Total 2000
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
E-commerce is the next step from online advertising
1,300 shops classified in 24 different categories
Affordable e-commerce solution for Spanish SMEs
Scalable developments
Positioning, today a main source of revenues
Value proposition:
Content + ASP offering
Simplified and efficient purchasing process
SMEs access to big companies purchasing terms and conditions
Transaction based revenues for TPI
Critical mass of buyers and sellers is Key
Virtual Mall www.comprarhoy.com
Virtual Mall www.comprarhoy.com
MRO’s Marketplace www.marketplace.com MRO’s Marketplace
www.marketplace.com
B2B
B2C
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Operator Assisted Yellow Pages are fully operational in Spain
Most comprehensive and accessible database
Mobility: access from anywhere
Revenues come from advertising and telephone traffic
Additional revenues as commerce enabler
Value added services to 10% of calls
Revenues grew 16% from 1999
Transferable model to Latam
Most comprehensive and accessible database
Mobility: access from anywhere
Revenues come from advertising and telephone traffic
Additional revenues as commerce enabler
Value added services to 10% of calls
Revenues grew 16% from 1999
Transferable model to Latam
SPAIN
Number of Calls(000´)
Talking Pages service has been offered nation wide in Spain since 2Q99
1,410
932
1999 2000
+ 51%
42,500
62,000
1999 2000
Clients
+ 46%
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Multimedia revenues will grow faster to represent up to 8% of total revenues by year 2004
Multimedia Revenues vs Other Revenues(EUR m)
CAGR 00/04e:50% - 60%
2% Multimedia Revenues
8% Multimedia Revenues
Year 2000 Proforma
Year 2004e
Spain
Latam
Consolidate advertising Model
Specialised Sales force
Develop transactional environments
Consolidate advertising Model
Specialised Sales force
Develop transactional environments
Product bundle strategy
Know how in Spain transferable
Core assets to leverage online strategy already in place
Product bundle strategy
Know how in Spain transferable
Core assets to leverage online strategy already in place
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
TPI Multimedia positioning
Note: Size of circle implies revenue potential
Virtual
Mall
Marketplace
Europages Online
E-commerce
Advertising
Residential
SMEs and Professionals
Reve
nu
e
Sou
r ce
Usage
Local Guides
Verticals
YPOL
TalkingPages
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
TPI will pursue different avenues to secure its international presence
AcquisitionAcquisition
GreenfieldGreenfield
Incumbent editor - Limited opportunities / Mature markets
Second player - Clear targets
- High growth markets
- Secure market share Niche operator - Exploit synergies
Incumbent editor - Limited opportunities / Mature markets
Second player - Clear targets
- High growth markets
- Secure market share Niche operator - Exploit synergies
- High growth markets
- Secure significant market share
- High growth markets
- Secure significant market share
AlliancesAlliances- Market knowledge and
presence
- Increase synergies
- Market knowledge and presence
- Increase synergies
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Revenue and EBITDAprojections
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
TPI´s solid P & L and strong business model will support the growth strategy envisaged by its management team
Total Revenues
2000 2004e
TPI ConsolidatedChile+Argentina+Peru (Pro forma)
CAGR11-13%
CAGR22-24%
Total EBITDA
2000 2004e
TPI ConsolidatedChile+Argentina+Peru (Pro forma)
CAGR10-12%
CAGR15-17%
Growth estimates in constant Euros
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
Summary
Telefónica First Investors ConferenceMarch 2001, Rio de Janeiro.
To summarize: TPI is an extraordinary mixture of highly profitable business and unique window opportunity to expand in the internet and internationally
TPI is a unique company with high margins, high growth, stable cash generation business and a natural expansion opportunity into the internet
TPI is a unique company with high margins, high growth, stable cash generation business and a natural expansion opportunity into the internet
TPI has a sound financial position to pursue new opportunities and to expand into new markets
TPI has a sound financial position to pursue new opportunities and to expand into new markets
TPI’s business model allows for a natural migration to internet
TPI’s business model allows for a natural migration to internet