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Telefónica’s AGM Approves the Distribution of Dividends and Presents the Achievements of its Transformation Policy


- César Alierta, Executive Chairman of Telefónica, highlighted the importance of the decisions made during 2012, which included a considerable reduction in executives’ salaries, among other things. Adjustments he considers key for the future of the company and its transformation as a Digital Telco. At the same time, he emphasised the value of Telefónica

Madrid, - Telefónica’s Annual General Shareholder Meeting today approved the distribution of dividends for 2013, thus confirming the company’s commitment to its shareholders and continuing the policy of the payment of dividends year after year, after having distributed 2.8 billion euros among its shareholders in May 2012. The approved dividend for 2013, of €0.75 per share, whose first payment of €0.35 will be made in November, represents a yield of 6.7% at current prices. This makes Telefónica the company with the highest expected 2013 dividend yield among the 25 largest companies by stock market capitalisation in the ICT sector.

In his report to shareholders, César Alierta explained that financial year 2012 “was a key year in the transformation of Telefónica, in which the decisions we have taken have already started to bring results.” Thus, in relation to the challenging global economic backdrop, César Alierta praised highly the fact that full year revenue reached €62,356M in 2012, in line with that obtained in 2011, thanks to the strong diversification of the company in Latin America and Europe. In this regard, he stressed the importance of Brazil, where Telefonica is the leader in the market and generates 44% of the revenue of the region, and also the positive evolution of Germany, which, after its successful stock market listing last year, continues to improve its positioning in the market with revenue growth of 3.5%.

The profound transformation undertaken in 2012 also meant the redefinition of the company’s commercial model, which, as the Executive Chairman of Telefónica explained, was a huge decision “a break with the past, evolving our offer from a model focussed on subsidies towards a more sustainable model based on quality and differential offerings which increase customer loyalty.”

Financial flexibility

Together with the transformation model embarked upon by the company in 2012, in his annual report to shareholders César Alierta also wished to underline the financial management carried out in the last 18 months, which led to a debt reduction of over 5 billion euros during the last financial year. He went on to claim that “there are very few companies with the capacity to reduce their debt in this way and in such a short time. In fact, in 2012, Telefónica slashed its debt by more than any other telecommunications company worldwide”. In the opinion of Alierta, the proactive management of Telefónica’s assets portfolio, the active refinancing policy and strong cash flow generation were some decisive measures which have enabled the company to regain its financial flexibility in a record time. Also notable is the fact that executive remunerations fell by around 30%, as an exercise to adjust them to the creation of value for shareholders.

Likewise, the Chairman of Telefónica reiterated that the company remains firmly committed to the digital world and assured that, in 2013, the company will continue to reap the benefits of the profound changes that have been made and which have placed the operator in a privileged position to lead the new wave of growth driven by the digitalisation of the economy. “The present and, above all, the future of Telefónica is to become a leading Digital Telco”, he said. And a vital part of that is Telefónica Digital, “which is playing a fundamental role, boosting innovation to offer our customers the best digital solutions”, explained Alierta, as well as Telefónica Global Resources, which, thanks to a significant simplification of its processes"is consistently contributing to the progress made by Telefónica in maximising its benefits of scale.”

Green light for the agreements proposed

Finally, all the resolutions proposed by Telefónica’s Board of Directors were today approved by the majority of votes of the company’s shareholders. The most important of these, in addition to the dividend to shareholders, included the approval of the company’s annual accounts and the management report, and the re-election as members of the board of José María Abril Pérez, José Fernando Almansa Moreno-Barreda, Eva Castillo Sanz, Luiz Fernando Furlán and Francisco Javier de Paz Mancho, as well as the ratification of the appointment as director, by co-option, of Santiago Fernández Valbuena and his corresponding appointment as executive director.

The company’s shareholders also gave their approval to the re-selection of the accounts auditor, the modification and approval of a revised text of the Articles of Incorporation and the report on the remunerations policy of the Board of Directors. In addition, the General Meeting authorised the delegation to the Board of the power to issue, among others, bonds and IOUs, and to formalise, interpret, rectify and execute the resolutions adopted by the General Meeting of Shareholders.


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