Transcript Telefónica First Investors Conference

Safe Harbour
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.
Telefónica First Investors Conference
March 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 Conference
March 2001, Rio de Janeiro.
Introduction
– Main highlights since floatation, value contribution
– Business model
– Group TPI international presence
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
Multiplied revenues 5x in Brazil
Core product
Tripled
traffic
and
and acquired
control
of biggest
revenues
increase
in
thein Chile
by
directory
publisher
10% in 2000
internet
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI is a Growth story that delivers value ...
(1)SOPV
EUR3bn
Verticals and
Cityguides
launched
B2B Marketplace
Beta Version
GBP’s
purchase
EUR 3.16bn
EUR2bn
IPO´s
Value:
EUR1.8bn
(2)
YPOL Relaunched
June 23rd, 1999
(1)
(2)
Virtual
Mall
launching
Expansion
into Sao
Paulo capital
1999
Touristic
Guides
launched
Publiguías Market cap
acquisitionEUR 2.50 bn
2000
March 2001
Sum Of the parts Valuation based on latest analyst reports (Jan-Feb 01). Average targert price: EUR 8.58
Average closing price Februrary 2001: EUR 6.78
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
… and is well positioned to guarantee continuous
growth based on core assets

Universal Brand Recognition

Largest Advertising Platform

Solid and Widespread Usage

High Lead Purchases

Experienced and Strong Sales force

Most Comprehensive Database

Strong Investment Capacity
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI is leader in connecting supply and demand...
More than 600,000
unique customers
Purchase of Products
and Services
Increase
Advertisers Base
60%
lead purchases
Over 50 million
users
Increase
Usage
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
More than 50 million
books published
… and expands its business model across the value
chain
Choice
Information
Contact
Transaction
White Pages
57.6m queries/month (1)
Yellow Pages
36.1m queries/month (1)
Talking Pages
Over 117,000 calls/month (2)
Online Products
More than 1.5m visits in December 2000 (3)
Customer Satisfaction
(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 Conference
March 2001, Rio de Janeiro.
Delivery
… in a market with over 5 million companies and more
than 289 million inhabitants
SPAIN
PERU (1)
BRAZIL
• Market share: 82%
• Directories revenues as a % of
GDP: 0.02%
• Unique advertisers: + 42,200
• Market share (Sao Paulo
capital): 16% (3)
• Directories revenues as a % of
GDP: 0.06%
• Unique advertisers: + 9,900
CHILE
• Market share: 93%
• Directories revenues as a % of
GDP: 0.10%
• Unique advertisers: + 47,900
• Market share: 84%
• Directories revenues as a % of
GDP: 0.06%
• Unique advertisers: + 480,000
• Nº Users: + 20.5 million
ARGENTINA (1)
• Market share: 90% (2)
• Directories revenues
as a % of GDP: 0.04%
• Unique advertisers: + 66,800
(1) Peru
and Argentina still pending
the area where it operates(Buenos Aires and South Argentina)
(3) Expected in year 2001
Directory revenues as % of GDP: Source Simba Cowles 1998
(2) In
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI Group
Over 600,000 clients
 Sales Force: over 1,800 people
 150 YP and WP Directories
 50 million circulation

Growth strategy
– Paper product
– Multimedia Platforms
– Geographical expansion
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI focuses its growth along three main lines
Growth Strategies
Paper Products

Sustained growth above peers
Diversify revenue streams
 Increase customers’ value added
 Extend the reach and visibility of our customers
Multimedia
Distribution Platforms

Geographical expansion



Sustained incremental growth
Possibility to exploit synergies & economies of scale
Know how transfer - Cross fertilization
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
In Spain, the focus is to sustain growth above
European peers ...
Yellow Pages: Grow average revenue per advertiser

Facilitating migration from B&W ads, to Colour ads

Increasing Headings per advertiser and Multiple Book presence

Encouraging migration towards Bigger Size ads
White Pages: Increase advertising content

Promoting new advertising content - Colour

Cross-selling with Yellow Pages

Implementing new segmentation strategies
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
… whilst in LATAM the focus will be in exploiting synergies
and transferring know how acquired in Spain
Dominant Players
Argentina



Relaunch brand name
Improve value added content and products
Reinforce advertising spending
Chile




Improve content
Reinforce advertising spending
Renegotiate key contracts
Launch niche products
Peru



Review pricing strategy
Improve content
Reinforce advertising spending
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
Start-up
Brazil


Reinforce advertising spending
Expand geographically
Paper Revenues in Latam will grow faster than in Spain
accounting for 43% of total revenue for year 2004
Total Proforma Paper revenues
CAGR
20-22%
CAGR
9-11%
43%
38%
2000
2004e
2000 Pro forma
TPI Spain
LATAM
Growth estimates in constant Euros
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI maximizes advertisers’ visibility, adapting
contents to multiple platforms
Mobile
Internet
(WAP, GRPS, UMTS)
TPI’s
Contents
Call Center
Operator Assisted
Yellow Pages
Digital TV
“Extend the reach of our customers through alternative platforms”
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
For Online Product our strategy is a natural
transition from paper to e-commerce
Paper
Biggest Advertising
Platform
Online Advertising
Increased value through
Target advertising
More than 600,000 1
Advertisers
in Paper Products
E-Commerce
Dual strategy in ECommerce
B2C - VIRTUAL MALL
More than 1,300 shops
in Spain
More than 63,000
paying customers
in Spain
B2B
MRO Marketplace
Ability to leverage Brand Equity,
Customer Base, Content and Sales Force
1Total
aggregated unique customers as of Dec. 2000
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
YPOL shows a strong potential to convert traffic
into revenues
000´Visits x 3.4
(1999-2000)
Revenues x 2.9
(Eur m)
11,270
7.4
3,308
1,941
Total 1999 1Q 00
2,071
2Q 00
2,807
3Q 00
4,450
2.6
4Q 00 Total 2000
000´Page Views x 2.9
(1999-2000)
1999
2000
Clients x 3.7
+ 63,000
232,192
78,428
40,074
Total 1999
1Q 00
50,666
2Q 00
59,527
3Q 00
81,925
4Q 00 Total 2000
* Visits and Page Views are audited by the OJD (January-September 2000)
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
+ 17,000
1999
2000
E-commerce is the next step from online
advertising
B2C
Virtual Mall
www.comprarhoy.com
B2B

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
MRO’s Marketplace
 SMEs access to big companies purchasing
www.marketplace.com
terms and conditions

Transaction based revenues for TPI

Critical mass of buyers and sellers is Key
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
Operator Assisted Yellow Pages are fully operational
in Spain
Clients
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
+ 46%
42,500
1999
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
2000
Number of Calls
(000´)
+ 51%
1,410
932
1999
Talking Pages service has been offered nation wide in Spain since 2Q99
62,000
2000
Multimedia revenues will grow faster to represent up to
8% of total revenues by year 2004
Multimedia Revenues
vs Other Revenues
(EUR m)
Spain

Consolidate advertising Model

Specialised Sales force

Develop transactional environments
2% Multimedia Revenues
Year 2000 Proforma
CAGR 00/04e:
50% - 60%
Year 2004e
8% Multimedia Revenues
Latam

Product bundle strategy

Know how in Spain transferable

Core assets to leverage online strategy
already in place
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI Multimedia positioning
E-commerce
Talking
Pages
Virtual
Mall
Marketplace
YPOL
Local Guides
Verticals
Europages
Online
Advertising
Residential
SMEs and Professionals
Usage
Note: Size of circle implies revenue potential
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
TPI will pursue different avenues to secure its
international presence
Acquisition

Incumbent editor - Limited opportunities / Mature markets

Second player
- Clear targets
- High growth markets
- Secure market share

Niche operator
- Exploit synergies
- High growth markets
Greenfield
- Secure significant market share
- Market knowledge and presence
Alliances
- Increase synergies
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
Revenue and EBITDA
projections
Telefónica First Investors Conference
March 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
Total EBITDA
CAGR
11-13%
CAGR
10-12%
CAGR
22-24%
CAGR
15-17%
2000
TPI Consolidated
2000
2004e
Chile+Argentina+Peru (Pro forma)
TPI Consolidated
Growth estimates in constant Euros
Telefónica First Investors Conference
March 2001, Rio de Janeiro.
2004e
Chile+Argentina+Peru (Pro forma)
Summary
Telefónica First Investors Conference
March 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’s business model allows for a natural migration
to internet

TPI has a sound financial position to pursue new
opportunities and to expand into new markets
Telefónica First Investors Conference
March 2001, Rio de Janeiro.