Telefonica on Wednesday posted declines in its turnover and bottom line for the full year 2014, but expressed confidence that the next couple of years will bring growth.
"The execution of our transformation strategy in recent years, coupled with the evident change in trends which is underway, lead us to upgrade the level of our ambition for the next two years," the Spanish telco’s CEO Cesar Alierta said, in a statement.
The operator expects to post more than 7% revenue growth this year and is aiming for a compound annual growth rate of more than 5% in the 2014-2016 period. However, its criteria for setting its guidance exclude its 2014 results in the U.K., where it is negotiating the sale of its O2 business to Hutchison Whampoa, and its results in Venezuela, which were adversely impacted by changes in the exchange rate.
Including those operations, Telefonica reported revenues of €50.38 billion last year, down by 11.7% on th e previous year, due to exchange rate fluctuations amongst other things; the changes in Venezuela had a negative impact of €2.19 billion in the fourth quarter. On an organic basis the company claims 2.6% revenue growth for the year.
Telefonica generated a full-year net profit of €3 billion, down from €4.59 billion in 2013. Venezuela had an impact again, as did restructuring expenses and a writedown on the value of Telco in Italy.
Venezuela also affected net debt which fell slightly to €45.09 billion at year-end. Telefonica said that excluding Venezuela and following the sale of O2 in the U.K., debt should stand at €31.71 billion.
The telco had 341 million accesses at the end of December, an increase of 6% following the addition of E-Plus customers in Germany and as a result of growth in Latin America, Brazil and the U.K.
"The final quarter of 2014 showed the potential of the newly established Telefonica Germany after the integration of E-Plus on 1 October," Telefonica said. The company leads the mobile market with 47.7 million accesses "and has shown stability in income in the fourth quarter resulting from the success of data monetisation," it added.
Spain, Germany and Brazil consolidated their position as Telefonica’s major markets, the telco said.
In its home market, it is performing well in the fibre, contract mobile and pay TV segments, it said. While in Brazil the purchase of GVT will give it a stronger presence in the higher value segments.
