Q2 2004 Telefonica Publicidad e Informacion, S.A. (TPI) Earnings Conference Call - Final.

(From Fair Disclosure Wire)

OPERATOR: Good morning, good afternoon, ladies and gentlemen. Welcome to the TPI First Half 2004 Results conference call. [OPERATOR INSTRUCTIONS] I would now like to hand over to the Head of Investor Relations, Mr Enrique de Benito. Please go ahead, sir. You can start your conference. ENRIQUE DE BENITO, HEAD OF IR, TELEFONICA PUBLICIDAD E INFORMACION, S.A.: Good afternoon, ladies and gentlemen, and welcome to TPI conference call to discuss the First Half 2004 results. Before proceeding, let me mention that forward-looking statement are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from those anticipated in any forward-looking comments made today as a result of macroeconomic conditions, market risks and other factors. With us today are Mrs Belen Amatriain, Chairman of TPI, and Mr Antonio Marti, CFO for the Company. It is now my pleasure to turn the call over to Mrs Belen Amatriain. BELEN AMATRIAIN, CHAIRMAN, TELEFONICA PUBLICIDAD E INFORMACION, S.A.: Good afternoon, ladies and gentlemen. Thank you for being with us today for TPI's first half results conference. As on previous occasions, I will lead you through the presentation we have prepared, in order to explain the evolution of the key figures and the performance of the various business lines on a per country basis. At the end of the presentation, there will be time for your questions, during which will answer any doubts you might have regarding TPI's performance in this period. Before we start with the presentation, I would like to remind you that first half results cannot be compared nor extrapolated to year-end. This is due to both a higher concentration of directory publications in the Second Half of the year, and changes in directory publications [skills]. Now, turning to slide 3, I will start by highlighting that in the first half of 2004, TPI continued to show healthy growth in terms of revenues, EBITDA and net income. The two main drivers behind this evolution were advertising revenues in Spain, which continued to cause solid growth, and telephone traffic revenues, in which more than [three-fold] those accomplished in the same period in 2003. Although we will comment on TPI Brazil results more deeply later in the presentation, the results coming from the publication of Sao Paolo's capital [port] edition did not help the Group results. The focus on the reduction of the Company's high bad debt levels, together with the stricter credit control policies implemented in 2004, explained the worse first half revenues and EBITDA in comparison with the same period of 2003. As we will see later, the sustained growth achieved allows us to maintain the guidance given in the first quarter of 2004 of 3%-5% increase in revenues and from 9%-11% in EBITDA. Moving now on to the first half results, page 4 of the presentation shows that Group revenues grew by 12.5% to E216.5m, while EBITDA went up by 39.4% to E59.3m. EBITDA margin improved by 5.3 percentage points to 27.4%. Net income grew 34.3% to E27.7m. As shown in the right column of the table, growth rates in constant euros are higher than real variations, reflecting the impact of Latin American currencies. Going to the bottom of the slide, we see the evolution of the different countries where TPI is present, with Spain's revenues growing by 19.7%, while EBITDA increased by almost 40% to E54.8m. As we will see later, changes in the publication calendar currently roughly explains this strong growth, which will come more in line with the Group's guidance indicators over the course of the year. Turning to Brazil, as previously commented, after the publication Sao Paolo's [port] edition, revenues and EBITDA dropped -19.5% and -17.8%. We will develop deeply on Brazil results later in the presentation. TPI Peru, revenues increased 5.8% in local currency and EBITDA by 35%, with EBITDA margin advancing 8.7 percentage points to 39.8%. The evolution of [indiscernible]'s accounts in the first half is not relevant yet, since most of the revenues are recorded in the third quarter, coinciding with publication of Santiago phone directory. If ...