Telefónica presented the results of the company's 2013 transformation process and set out an attractive remuneration policy to shareholders at its General Meeting of Shareholders on Friday 30 May.
With a debt reduction of €5.8 billion ($7.8 billion), Telefónica met its target of ending 2013 with net debt of less than €47 billion; using data available at the end of March 2014, Telefónica's present debt stands at around €42.7 billion.
The reduction in net debt over 2013 has positioned Telefonica as the leading European telecoms company in terms of debt reduction for the second year in a row. Executive Chairman, César Alierta, aid the reduction "is the result of the solid cash generation and the efficient management of our assets, which has enabled us to focus on key markets and reinforce our growth profile".
Telefónica's General Meeting of Shareholders also approved the distribution of a large dividend of €0.75 per share for 2014. The first tranche (€0.35) will be distributed in the fourth quarter of the year in the form of a scrip dividend, which will be completed in the second quarter of 2015 with the payment of the remaining €0.40 per share in cash.
Alierta commented in the annual report "We have made considerable progress in the transformation process of the company, achieving the objectives we had been set for the year; the return to organic revenue growth, a progressive stabilisation of the margins and the improvement of our financial flexibility".
He also said that the company had set the objective of offering an attractive remuneration policy to shareholders and he indicated that "the remuneration announced for 2014 represents profitability of 6.2%, which positions Telefónica as the company with the highest profitability from expected dividends for the current financial year among the largest companies in the telecommunications sector by stock market capitalisation".
On the businesses future, Alierta added that "it is vital for regulation to adapt in order to reflect the reality of the new digital economy and the new policies must be flexible and guarantee a level playing field for all the agents in the digital ecosystem". He also highlighted the importance of advancing in the harmonisation of European regulations, stating that "Europe can and should lead the next wave of innovation and regain technological leadership".
In addition to the agreement on the payment of dividends, Telefónica's General Meeting of Shareholders approved: the annual accounts corresponding to 2013; and renewed the power of the company's Board of Directors to issue debentures, bonds, promissory notes and other securities, and also to acquire treasury shares, directly or through companies of the group.
A long term incentive plan was also approved, aimed at the group's executives, who will receive Telefónica shares, as well as a global plan for the incentivised purchase of Telefónica shares for all the company's employees.
For more:
- see this Telefónica press release
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