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For our shareholders

The majority of the world's stock exchanges closed 2014 with gains. It was a positive year for the major stock market indices, and especially for the European telecommunications sector.

The stimulus for these increases has arisen from the gradual recovery of the economic cycle in the US and the expectations of investors that the central banks (the US Federal Reserve and the European Central Bank) were going to maintain or initiate new economic stimulus plans. This, ultimately, means the injection of new money into the economy.

The main index of the Spanish market, the IBEX 35, ended 2014 with a revaluation of 3.7%, well above the 2.2% achieved by the German DAX or the loss of half a point which the French CAC 40 experienced. The positive evolution of the Spanish continuous market is a reflection of the improvement in the macroeconomic expectations of the country and the recovery of international investor confidence. A test of this confidence was the behaviour of the risk premium, which closed on 104.8 basis points with a yield of 1.5 %, compared to 218.3 basis points and a yield of 4.1 % at the end of 2013.

 

The Telecommunications Sector

The European telecommunications sector recorded a profit of 7.5%, which was 3.1 percentage points more than the index that reflects the activity of the main companies in Europe, the DJ Stoxx 600, which closed with an increase of 4.4%.

The impetus for investment in technology securities has been supported by: 

  • Intense activity in corporate operations of consolidation in different markets.
  • Fundamental business improvements, aided by the improved macroeconomic situation: the main positive effects resulting from the technological transformation which have enabled companies to profit from fibre and mobile data.
  • Expectations for a more favourable regulatory scenario for investment by the new European Commission.
  • High dividend yield.
  • Attractive valuation.

In this context, Telefónica shares experienced a revaluation of 0.7%, rising to 11.92 euros. This, coupled with the Company dividend distribution policy, generated a total shareholder return of 7%.

This evolution can be explained by the effective execution of the transformation strategy that Telefónica implemented in order to become a Digital Telco; by the improvement in competitive positioning, thanks to consolidation in the major markets; and by the gradual improvement in results trends, which has offset the negative impact of foreign currencies, mainly in Latin America.

Telefónica ended the year among the top ten companies in the global telecommunications sector in terms of market capitalisation: 55,514 million euros by the end of 2014. The average volume of daily trading in the Spanish continuous market was 33.6 million shares.

The remaining companies in the European sector experienced a mixed performance. Corporate mergers and acquisitions have benefited some of the firms which began the year with lower-than-average valuations for the sector.

According to the information obtained from the Securities, Recording, Clearing and Settlement Systems Management Company (Iberclear), in April 2015, the number of Telefónica shareholders, according to individualised records of both natural and legal persons, amounted to 1,339,248.

Shareholders' Office

Telefónica ensures smooth and transparent communication with their individual shareholders via the Shareholders' Office, providing the same information, at the same time and in the same format, as for institutional shareholders. At the end of 2014, more than 200,000 shareholders were registered with the Shareholder Service, and receive the Shareholder Card which identifies them as such. The Company distributes to all of them the quarterly magazine Acción Telefónica, a publication that contains financial news reports and information on the exclusive campaigns that can be accessed. In 2014, around 600,000 copies were sent to shareholders.

Telefónica's Shareholders' Office operates a freephone information line (900 111 004), from which it handled a total of 52,958 calls in 2014, with a monthly average of 4,413. In the period coinciding with the General Meeting of Shareholders call volume increased, reaching a total of 16,632 calls per month. In addition, the Shareholders' Office handled 2,121 queries received via email (accion.telefonica@telefonica.com) and by post.