Victory of Cesar Alierta in the G4 of European telecommunications companies | Financial markets

Analysts and managers, who are labeled daily as our net asset value, with a certain element of low correlation between knowledge-time-results, know well what it means in this profession to be judged only by numbers and not by intangible facts. For a man like Cesar Alierta, with a huge level of responsibility – not only to millions of investors, but also to the almost 200,000 average employees he had to manage during his 16 years in office – an assessment of his professional career must include very much. more than numbers. Intangible assets in a position of such responsibility result in a legacy that will last for years to come, a legacy that has been handed over under the current mandate of José María Álvarez Pallete.

Internationalization, network transformation and playing with telecom giants to make Matildes the largest company in Europe are among the main milestones that explain its mandate. Another great intangible virtue was the ability to listen and surround yourself with high-level leaders who carried out very important strategic actions. The valuation of immaterial labor is always subjective to each individual, and I’m glad to read everything I’ve read about it in these days of posthumous recognition, but we must also get back to the numbers.

This week the chart I offer is Telefónica’s stock market performance in its sector and in comparison with G4 Europe players Deutsche Telekom, Orange, Telecom Italia and Telefónica itself. You can see that Telefonica from July 2000 to April 2016, the date of Alierta’s mandate, was the company that had the best relative performance in a sector that had been profitable for 16 years at “-0.20% per annum” due to influencing much of the digestion of the price frenzy of the 2000 bubble years. Taking overall profitability including dividends as a basis, Telefónica fell 0.62% annually between 2000 and 2016, compared with Deutsche Telekom’s 2.96% annual decline; 7.68% Orange and 9.72% Telecom Italia. Thus, Alierta won the game against the other operators in this unfair but necessary photo, in which he saw only “numerical data” about the behavior of Telefónica shares.

Someone will captiously say that how can you say that this is a good “picture and balance” when no money has been made for 16 years, and during this period of time, investors who invested in the Eurostoxx 50 index received a 0% return: the beginning of Alierta’s mandate coincides with the market crash of 2000. telecommunications European companies were one of the star sectors of the rally from 1996 to 2000, when the Stoxx 600 Telecoms index rose from 136 points to 1062 points in March 2000. Then in October 2002 (today) a huge drop began in the region of 169 points. 201.3), which witnessed one of the largest corrections in the history of the stock market sector.

Finally, I would like to emphasize that Cesar Alierta has been an example of defending the sector against Big Tech, and his fight to get Big Tech to pay for the network is extremely reasonable. There is still a lot of debate going on today. The enormous effort that companies like Telefonica put into investing in the network was not monetized properly and became a “bargain” for US tech companies. Hugs to your entire family.

Alberto Espelosin, manager of Renta 4 Alpha

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