DGAP-News: Telefónica Deutschland Holding AG / Key word(s): AnnualResults/Preliminary ResultsTelefónica Deutschland Holding AG: Preliminary results for January toDecember 201919.02.2020 / 07:30The issuer is solely responsible for the content of this announcement.
MUNICH, 19 February 2020Preliminary results [1] for January to December 2019Telefónica Deutschland meets FY 2019 guidance across all metrics onsustained commercial momentum; aiming to accelerate growth profile- Underlying [2] revenue grew +1.9% year-on-year in FY 2019 and +1.2% in Q4driven by continued strong demand for the O2 Free portfolio- Underlying [3] OIBDA (as per IAS 17) up +1.0% year-on-year in in FY 2019and +1.7% year-on-year in Q4; integration synergies fully delivered- C/S ratio of 14.1% in 2019; focus on LTE roll-out and enhancing customerexperience- Breakthrough in network quality with 3x "good" ratings in major Germannetwork tests- In 2020 and beyond, Telefónica Deutschland will continue to pursue thepath of digital transformation and aims to further accelerate its growthtrajectory in a 5G world leveraging a smart investment programmeFourth quarter 2019 operational & financial highlights- Mobile postpaid saw +456 thousand net additions in Q4 2019, driven by theO2 Free portfolio and strong partner trading (60% share of gross additionsin the fourth quarter). Total postpaid churn stood at -1.5% in the fourthquarter while churn in the O2 brand remained on even lower levels of -1.2%leveraging the network quality improvements and the success of the O2 Freeportfolio- LTE customer base stood at 24.6 [4] million at the end of December 2019,an increase of +33.5% year-on-year, bringing the LTE penetration to 58%, +13percentage points year-on-year. The ongoing adoption of LTE and the O2 Freeportfolio with large data buckets continues to drive data growth with a CAGRof 50%. The average data usage by O2 Free customers reached 6 GB per month.- Underlying [5] revenue grew +1.2% year-on-year and reached EUR 1,990million, mainly driven by the good performance of the O2 Free portfolio,while legacy base headwinds were further easing and somewhat offset ongoingregulatory impacts (e.g. RLAH, intra-EU calling, MTR cuts) as well as aslight decline in handset sales. Including negative regulatory effects ofEUR -20 million, revenue was +0.2% year-on-year at EUR 1,970 million- Underlying4 mobile service revenue [6] (MSR) reflected the sustainedtraction of the own retail business and a solid partner performance and rose+2.1% year-on year to EUR 1,359 million. In reported terms, MSR stood at EUR1,341 million, up +0.8% year-on-year and was thus again in positiveterritory after the turnaround in Q2 2019- Handset revenue declined -2.9% year-on-year mainly on tougher comps vs avery strong prior year quarter, but still posting a strong number of EUR 432million in Q4 19 on continued demand for high value handsets- Fixed-line revenue turned positive and grew by +2.0% year-on-year to reachEUR 189 million in Q4, supported by sustained operational traction. Fixedretail revenue maintained their upward trend and saw +2.3% year-on-yeargrowth, reflecting the year-on-year higher customer base on strong demandfor VDSL- OIBDA adjusted for exceptional and regulatory effects [7] based on IAS 17posted growth of +1.7% year-on-year reaching EUR 520 million in Q4 19,reflecting market and transformation investments. The outcome reflects botha gradual ramp-up in savings from the D4G programme (gross benefits of ~EUR15 million in Q4 19 and ca. EUR 40 million YTD) and the delivery of thefinal integration synergies (ca. EUR 5 million in Q4 and ca. EUR 40 millionYTD). Under IFRS 16 accounting standards, underlying6 OIBDA totalled EUR 632million, up +23.7% year-on-year in the fourth quarter of 2019. The OIBDAmargin adjusted for exceptional and regulatory effects6 was flat (+0.1percentage points year-on-year) at 26.1% under IAS 17 and expanded by +5.8percentage points year-on-year to 31.8% under IFRS 16- CapEx [8] stood at EUR 263 million with a C/S ratio of 13.3% mainly drivenby LTE roll-out and the continued focus on enhancing customer experience inthe network- Consolidated net financial debt [9] under IFRS 16 was EUR 3,860 million asof 31 December 2019 with a leverage ratio of 1.7x [10] ( 0.8x under IAS 17),benefitting from the deferral of spectrum payments. Thus, leverage was wellbelow the self-defined target of at or below 2.5xFinancial outlook 2020In 2020, Telefónica Deutschland will continue to build on the achievementsfrom the successful integration of Telefónica Deutschland and E-Plus, inparticular economies of scale and the consolidated network as the basis forfuture growth. We will continue to pursue the path of digital transformationwith our programme Digital4Growth, which we have launched in 2019 in orderto make our business 'simpler, faster and better' and benefit from revenueand transformation gains.Our multi-brand and multi-channel strategy will remain the backbone of ourgo-to-market strategy that has a clear focus on ARPU-up and churn down. Weexpect pricing in the premium and discount segments to remain stable in 2020as per the current market environment. As before, postpaid will remain thestrongest value-generator for our business driven mainly by own brandperformance. Prepaid will also remain an important pillar of our operationaland financial performance; however, we expect the current trend of pre- topostpaid migration on the back of regulation to continue.In 2020, Telefónica Deutschland will be entering into the 5G era and we aimto further accelerate our growth trajectory in the word of 5G by capturingopportunities in the following three areas- Growing mobile market share in rural areas and reinforcing our strongposition in urban areas- Smart bundling of fixed & mobile products and fixed-mobile-substitution todeliver technology-agnostic products for our customers- Seizing the B2B market opportunity, particularly in the SME segmentThese will form the basis for sustained mobile service revenue momentum.Handset revenue will continue to depend on market dynamics as well as thelaunch cycles and availability of new device generations. As in the past,handsets margins continue to be broadly neutral. In the fixed business,Telefónica Deutschland Group's technology-agnostic all-infrastructurepositioning enables us to match individual customer needs with either VDSL,FTTx or cable.We expect regulatory changes to remain a headwind for the financialperformance in 2020. Revenue will be affected by the negative effects of thetermination rate cut for mobile voice minutes from EURc 0.95 to EURc 0.90 asof 1 December 2019 and the new regulation for intra-EU calls/SMS with a capat EUR 0.19 per minute/EUR 0.06 per SMS since 15 May 2019. In total, weexpect the negative regulatory impact on total revenue to amount to approx.EUR 20-30 million in 2020. Similarly, OIBDA performance will continue toreflect the negative usage elasticity effects from the roam-like-home andthe before-mentioned intra-EU calls/SMS regulation as well as to a lesserextent the effects from termination rate cuts. In total, we expect thenegative regulatory impact on OIBDA to amount to less than EUR 10 million in2020.As a result, we expect total revenue in 2020 to be flat to slightly positiveyear-on-year.Against this background, we expect OIBDA adjusted for exceptional effects in2020 to be broadly stable to slightly positive year-on-year.To capture these growth opportunities in revenue and OIBDA, TelefónicaDeutschland has launched a two-year network-focused investment programmewith a C/S peak in these years. It is centred on boosting rural coverageprimarily with 4G and accelerating urban capacity primarily with 5G. Ourinvestment profile foresees the re-farming of spectrum and efficient use oftechnologies including the envisaged switch-off of our 3G network by the endof 2022. For 2020, we expect C/S to be at 17-18%.Our assumptions are based on the expectation of continuity with regards tothe competitive environment, economic conditions and existing wholesalerelationships.
Financial Outlook 2020 Actual Outlook 2020 2019 Revenue EUR 7,399 flat to slightly positive million year-on-year OIBDA Adjusted for EUR 2,316 broadly stable to slightly exceptional effects million positive year-on-year Capex to Sales Ratio 14.1% 17 - 18%
Telefónica Deutschland operating performance 2019Operating performance in mobileAs of 31 December 2019 Telefónica Deutschland's mobile customer accessesgrew by +2.4% year-on-year and reached 43.8 million [11] driven by themobile postpaid business which posted a continued strong growth of +6.5%year-on-year and came to 23.7 million customers. At the end of December,mobile postpaid accounted for 54.1% of our total mobile base, a plus of +2.1percentage points year-on-year. The mobile prepaid base stood at 20.1million customers, a decline of only -2.2% year-on-year reflecting theprepaid to postpaid migration trend in the market post regulatory changes.Mobile postpaid had the best year since the merger and posted +1.5 millionnet additions in 2019 (+1.0 million net additions in 2018), thereof +456thousand in the fourth quarter (+279 thousand in Q4 2018). This was drivenby sustained demand for the O2 Free portfolio further supported bycommercial invest to drive ARPU-up. Additionally, the contribution frompartner brands remained strong and delivered 61% of gross additions in thefull year period, supported by migrations to Telefónica Deutschland network.Mobile prepaid registered -447 thousand net disconnections in 2019 versus-1.3 million in 2018 on continued weaker demand for prepaid offers followingregulatory changes in 2017 and the general market trend towards postpaid. Q4posted -236 thousand net disconnections (-509 thousand in Q4 2018), thus asimilar seasonality as in prior year.Postpaid churn was -1.5% in the full year and in Q4 respectively, animprovement of+0.1 percentage points year-on-year in 2019 and +0.3 percentage pointsyear-on-year in the fourth quarter. O2 consumer postpaid churn remained evenlower and saw a +0.1 percentage points year-on-year improvement to -1.3% inthe full year period and to -1.2% in Q4 2019 respectively. The impliedannualised churn rates in 2019 stood at -15.5% vs. -17.3% in 2018, thusproviding clear evidence of an excellent customer experience in the O2network, which was also acknowledged by 3 major network tests in Germany.Telefónica Deutschland achieved a breakthrough in network quality, scoring"good" for the first time in Chip, Computerbild and connect test.The LTE customer base reached 24.6 [12] million accesses at year end, anincrease of +33.5% year-on-year, supported by sustained demand forhigh-speed mobile data services. LTE-penetration was up +13.4 percentagepoints year-on-year across the base and reached 57.7%, while in postpaid LTEpenetration continues to be significantly higher at 73.0%.ARPU trends continued to show the expected impact of regulation and legacybase effects, which was partly offset by visible ARPU accretive effects fromthe O2 Free portfolio and new value-added services. Postpaid ARPU declinedby -4.0% year-on-year to reach EUR 14.3 in 2019 and -5.4% year-on-year toEUR 14.0 in the October to December period with lower inbound roaming in thefinal quarter of the year. Prepaid ARPU stood at EUR 6.0 in the 2019 andreached EUR 6.1 in Q4, a plus of +3.2% and +2.9% year-on-year respectively.The blended mobile ARPU reached EUR 10.0 in 2019 and Q4 respectively, adecline of -0.2% in 2019 and -1.4% in Q4.Our successful APRU-up strategy is reflected in own brand postpaid ARPU,which grew +0.9% year-on-year in 2019 despite continued regulatoryheadwinds. APRU-dynamics will be further enhanced by the new speed-tiered O2Free unlimited tariffs launched on 4 February 2020.Operating performance in fixedThe fixed broadband customer base totalled 2.2 million accesses at the endof December 2019, (up +6.1% year-on-year), with the VDSL base climbing +14.6% year-on-year to 1.7 million to 75% of our fixed retail base. Fixedretail registered +127 thousand net additions in 2019, thereof +13 thousandin the last quarter on the back of continued strong demand for VDSL with+211 thousand net additions from January to December and +33 thousand in thefourth quarter.Thus, fixed churn was -1.0% both in 2019 and the fourth quarter of the year,an improvement of +0.3 percentage points and +0.1% percentage pointsrespectively.The fixed retail ARPU reached EUR 23.3 in the full year and EUR 23.1 in Q4(-5.0% year-on-year in 2019 and -4.0% in Q4) and reflects the year-on-yearhigher customer base as well as a higher share of bundles in the customerbase.Telefónica Deutschland financial performance 2019Revenue totalled EUR 7,399 million in 2019, up +1.1% year-on-year (EUR 1,970million in the fourth quarter, +0.2% year-on-year) mainly driven by theturnaround in mobile service revenue since Q2 2019 which in combination witheasing legacy base headwinds helped to offset ongoing regulatory impacts. Atthe same time, handset sales remained strong. Fixed revenue also crossed thezero-line in Q4 2019. Excluding negative regulatory effects of EUR -59million (mainly MTR) [13], revenue was up +1.9% year-on-year in the fullyear and reached EUR 7,458 million and +1.2% year-on-year in Q4 to EUR 1,990million.Mobile service revenue [14] (MSR) reflected the sustained traction of theown retail business as well as a solid partner performance and reached EUR5,301 million (+0.6% year-on-year) in 2019 and EUR 1,341 million (+0.8%year-on-year) in the final quarter of the year on tougher comps and withlower inbound roaming. Excluding negative regulatory effects of EUR -54million in 2019 (EUR -20 million in Q4), MSR grew by +1.7% year-on-year inthe full year period and +2.1% year-on-year in Q4 2019 to EUR 5,355 millionand EUR 1,359 million respectively.Handset revenue rose +5.8% year-on-year to EUR 1,346 million in the Januaryto December period and declined -2.9% year-on-year in Q4 2019 vs aparticularly strong prior year quarter; still post a strong number of EUR432 million on continued demand for high value handsets.Fixed revenue reached EUR 741 million (-3.4% year-on-year) for FY 2019 andreturned to growth in the final quarter of 2019, up +2.0% year-on-year toEUR 189 million driven by the higher retail customer base and strong VDSLdemand. Thus, fixed retail revenue confirmed the turnaround achieved in Q32019 and posted -0.6% year-on-year for the 12 months period and growth of+2.3% year-on-year in the final quarter of the year.Other income stood at EUR 183 million in 2019 (+3.6% year-on-year) and EUR63 million (+5.6% year-on-year) in the fourth quarter and is mainly relatedto the capitalisation of network rollout costs.Operating expenses totalled EUR 5,290 million in 2019 and EUR 1,413 millionin Q4 and include exceptional [15] effects of EUR 23 million and EUR 1million respectively mainly related to remaining rental obligations in themobile and the legacy fixed network. The year-on-year decline of -7.2% inthe full year and -8.9% year-on-year in the October to December period ismainly driven by the implementation of IFRS 16 accounting standards and itsimpact on operating lease expenses further helped by lower supplies as wellas integration and transformation benefits. According to IAS 17, exceptionaleffects [16] reached EUR 52 million in 2019 and EUR 3 million in Q4.- Supplies stood at EUR 2,372 million, -3.5% lower year-on-year in thefinancial year 2019, and EUR at 694 million in Q4, -2.7% lower year-on-year;with benefits from the implementation of IFRS 16. Also, connectivity-relatedcost of sales (41% of supplies in 2019) came in lower year-on-year, ashigher wholesale costs for outbound roaming and international calls withinthe EU were more than compensated by lower costs for voice termination.Hardware cost of sales (56% of supplies in the January to December period)were higher year-on-year in line with the solid demand for handsets.- Personnel expenses adjusted for restructuring costs of EUR -5 million (EUR-19 million in 2018) were -0.6% lower year-on-year in 2019 at EUR 587million, primarily on the back of a lower FTE base versus prior year.Personnel expenses in Q4 2019 were slightly higher year-on-year (+1.5% inyear-on-year) at EUR 145 million with no material restructuring costs(compared to EUR -16 million in the previous year) mainly on the back ofinflation-related pay rises in the quarter.- Other operating expenses [17] totalled EUR 2,308 million in the financialyear including exceptional16, 17 effects of EUR -17 million (EUR +2 millionrestructuring costs and EUR 576 million respectively in Q4). The significantdecline of -10.0% year-on-year in 2019 (-12.7% in Q4) is due to theimplementation of IFRS16 accounting standards and the resulting impact onoperating lease expenses, excluding the before mentioned exceptionaleffects. Commercial costs and non-commercial costs made up 70% and 26%respectively in the January to December period.Operating Income before Depreciation and Amortisation (OIBDA) adjusted forexceptional [18] and regulatory effects [19] came to EUR 1,903 million basedon IAS 17, +1.0% year-on year in 2019 (EUR 520 million, +1.7% year-on-yearin the fourth quarter). As per IFRS 16 accounting standards underlying19, 20OIBDA increased by +24.9% year-on-year to EUR 2,353 million in the Januaryto December period (+23.7% year-on-year to EUR 632 million in Q4).Exceptional effects19 are mainly restructuring costs related to remainingnetwork rental agreements and provisions for severance payments. Regulatoryeffects were EUR -38 million in 2019 (EUR -13 million in Q4), mainly relatedto usage elasticity effects from the EU roaming and international callsregulation, with the latter coming into effect as of 15 May 2019. Includingthose exceptional and regulatory effects, OIBDA-based on IFRS 16 reached EUR2,292 million, +27.6% year-on-year the full year period (EUR 620 million;+31.1% year-on-year in Q4).Telefónica Deutschland continued to invest into the market and intransformation to keep the momentum up and to generate sustainable revenuegrowth. We registered transformation gains of ~EUR 40 million in 2019 (~EUR15 million in Q4), as well as the final roll-over effects from integrationsynergies of ~EUR 40 million (~EUR 5 million in Q4), thus meeting our targetof a combined EUR 80 million in 2019. Thus, in combination with the belowmentioned CapEx synergies we have also finally successfully delivered theupdated synergy case with integration related savings of ~EUR 900 million inOperating Cash Flow.The underlying OIBDA margin19, 20 came to 31.6% in the full year period, up+5.8 percentage points year-on-year to under IFRS 16.Group fees reached EUR 34 million in 2019 and EUR 9 million in the Octoberto December period.Depreciation & Amortisation increased +21.6% year-on-year to EUR 2,416million in the January to December period, driven by the implementation ofIFRS 16 as a bulk of the operating lease expenses become right-of-use assetson the balance sheet. As per IAS 17, Depreciation & Amortisation amounted toEUR 1,924 million, -3.2% y-o-y, mainly due individual assets in PPE andintangibles reaching the end of their useful life.The operating loss came to EUR -124 million in 2019 versus an operating lossof EUR -190 million in the same period of 2018.The net financial expenses for 2019 was to EUR -55 million compared to EUR-42 million in the prior year.The Company reported income tax expenses of EUR -33 million in financialyear 2019 (EUR 3 million in 2018)The net loss in 2019 amounted to EUR -212 million, compared to a net loss ofEUR -230 million in the same period of the prior year.CapEx [20] was EUR 1,044 million in 2019 (including final synergies of EUR~40 million), a reflection of our continued focus on customer experience asthe LTE roll-out is in full swing. Thus, C/S ratio came to 14.1% in thetwelve months period and 13.3% in the fourth quarter (EUR 263 million).Operating cash flow (OIBDA minus CapEx23) reached EUR 1,248 million in 2019(+50.2% year-on-year), mainly as a result of the positive IFRS 16 impacts onOIBDA.Free cash flow (FCF) [21] pre the dividend payment of EUR 803 million forthe financial year 2018 and payments for spectrum (first tranche of EUR 87million from the 2019 spectrum auction) came to EUR 1,023 million for FY2019 under IFRS 16. Lease payments, primarily for leased lines and antennasites, amounted to EUR -476 [22] million. As a result, FCF aL (IAS 17) stoodat EUR 547 million for the reporting period compared to EUR 733 million inthe prior year.Working capital movements and adjustments were negative in the amount of EUR-148 million. This development was mainly driven by prepayments forincidental lease costs, low value and short term leases in connection withleased line and mobile site rental and other prepayments (EUR -55 million),a reduction in restructuring provisions (EUR -38 million) as well as otherworking capital movements in the amount of EUR -135 million. The latterinclude silent factoring transactions for handset receivables in the grossamount of EUR 677 million, which were outweighed by other working capitalmovements, including a reduction in trade and other payables. These wereoutweighed by other working capital movements, including a reduction intrade and other payables. In addition, 2019 working capital dynamics wereeffected by usual prepayment for wholesale contracts and a reduction ofinventories.Consolidated net financial debt [23] under IFRS 16 was EUR 3,860 million asof 31 December 2019 with a leverage ratio of 1.7x [24] ( 0.8x under IAS 17),benefitting from the deferral of spectrum payments. Thus, leverage was wellbelow the self-defined target of at or below 2.5x which leaves solidheadroom with regards to our BBB-rating by Fitch.APPENDIX - DATA TABLESPlease refer to the following link to access the download of the datatables. Thank you.https://www.telefonica.de/investor-relations-en/publications/financial-publications.htmlFurther informationTelefónica Deutschland Holding AGInvestor RelationsGeorg-Brauchle-Ring 5080992 MünchenDr. Veronika Bunk-Sanderson, Director Communications & Investor RelationsMarion Polzer, Head of Investor RelationsEugen Albrecht, Senior Investor Relations OfficerPia Hildebrand, Investor Relations OfficerAbigail Gooren, Investor Relations OfficerSaskia Puth, Office Manager Investor Relations(t) +49 89 2442 1010ir-deutschland@telefonica.comwww.telefonica.de/investor-relationsDisclaimer:This document contains statements that constitute forward-looking statementsand expectations about Telefónica Deutschland Holding AG (in the following"the Company" or "Telefónica Deutschland") that reflect the current viewsand assumptions of Telefónica Deutschland's management with respect tofuture events, including financial projections and estimates and theirunderlying assumptions, statements regarding plans, objectives andexpectations which may refer, among others, to the intent, belief or currentprospects of the customer base, estimates regarding, among others, futuregrowth in the different business lines and the global business, marketshare, financial results and other aspects of the activity and situationrelating to the Company. Forward-looking statements are based on currentplans, estimates and projections. The forward-looking statements in thisdocument can be identified, in some instances, by the use of words such as"expects", "anticipates", "intends", "believes", and similar language or thenegative thereof or by forward-looking nature of discussions of strategy,plans or intentions. Such forward-looking statements, by their nature, arenot guarantees of future performance and are subject to risks anduncertainties, most of which are difficult to predict and generally beyondTelefónica Deutschland's control and other important factors that couldcause actual developments or results to materially differ from thoseexpressed in or implied by the Company's forward-looking statements. Theserisks and uncertainties include those discussed or identified in fullerdisclosure documents filed by Telefónica Deutschland with the relevantSecurities Markets Regulators, and in particular, with the German FederalFinancial Supervisory Authority (Bundesanstalt fürFinanzdienstleistungsaufsicht - BaFin). The Company offers no assurance thatit* expectations or targets will be achieved.Analysts and investors, and any other person or entity that may need to takedecisions, or prepare or release opinions about the shares / securitiesissued by the Company, are cautioned not to place undue reliance on thoseforward-looking statements, which speak only as of the date of thisdocument. Past performance cannot be relied upon as a guide to futureperformance.Except as required by applicable law, Telefónica Deutschland undertakes noobligation to revise these forward-looking statements to reflect events andcirc*mstances after the date of this presentation, including, withoutlimitation, changes in Telefónica Deutschland's business or strategy or toreflect the occurrence of unanticipated events.The financial information and opinions contained in this document areunaudited and are subject to change without notice.This document contains summarised information or information that has notbeen audited. In this sense, this information is subject to, and must beread in conjunction with, all other publicly available information,including if it is necessary, any fuller disclosure document published byTelefónica Deutschland.None of the Company, its subsidiaries or affiliates or by any of itsofficers, directors, employees, advisors, representatives or agents shall beliable whatsoever for any loss however arising, directly or indirectly, fromany use of this document its content or otherwise arising in connection withthis document.This document or any of the information contained herein do not constitute,form part of or shall be construed as an offer or invitation to purchase,subscribe, sale or exchange, nor a request for an offer of purchase,subscription, sale or exchange of shares / securities of the Company, or anyadvice or recommendation with respect to such shares / securities. Thisdocument or a part of it shall not form the basis of or relied upon inconnection with any contract or commitment whatsoever.These written materials are especially not an offer of securities for saleor a solicitation of an offer to purchase securities in the United States,Canada, Australia, South Africa and Japan. Securities may not be offered orsold in the United States absent registration under the US Securities Act of1933, as amended, or an exemption there from. No money, securities or otherconsideration from any person inside the United States is being solicitedand, if sent in response to the information contained in these writtenmaterials, will not be accepted.[1] Unless indicated otherwise, all financial KPIs and year-on-yearcomparisons published in this document are prepared in accordance with IFRSaccounting standards as adopted by the European Union. Financial KPIs for2019 therefore include the effects of the implementation of IFRS 16 as of 1January 2019[2] Excluding the negative impact from regulatory changes; mainly driven bythe MTR regulation (mobile termination rate cut to EURc 0.95 per minute asof 1 Dec 2018 and EURc 0.90 per minute as of 1 Dec 2019) and the EUinternational call regulation from 15 May 2019 and remaining effects fromthe RLH regulation[3] Adjusted for exceptional effects and excluding the negative impact fromregulatory changes; mainly usage elasticity effects from the Europeanroaming regulation and the international call regulation within the EU[4] Includes a technical database adjustment of 3.2 million customer inQ4-2019[5] Excluding the negative impact from regulatory changes; mainly driven bythe MTR regulation (mobile termination rate cut to EURc 0.95 per minute asof 1 Dec 2018 and EURc 0.90 per minute as of 1 Dec 2019) and the EUinternational call regulation from 15 May 2019 and remaining effects fromthe RLH regulation[6] Mobile service revenues include base fees and fees paid by our customersfor the usage of voice, SMS and mobile data services. Also, access andinterconnection fees as well as other charges levied on our partners for theuse of our network are included[7] Exceptional effects were EUR 23 million of restructuring expenses in theperiod January to December 2019 (EUR 52 million based on IAS 17). Thedifference between restructuring charges under IAS 17 and IFRS 16 is due tothe fact that certain IAS 17 operating lease commitments require therecognition of provisions, whereas those are recognised as lease liabilitiesunder IFRS 16. Regulatory effects amounted to EUR -38 million in the periodJanuary to December 2019[8] Excluding additions from capitalised right-of-use assets (as of 1January 2019) and excluding additions from capitalised finance leases (till31 December 2018)[9] Net financial debt includes current and non-current interest-bearingfinancial assets and interest-bearing liabilities as well as cash and cashequivalents and excludes the payables for the spectrum auction[10] Leverage ratio is defined as net financial debt divided by the OIBDAfor the last twelve months adjusted for exceptional effects[11] Based on 6 months inactivity accounting, mobile customer base stood at46.0 million accesses and our total access base reached 50.4 million[12] Includes a technical database adjustment of 3.2 million customer inQ4-2019[13] Mobile termination rates were lowered to EURc 0.95 per minute (fromEURc 1.07 per minute) as of 1 Dec 2018 and to EURc 0.90 per minute as of 1December 2019[14] Mobile service revenues include base fees and fees paid by ourcustomers for the usage of voice, sms and mobile data services. Also, accessand interconnection fees as well as other charges levied on our partners forthe use of our network are included[15] Exceptional effects were EUR 22 million of restructuring expenses inthe period January to December 2019 (EUR 50 million based on IAS 17)[16] The difference between restructuring charges under IAS 17 and IFRS 16is due to the fact that certain IAS 17 operating lease commitments requirethe recognition of provisions, whereas those are recognised as leaseliabilities under IFRS 16[17] Includes other expenses and impairment losses in accordance with IFRS 9[18] Exceptional effects were EUR 22 million of restructuring expenses inthe period January to December 2019 (EUR 50 million based on IAS 17). Thedifference between restructuring charges under IAS 17 and IFRS 16 is due tothe fact that certain IAS 17 operating lease commitments require therecognition of provisions, whereas those are recognised as lease liabilitiesunder IFRS 16[19] Regulatory effects amounted to EUR -38 million in the period January toDecember 2019[20] Excluding additions from capitalised right-of-use assets (as of 1January 2019) and excluding additions from capitalised finance leases (till31 December 2018)[21] Free cash flow pre dividends and payments for spectrum (FCF) is definedas the sum of cash flow from operating activities and cash flow frominvesting activities and does not contain payments for investments inspectrum as well as related interest payments[22] Financial lease payments under IFRS16 amounted to EUR -484 million andto EUR 8 million under IAS 17[23] Net financial debt includes current and non-current interest-bearingfinancial assets and interest-bearing liabilities as well as cash and cashequivalents and excludes the payables for the spectrum auction[24] Leverage ratio is defined as net financial debt divided by the OIBDAfor the last twelve months adjusted for exceptional effects.
19.02.2020 Dissemination of a Corporate News, transmitted by DGAP - aservice of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Archive at www.dgap.de
Language: English Company: Telefónica Deutschland Holding AG Georg-Brauchle-Ring 50 80992 München Germany Phone: +49 (0)89 24 42 0 Internet: www.telefonica.de ISIN: DE000A1J5RX9 WKN: A1J5RX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange EQS News ID: 978019 MDAX TecDAX End of News DGAP News Service
