Telefónica Deutschland prepares for IPO
|Listing on Prime Standard of the Frankfurt Stock Exchange planned in 2012|
|Strong track record of attractive growth and cash flow generation by capitalizing on demand for mobile data services|
|First half 2012 operating results and cash flow generation highlight continued growth|
MUNICH. Telefónica Deutschland Holding AG is preparing its initial public offering. The company aims to list its shares on the regulated market (Prime Standard) of the Frankfurt Stock Exchange in 2012. Telefónica S.A. will remain the majority shareholder of Telefónica Deutschland.
|Cash dividend payable in 2013 targeted to be around €500 million|
"The rise of Telefónica Deutschland is based on the successful implementation of our data services strategy, our strong brand portfolio and a very high customer satisfaction. Moreover, we operate in Germany, which is one of the strongest economies in Europe and one of the largest telecommunications markets in Europe," says René Schuster, CEO of Telefónica Deutschland. "We are convinced that an IPO will enable us to raise our profile further, and to continue the successful growth story of Telefónica Deutschland in Germany in the long term."
Telefónica Deutschland is the fastest-growing integrated telecoms network operator and the third largest telecommunications services provider in Germany based on 2011 revenue, serving approximately 25 million customer accesses as of June 30, 2012.
Telefónica Deutschland operates in Germany, one of the strongest economies in Europe. It offers an attractive customer proposition through its powerful brand portfolio, innovative data solutions, converged offers and strong distribution channels. The company aims to drive growth through leveraging its existing assets to outperform the market and increase revenue market share in the mobile market.
Its strong revenue growth over recent years, as well as its internal efficiency enhancement initiatives, have enabled Telefónica Deutschland to significantly increase cash flow. The company aims to keep improving OIBDA margins on the back of scale effects and efficiency improvements.
Therefore, the company intends to propose to the General Shareholders' Meeting to be held in 2013 a cash dividend for the year ending December 31, 2012, of approximately €500 million, payable in 2013 and intends to increase the amount of dividends to be distributed in future years.
Strong position to enhance further growth
With its strong multi-brand portfolio, especially the core premium O2 brand, and high levels of customer satisfaction, Telefónica Deutschland operates as an innovative challenger in Germany. The company aims to increase its mobile market share by further leveraging its portfolio.
It also intends to monetize further the opportunity of increasing consumption of data services. Telefónica Deutschland's early focus on data through innovative tariff solutions, smartphone shipments, and the development of converged offerings has translated into proven monetization of growth in data traffic. In the first half year of 2012, more than 90 percent of devices sold by Telefónica Deutschland have been smartphones. Moreover, the recent investment in LTE or 4G (the next generation mobile technology standard) spectrum, as well as in innovative product offerings and further digital services, are intended to further leverage this opportunity. In terms of investments, the company sees 2013 and 2014 as key years for its LTE rollout; however, it does not expect capital expenditures to exceed the levels reached in 2010 when 3G capacity was rolled out. Thereafter the company expects capital expenditures to decline to lower levels again.
A trend emerging in the German telecommunications market is a strengthening demand for converged offerings for fixed and mobile services. Therefore, the company intends to expand its convergence strategy to increase its share of the customer wallet and to build stronger customer relations and, as a result, reduce churn. Other elements of the company's growth strategy are new business fields such as mobile security solutions, financial services and machine-to-machine communication.
Strong Financial Profile
In 2011, Telefónica Deutschland recorded revenues of €5 billion and an operating income before depreciation and amortization (OIBDA) of €1.1 billion, corresponding to year-on-year increases in revenue of 4 percent and 5 percent in OIBDA, excluding restructuring costs in 2010.
This steady growth has continued during the first half of 2012. In this period, revenues reached €2.6 billion and OIBDA €597 million, corresponding to year-on-year increases in revenue and OIBDA of 5 percent and 12 percent, respectively.
As of September 30, 2012, Telefónica Deutschland's net financial debt was approximately €1.1 billion. Over the medium term, Telefónica Deutschland targets a leverage ratio (Net debt/OIBDA) of below 1.0.
"Our results in the first half of 2012 prove our healthy growth," says Rachel Empey, CFO of Telefónica Deutschland. "We intend to drive profitable growth and efficiency resulting in enhanced cash flow generation."
J.P. Morgan and UBS Investment Bank are acting as Global Coordinators and Joint Bookrunners of the IPO. Further Joint Bookrunners include BofA Merrill Lynch, BNP PARIBAS, Citigroup and HSBC. Banca IMI, BayernLB, BBVA, COMMERZBANK, Banco Santander and Société Générale Corporate & Investment Banking are acting as Co-Lead Managers.
Telefónica Deutschland Holding AG
Head of External Communications
t +49 (0)89 2442- 1201
m +49 (0)176 60800995
Dr. Roland Kuntze
Vice President Corporate Communications
t +49 (0)89 2442- 1201
m +49 (0)179 2952494
These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. The issuer or selling security holder has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.
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