Dividend policy

The Company's management board and the supervisory board intend to make suggestions for the distribution of dividend to the general shareholders' meeting taking into account: (i) the profit for the year; (ii) historical and forecasted free cash flow and liquidity; (iii) distributable reserves available; (iv) benchmarking against other telecommunications companies; (v) the current and expected leverage and financial condition of the Company; (vi) the general economic and business conditions; (vii) any applicable legal and regulatory requirements; and (viii) any other factors the management board and supervisory board may deem relevant.

Financing policy*

Our management board and supervisory board intend to maintain the Company's leverage ratio (calculated by dividing net financial debt by OIBDA) below or at 1.0x over the medium term (the "Target Leverage")*. In order to assess compliance with the Target Leverage, net financial debt will be measured as interest-bearing financial liabilities less interest-bearing financial assets, cash and cash equivalents, taking into account the value of financial derivatives and hedge arrangements. According to its financing policy, the Company aims to: (i) refrain from paying dividends, distributing capital or capital reserves in cash or buying back shares, if the ratio of net financial debt/OIBDA materially and consistently exceeds the Target Leverage; and (ii) restrict the use of new debt to pay dividends, allowing it only if the ratio of net financial debt/OIBDA complies with the Target Leverage. The management board intends to maintain a high payout ratio in relation to free cash flow. With regards to the integration of the E-Plus Group, the management board and the supervisory board might also consider synergies expected to be realized in the near future when making a dividend proposal.
*Since the IPO and throughout the integration of Telefónica Deutschland Group and E-Plus Group, we have maintained a strong balance sheet and a conservative leverage[1] target of below 1.0x. This has been reflected in a solid investment grade rating from Fitch and sustained access to capital markets. Over the course of the financial year 2019 we will review our self-defined leverage target for two reasons: Firstly, we will reflect the technical changes triggered by the introduction of the IFRS 16 accounting standard. We expect the implementation of IFRS 16 to have significant effects on OIBDA, balance sheet and leverage ratios. Secondly, we envisage to move to an increased target leverage, allowing us to utilize our full financial flexibility with regard to the upcoming spectrum and 5G investments whilst maintaining our BBB investment grade rating from Fitch.
YearDistribution in totalDividend per share1)Date
2018EUR 803,129,848.11EUR 0.2721 May 2019
2017EUR 773,384,298.18EUR 0.2617 May 2018
2016EUR 743,638,748.25EUR 0.259 May 2017
2015EUR 713,893,193.32EUR 0.2419 May 2016
2014EUR 713,893,193.32EUR 0.2412 May 2015
2013EUR 524,964,338.00EUR 0.4720 May 2014
2012EUR 502,625,430.00EUR 0.457 May 2013
1)for each share entitled to dividends

Information for paying agent

BNP Paribas Securities Services S.C.A. Europa-Allee 12 60327 Frankfurt am Main

Investor Relations

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