Dividends

Dividend policy

The Company’s management board and the supervisory board intend to make suggestions for the distribution of dividends to the general shareholders’ meeting taking into account: (i) the profit for the year; (ii) historical and forecasted free cash flow adjusted for leases and excluding exceptional items and payments for spectrum as well as 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 management may deem relevant. The management board intends to maintain a high payout ratio in relation to free cash flow adjusted for leases and excluding exceptional items and payments for spectrum. With regards to the 5G network rollout and the launch of the 5G commercial offers, the management board and the supervisory board might also consider in their dividend proposal expected benefits to be realized in the future.

Financing policy

The management board and supervisory board intend to maintain the Company’s investment grade rating (BBB from Fitch or equivalent from Moody’s and S&P) as well as the leverage ratio (calculated by dividing net financial debt according to IFRS16 by OIBDA according to IFRS16) at or below 2.5x over the medium term (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. Future payment obligations in relation to the acquired 5G spectrum are not considered as financial debt. In order to assess compliance with the Target Leverage, OIBDA will be measured as operating income before depreciation and amortization for the last twelve months, excluding non-recurring and exceptional items. 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.
2020 The management board and supervisory board of Telefónica Deutschland Holding AG propose a dividend of EUR 0.18 per share for the financial year 2020 to the annual general meeting on 20 May 2021. Subject to the approval of the annual general meeting on 20 May 2021, the dividend of EUR 0.18 per share is due for payment on the third business day following the annual general meeting, i.e. on 26 May 2021, in accordance with the legal requirements of section 58 para. 4 sentence 2 of the German Stock Corporation Act (AktG). The dividend payment will be made irrespective of whether a shareholder has attended the annual general meeting. Relevant for the dividend entitlement is the "ex-dividend" day (21 May 2021). A shareholder who purchases a share on the day before acquires this "cum dividend", i.e. with dividend entitlement. Accordingly, a seller on this day also loses his dividend entitlement when he sells the share. This changes on the ex-dividend day (21 May 2021). From this day on, the share will be traded "ex-dividend", i.e. without dividend entitlement. Accordingly, a seller who sells only on the day after the annual general meeting retains his dividend entitlement, the buyer receives no dividend payment on the payment day. The dividend is paid in full from the tax contribution account within the meaning of section 27 of the German Corporation Tax Act (KStG) (contributions not made to the nominal capital). The payment is made without deduction of capital gains tax and solidarity surcharge. In the case of domestic shareholders, the dividend is generally not subject to taxation. The dividend is not subject to any tax refund or tax credit. Out of today's perspective, the dividend payment (subject to change) will continue to be made from the tax contribution account in the coming years.
YearDistribution in totalDividend per share1)Date
2019EUR 505,674,348.81EUR 0.1720 May 2020
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

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