Preliminary annual results:Telefónica Deutschland closes 2021 as record year
|Telefónica Deutschland achieves record figures for revenues, OIBDA and customer development in the past financial year|
|Forecast for sales and twice raised expectation for OIBDA adjusted for special effects in fiscal 2021 met at upper end|
|Mobile Postpaid net adds in mobile communications climbed by 1.5 million (excluding M2M) thanks to strong core brand O2|
|Revenue increased by 3.1 percent to an all-time high of EUR 7.765 billion. Mobile service revenue of EUR 5.492 billion (+3.5 percent) at record level|
|OIBDA adjusted for exceptional effects 3.9 percent higher year-on-year at EUR 2.41 1 billion|
|Network parity thanks to record investments in network and customer satisfaction. Investment focus of around EUR 1.3 billion in the 2021 financial year|
|Ambitious targets for fiscal 2022: growth in revenue and OIBDA adjusted for exceptional effects expected to be in the low single-digit percentage range above previous year, investments of over 1 billion euros planned again (investment ratio 14-15%)|
|Attractive shareholder remuneration reaffirmed, dividend proposal to the Annual General Meeting of 0.18 euros per share for fiscal 2021|
|Further substantial improvements and awards achieved in ESG activities|
Telefónica Deutschland closed 2021 as a record year. The company confirmed its strong momentum and again significantly improved operationally and financially compared to the previous year. In terms of revenue and customer development, Telefónica Deutschland achieved new records. Revenue increased by 3.1% to EUR 7.765 billion and was driven by a 3.5% increase in mobile service revenue to EUR 5.492 billion. Both figures achieved an all-time high. At EUR 2.411 billion, OIBDA adjusted for exceptional effects was 3.9% higher than in the previous year, also at a record level. Telefónica Deutschland thus met its forecast, which had previously been raised twice, at the upper end of expectations. At the same time, the company invested around EUR 1.3 billion, more than ever before in its corporate history, in network and thus in customer satisfaction. For the current fiscal year 2022, the company has again set itself ambitious targets and expects growth in revenue and OIBDA adjusted for exceptional effects in the low single-digit percentage range. It is again planning investments of over one billion euros.
"We look back on a record year 2021. Operationally and financially, we have been able to leverage our strong momentum. We set new records for revenue, earnings and customer development. The investments in our very good network and the satisfaction of our customers are paying off. Millions of people switched to O2 Telefónica in the past financial year. We want to continue this excellent development at full speed with our great team in 2022," said Telefónica Deutschland CEO Markus Haas.
Market share gained and customer satisfaction improved
Independent tests confirm that Telefónica Deutschland's mobile network has reached network parity. Combined with an excellent price-performance ratio, the company was able to gain market share in the fiscal year 2021 and record more than 1.5 million additional postpaid mobile net additions. This is an increase of 46% year-on-year and the largest growth in the company's history since the merger with E-Plus in 2014. At the same time, fewer customers than ever switched to other providers. The so-called monthly churn rate at the core brand O2 was 0.9%. This means that less than one percent of O2 customers switched to another provider each month. Around 46 million mobile lines now use the O2 network for telephony and mobile data. Data consumption rose to more than 2.4 billion gigabytes in the 2021 financial year. No provider thus transports more mobile data in Germany, and none connects more people with mobile communications.
Operational success translates into financial performance
This operational development also translated into financial improvements. Revenue increased on a broad basis by 3.1% to 7.765 billion euros. The company had forecast a slightly positive year-on-year development here for the financial year. Mobile service revenue climbed 3.5% to a record EUR 5.492 billion. In addition to the strong core brand O2, the partner business and the business customer unit also continued to perform well. In the partner business, Lebara, a prominent new entrant, was acquired for the Telefónica Deutschland network for the financial year 2022. In the Business Customers segment, the company recorded sustained strong momentum. Numerous new customers were acquired for O2 Business, including various large enterprises. The company was also able to tap into new markets in the areas of 5G campus networks and Internet of Things (IoT) solutions, winning new customers for these future technologies in the form of Helios and Dataport, for example. Sales revenue from Hardware increased by 1.9% to EUR 1.450 billion in the fiscal year. This continued the trend of recent years, with increasing demand for high-quality terminal equipment. Fixed-network business continued to develop positively. Here, revenue increased by 3.6 percent to EUR 814 million.
Adjusted operating profit OIBDA increased by 3.9% above the already strong prior-year figure, thus also reaching a record level. The sustained high demand for premium O2 tariffs delivered value-driven growth and corresponding contributions to earnings. The share of own sales channels in the Internet and retail also had a positive impact on earnings development. Telefónica Deutschland had raised its original forecast for OIBDA twice in the course of the fiscal year 2021 and most recently held out the prospect of a year-on-year increase in growth in the low mid-single-digit percentage range. The increase of 3.9% achieved was thus at the upper end of this forecast. Total profit for the period was 211 million euros for the fiscal year.
Sustained momentum in Q4
The very good development in the 2021 financial year was also supported by strong momentum in the fourth quarter. The number of mobile postpaid net additions recorded strong growth with more than 518,000 net additions. Revenue increased by 1.6% to EUR 2.055 billion in Q4 2021, mainly driven by the continued strong performance of the core brand O2. Mobile service revenue climbed 2.6% to EUR 1.394 billion. The partner business and business customer segment also developed solidly in the reporting period. OIBDA adjusted for exceptional effects decreased by 2.3% to EUR 624 million in Q4 2021, mainly due to temporary increases in commercial and non-commercial costs. Among other things, this is reflected in COVID-19-related postponement of marketing expenses into the second half of the year. With the increased marketing spend in the final quarter of 2021, commercial momentum and brand awareness should already be strengthened with a view to fiscal 2022.
Record investment and rapid progress in network expansion
In addition to operational and financial improvements, Telefónica Deutschland continued to drive forward the expansion of its network and the improvement of the customer experience in the financial year 2021. With around EUR 1.3 billion, the company invested over 17% more than ever before in the expansion of its mobile network and the satisfaction of its customers. Telefónica Deutschland is rolling out the new mobile technology 5G at record speed. At the end of the year, around 30% of the German population was covered by the company's 5G, and this figure is set to rise to 50% by the end of 2022. In 4G, the company achieved population coverage of over 99% by the end of 2021, with largely full coverage of key transport routes. 4G area coverage is benefiting from the faster than originally planned 3G network shutdown at the end of 2021, with additional sites in underserved regions to be added via sharing agreements in gray areas during 2022. In parallel, the company is developing further white spots in network coverage on its own and in cooperation with its competitors. In 2022, the company again plans to invest more than EUR 1 billion.
Leading role in ESG
With the accelerated 3G switch-off by the end of 2021, the company has also improved the energy efficiency of its mobile network and achieved its 2025 energy efficiency target ahead of schedule. Accordingly, the company raised its 2025 network energy efficiency target to 87% reduction in energy consumption per data volume (GWh/PB) from 82% previously. In the past fiscal year, the company significantly reduced its CO2 emissions by a further 20,000 tons or so. The leading ESG rating providers rate Telefónica Deutschland highly and recognize it for its leading ESG strategy. Most recently, the company improved its ESG ratings from Sustainalytics and EcoVadis and was again included in the internationally acclaimed Bloomberg Gender Equality Index in 2022. ESG stands for Environment, Social, Governance.
High level of ambition for 2022 as well
Telefónica Deutschland expects both revenues and OIBDA adjusted for exceptional effects to grow in the low single-digit percentage range year-on-year in the financial year 2022. The OIBDA margin is to be further expanded. In order to fully exploit the growth opportunities in revenues and OIBDA, Telefónica Deutschland will continue its network-oriented investment program. Telefónica Deutschland expects the investment ratio to be between 14% and 15% in the fiscal year 2022 and to normalize towards the end of the year. Telefónica Deutschland's assumptions are based on largely unchanged macroeconomic conditions, current competitive dynamics and existing wholesale relationships. At the same time, management continuously monitors and analyzes the impact of the COVID-19 environment, including the development of global supply chains, on the company's performance.
|O2 Telefónica Deutschland offers telecommunications services for consumers and business customers as well as innovative digital products and services in the area of the Internet of Things and data analytics. The company is one of the leading integrated telecommunications providers in Germany. In mobile communications alone, O2 Telefónica Deutschland serves more around 46 million mobile lines (incl. M2M - as of 09/30/2021). No network operator connects more people in this country. Under its core brand O2 and various secondary and partner brands, the company sells postpaid and prepaid mobile communications products with innovative mobile data services. The basis for this is the mobile communications network based on a highly resilient GSM, UMTS and LTE infrastructure. At the same time, the company is building a powerful and energy-efficient 5G network. O2 Telefónica Deutschland also provides telephony and high-speed Internet products based on various technologies in the fixed-network area. Telefónica Deutschland Holding AG has been listed in the Prime Standard segment of the Frankfurt Stock Exchange (TecDAX) since 2012. In the 2021 financial year, the company generated revenue of EUR 7.8 billion with around 7,400 employees. The company is majority-owned by the Spanish telecommunications group Telefónica S.A., headquartered in Madrid. With business activities in 14 countries and a customer base of around 345 million lines, the Group is one of the world's largest telecommunications providers.|
Written by: Alexander Becker
Alexander Becker ist Pressesprecher für Finanzthemen sowie für Fragen rund um die Innovationsfabrik Wayra.