Interim announcement on the first quarter of 2022:Telefónica Deutschland starts strongly into fiscal year 2022
- Telefónica Deutschland confirms sustained momentum in first quarter of fiscal year 2022 and continues profitable growth
- Number of mobile postpaid adds increases by 287,000 (excluding M2M) driven by core O2 brand
- Important milestone in network roll-out reached with now more than 10,000 5G antennas in place
- Revenue increased significantly by 5.2% to EUR 1.946 billion. Margin improvement accelerates OIBDA growth adjusted for special effects by a strong 7.2% to 602 million euros
- ESG pioneering role in the industry confirmed
- Full-year 2022 outlook for sales and OIBDA confirmed
Telefónica Deutschland has confirmed its strong momentum from the record year 2021 and again grew dynamically in the opening quarter of 2022. The operating momentum accelerated further in the process. The number of contract lines in mobile communications increased by 287,000 and was thus above the prior-year figure of 220,000. The portfolio of the core brand O2 continues to be equally attractive for new and existing customers, which is reflected in a low churn rate of 1.2%. Telefónica Deutschland achieved a 5.2% increase in revenues. This very strong revenue development translated into a disproportionately strong earnings development. OIBDA adjusted for special effects climbed significantly by 7.2% year-on-year. The company reaffirmed its sales and earnings targets as well as its investment plans for the full year 2022.
"We have confirmed our sustainable momentum in the first quarter and have started strongly into fiscal 2022. Currently, we do not see any direct impact of the terrible war in Ukraine and the weakening macroeconomic development on our operating business. Accordingly, we confirm our outlook for revenues and OIBDA for fiscal year 2022," said Telefónica Deutschland CEO Markus Haas.
5G rollout reaches important milestone
By the end of the first quarter of 2022, Telefónica Deutschland has reached an important milestone in its nationwide 5G network expansion offensive: around 10,000 5G antennas are transmitting on the O2 network. This means that O2 currently supplies around 40% of the population with 5G. After the launch of the 5G network in October 2020, O2 has continuously accelerated its network expansion and brought the mobile high-speed standard to more and more cities and also rural communities. The company is consistently continuing its network expansion offensive: by the end of the year, the provider will cover half of the population with its 5G network, and the whole of Germany by the end of 2025.
Customer base continues to grow
The investments in network expansion combined with an excellent price/performance ratio have resulted in further strong growth in the number of mobile customers. The company recorded 287,000 new mobile postpaid adds (excluding M2M) in the first quarter of the 2022 financial year, further accelerating the strong momentum. In the previous year, the number of mobile postpaid adds was 220,000. The churn rate was a low 1.4 percent on average per month. At O2, this figure was even lower at 1.2 percent. The business customer segment was able to confirm its positive development.
O2 celebrates 20th birthday with rate innovation
O2 celebrated its 20th birthday on May 1. The core brand of Telefónica Deutschland has repeatedly shaped the telecommunications market in this country with innovative products. To mark its 20th birthday, the company presented another innovation: the O2 Grow promotional rate. It is Germany's first mobile rate plan that automatically grows in line with increasing data usage: customers are automatically added 10 GB per month every year at no extra charge.
Revenue growth driven by mobile service revenue
Driven by the strong operating performance of the O2 brand, revenue in the first quarter increased by 5.2% to EUR 1.946 billion. Mobile service revenue grew by 3.3 percent to EUR 1.351 billion. Hardware revenue climbed 13.2% to EUR 392 million on strong demand for high-end handsets. At EUR 197 million, revenue from fixed-network/DSL was 1.6 percent below the prior-year figure. This was due in particular to the regulation-induced decline in the low-margin international carrier voice business. Demand for fixed-network lines with high bandwidths continues unabated and the positive trend in fixed-network service revenues remains intact, with growth of 1.8% year-on-year.
Overproportionately high growth in profit
OIBDA adjusted for special factors developed disproportionately to revenue thanks to an improvement in margins. It rose by a strong 7.2% to 602 million euros in the reporting period. The OIBDA margin adjusted for special items improved to 30.9% from 30.3% in the prior-year period. Net profit for the period amounted to 27 million euros, compared with a net loss of 40 million euros in the first quarter of the previous year.
ESG pioneering role confirmed
At Telefónica Deutschland, profitable growth and sustainability go hand in hand. In terms of ESG - Environmental, Social and Governance - the company has set itself ambitious targets as a pioneer in its industry. The O2 network is already powered 100 percent by green electricity, making it net CO2 neutral. As a whole company, Telefónica Deutschland aims to be net CO2 neutral by 2025 at the latest. This is the goal of the Responsible Business Plan 2025 with a total of 76 sustainability measures. One example is the company's "Reduce-Repair-Recycle" measures. By shipping around 8.6 million SIM cards in half-SIM card format, we also saved over 17 tons of plastic in 2021. These and many other facts and figures on our commitment to the environment and society can be found in the recently published Corporate Responsibility Report 2021.
Full-year forecasts confirmed
Based on the good development in the first quarter, the company confirmed its sales and earnings targets as well as its investment plans for the full year 2022.
|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 serves around 46 million mobile lines (incl. M2M - as of 31.03.2022). 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 and LTE infrastructure. At the same time, the company is building a powerful and energy-efficient 5G network. O2 Telefónica 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 12 countries and a customer base of around 369 million lines, the Group is one of the world's largest telecommunications providers.|