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27.07.2022

Quality leap provides additional boost:O2 Telefónica achieves record results in first half of 2022

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  • Strong growth: revenues up 5.5 percent to EUR 3.95 billion in the first half-year, supported by strong growth in mobile service revenues (+2.8 percent)
  • Higher profit: adjusted operating profit OIBDA grows by 4.9 percent to EUR 1.23 billion
  • Significant customer gains: +661,000 mobile postpaid adds (excluding M2M) in the first half of the year, driven by core brand O2
  • Accelerated network rollout: 5G coverage target of 50 percent of the population in 2022 achieved six months earlier than planned
  • Expansion of guidance for the 2022 financial year: low to low mid-single digit percentage growth for adjusted operating profit OIBDA
Both sales and adjusted operating profit OIBDA increased significantly.
O2 Telefónica closes the first half of 2022 with a record performance. Investments in improved network quality, innovative tariffs, excellent services, and greater sustainability are once again giving the company a significant performance boost for its customers. Both revenue and adjusted operating profit OIBDA increase significantly in the first half of 2022. As a result, the company is expanding its guidance and expects low to low mid-single digit percentage growth in adjusted OIBDA in fiscal year 2022.
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Markus Haas (english subtitles)
"O2 Telefónica's record figures in business development and 5G network rollout in the first half of the year impressively underline that our investments are paying off. We intend to continue on our growth path," said Telefónica Deutschland CEO Markus Haas. "Our customers receive an increasingly strong package of network, tariff, service and an improved environmental balance. This is something we are proud of. Our products are getting better every day. This gives us the necessary tailwind for the future. Our investments and quality enhancements will make an even better contribution to our commercial success in future offerings."

Record revenues and operating profit

Credits: Gettyimages (edited)
The positive development in the first half of the year is attributable to strong growth in mobile service revenues.
The improved performance is clearly reflected in the first-half results: Revenues increase by 5.5 percent to 3.95 billion euros in the first half of 2022. A significant increase of 5.8 percent in the second quarter ensures that O2 Telefónica exceeds the EUR 2 billion revenue mark per quarter. This positive development in the first half of the year is attributable to strong growth in mobile service revenues, which increased by 2.8 percent to a total of EUR 2.75 billion. In the second quarter, the figure was EUR 1.4 billion, which is 2.3 percent higher than in the prior-year period. Due to the unabated high demand for current 5G-capable smartphones and good availability at O2 Telefónica, the company increases handset revenues by more than 18 percent to EUR 787 million in the first six months of the year. Revenues from fixed-network lines with high bandwidths grow by 2.1 percent in the first half of the year. In the second quarter, growth was as high as 2.5 percent. Since May 2022, O2 has been marketing Internet speeds of up to 1 Gbit/s to more than 22 million cable households. To mark O2's 20th anniversary, consumers can book these at a particularly good price-performance ratio.

O2 Grow anniversary tariff ensures strong customer growth

Credits: Gettyimages (edited)
In the first half of the year, O2 Telefónica gained around 661,000 new postpaid customers.
Improved performance in terms of network quality, tariffs and services continues to lead to significant growth in the number of mobile postpaid adds. In the first half of the year, O2 Telefónica gained around 661,000 new postpaid customers (excluding M2M). Demand continues to grow: In the second quarter alone, around 374,000 new postpaid customers (excluding M2M) opted for the telecommunications provider's offerings - driven by core brand O2 and the innovative anniversary tariff O2 Grow. No other provider connects more people with mobile communications in Germany.

Higher earnings enable expansion of full-year guidance

Despite all the macroeconomic challenges, the company is even more confident for the current financial year.
The positive trend is also reflected in higher bottom-line earnings: adjusted operating profit OIBDA grows by 4.9 percent to EUR 1.23 billion due to improved mobile service revenues and effective cost management. Despite all the macroeconomic challenges, the company is even more confident for the current financial year: O2 Telefónica is therefore extending its guidance and expects low to low mid-single digit percentage growth in adjusted operating profit OIBDA in the financial year 2022. In the second quarter, adjusted operating profit increases by 2.7 percent. On the bottom line, O2 Telefónica again generates positive net income of EUR 67 million in the first half of the year.

5G expansion target 2022 reached early

Credits: O2 Telefónica
By the end of 2022, the company now aims to cover at least 60 percent of the population with 5G.
The company's significantly improved network quality also forms the foundation for this success. In the first half of the year, O2 Telefónica made rapid progress in the 5G network rollout: since June, the telecommunications provider has been supplying 50 percent of the population with its fast O2 5G network. This means that O2 Telefónica has already achieved this year's 5G expansion target six months ahead of schedule. This is based on efficient investments of EUR 556 million (+9.5 percent) in the first half of the year. By the end of 2022, the company now aims to cover at least 60 percent of the population with 5G. As a result, millions of consumers in Germany will benefit even faster from the modern 5G mobile communications standard in the O2 network. This can still be achieved with the planned investment volume due to further efficiency improvements in the rollout. As part of the nationwide expansion program, O2 Telefónica is also investing heavily in additional capacities for mobile data usage. In the first half of 2022 alone, the O2 network transported almost 1.6 billion gigabytes of data volume due to the growing data hunger of German consumers. That is around 50 percent more than in the same period of the previous year. This exponential growth is primarily a result of the fact that customers are using mobile data for the offerings of the major U.S. streaming and messaging providers. O2 Telefónica therefore advocates the financial participation of streaming providers in network investment in Germany.

Sustainability is an integral part of an improved service offering

Credits: Gettyimages (edited)
Overall, the company is on a very good track in improving its carbon footprint with the aim of reducing its emissions by 90 percent by 2025.
Sustainable customer solutions play a central role in O2 Telefónica's service offering. For example, since May the company has been offering a new service within its used smartphone purchasing program, where the residual value of the used end device can be offset directly. Overall, the company is on a very good track in improving its carbon footprint with the aim of reducing its emissions by 90 percent by 2025 at the latest and offsetting residual emissions to achieve net CO2 neutrality (Scope 1 and 2). This is already the case today in the O2 network. To also reduce CO2 consumption that occurs along the supply chain (Scope 3), the company collects climate-focused data from around 1,000 suppliers, among others. In the first half of the year, it was already possible to ascertain the high level of climate maturity of important SIM card manufacturers. The company is thus making important progress toward becoming the most sustainable telecommunications provider in Germany.
For more detailed informations on the financial results see https://www.telefonica.de/investor-relations-en/publications/financial-publications.html
O2 Telefónica is a leading full-service provider of telecommunications services for consumers and business customers. In addition to traditional telephony and Internet connections, the portfolio of the core brand O2 and various secondary and partner brands also includes innovative digital services in the area of the Internet of Things and data analysis. In mobile communications, O2 Telefónica serves around 47 million mobile lines (incl. M2M - as of June 30, 2022). No other network operator connects more people in this country. The company's high-performance, award-winning mobile network reaches over 99% of the population. In the fixed network, O2 Telefónica offers its customers the greatest technological diversity and geographical availability of any provider in Germany. Telefónica Deutschland Holding AG is listed on the TecDAX and MDax and has been part of the Stoxx Europe 600 since June 2022. In fiscal year 2021, the company generated revenues of 7.8 billion euros with around 7,400 employees. The company is majority-owned by the Spanish telecommunications group Telefónica S.A., headquartered in Madrid, one of the largest telecommunications groups in the world.