Strong growth:O2 Telefónica significantly increases revenue thanks to strong customer growth in the third quarter
- Continued positive trend: third-quarter revenues up 6.0 percent to EUR 2.085 billion based on strong mobile service revenues (+3.7 percent) and terminal equipment business
- Higher operating profit: adjusted operating profit OIBDA increases by 4.7 percent to EUR 642 million
- Customer confidence unbroken: Additional 304,000 mobile post paid net additions (excl. M2M) in the third quarter due to strong development of the core O2 brand
O2 Telefónica confirmed its positive momentum in the third quarter even in a challenging economic environment and continued to grow strongly. Around 304,000 new contract customers (excluding M2M) opted for the network of the Munich-based telecommunications provider in the third quarter. This positive development was again driven by the core brand O2, with sustained strong demand for the innovative O2 Grow tariff. As a result of the strong operating performance, revenue and operating profit OIBDA also increased by 6.0 percent and 4.7 percent respectively. The company is progressing faster than planned with the 5G network roll-out.
Markus Haas (english subtitles)
“In a challenging economic environment, we have impressively confirmed our positive growth trends in the third quarter,” said Markus Haas, CEO of Telefónica Deutschland. “The third quarter once again shows how we are winning the trust of people in Germany for our offerings with excellent services and attractive pricing. This translates into strong financial results. Based on continued growth, we have raised our revenue and earnings guidance for the current fiscal year.”
Committed to sustainability and optimizing energy strategy
O2 Telefónica is currently optimizing its energy strategy for fiscal year 2023 and beyond. To this end, the company has now signed a long-term contract for the direct supply of green energy. O2 Telefónica is currently negotiating one to two additional power supply contracts in this context. The company has also launched a three-year energy-saving program. This includes free cooling of network elements, conversion to single RAN technology in the network, and use of artificial intelligence to put parts of the network components at the sites into standby mode at night and in rural areas when the load is low. The company is also exploring the use of solar panels to power grid sites. With the program, the company aims to achieve gross savings in electricity consumption of 20 percent annually in fiscal 2026 compared with 2021, when electricity consumption was around 730 gigawatt hours. In this way, O2 Telefónica aims to largely offset rising energy demand as a result of customers' ever-increasing data usage and the associated densification of the network. “As a company, we are committed to sustainability and we are sticking to it even in a challenging economic environment. Sustainability is the solution for us, not an additional challenge. Our energy strategy reduces our dependence on the volatile market environment in Germany,” said Markus Haas.
Positive trends in operating business confirmed
In the third quarter, the company continued its positive trend of the first half of the year and significantly increased the number of its customers. Around 304,000 mobile post paid net additions (excluding M2M) opted for O2 Telefónica. With around 47 million customers, no other provider connects more people with mobile communications in Germany.
5G network rollout progressing better than planned
The company continues to improve its performance in terms of network quality, rates and services, thus laying the foundation for further growth. The telecommunications provider is making better progress than planned with the roll-out of its 5G network. Currently, O2 Telefónica provides around 75 percent of the population with the most modern mobile communications standard 5G. This is due to the good weather in the summer months, which is important for the roll-out, the significantly reduced restrictions as a result of the Corona pandemic compared with the previous year, and an increased focus on area coverage. The investment volume remains at the originally planned level.
Strong growth in revenue and operating profit
The operating momentum translated into significantly improved financials. Revenue in the third quarter of 2022 increased by 6.0 percent to EUR 2.085 billion. This was based on strong growth in mobile service revenue of 3.7 percent to EUR 1.473 billion. Handset revenue contributed to this growth with an increase of almost 19 percent to EUR 403 million, thanks to the continued high demand for the latest 5G-capable smartphones and good availability at O2 Telefónica. Fixed revenue grew by 0.5 percent to EUR 204 million in the third quarter. Adjusted operating profit OIBDA grew by 4.7 percent to EUR 642 million due to improved mobile service revenue and efficiency gains. Profit for the period amounted to EUR 39 million.
Full-year revenue and earnings guidance raised again
Telefónica Deutschland built on previous financial years’ momentum in the final year of its three-year “Investment for Growth” program, delivering strong commercial traction and sustained financial performance in 9M 22. The company thus is regaining its mobile market share in a dynamic yet rational environment. In this context, Telefónica Deutschland upgrades its financial year 2022 outlook for both, revenues and OIBDA12, to ‘low mid-single digit percentage growth’ including anticipated energy costs of around EUR 210m. Capex/Sales (C/S) is also expected to remain unchanged at 14-15%.
|O2 Telefónica is a leading full-service provider of telecommunications services for consumers and business customers. The portfolio of the core brand O2 and various secondary and partner brands includes not only traditional telephony and Internet connections but also innovative digital services in the area of the Internet of Things and data analysis. In mobile communications, O2 Telefónica serves more than 47 million mobile lines (incl. M2M - as of September 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 Eurostoxx 600 since June 2022. In fiscal year 2021, the company generated revenues of EUR 7.8 billion with around 7,400 employees. The company is majority-owned by the Madrid-based Spanish telecommunications group Telefónica S.A., one of the largest telecommunications groups in the world.|