Annual results 2022:O2 Telefónica accelerates growth and looks confidently to the new financial year
- O2 Telefónica exceeds targets for three-year "Investment for Growth" strategy programme
- Continued operational momentum accelerates growth in revenue (+5.9 percent) and OIBDA adjusted for exceptional effects (+5.3 percent). Revenue climbs above the 8 billion euro mark for the first time
- Number of mobile contract lines increases by more than 1.2 million thanks to the strong core brand O2
- Strong network expansion momentum meets expansion obligations as far as legally and actually possible and already delivers 5G coverage to more than 80 percent of the population
- O2 Telefónica confident about 2023 financial year and plans to continue growth trajectory; revenues and OIBDA adjusted for non-recurring items expected to grow by low single-digit percentage year-on-year
O2 Telefónica CEO Markus Haas looks back on a year with unexpected challenges: "In a challenging economic environment, O2 Telefónica closed the financial year 2022 extraordinarily successfully. Our 'Investment for growth' programme launched in 2020 was ambitious and delivered impressive results. Our network is very good and we are gaining market share. Our business performance is leading the German mobile market and we have further strengthened our ESG leadership. Based on this momentum, we are confident about the 2023 financial year and aim to continue to grow faster than the market. I thank the whole team O2 Telefónica for the great results and look forward to approaching the new year with our unique 'can do' spirit."
With a mobile network at eye level and excellent value for money, O2 Telefónica gained more than 1.2 million mobile postpaid net additions. Revenues increased by 5.9 percent to 8.224 billion euros in the 2022 financial year, exceeding the 8 billion euros mark for the first time in the company's history. Drivers of this revenue development was once again mobile service revenue with an increase of 4.6 per cent to 5.742 billion euros and a high increase in hardware revenue of 13.9 percent to 1.652 billion euros. OIBDA adjusted for exceptional effects increased by 5.3 percent to 2.539 billion euros. Profit for the period increased by almost 10 percent to 232 million euros.
Three-year investment programme successfully implemented
With these new records in revenue and profit in the financial year 2022, O2 Telefónica successfully completes its three-year "Investment for Growth" programme. In the process, the company clearly exceeded the targets it had set. During the period of the programme, revenues increased cumulatively by more than 10 percent, twice as much as forecast at the beginning of the program. The mobile gross margin improved by more than 1.5 percentage points in the reporting period. The programme focused on investments in the mobile network and services. These amounted to around 3.6 billion euros and led to a significant improvement in the network experience of O2 Telefónica customers. In the three years of the programme, O2 received the grade "very good" three times in the network test of the trade magazine "connect" and improved its scores with each year. The coverage of the population with 4G mobile communications was over 99 percent at the end of the business year. O2 Telefónica expanded the new 5G network at record speed. By the end of the 2022 financial year, more than 80 per cent of the German population could already surf and make phone calls with the new super-fast mobile standard. As a result, O2 Telefónica gained more than 3.8 million mobile post paid net additions in the three years and increased its market share in mobile service revenues by 1.4 percentage points to more than 33 percent by the end of 2022. No other provider is currently growing as dynamically as the company, and no one connects more people with mobile communications in Germany.
Strong O2 core brand as growth driver
A key success factor was the strong development of the core brand O2, both in terms of new customer acquisition and sales development. The so-called monthly churn rate at O2 reached historic lows in the course of the three-year programme and was 1.1 percent in the financial year 2022. Only about one percent of O2 customers switched to another provider per month. In May 2022, the O2 brand celebrated its 20th birthday and looked back on 20 years of innovation in the German mobile market. With the O2 Grow, the company introduced Germany's first mobile tariff that automatically grows along with increasing data usage: customers are automatically added 10 GB per month every year at no extra charge. The O2 Grow tariff is a successful model: almost every second O2 customer opted for the O2 Grow tariff in 2022.
Stricter definition for active prepaid customer base
O2 Telefónica will apply a stricter definition for active SIM cards of its prepaid customers at the end of the financial year 2022. This step is revenue neutral and aims to reduce the technical fluctuations of the customer base in this segment. This technical and revenue-neutral effect, in combination with the general trend towards postpaid tariffs, reduced the number of prepaid customers by around 2.5 million to approximately 16 million customers at the end of the financial year. The total number of mobile connections is thus more than 44 million, or 42.6 million excluding SIM cards for machine-to-machine communication (M2M).
Leading role in ESG expanded
Even in a macroeconomically volatile environment, sustainability remains an integral part of O2 Telefónica's corporate strategy. External rankings confirm the company's leading role in the telecommunications industry and the German economy in the sustainability criteria Environmental, Social and Governance (ESG). O2 Telefónica received the best ESG risk score in Germany in 2022 in the telecommunications services category of the sustainability rating specialist Sustainalytics. Globally, the company is ranked 3rd out of more than 200 companies in this category. O2 Telefónica is also listed in the Bloomberg Gender Equality Index for the fourth year in a row and has again improved its overall score.
Attractive shareholder remuneration - 0.18 euro dividend
As a company, O2 Telefónica is committed to attractive shareholder remuneration. In view of the good operational and financial performance, the Management Board proposes a dividend of 0.18 euros per share for the financial year 2022, in line with the announced dividend floor.
Further growth expected in financial year 2023
In the financial year 2023, O2 Telefónica will build on the good momentum of the past financial years and the successful completion of the three-year "Investment for Growth" programme and continue on its growth path. For the financial year 2023, O2 Telefónica expects low single-digit percentage year-on-year growth in revenues and OIBDA adjusted for exceptional effects. Further details on the business development and the outlook for the year 2023 at Financial publications.
Link to the data tables. More detailed information regarding the financial result can be found here: Financial publications
|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.|