Annual General Meeting of Telefónica Deutschland:

Shareholders informed about company's successes with the integration and transformation

At its Annual General Meeting today, Telefónica Deutschland Holding AG provided detailed information on its achievements in the first full year following the merger with E-Plus. The management reported on operational developments as well as the progress with the integration and digital transformation of the company. A large majority of the shareholders in attendance at the Kongresshalle at Theresienhöhe in Munich voted to approve the resolutions put forward by the Management Board. As in the previous year, the shareholders will receive a cash dividend of EUR 0.24 per share for the 2015 fiscal year.
Thorsten Dirks, Rachel Empey & Markus Haas
"We have met and in some cases exceeded our targets for 2015," said Thorsten Dirks, the CEO of Telefónica Deutschland. "We have made real progress towards our goal of becoming Germany’s Leading Digital Telco. At the same time we have maintained our strong momentum in the market. We are right on track." Telefónica Deutschland increased its revenues amid a challenging market environment and improved its operating income adjusted for exceptional effects (OIBDA) by a very substantial 20.5 percent, mainly owing to synergy effects. Dirks noted that the capture of synergies has exceeded expectations, with 35 percent of the target synergy volume of a total EUR 800 million per year already achieved in the first full year since the merger with E-Plus. This is expected to increase to more than 50 percent by the end of the current year.

Digitalisation strategy mapped out – growth areas defined

Dirks commented in detail on the opportunities which digitalisation presents to Telefónica Deutschland. "We provide reliable, high-performance networks without which digitalisation would not function," said the CEO. As a result, Telefónica Deutschland is delivering the essential raw materials needed by a mobile and digital society, according to Dirks. With Vision 2020, he added, the company has precisely mapped out its digitalisation strategy and clearly defined its growth areas. Vision 2020 calls for the expansion of the company's business activities in advanced data analytics (ADA) and the internet of things (IoT), among other fields. This will create opportunities to gain valuable knowledge through the analysis of anonymised data gained through its everyday business. Moreover, Telefónica Deutschland is well-positioned to benefit from the rapid growth in the networking of devices, machines and vehicles, building on already successful operations in this area.

"Right on track" in the current fiscal year

Rachel Empey, who is responsible for finance and strategy in the Telefónica Deutschland Management Board, underlined the company’s financial success in 2015 as well as the first quarter 2016, emphasizing its high level of investment. "Including spectrum investments, we invested more than EUR 2.2 billion in 2015," she said. A large share of this will lead to long-term improvements in the network experience and thus directly benefit the customer, according to the CFO. Empey also reaffirmed the outlook for the current financial year. In 2016, with the integration of the networks and IT and the repositioning of the brand portfolio, decisive major projects are on the agenda. "A look at what we have achieved since the start of the year makes it clear that we're right on track," she concluded. In a market environment that remains challenging, Telefónica Deutschland expects slightly negative to broadly stable mobile service revenues in the current year. Growth in OIBDA is expected to continue in the low to mid-single digit year on year range. Empey also expects the capture of further synergies to have a further positive effect.

Dividend yield remains attractive

In the course of voting on the resolutions, the shareholders voted to approve the distribution of profits as proposed by the Management Board and Supervisory Board. For the financial year 2015, Telefónica Deutschland Holding AG will pay out an unchanged cash dividend of EUR 0.24 per share, or EUR 714 million in total. Based on the share price on the day before the AGM, this results in a dividend yield of 5.1 percent. A large majority of the shareholders approved the resolution to discharge the members of the Management Board and Supervisory Board and elected Peter Erskine to the Supervisory Board to replace the retiring member Antonio Manuel Ledesma Santiago. In addition, the AGM approved the proposed resolutions for authorization for the acquisition of own shares and the creation of a new authorised capital. This provides Telefónica Deutschland above all with greater financial flexibility. At present, no concrete capital measures are planned. The shareholders in attendance represented 94 percent of the share capital.