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OFFON

TELEFÓNICA DEUTSCHLAND HOLDING AG

(O2D)
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PRESS RELEASE : Telefónica Deutschland Holding AG: -2-

07/28/2021 | 01:31am EDT
fees were EUR 6m in Q2 21 and EUR 15m in H1 21 (EUR 8m in Q2 20 and EUR 16m in H1 20). 
 
OIBDA^[6] grew +10.8% y-o-y to EUR 612m in Q2 21 (+8.2% y-o-y to EUR 1,173m in H1 21) reflecting improved revenue 
quality, operating efficiencies and effective C-19 cost management as well as non-recurrent special factors^[7] and 
received social security payments in Q2 21 and Q2 20 (underlying^[8] growth +3.6% y-o-y in Q2 21 and +3.5% y-o-y in H1 
21). OIBDA^6 margin stood at 32.3% in Q2 21 (31.3% in H1 21), up +1.5 p.p. y-o-y in Q2 21 as well as in H1 21, 
reflecting the before mentioned effects. 
Depreciation & Amortisation totalled EUR 1,186m in H1 21, up +6.9% y-o-y. The increase in D&A is due to a combination 
of the earlier 3G switch off by YE21 and higher RoU asset amortisation while somewhat offset by the UMTS licenses 
having reached their end of useful life at YE20. 
Operating income for the first 6M of 2021 stood at EUR -29m compared to EUR -30m in the prior year. 
Net financial expenses accounted for EUR -33m in H1 21 versus EUR -32m in H1 20. 
Income tax was EUR -21m in the first 6M of 2021 (EUR 0m in H1 20) 
Total profit for the period stood at EUR -84m in the first half-year of 2021 compared to EUR -62m in H1 20. 
CapEx^[9]increased +11.5% y-o-y amounting EUR 280m in Q2 21 (+6.9% y-o-y to EUR 508m in H1 21) with a C/S ratio of 
14.8% (13.6% in H1 21). The CapEx^9 deployment comes with backend-loaded annual phasing as Telefónica Deutschland is 
executing its 'investment for growth' programme according to plan to capture valuable revenue and OIBDA growth 
opportunities. 
Operating cash flow (OIBDA^[10] minus CapEx^9) increased +7.4% y-o-y and reached EUR 649m after the first 6 months of 
2021. Excluding exceptional effects, operating cash flow amounted to EUR 666m in H1 21, up +9.1% y-o-y. 
Free cash flow (FCF)^[11]amounted to EUR 382m in H1 21 compared to EUR 316m in the first 6M of 2020. Lease payments, 
primarily for leased lines and antenna sites, amounted to EUR -368m in the first 6 months of 2021 (EUR -336m in H1 20). 
As a result, FCFaL is already positive with EUR +14m in H1 21 compared to EUR -20m in H1 20. 
Working capital movements were negative in the amount of EUR -253m in H1 21. This development was mainly driven by a 
decrease in capex payables (EUR -158m), increased pre-payments (EUR -45m), net restructuring impacts (EUR +9m) as well 
as other working capital movements of EUR -59m. The latter include the development of net receivables of EUR +71m 
(including factoring), which was outweighed by other working capital movements, especially a decrease in trade and 
other payables (EUR -142m). 
Consolidated net financial debt^[12] amounted to EUR 3,888m as of 30 June 2021, and included the FY20 dividend payment 
of EUR 535m in May as well as an increase in lease liabilities of EUR 131m due regular contract renewals. The resulting 
leverage ratio of 1.6x^[13] remained well below the company's self-defined target ratio of at or below 2.5x and leaves 
comfortable leverage headroom with regards to the company's BBB-rating with stable outlook by Fitch. 
Financial outlook 2021 
Telefónica Deutschland delivered strong operational and financial momentum in a rational market environment in H1 2021. 
The focused execution of the company's growth-oriented investment programme is bearing fruit while C-19 related 
restrictions weighed on commercial activities and international roaming revenues particularly in the first four months 
of the year. Telefónica Deutschland registered strong trading momentum especially the second quarter of the year with 
continued traction of the O[2 ]Free portfolio leveraging online channels and historic low churn rates. The dynamic was 
reinforced by the gradual reopening of the O[2] shops and the accompanying network marketing campaign. Also, 
performance of partner brands was solid. 
Consequently, Telefónica Deutschland posted good operational and financial performance with progress in underlying 
trends as the company continued to focus on profitable growth. C-19 related impacts have mostly annualized with 
pandemic related measures being gradually lifted over the course of the second quarter. All O[2] shops are open again 
since the beginning of June. Travel restrictions limiting roaming activities saw a gradually easing towards the start 
of the German school holiday season. 
At the same time, Telefónica Deutschland continues to pursue its path of digital transformation to make its business 
model 'simpler, faster and better' and to benefit from revenue growth as well as efficiency gains. Telefónica 
Deutschland emphasizes sustainable growth and, as part of its ESG targets, is committed to achieve net zero carbon 
emissions by no later than 2025. 
Against this background, Telefónica Deutschland is updating its FY 2021 outlook as below: 
Financial year 2021 total revenues and OIBDA adjusted for exceptional effects are both expected to be 'slightly 
positive' year-over-year, respectively. 
The company's CapEx deployment comes with backend-loaded phasing in 2021 as Telefónica Deutschland is executing its 
network-focused 'investment for growth' programme to capture available revenue and OIBDA growth opportunities. The 
expected Capex to Sales ratio remains unchanged at 17% - 18% in FY2021. 
Telefónica Deutschland's assumptions are based on broadly unchanged overall economic conditions, current competitive 
dynamics, and existing wholesale relationships. At the same time, management is continuously monitoring and analysing 
the further C-19 developments. 
                                  Baseline                Outlook                    Actuals            Updated 
                                    2020                   2021                      H1 2021         Outlook 2021 
Revenue                          EUR 7,532m      Flat to slightly positive      EUR 3,743m         Slightly positive 
                                                           y-o-y                (+2.9% y-o-y)^[14]       y-o-y 
OIBDA                            EUR 2,319m Broadly stable to slightly positive EUR 1,174m         Slightly positive 
Adjusted for exceptional effects                           y-o-y                (+8.2% y-o-y)^[15]       y-o-y 
Capex to Sales Ratio               14.5%                  17-18%                      13.6%             17-18% 

Link to detailed Data Tables

Further information

Telefónica Deutschland Holding AG

Investor Relations

Georg-Brauchle-Ring 50

80992 München

Christian Kern, Director Investor Relations; (m) +49 179 9000 208

Marion Polzer, CIRO, Head of Investor Relations; (m) +49 176 7290 1221

Eugen Albrecht, CIRO, Senior Investor Relations Officer; (m) +49 176 3147 5260

(t) +49 89 2442 1010

ir-deutschland@telefonica.com

www.telefonica.de/investor-relations

Disclaimer:

This document contains statements that constitute forward-looking statements and expectations about Telefónica Deutschland Holding AG (in the following "the Company" or "Telefónica Deutschland") that reflect the current views and assumptions of Telefónica Deutschland's management with respect to future events, including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations which may refer, among others, to the intent, belief or current prospects of the customer base, estimates regarding, among others, future growth in the different business lines and the global business, market share, financial results and other aspects of the activity and situation relating to the Company. Forward-looking statements are based on current plans, estimates and projections. The forward-looking statements in this document can be identified, in some instances, by the use of words such as "expects", "anticipates", "intends", "believes", and similar language or the negative thereof or by forward-looking nature of discussions of strategy, plans or intentions. Such forward-looking statements, by their nature, are not guarantees of future performance and are subject to risks and uncertainties, most of which are difficult to predict and generally beyond Telefónica Deutschland's control and other important factors that could cause actual developments or results to materially differ from those expressed in or implied by the Company's forward-looking statements. These risks and uncertainties include those discussed or identified in fuller disclosure documents filed by Telefónica Deutschland with the relevant Securities Markets Regulators, and in particular, with the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - BaFin). The Company offers no assurance that its expectations or targets will be achieved.

Analysts and investors, and any other person or entity that may need to take decisions, or prepare or release opinions about the shares / securities issued by the Company, are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this document. Past performance cannot be relied upon as a guide to future performance.

Except as required by applicable law, Telefónica Deutschland undertakes no obligation to revise these forward-looking statements to reflect events and circumstances after the date of this presentation, including, without limitation, changes in Telefónica Deutschland's business or strategy or to reflect the occurrence of unanticipated events.

The financial information and opinions contained in this document are unaudited and are subject to change without notice.

This document contains summarised information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information, including if it is necessary, any fuller disclosure document published by Telefónica Deutschland.

(MORE TO FOLLOW) Dow Jones Newswires

July 28, 2021 01:30 ET (05:30 GMT)

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Financials
Sales 2021 7 690 M 9 027 M 9 027 M
Net income 2021 -91,2 M -107 M -107 M
Net Debt 2021 3 326 M 3 904 M 3 904 M
P/E ratio 2021 -81,0x
Yield 2021 7,53%
Capitalization 7 085 M 8 315 M 8 317 M
EV / Sales 2021 1,35x
EV / Sales 2022 1,36x
Nbr of Employees 7 852
Free-Float 30,8%
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Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 2,38 €
Average target price 2,71 €
Spread / Average Target 13,7%
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Managers and Directors
Markus Haas CEO & Chief Operating Officer
Markus Rolle Chief Financial Officer
Peter D. Löscher Chairman-Supervisory Board
Mallik Rao Chief Technology Officer
Patricia Cobián González Member-Supervisory Board
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