Debt evolution
Net financial debt and commitments
Unaudited figures (Euros in millions)
| December 2022 | March 2023 | |
|---|---|---|
| Non-current financial liabilities | 35,059 | 33,978 |
| Current financial liabilities | 4,020 | 4,207 |
| Gross Financial Debt | 39,079 | 38,185 |
| Cash and cash equivalents | (7,245) | (7,337) |
| Current financial assets | (2,431) | (2,236) |
| Non-current financial assets | (4,560) | (4,483) |
| Mark-to-market derivatives adjustment (1) | 780 | 982 |
| Other current assets and liabilities | (244) | (235) |
| Other non-current assets and liabilities | 1,308 | 1,567 |
| Net Financial Debt | 26,687 | 26,443 |
| Lease Liabilities | 8,645 | 8,618 |
| Net Financial Debt including Lease liabilities | 35,332 | 35,061 |
Notes:
(1) Includes the market value of cash flow hedges related to debt instruments and the market value of economic hedges associated with gross employee benefit commitments.
Financing activity
Telefónica raised €1,857m long term financing in Q1, of which €1,150m at the Group and €707m equivalent at VMO2.
- In Jan-23, Telefónica launched a green hybrid bond of €1,000m and 7.25 years reset date together with a tender offer for the purchase of existing hybrid bonds with first call date in Sep-23 and Mar-24. T. Europe accepted the purchase in an aggregate principal amount of €1bn. In Feb-23, Telefónica signed a 10-year bilateral loan of €150m. VMO2 signed a USD 750m sustainable-linked term loan with maturity in Mar-31.
Telefónica financing activity has allowed the Group to maintain a solid liquidity position of €21,391m of which €11,819m correspond to undrawn committed credit lines (€11,029m maturing over 12M) and maintain long debt maturities with 2023-2026 gross debt maturities average at €3.0bn, -58% lower vs four-year average at Mar-17. As of Mar-23, the Group has covered debt maturities over the next three years and the average debt life stood at nearly 13.2 years. Telefónica and its holding companies continued their issuance activity under the Promissory Notes and Commercial Paper Programmes (Domestic and European), maintaining an outstanding notional balance of €992m as of Mar-23.
Financial debt
Total Financial Liabilities Breakdown
Unaudited figures (Euros in millions)
| March 2023 | |||
|---|---|---|---|
| Bonds and commercial paper | Debt with financial institutions | Other financial debt (including governments) and net derivatives | |
| Total financial liabilities (1) | 84% | 9% | 7% |
(1) Includes positive value of derivatives and other financial debt
Net financial debt plus Lease Liabilities structure by currency
Unaudited figures (Euros in millions)
| March 2023 | ||||
|---|---|---|---|---|
| EUR | BRL | HISPAM | OTHER | |
| Net financial debt plus Lease Liabilities structure by currency | 70% | 17% | 13% | 0% |
Financial expenses
Interest payments increased 19.2% y-o-y to €667m in Q1 23 due to seasonality effects and extraordinary payments. The effective cost of debt related interest payments (L12M) was 3.87% as of Mar-23.
Note: For further information, please access the January – March 2023 Results Report.