DEBT DETAIL AND EVOLUTION

LEVERAGE RATIO

 

January-December 2020 Net Financial Debt Evolution

See this information in accesible format

 

 

Net financial debt and commitments

Unaudited figures (Euros in millions)

  December 2020 March 2021

Notes:

(1) Includes assets and liabilities defined as net financial debt including lease liabilities of T. UK, T. Costa Rica and those subject to the agreement of Telxius Telecom with American Tower Corporation, that are classified as non-current assets and disposal groups held for sale and liabilities associated with non-current assets and disposal groups held for sale.

- Net financial debt includes a negative value of the derivatives portfolio for a net amount of €71m, €3,438m included as financial liabilities and €3,366m included as financial assets.

Non-current financial liabilities 42,297 40,451
Current financial liabilities 8,123 7,832
Gross Financial Debt 50,420 48,283
Cash and cash equivalents (5,604) (4,940)
Current financial assets (2,489) (1,493)
Non-current financial assets (5,137) (4,240)
Mark-to-market adjustment by cash flow hedging activities related to debt (1,048) (886)
Other current assets and liabilities (260) (278)
Other non-current assets and liabilities (654) (650)
Net Financial Debt 35,228 35,796
Lease Liabilities 6,469 6,584
Net Financial Debt including Lease liabilities (1) 41,697 42,380
  December 2020 March 2021

Notes:

(1) OIBDA plus adjustments and after Leases.

Net Financial Debt / OIBDAaL adjusted (1) 2.79x 2.91x

 

FINANCING ACTIVITY

Telefónica, in the current low-interest rate environment, re-financed €3,022m (€1,372m at the Group and €1,650m at the joint venture of Telefónica with Allianz) of its debt in Q1 21 (excluding commercial paper and short-term bank loans), which allowed the Group to maintain a solid liquidity position and to further extend debt maturities. As of the end of March 2021, the Group has covered debt maturities over the next two years, not including the c. €9bn generated by announced inorganic initiatives. The average debt life stood at 10.32 years (vs. 10.79 years in December 2020). In February 2021, Telefónica Europe, B.V. launched the first sustainability hybrid bond issuance in the sector with the subordinated guarantee of Telefónica, S.A., (€1,000m, 8.25 years reset date) and a tender offer for the purchase of the existing hybrid bond with first reset date in March 2022 (purchase aggregate principal amount of €757.6m equivalent). After this transaction, the average years to call was extended from 3.75 as of December 2020 to 4.58, and the average coupon paid was reduced from 3.74% to 3.56%, respectively. In March 2021, T. Móviles Chile, S.A. obtained long-term bank financing in local currency through local and international financial institutions for approximately €172m equivalent. In April 2021, T. Móviles Chile, S.A. launched a Chilean peso denominated 90,000m bond with maturity in March 2026. Telefónica, S.A. and its holding companies continued their issuance activity under the Promissory Notes and Commercial Paper Programmes (Domestic and European), with an outstanding notional balance of €3,534m as of March 2021. Undrawn committed credit lines with different credit institutions amounted to €13,231m as of March 2021 (€12,116m maturing over 12 months), which combined with the cash equivalents position and current financial assets, placed liquidity at €19,664m1.

1. Liquidity not including inorganic deals (proceeds from the JV in the UK, the sale of Telxius Towers, the disposal of Costa Rica, the sale of stakes in InfraCo Chile and Fibrasil and reduced by payment for the acquisition of Oi assets).

 

 

FINANCIAL DEBT

Total financial liabilities breakdown including lease liabilities

Unaudited figures (Euros in millions)

  March 2021
  Bonds and commercial paper Debt with financial institutions Other financial debt (including governments) and net derivatives
Total financial liabilities including Lease liabilities (1) 87% 11% 2%
(1) Includes positive value of derivatives and other financial debt.

 

Net financial debt structure by currency

Unaudited figures (Euros in millions)

  March 2021
  EUR LATAM GBP USD
Net financial debt structure by currency 53% 21% 25% 1%

 

FINANCIAL EXPENSES

Interest payments decreased by 14.2% y-o-y in Q1 21 mainly due to the reduction in debt denominated in European currencies and its cost. The effective cost of interest payments over the last 12 months stood at 2.94% as of March 2021 (excluding lease interests: 2.96%).

NOTE: For further information, please access the January – March 2021 Results Report PDF document [1.7 MB]