DEBT DETAIL AND EVOLUTION

LEVERAGE RATIO

 

January-September 2019 Net Financial Debt Evolution

See this information in accesible format

 

 

Net financial debt and commitments

Unaudited figures (Euros in millions)

  September 2019

Notes:

* Includes assets and liabilities defined as net financial debt plus commitments for El Salvador and Costa Rica, that are classified as non-current assets held for sale and liabilities associated with non-current assets held for sale.

Net financial debt includes a positive value of the derivatives portfolio for a net amount of €2,330m, €3,784m included as financial liabilities and €6,114m included as financial assets.

Non-current financial liabilities 47,611
Current financial liabilities 9,288
Gross Financial Debt 56,900
Cash and cash equivalents (8,778)
Other assets included in "Other current financial assets" (3,037)
Cash and other current financial assets included in "Non-current Assets Held for Sale" (19)
Positive mark-to-market value of long-term derivative instruments (4,635)
Other liabilities included in "Payables and other non-current liabilities" 808
Other liabilities included in "Payables and other current liabilities" 102
Other assets included in "Financial assets and other non-current assets" (952)
Other assets included in "Receivables and other current assets" (767)
Other assests included in “Tax receivables" (564)
Financial liabilities included in "Liabilities associated with non-current assets held for sale 37
Finance Leases under IAS 17 (1) n.a
Mark-to-market adjustment by cash flow hedging activities related to debt (1) (801)
Net Financial Debt * 38,293
Lease Liabilities 7,301
Net Financial Debt including Lease liabilities 45,594
Gross commitments related to employee benefits 6,974
Value of associated Long-term assets (134)
Tax benefits (1,798)
Net commitments related to employee benefits 5,041
Net financial debt plus commitments* 43,334
Net Financial Debt / OIBDA 2.49x

 

FINANCING ACTIVITY

In January-September 2019, the financing activity of Telefónica amounted to €6,899m equivalent (without considering the refinancing of commercial paper and short-term bank loans) and focused on maintaining a solid liquidity position and refinancing and extending debt maturities (in an environment of low interest rates). Thus, as of the end of September, the Group has covered debt maturities for the next two years. The average debt life stood at 10.7 years (vs. 9.0 years in December 2018).

The main financing operations of the quarter included:

  • In July, Telefónica Emisiones, S.A.U. completed a €500m, 20-year senior debt issue with an annual coupon of 1.957%. These tenors are usually very difficult to access, as they are carried out under very positive market conditions, and are often restricted to companies with high credit ratings.
  • In September, T. Europe, B.V. issued Undated Deeply Subordinated Guaranteed Fixed Rate Reset Securities, with the subordinated guarantee of Telefónica S.A., for a nominal amount of €500m subject to a call option excercisable from the eighth anniversary of the issuance date.

Throughout the first nine months, Telefónica Group obtained funding by means of extending payment terms with suppliers or the factoring firm where those had been discounted, for a total of €302m equivalent (€349m equivalent in July-September 2018).

Telefónica, S.A. 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 €1,477m at September.

At September, Telefónica maintained undrawn, committed credit lines with different credit institutions for an approximate amount of €13,084m (€12,741m maturing in over twelve months) which, combined with the cash equivalents position and current financial assets, placed liquidity at €24,899m.

 

FINANCIAL DEBT

Total financial liabilities breakdown

Unaudited figures (Euros in millions)

  September 2019
  Bonds and commercial paper Debt with financial institutions Other financial debt (including governments) and net derivatives
Total financial liabilities (1) 92% 9% -1%
(1) Includes positive value of derivatives and other financial debt.

 

Net financial debt structure by currency

Unaudited figures (Euros in millions)

  September 2019
  EUR LATAM GBP USD
Net financial debt structure by currency 77% 11% 10% 2%

 

FINANCIAL EXPENSES

Net financial expenses in July-September totalled €540m vs. €209m in July-September 2018 (positively impacted in €223m due to a favourable court ruling in Brazil), and reflected the impact from the adoption of IFRS 16.

NOTE: For further information, please access the January – September 2019 Results Report

View Quarterly Report PDF document [1.6 MB]