DEBT DETAIL AND EVOLUTION

LEVERAGE RATIO

 

January-June 2021 Net Financial Debt Evolution

See this information in accesible format

 

 

Net financial debt and commitments

Unaudited figures (Euros in millions)

  December 2020 June 2021

Notes:

(1) As of June 2021 includes assets and liabilities defined as net financial debt including lease liabilities of T. Costa Rica as well as those related to the second tranche of the sale of towers of T. Deutschland to Telxius 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. As of December 2020, 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, classified as non-current assets and disposal groups held for sale and liabilities associated with non-current assets and disposal groups held for sale.

Telefónica Group consolidated results deconsolidate Telxius towers division while T. UK is no longer consolidated under the full consolidation method and the new VMED O2 UK joint venture has been accounted for by the equity method since June 1, 2021.

Net financial debt includes a positive value of the derivatives portfolio for a net amount of €468m, €3,277m included as financial liabilities and €3,745m included as financial assets.

Net financial debt stood at €26.2bn as of June 2021 post estimated distribution of proceeds to Telxius minorities.

Non-current financial liabilities 42,297 38,141
Current financial liabilities 8,123 7,512
Gross Financial Debt 50,420 45,653
Cash and cash equivalents (5,604) (14,522)
Current financial assets (2,489) (2,733)
Non-current financial assets (5,137) (4,687)
Mark-to-market adjustment by cash flow hedging activities related to debt (1,048) (294)
Other current assets and liabilities (260) (280)
Other non-current assets and liabilities (654) 15
Net Financial Debt 35,228 23,152
Lease Liabilities 6,469 7,874
Net Financial Debt including Lease liabilities (1) 41,697 31,026
  December 2020 June 2021

Notes:

(1) OIBDA plus adjustments and after Leases.

Net Financial Debt / OIBDAaL adjusted (1) 2.79x 2,27x

 

FINANCING ACTIVITY

Telefónica, in the current low-interest rate environment, re-financed €4,681m (€1,523m at the Group, €1,650m at the JV with Allianz and €1,509m at VMED O2 UK JV) of its debt in Q2 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 June 2021, the Group has covered debt maturities beyond 2024. The average debt life stood at 13.69 years (post estimated distribution of proceeds to Telxius minorities), vs. 10.79 years in December 2020.

Financing activities in Q2 21

  • In April 2021, T. Chile launched a Chilean peso denominated 90,000m bond with maturity in Mar-26.
  • In June 2021, T. Colombia signed a sustainability linked bilateral loan of COP 200,000m maturing in Jun-24. After June 30, 2021, in July, Telefónica Europe, B.V. purchased €953.5m of existing senior bonds in euros and the existing hybrid bond with first reset date in Mar-22 following the tender offer launched in June. Also, in July, T. Colombia signed a sustainability linked bilateral loan of COP 500,000m maturing in Mar-25 and Telefónica Emisiones, S.A.U., issued a notice of redemption with respect to its $750m 4.570% senior notes due 2023 that will be redeemed in full on August 2, 2021.

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 €1,994m as of Jun-21.

Undrawn committed credit lines with different credit institutions amounted to €12,741m as of June 2021 (€11,872m maturing over twelve months), which combined with the cash equivalents position and current financial assets, placed liquidity at €26,924m (post estimated distribution of proceeds to Telxius minorities).

 

 

FINANCIAL DEBT

Total financial liabilities breakdown including lease liabilities

Unaudited figures (Euros in millions)

  June 2021
  Bonds and commercial paper Debt with financial institutions Other financial debt (including governments) and net derivatives
Total financial liabilities including Lease liabilities (1) 90% 9% 1%
(1) Includes positive value of derivatives and other financial debt.

 

Net financial debt structure by currency

Unaudited figures (Euros in millions)

  June 2021
  EUR LATAM GBP USD
Net financial debt structure by currency 52% 33% 13% 2%

 

FINANCIAL EXPENSES

Interest payments decreased by 13.4% y-o-y in H1 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 2.75% as of June 2021 (excluding lease interests: 2.69%).

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