Telefónica Q1 2024 Financial Results PDF Free Download
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TABLEOFCONTENTS
Telefónica
Highlights 3
Operational,infrastructureandITperformance 6
Financialperformance 7
Sustainabilityperformance 9
TelefónicaEspaña 10
TelefónicaBrasil 11
TelefónicaDeutschland 12
TelefónicaTech 13
TelefónicaInfra 14
TelefónicaHispam 15
JointVenture,VirginMedia–O2UK 17
Appendix
Selectedconsolidatedfinancialstatements 18
Alternativeperformancemeasures 21
Disclaimer 24
ThefinancialinformationrelatedtoJanuary-March2024containedinthisdocumenthasbeenpreparedunderInternationalFinancial
ReportingStandards(IFRS),asadoptedbytheEuropeanUnion,whichdonotdifferforthepurposesoftheTelefónicaGroup,fromIFRS
asissuedbytheInternationalAccountingStandardsBoard(IASB).ThemanagementoftheGroupusesaseriesofAPMinitsdecision-
making, in addition to those expressly defined in the IFRS, as they provide additional information useful to assess the Group’s
performance,solvencyandliquidity.Thesemeasuresshouldnotbeviewedseparatelyorasasubstituteforthemeasurespresented
accordingtotheIFRS(seetheAppendix“Alternativeperformancemeasures”,page21ofthisdocument).
Telefónica’s management model, regional and integrated, means that the legal structure of the companies is not relevant for the
release of Group financial information, and therefore, the operating results of each of these business units are presented
independently, regardless of their legal structure. For the purpose of presenting information on a business unit basis, revenue and
expenses arising from invoicing among companies within Telefónica’s perimeter of consolidation for the use of the brand and
managementcontractshavebeenexcludedfromtheoperatingresultsforeachbusinessunit.Thisbreakdownoftheresultsdoesnot
affectTelefónica’sconsolidatedearnings.
The English language translation of the consolidated financial results originally issued in Spanish has been prepared solely for the
convenienceofEnglishspeakingreaders.Despitealltheeffortsdevotedtothistranslation,certainomissionsorapproximationsmay
subsist. Telefónica, its representatives and employees decline all responsibility in this regard. In the event of a discrepancy, the
Spanish-languageversionprevails.
Linktodetailedfinancialandoperationaldata:clickhere.
Resultspresentation
Themanagementwillhostapresentation(clickhere)todiscusstheresultsat10:00amCETon9thMay2024.
Formoreinformation,pleasecontact:
Adrián Zunzunegui (adrian.zunzunegui@telefonica.com); Isabel Beltrán (i.beltran@telefonica.com); Torsten Achtmann
(torsten.achtmann@telefonica.com);ir@telefonica.com;Phone:+34914828700
https://www.telefonica.com/en/shareholders-investors/
2
TelefónicaQ12024FinancialResults 9thMay2024
Strongstartto2024,executingourGPSplan
Highlights
•Growth(y-o-y)
◦Acceleratedrevenuegrowth(+0.9%1,-0.5%inQ423)drivenbyrobustservicerevenue(+2.3%)
◦B2Crevenuegrowth(61%oftotalrevenue;+0.8%).Enrichedoffering,digitalecosystem,andincreasedloyalty
◦IntactB2Bmomentum(22%oftotalrevenue;+2.8%),withT.Tech(+11.0%)cornerstoneoftransformation
◦Evolvingwholesale&partnersandothersrevenue(17%oftotalrevenue;-0.9%);future-proofingwholesale
◦NBMoUwithDIGIforalong-termmobilenetworkagreementinSpain
◦Expandsuperiornetworks(FTTHPPs+13.4%;63%5Gcoverageincoremarkets)
•Profitability(y-o-y)
◦AcceleratingEBITDA*growthto+1.9%(+1.6%inQ423);expandingmargin(+0.3p.p.)onleaneroperations
◦Operatingleverage(marginEBITDAaL*-CapEx)broadlyflat;higherefficienciestocomefromQ2
◦DecliningCapExex-spectrumintensity(10.4%CapEx/Sales),butmaintainingdifferentiation
•Sustainability
◦Moresatisfiedandengagedcustomers(NPS31)withAIembracinglatesttechnologies
◦Leadingindustrydebates,OpenGateway,fairshare,balancedregulatoryframework
◦ProgressonESGaspectstobuildagreenerfuture,helpsocietythriveandleadbyexample
•Furtheradvanceonourefficienttransformationpath
◦Copperswitch-offinSpain(~5kCOssince2014)
◦DelistingofferofT.DEcompleted;simplifyourgroupstructure
◦OpenGatewaypartners’modelsuccessfullylaunchedatcoreOB’s
•Momentumunchangedwithcompetitivelandscapeunaltered
◦Spaindeliveringgrowthbothinservicerevenue(+1.2%)andEBITDA*(+0.2%).Goodtradingmomentum
◦Braziloutstanding;simultaneousdouble-digitgrowthinrevenueandEBITDA*
◦Germanyoperatingleverageincreasing1.4p.p.(marginEBITDAaL*-CapEx)
•Firmlyontracktomeet2024financialguidance
◦EBITDAaL*-CapExtoacceleratethroughouttheyear
◦FCFphasingfullyalignedwithexpectations;-€41minQ1
◦Netdebt(€28.5bn;2.71xND/EBITDAaL*)reflectstheincreasedstakeinT.Deutschland;decliningafterwards
•Disciplinedcapitalallocation,strongBSmanagement
◦ExcellentMarketExecutioninthelast2yearsinthehybridsmarket
◦Containedinterestcosts,3.51%and>80%ofdebtinfixedrated
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1 Unlessstatedotherwise,allyear-on-yearvariationsfortheGroupandOBsarereported.CapExexcludesspectrum
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
Commentingontheresults,JoséMaríaÁlvarez-Pallete,ChairmanandCEOofTelefónica,said:
“On19thApril2024wecelebratedourCompanyCentenary,ofwhichIamveryproudof.Thiswasthedaythatmarksan
important milestone, the Spanish copper network is almost fully shutdown allowing us to reap the benefits of past
investmentcycles,whilstsustainingourdifferentiationintermsofnetworkquality.
We delivered solid Q1 results to start 2024 into our GPS plan. Where we plan to deliver tangible, material
transformation. Q1 shows intact commercial momentum and growing revenue and EBITDA, while FCF reflected usual
seasonalityinQ1.
Looking forward, our GPS plan backed by our principles of integrity, commitment and transparency, will allow us to
continuetodelivershareholdervalue.”
Outlook
January-March 2024 Group results on track to meet 2024 guidance, with performance in Q1 fully in line with
managementexpectations.Financialfor2024areasfollows(reported2)
•Revenue+0.9%y-o-yinQ124vs.2024targetof~1%growthy-o-y
•EBITDA+1.9%y-o-yinQ124vs.2024targetof1%to2%growthy-o-y
•EBITDAaL-CapEx-3.4%y-o-yinQ124vs.2024targetof1%to2%growthy-o-y
•CapEx/Revenue10.4%inQ124vs.2024targetofupto13%
•FCF-€41minQ124vs.2024targetof>10%growthy-o-y
Shareholderremunerationconfirmedfor2024and2024-2026period
•Thesecondtrancheofthe2023dividendof€0.15pershareincashtobepaidthe20thJune,2024
•2024dividendof€0.30pershareincashwillbepaidthe19thDecember2024(€0.15)andJune2025(€0.15)
•ReductionofsharecapitalthroughthecancellationoftheCompany’sownshares(80,296,591)inApril2024
AsannouncedduringtheCapitalMarketsDay(8Nov-23),ourstrategicguidelinesundertheGPSframeworkprovide
thefollowingguidance(CAGR23-26reported2)
•Growth:Revenue~1%;~1.5%B2C,~5%B2B,low-to-midsingledigitdeclineinwholesale&partners
•Profitability:EBITDA~2%;EBITDAaL-CapEx~5%;-2p.p.CapEx/Revenueto<12%
•Sustainability:Leveragereductionto2.2-2.5xin2026;>10%FCFgrowth
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2 Criteria for 2024 and 2023-2026 guidance: reported, current FX, ex VMO2, constant perimeter, includes cost to capture (cash cost to capture, excludes non-cash
provisioning and others) and excludes material non-ordinary impacts. CapEx ex-spectrum. FCF excludes spectrum and VMO2 recaps and includes, hybrid coupons and
commitments.
TelefónicaGroupMainKPIs
Q124
(€m) y-o-y%Chg
Revenue 10,140 0.9
EBITDA* 3,205 1.9
EBITDAaL*-CapEx 1,453 (3.4)
CapEx(ex-spectrum)/Sales 10.4% 0.2
FCF (41) n.s.
NetFinancialDebt 28,482 7.7
NetIncome 532 78.9
Q124(€m) y-o-y%Chg
Revenue 10,140 0.9
TelefónicaEspaña 3,118 1.0
TelefónicaBrasil 2,520 10.4
TelefónicaDeutschland 2,098 (0.1)
TelefónicaHispam 2,054 (8.2)
Othercompanies&eliminations 350 4.1
EBITDA* 3,205 1.9
TelefónicaEspaña 1,118 0.2
TelefónicaBrasil 1,022 10.7
TelefónicaDeutschland 653 5.0
TelefónicaHispam 367 (14.9)
Othercompanies&eliminations 46 (14.4)
EBITDAaL* 2,509 (0.9)
TelefónicaEspaña 959 (3.5)
TelefónicaBrasil 793 10.8
TelefónicaDeutschland 469 3.8
TelefónicaHispam 243 (23.6)
Othercompanies&eliminations 44 (14.4)
CapEx(excludingspectrum) 1,056 2.7
TelefónicaEspaña 337 4.8
TelefónicaBrasil 349 15.2
TelefónicaDeutschland 233 (5.1)
TelefónicaHispam 110 (14.6)
Othercompanies&eliminations 28 (8.0)
Spectrum 60 196.4
EBITDAaL*-CapEx(excludingspectrum) 1,453 (3.4)
TelefónicaEspaña 622 (7.5)
TelefónicaBrasil 445 7.6
TelefónicaDeutschland 236 14.3
TelefónicaHispam 134 (29.7)
Othercompanies&eliminations 16 (23.5)
(*) Adjusted: Excludes restructuring costs, significant capital gains/losses from the sale of
companies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts.
Mar24
(thousands)
y-o-y%Chg
TotalAccesses 388,260 1.2
o/wFTTH 16,587 12.3
o/wContract 130,919 3.5
o/wPayTV 10,206 (2.4)
o/wWholesale 26,453 0.6
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Operational,infrastructureandITperformance
TheGroup’saccessesgrew1%y-o-yto388.3minMar-24,withhighvalueFTTHandcontractaccessesup+12%and+3%
y-o-y,respectively.
IntheNetworkandSystems,weareimplementingourArtificialIntelligenceProgram,encompassingacomprehensive
strategyforstandardizingAIarchitecture,andfosteringanAI-centricculture.Focusisonacceleratingtheapplicationof
AI across both Network and IT operations by enlarging the number of AI solutions (650 uses cases currently) which
enabletoreducecomplexityandtoenhanceautomation,efficiency,andcustomerexperience.
DuringQ124,aspartofourAIGovernancemodelwelaunchedAICentresofExcellence(CoEs)ineachBUtoensurethe
PrivacyinDesignandtoboosttheprocessofscalingAIapplicationsacrossthecompany.
This helps us to keep moving towards the Hyper-Automation through the Autonomous Network Journey program
(ANJ). Noteworthy is the recent launch of some specific projects to achieve Level 4 autonomy in the Radio Access
Network (RAN), Transport, Operations, and IT Cloud domains. At Level 4 autonomy in Autonomous Networks, the
networkoperateswithahighdegreeofautomationandself-management,makingcomplexdecisionsandtakingactions
independently,oftenwithouthumanintervention.
Inparallel,thistransformationbasedonahigherdegreeofvirtualisationisacceleratingtheFTTHand5Gdeployments
andtheplannedswitch-offoftheretailcopperserviceinSpainsetfor2024(123COsclosedin2024toendofMarch;
4,272closedsince2014).
Thepositionasagloballeaderinfibreismaintainedofferinganoptimalcarriersolution(withXGS-PONreadiness)for
thenext50years.Ourextensivecoverageincludes175.0mUBBPPs,+4%y-o-y,outofwhich76.6mareFTTHPPs(+13%
y-o-y)including21.9mPPsofourFibreCos(+44%y-o-y).Assuch,inQ124totalFTTHPPhaveincreasedin2.1mwitha
43%rolledoutthroughco-investmentvehicles.
5G network covers 89% of population in Spain as of March, 95%in Germany, 48% in Brazil and 53% in the UK. In
addition,5GSAisalreadylaunchedinSpain(5G+),Brazil,Germany,andtheUK.Thisisacoremobiledatanetwork
evolutionwhichimprovesuserexperienceandallowsenterprisestoimplementadvancedmobileconnectivityservices.
Massivecommercialdeploymentoffull5GSAincoremarketswillcontinueuntil2025,dependingontheavailabilityof
technology,devices,andspectrumaswellasonthespecificmarketconditions.
Inthecoremarkets,Peru, andChile,100%oftheelectricityusedisfromrenewablesources.Simultaneously,weare
reducingenergyconsumptionatGroupleveldespitethestrongincreaseoftrafficthroughmeasuressuchasreducing
theRANandswitchingofflegacy.Alltheseeffortsarekeytoachieveourgoalofnet-zeroemissionsin2040,withan
interimtargetofreducingscope1+2emissionsby90%andneutralisingemissionsincoremarketsby2025.
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Financialperformance
IncomeStatement
InQ124,FXimpacty-o-ywaspositive,+€104monrevenue,+€40monEBITDA,mainlyontheBrazilianreaisandthe
Colombianpesoevolution.Fornetdebtand net debt plus leases,FXhadanegativeimpactof€0.1bnin Q1 24. The
contributiontoy-o-ygrowthfromhyperinflationarycountrieswas-€106monrevenueand-€17monEBITDAduetothe
ArgentinepesodevaluationfromDec-23.
Revenuegrew0.9%y-o-yto€10,140minQ124,drivenbya2.3%y-o-yincreaseinservicerevenuesy-o-ypartiallyoffset
bya9.5%declineinhandsetsales.
B2Crevenue(€6,228m,61%oftotal)increased0.8%y-o-yinQ124.Additionally,wearefurtherstrengtheningourvalue
proposition by leveraging strong brands, like the new O2 brand identity. We also offer top-tier connectivity and a
relevantdigitalproductrange,exemplifiedbythemiMovistarupgradeinSpain,whichhelpssustainbenchmarklevelsof
churnandNPS.
B2Brevenue (€2,185m, 22% of total) increased by 2.8% y-o-y in Q1 24 (+2.8 p.p. q-o-q) on the back of a solid
performanceinSpain,BrazilandGermany.Among segments,CorporateandSMEgrewat3.7%y-o-y and 0.7% y-o-y
respectively.Followingastrongendof2023,B2BrevenuewasmainlyfuelledbyITrevenuewithdouble-digitgrowth
whilestrongsalesfunnelensureshighergrowthaheadinthecomingquarters.
Wholesale & Partners and Others revenue (€1,726m, 17% of total) saw a slight decline of -0.9% y-o-y in Q1 24.
However,notableadvancementshavebeenmadeincludingthelaunchofcommercialAPIsinSpain,Brazil,andGermany
undertheOpenGatewayinitiative.Additionally,5GservicesbecameavailableforDIGI(MVNO)inSpain.Telefónicahas
alsosecuredwell-establishedlong-termwholesalecontractsinSpain,Germany,andtheUK.
Otherincomereached€289minQ124vs€284minQ123.
Operatingexpensesincreasedby0.5%to€7,213madjustedinQ124.
Impairmentsandlossesondisposalofassetstotalled€11minQ124(vs€6minQ123).
Earnings before depreciation and amortisation (EBITDA)* accelerated to 1.9% y-o-y in Q1 24 (+0.4 p.p. q-o-q) to
€3,205m,mainlydrivenbyBrazilandGermany.
EBITDA*margingrew0.3p.p.to31.6%inQ124,drivenbyleaneroperations.
Depreciation and amortisationincreased 0.5% y-o-y to €2,163m in Q1 24, mainly affected by the increases in the
amortisation of material assets in T. Brasil, partially offset by the impact of the Argentine peso devaluation on the
depreciationoffixedassets.
Shareofprofitofinvestmentsaccountedforbytheequitymethodamountedto€45minQ124vs-€188minQ123,
mainlyreflectingVMO2'sresults,whichwerepositivelyaffectedbyFXandachangeinfairvalueofderivatives.
Netfinancialexpensesamountedto€359minQ124(€266minQ123).Debt-relatedinterestexpensesremainstable
duetoasignificantreductionininterestratesinBrazilandasolidfixedinterestratespositioninstrongcurrencies.
Corporatetaxexpensesamountto€165malignedwiththatofthepreviousyear.
Profitattributabletonon-controllinginterestswas down -46.0% y-o-y in Q1 24 to €31m mainlyduetolowerprofit
fromminorityinterestsfromT.Colombia,TelxiusandT.Deutschland.
Profitattributableto equity holdersoftheparentcompany was €532minQ124,withearnings per shareof€0.08
(€298mand€0.04inQ1 23). In adjusted terms, net income amounted to €632m in Q124(+7.5%y-o-y),withEPSof
€0.10(+8.0%y-o-y)afterexcluding-€100mofotherimpacts.
FreeCashflow
EBITDAaL*-CapExex-spectrumtotalled€1,453minQ124,declining3.4%y-o-y.
CapExex-spectrumroseslightlyby2.7%to€1,056minQ124,whileCapEx/Revenuestoodat10.4%.
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
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Workingcapitalconsumed€473minQ124,primarilyimpactedbyseasonaleffects(mainlyCapEx,aswellaspersonnel
payments).Workingcapitalconsumptionwas€76mmorey-o-yduetothehigherworkingcapitalinBrazilassociated
withthemonetisationoftaxassetsinQ123andotherseasonalimpacts.
Interestpaymentsdeclined20.9%y-o-yto€447minQ124mainlyduetocalendareffectsandextraordinarypayments
inQ123.Debt-relatedinterestpaymentsalsodecreasedduetolowerinterestratesinBrazilandarobustfixedinterest
ratespositioninhardcurrencieswhichcounteredtheimpactofrisinginterestratesinthesecurrencies.Theeffective
costofdebtrelatedinterestpayments(L12M,exleases)was3.51%asofMar-24(3.87%inMar-23).
Dividendsreceivedamountedto€8minQ124from€9minQ123.
Taxpaymentsincreasedby17.8%y-o-yupto€149m,mainlyduetohighertaxpaymentsinadvanceinGermanyand
Colombia.
Dividendspaidtominorityshareholderstotalled€7minQ124(vs€5minQ123).
Lease principal and interest payments amounted to €783m in Q1 24 (+8.2% y-o-y) mainly explained by seasonality
impacts,higherdebtinBrazilandinterestratesincreaseinEurope.
Thus,freecashflowamountedto-€41minQ124(-€9minQ123).
Fundingandfinancing
Net financial debt stood at €28,482m as of Mar-24. In Q1 24, debt has increased by €1,133m due to net financial
investmentsof€882m(mainlyacquisitionofT.Deutschlandshares),shareholderremunerationof€178m,freecashflow
includingspectrumpayments(€69m)andothernetfactors(€4m).
Netfinancialdebtincludingleaseliabilitiesamountedto€37,008masofMar-24.Leaseliabilitiesdown4%(€394m)in
Q124duetohigherprincipalpaymentsthanROUadditions.
InQ124,Telefónicaraisedlongtermfinancingby€4,008m;€3,133mattheGroupand€877mequivalentatVMO2.
FinancingactivitiesinQ124included:
• In January, T. Emisiones launched a €1,750m green bond that was structured in two senior tranches with
maturitytenorsof8and12years(€1,000mand€750m,respectively)whileColtelsignedthreeCOP-denominated
bilateralloansforanaggregateamountof€133mequivalentandmaturitiesinJan-26andJan-27.
• InMarch,Telefónicalaunchedagreenhybridbondof€1,100mand8.1yearsresetdatetogetherwithatender
offerforthepurchaseofexistinghybridbondswithfirstcalldateinDec-24.T.Europeacceptedthepurchasein
anaggregateprincipalamountof€1,097m.Telefónicaalsosigneda10-yearbilateralloanof€150m.
• AlsoinMarch,VMO2signedatwoyearextensionofitsGBP750mTermLoanA,nowwithmaturityinSep-29.
AfterMar-24,inApr-24,T.MóvilesChilesignedaCLP50,000mbilateralloanwithmaturityinApr-27andVMO2issued
twoseniorsecurednotesof€600mandUSD750m,bothwithmaturitiesinApr-32.
Telefónica financing activity has allowed the Group to maintain a solid liquidity position of €19,337m (€11,375m of
undrawncommittedcreditlines;€10,438mmaturingover12M).AsofMar-24,theGrouphascovereddebtmaturities
overthenextthreeyearsandtheaveragedebtlifestoodatnearly11.7years.
Telefónica and its holding companies continued their issuance activity under the Promissory Notes and Commercial
PaperProgrammes(DomesticandEuropean),maintaininganoutstandingnotionalbalanceof€1,000masofMar-24.
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
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Sustainabilityperformance
OursustainabilityobjectivesarebuiltintotheGroup’sGPSplanandalignedwiththeUNSDGs.
“E”Environmental:Buildingagreenerfuture
•Driving Scope 3 efficiencies in the value chain: Telefónica was included on the CDP Supplier Engagement
Leaderboardforthe5thconsecutiveyear.Growthviaeco-solutionsforourcustomers:theEcoSmartsolutions
portfoliowasnamedaChampionProjectbytheITUintheWorldSummitOnTheInformationSociety2024.
(SDG#7,#11,#12,#13)
“S”Social:Helpingsocietytothrive
•Attraction and retention of talent via diversity: 33.1% women executives, and 858 additional persons with
disabilitiesworkingatGrouplevelvs. Q1 23. Furthermore,33.1%leadershippositionsheldbyBlackpeople in
Brazil.Protectingcustomers:Blocked~320mcybersecuritythreatsforSMEsandretailcustomersinSpain(+30%
y-o-y),serving>1.7mcustomers.
(SDG#5,#8,#9)
“G”Governance:Leadingbyexample
•Shareholder confidence: all resolutions proposed by the Board of Directors were approved at the General
Shareholders’Meeting.Facilitatingaccesstofinancing:issuanceoftwotranche-seniorgreenbondandagreen
hybridbond,takingafurthersteptowardsthegoaloflinking~40%offinancingtosustainablecriteriaby2026.
(SDG#7,#9,#11,#13)
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TELEFÓNICAESPAÑA
31% oftotalTelefónicaQ124revenue 35% oftotalTelefónicaQ124EBITDA*
Keymessages
• Solidcommercialtraction,growthinmainaccessesforthethirdquarterinarow
• Y-o-yfallinchurntolowest-ever0.9%evenafterthetariffupdateinJanuary
• AccelerationinEBITDA*growth(+0.2%y-o-y)
Operatingperformance
T. España maintained in Q1 24 the positive evolution shown in 2023 and reaffirmed its commercial and financial
recovery. Commercial activity drove revenue growth in a quarter with tariff repositioning (~+3% in the Movistar
portfoliosincemid-January)thankstoadifferentialqualityoffer.ThecaptureofhighersavingsenabledEBITDA*growth
toaccelerate(+0.2%y-o-y,+0.1p.p.vs.Q423).
Asaproofofthesuperiorqualityofournationwidenetworkinfrastructureandconfirmingtheconfidencepartnershave
inourabilitytoprovidehigh-qualityservicesoversuchinfrastructure,wehavesignedanon-bindingMOUwithDIGIfor
along-termmobilenetworkagreement.Termsandconditionsareagreedinprinciple,andweexpecttoconcludethis
agreement,subjecttodefinitivefinallong-formdocumentation,inthenextfewweeks.
In terms of sustainability, T. España continues to foster the circular economy by promoting the buy-back and
refurbishmentofcustomerequipmentaswellastherepairandrecyclingofdevices.Inaddition,thecompanycontinues
tofocusonenergyefficiency,migratingitscustomerstonetworksthatsubstantiallyemitlessCO2.
Inaccesses(+1%y-o-y)noteworthywerethegrowthinfixedbroadbandandmobilecontract(+1.2%y-o-yinbothcases)
andTVnetaddsforthethirdquarterinarow(+7k).Fibreaccessesgrowthaccelerated(+113kaccesses;+85kretail)on
anetworkof29.7mPPs(29%uptake),whichincreasedby447kinQ1.
Convergentcustomersmaintainedpositivenetadds(+3kinQ124)andwerestabley-o-y.ARPUincreasedsequentially
€1 to €92.2 and the excellent churn figure of 0.9% (-0.1 p.p. y-o-y) is to be highlighted, despite mid-January price
increase.ThecombinationofARPUandchurnleadershipconsolidatesavalueoftheconvergentcustomerbase,whichis
farsuperiortothatofanyotheroperator.
Financialperformance
Revenuegrew+1.0%y-o-y in Q124,drivenbyhigherservice revenue(+1.2%y-o-y),ashandsetsales,more volatile,
declinedby3.3%.Retailrevenuegrew1.6%inQ124,reflectingthegoodcommercialevolutionandthetariffupdatein
consumer as well as the solid evolution of IT sales in B2B. Wholesale and other revenues declined 0.8% y-o-y with
negativeimpactsduetomobileterminationratecuts(-50%since1Jan-24)andlowerTVcontent(Formula1),notoffset
bythegoodevolutionofMVNOrevenues.
Sequentially,retailrevenuegrowthslowedslightlyduetoalowertariffincreaseinJan-24thaninJan-23andlowery-o-y
growth in IT (strong Q4 on business seasonality). Wholesale and other revenue leave behind extraordinary positive
effects(suchastheredefinitionoftheUniversalService).
EBITDA*inQ124(+0.2%y-o-y)accelerateditsgrowthfromthepreviousquarter(+0.1p.p.)duetohigherrevenueand
savings(>€20m)associatedwiththedepartureon1Marchofmostoftheemployeesincludedintheredundancyplan,
anddespitehigherdirectexpenses(asinIT).Marginstoodat35.8%.
EBITDAaL*-CapExwasdown-7.5%vs.Q123(marginof20.0%o/revenue),drivenbythedeclineinEBITDAaL*(-3.5%
y-o-yduetoincreasedsiterequirementsfor5Gdeploymentandincreasedinterest)andthe+4.8%increaseinCapEx
(10.8%o/revenue),focusedonthe5Gandfibrenetworksrolloutthatwillallowtoswitchofftheretailcopperservice.
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
10
TELEFÓNICABRASIL
25% oftotalTelefónicaQ124revenue 32% oftotalTelefónicaQ124EBITDA*
KeyMessages
• Increasedcustomervalue;continuedARPUgrowthandchurnreduction
• Above-inflationrevenuegrowthfromcontract,FTTH,B2Bandservicesbeyondconnectivity
• BenchmarkEBITDAaL*-CapExmargin(17.7%)
Operatingperformance
Vivo continues to advance across the pillars of E, S & G and has been recognised by leading analysts. As such, it is
includedinCDP's"ClimateA"Group(oneofsevenBraziliancompaniesandtheonlyoneinthesector)andisintheTop
20oftheMercorankingofcompanieswiththebestcorporatereputation,havingimproved13positionsinoneyear.
Vivomaintaineditsleadershipinthecountry,witha39%mobilemarketshare,43%incontractand18%inFTTH(32%in
areaspassedmorethan5yearsago).
Inmobile,contractnetadditionsstoodat686kinQ124,andchurnreachedanewhistoricallow(0.97%),significantly
increasingcustomervalue.MobileARPUcontinuedtogrowsteadily(+9.4%)thankstothehigherqualityofthecustomer
base(higherweightofcontract,+3p.p.y-o-y),theincreaseddemandfordigitalservicesandhighertariffs.
Infixed,thetransformationtoFTTHcontinued,whichisnowavailablein443citiestotalling26.8mPPs.InQ124,173k
newaccesseswereconnectedtoFTTH,bringingthetotalto6.3m(24%take-up).
VivoTotal(FTTH+mobileoffer)amountedto1.5m(+111%y-o-y),improvingARPUandchurn,thelatterbeing1.0p.p.
betterthanstand-aloneaccesses.
In the residential segment, digital services gained commercial traction; Vivo Money almost doubled the volume of
creditsy-o-yandOTTvideoandmusicservicesreached2.7Msubscriptions(+14%y-o-y).
Financialperformance
Revenuegrew10.4%y-o-yinQ124,duetothegrowthinfixedandmobile,aswellastheappreciationoftheBrazilian
realagainsttheeuro(+3.9p.p.contributingtogrowth).
Mobilerevenueincreased12.7%y-o-y,drivenbythegoodperformanceofcontractrevenues.Fixedrevenuegrew5.3%
y-o-yonthebackofFTTH(+19.8%)andtheB2Bsegment(+6.7%y-o-y).
EBITDA*grew10.7%y-o-yduetohigherrevenue,whichoffsetthehigherexpensesassociatedwithrevenuefromdigital
servicesinresidentialandbusinesses.EBITDA*marginstoodat40.6%(+0.1p.p.y-o-y)inQ124.
CapEx increased 15.2% y-o-y (CapEx o/revenue was 13.8%, +0,6 p.p. y-o-y) and EBITDAaL*-CapEx margin stood at
17.7%(-0.5p.p.y-o-y).
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
11
TELEFÓNICADEUTSCHLAND
21% oftotalTelefónicaQ124revenue 20% oftotalTelefónicaQ124EBITDA*
Keymessages
• Ongoingoperationalandfinancialmomentum
• ServicerevenuegrowthandsuccessfulcostmanagementdrivingsubstantialEBITDA*expansion
• Digitalservicesofferingextension(IoTquickwins,CloudSWATwithT.Tech)
Operatingperformance
T.DeutschlandconsistentlydeliveredasolidstarttoFY24.Inadynamicyetrationalmarket,theongoingmomentumin
thecompany’scorecustomerbasewasdrivenbya‘value-over-volume’strategycombinedwithatargeted‘friends&
family’campaignandcontinuouslowchurnlevels.
T.Deutschlandalsomadegoodprogressinnetworkdensificationand5Groll-outinQ124witharound2kexpansion
measures and 400 new 5G sites on air, bringing the total number of 5G base stations to more than 10k and the
company’s5Gpopcoverageto>95%.
5Gdoesnotonlyenhancecustomerexperience,butitisalsoamajorcontributortoT.Deutschland’sESGcommitment
due to better energy efficiency. Energy consumption improved to 0.07 GWh/PB in 2023 which is an 83% reduction
vs. the base year 2015. Starting 2025, O2 Telefónica will receive 3,000 GWh of green energy from the Baltic Eagle
offshorewindfarmfor15years,enoughtopower8kofthetotal28kmobilestationscurrentlyinoperation,securinga
sustainableenergysupply.
Themobilecontractbasestoodat28.0masofMarchand16.6mexcluding3rdpartyMNO-accesses.InQ124,corenet
adds grew +157k (excluding 3rd party MNO-accesses), driven by continued O2 brand momentum. O2 contract churn
improved0.1p.p.y-o-yto1.0%reflectingboth,thestrongbrandappealaswellastheenhancednetworkandservice
quality.
O2contractARPUwas impacted bythehalvingofMTRto€0.2c per minuteeffective1Jan-24growth and posteda
declineof-0.4%y-o-yinQ124;underlying(exMTR-cut)O2contractARPUcontinuedtogrow+0.7%y-o-y.
Mobileprepaidregistered-288knetdisconnectionsmainlyreflectingtheongoingprepaidtopostpaidmigrationtrend
intheGermanmarket.
Fixedbroadbandrecorded +3knetaddsdrivenbystrong customerdemandforhigh-speedcableand fibre accesses
whileDSL/VDSLaccessesdeclined.Churnwasflaty-o-yatalowlevelof0.9%inQ124.
Financialperformance
Q124resultsarefullyontrackforthecompany’sconfidentFY24outlook,withtheAcceleratedGrowth&Efficiency
Plan’asafundamentforamoreresilientbusinessmodelandcontributingtotheGPS-programme.
Revenuewasflattish(-0.1%y-o-y)inQ124asaresultoftheMTR-headwindsandtoughcompsinthehandsetbusiness
(-4.2% y-o-y) while both, mobile service revenue (+0.7% y-o-y and +2.3% y-o-y ex MTR-headwinds) and the fixed
business (+3.7% y-o-y) maintained their growth path. Total mobile business was -0.6% y-o-y mainly due to a record
quarterforhandsetsalesinQ123.
EBITDA*postedstronggrowthof5.0%y-o-yinQ124reflectingcommercialsuccess,lowersupplycostsandfocused
executionofefficiencymeasures.EBITDA*marginexpanded1.5p.p.y-o-yto31.1%inQ124.
CapExfollowsthetypicalback-endloadedprofileandwas-5.1%y-o-ywithaCapEx/Revenueratioof11.1%.Assuch,
EBITDAaL*-CapExgrew+14.3%y-o-yinQ124andEBITDAaL*-CapExmarginimproved+1.4p.p.y-o-yto11.3%.
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts.
12
TELEFÓNICATECH
Keymessages
• Revenuegrowingdouble-digit
• Stronggrowthinbookings,morerevenueanticipatedbycommercialfunnel
• Improveddeliverycapabilities,marketpositionandrecognitionamongindustry
T.Techcontinuestodeliversolidrevenuegrowth,whilestrengtheningits credentialsasaleadingNextGen solutions
provider.Since2023,T.TechoperateswithGlobalServiceLines(GSL)astransversalunitsforallthegeographicunits
(Spain&Americas,UK&Ireland,andCentralEurope)enablingunifiedportfoliosandthecaptureofsynergies.IoTand
BizAppsGSLs,launchedinmid-2023,arefosteringcommercialactivityand,astheseedforanewGSL,theNextDefense
CybersecurityservicewascommerciallylaunchedintheUK&I,andwewereawardedtherewiththefirstMDRcontract
(Management,DetectionandResolution).
T. Tech obtained new Partners’ accreditations: Managed Service Provider competency in Google Cloud and AWS,
positioningusasprovenspecialistsincloudmigration;Cybersecuritycapabilitiesrecognizedby:Netskope(“Memberof
MSPandServiceDeliveryPartner),PaloAlto(“PartneroftheYear2023”),Tenable(“MSSPEMEAPartneroftheYear”)
and Varonis (“Partner of the Year 2023”). T. Tech was also recognized as: “Leader: in Magic Quadrant Managed IoT
Connectivity Services 2024” for 10th consecutive year” by Gartner and “VERY STRONG: in Competitive Landscape for
ManagedSecurityServices”byGlobalData.
Operatingperformance
T.TechpostedstrongcommercialactivityinQ124(bookings>+30%y-o-yinQ124,+17%y-o-yinLTMasofMar-24)
thanks to the positive performance in the private sector and especially in Financial, Healthcare and Manufacturing
customers, where relevant deals in terms of value and level ofcriticality were closed. Moreover, commercial funnel
(most of it qualified) continued to grow at double-digit with healthy sales pipeline in various sectors (Finance,
Healthcare,Utilities,Mobility,Mining,Retail,andPublicSector).
Cybersecurity&CloudcapabilitieswerestrengthenedinQ1thankstonewlaunches(EdgeSecuritybyNetskope,New
StoragebyNetapp,newfunctionalitiesinWebexMeetings)andtheexpansionofourportfolioinLatinAmerica(Security
Edge,NetskopeCloudsecuritysolutions)andtheUK&I(NextDefense).Alltheseservicesleverageonourcutting-edge
Digital Operations Centers (DOCs) and Security Operation Centers (SOCs) located across Europe, the UK, and the
Americas.
InAI & Data, T. Techpartnered with Microsoft in Generative AI (Responsible AI Innovation Center launched by
MicrosoftinFebruary2024)andreinforceditsportfoliobyforgingrelevantpartnershipswithspecialisedmarketleaders
suchas:Denodo, adataintegrationand virtualizationplatformprovider;Palantir, akeyAIplayerintheDefenseand
HomelandSecuritymarket;andTeradata,atopcloudanalyticsanddataplatformprovider.
IoTcapabilitieswerereinforcedwithanewOperationandDeploymentCenterforprivatenetworksandthelaunchof
SmartLighting,remotemanagementserviceofpubliclightingtoimproveenergyefficiency,lightpollutionandsafetyin
cities.
FinancialPerformance
Revenuereached€476minQ124withasoliddouble-digitgrowthof+11.0%y-o-yimpactedbyanexcellentQ123and
somephasingintheclosingofsomecontractsattheend2023.T.Techrevenuemixiswell-balancedinservices(witha
highweightofrevenuefromManaged&Professionalservices&ownplatforms)andgeographies(>85%revenuesfrom
hard-currencymarkets).Consideringthestrongcommercialperformanceandoursalespipeline,wemaintainapositive
revenueoutlookfortherestoftheyear.
Perservice,T.Cybersecurity&CloudTechandT.IoT&DataTechrevenuesamountedto€413m(+11.2%y-o-y)and
€63m(+8.2%y-o-y),respectively.
13
TELEFÓNICAINFRA
KeyMessages
• Aglobalconnectivityplatform:22m3FTTHPPs,26MWdatacentres,>100kkm4ofinternationalconnectivity
• T.Infracontinuestocreatevaluethroughitsleadingportfolioofinvestments
• Telxiusmaintainedahighprofitability(>50%EBITDA*margin)
Operatingperformance
T.Infra:Increasingnetworkdifferentiationandcapabilities
InSpain,Bluevía(Vauban/CAAconsortium45%,T.Infra25%andT.España30%)added0.2mPPstoitsfibrefootprint
duringQ124reaching5mPPs,focusingonlowpopulationmunicipalitiesanddrivingdigitaldevelopment.
InGermany,UnsereGrüneGlasfaser(UGG) (Allianz50%,T.Infra40%andT.Deutschland10%)isdeployingitsFTTH
networkinruralandsemiruralareasin8federalstates(“Länder”).Itcurrentlyhas0.8mPPsonconstructionorready
forconstruction(0.2malreadypassed).
IntheUK,nexfibre(InfraViaCapitalPartners50%,T.Infra25%andLibertyGlobal25%)extendeditsfootprinttoatotal
of1mPPsasofMar-24andplanstoinvest£1bninbroadbandinfrastructurethroughout2024.
In Brazil, FiBrasil (CDPQ 50%, T. Infra 25% and T. Brasil 25%) delivers top-quality fibre connectivity services across
footprintspanning>150municipalities,withdeploymentstotalling4.4mPPsacross22Brazilianstates.Ithassecured
contractswithover50ISPstoofferconnectivityservices,solidifyingitsroleasaneutralfibrenetworkprovider.
ONNET Fibra Chile (KKR 60% and T. Chile 40%) continued its roll-out reaching 4.1m PPs as of Mar-24 and added
ClaroVTRtoitsnetwork,whichnowhasthreeofthecountry'sfourmajortelcoserviceprovidersonitsinfrastructure.
ONNET Fibra Colombia (KKR 60% and T. Colombia 40%) made good progress with 3.8m PPs as of Mar-24. In Perú,
Pangea(KKR54%, Entel Perú 10% and T. Hispam 36%), expects the sale approval in H2 24 and accelerated its FTTH
deploymentwith3.4mPPsasofMar-24(alsoincludingT.PerúPPs).
Nabiax (Asterion Industrial Partners 80% and T. Infra 20%) has consolidated its position as the largest data centre
platforminSpainwith22,000sqm,andacombinedITpowerof26MW,whichrepresentsmorethana54%increasein
installedcapacitysinceourentryinJun-21.
Telxius:Best-in-classinternationalconnectivityInfrastructure
DuringQ1Telxiussustainedpositivetrafficgrowthof+12%y-o-y,which,combinedwithpermanentcostmanagement,
allowedtomaintain ahighprofitability(50.8% EBITDA*margin).Inaddition, Telxiushasopenedits latestsubmarine
cableroute,connectingtheDominicanRepublictotheU.S.withanextensionofSAm-1betweenPuntaCanatoPuerto
Rico,furtherbridgingthegapbetweentheCaribbeanandtheAmericas.
Also, Telxius has been awarded, at the 2024 Data Centre Market Awards, the Excellence in Connectivity for its
state-of-the-art Derio Data Centre. In addition, Telxius and Arelion are collaborating to provide fully diverse,
multi-terabitconnectivityintoTelxius’landingstationsinBocaRatonandJacksonville,Florida.
14
3IncludedinthetotalGroup´sFTTHPPs
4 InternationalfibreasofMar-24
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
TELEFÓNICAHISPAM
20% oftotalTelefónicaQ124revenue 11% oftotalTelefónicaQ124EBITDA*
KeyMessages
• T.Hispamcontinuestomakeprogressininfrastructuresharing
• Growthinvalueaccessesy-o-y(contract+1%,FTTH:+6%leveragedbyalternativeinvestmentmodels)
• Revenue(-8.2%)andEBITDA*(-14.9%)hitbyFXandlowerhandsetsales.ImprovedperformanceexpectedinH2
Operatingperformance
ONNetFibraChile,followingtheapprovaloftheagreementwithEntelon24Oct-23,reachedanagreementinMarch
with Claro VTR for the use of its FTTH infrastructure in the country, rationalising investments and making a more
efficientuseofresources.
Mobilecontractaccessesup 1%y-o-y.CommercialactivitywasaffectedinmostcountriesbytheT.Hispamfocuson
coolingdownthecompetitiveenvironment.Insomecountries,amorerationalenvironmenthasstartedtoemerge.
Infixed,progresscontinuedinthetransformationtoFTTH,withconnectedaccessesup6%,particularlyinColombiaand
Argentina(+37%and+24%respectively).PPsamountedto20.9mafterpassing3.3minthelast12months.
Financialperformance
Revenue declined 8.2% vs. Q1 23, mainly due to the negative impact of the devaluation of the Argentine peso, the
depreciationoftheChileanpeso,lowerhandsetsales(-24.9%),andlowerrevenuesinChile(-20.2%y-o-yaffectedby
thebeforementioneddepreciationoftheChileanpesoandthedecisiontotrytocooldownthemarket).Growthwas
particularlystronginColombia(+7.8%)andMexico(+10.2%).
EBITDA*declined14.9%,affectedbythelowerrevenuementionedabove.Likerevenue,growthinColombia(+20.2%
duetoFTTH,costefficienciesandtheappreciationoftheColombianpeso)andinMexico(+13.9%onhighercontract
revenueandthestabilisationofexpenseswithAT&T)werenotable.EBITDA*marginstoodat17.9%(-1.4p.p.y-o-y).
CapExdeclined14.6%y-o-yandCapExoverrevenuewas5.3%(-0.4p.p.y-o-y)asaresultofslowerexecutionthaninthe
previousyear.EBITDAaL*-CapEx-29.7%y-o-yduetothefallinEBITDA*andthegrowthinleasingexpenses(+10.0%,
mainlycontractrenewalsinPeru;partiallyoffsetbylowerexpensesinMexicofollowingtheclosureofsites).
EvolutionbyCountry
Chile: Revenue declined 20.2%, affected mainly by the difficult mobile competitive environment (although signs of
greaterrationalityarebeginningtoemerge)andthedepreciationoftheChileanpeso.EBITDA*-35.2%duetothefallin
revenue, partially offset by cost efficiencies. Movistar Chile obtained certification in the International Standard for
OccupationalHealthand Safety(OHS)ManagementSystems ISO45001:2018,as anorganisationthatprovides asafe
and healthy working environment by identifying and controlling occupational risks, reducing accidents, injuries and
occupationalillnesses.
Perú:ResultsaffectedbytoughcompetitiveenvironmentdrivingmarketandT.Perurevenuedown(-6.6%vs.Q123).
However,therewasanimprovementinthetrendofmobilerevenue,mainlycontract.EBITDA*fell34.8%y-o-y.T.Perú
reneweditsISO37001anti-briberycertificationfor3years,awardedbyAENORandreaffirmsitscommitmenttozero
tolerance,inallitsoperations,toactsofcorruptioninboththepublicandprivatespheres.
Colombia:Revenue(+7.8%y-o-y)andEBITDA*(+20.2%y-o-y)grewthankstohigherservicerevenues,mainlyfromFTTH
andprepay,costefficienciesandtheappreciationoftheColombianpeso.T.ColombiaistheTelcowiththebestranking
intheEmployersforYouth(EFY)2023study.
15
México:TheCompanycontinuedtoperformwell,withrevenueup10.2%andEBITDA*up13.9%y-o-yinQ124,driven
bytheperformanceofthecontractsegment(ARPU+4.5%).Lowerrentalexpenses,associatedwiththeclosureofsites,
explainedtheincreaseinEBITDAaL*-CapEx(+103.7%y-o-y).Progresscontinuedtobemadeinrecyclingthedismantling
oftheaccessnetwork;152tonnesofelectricalandelectronicequipment,23tonnesofferrousmetalstructuresand14
tonnesofdebriswererecycledinQ124.
Argentina:Revenuefell-20.0%y-o-yandEBITDA*-26.6%,affectedbythepeso'sdevaluationrelativetoeuro(-308%),
higher inflation-related expenses (mainly personnel) partially offset by the progressive rise in tariffs and the lower
impact of promotions. T. Argentina strengthened its commitment to the environment, with a target to reduce 1+2
emissionsby35%by2024.
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts
16
JointVenture,VirginMedia-O2UK
(100%ofVMO2)
Keymessages
• QuarterlyfixedARPUstabilisation
• Improvedservicerevenuegrowthacrossmobileandconsumerfixed
• Rampingupfibredeployment,80%increaseinbuildpacey-o-y
Operatingperformance
VirginMediaO2(VMO2)hasstartedtorampupnetworkinvestmentsandisgatheringmarketingmomentumin the
nexfibrefootprint.Inaddition,VMO2alsostartedtolaunchnewserviceswhilebuildingwiderITefficiencies.Acrossa
quarteroflowcustomeractivity,VMO2deliveredastablefixed-lineandconvergedcustomerbase.
Thefixedfootprintnowreaches17.2mPPs,with194khavingbeenpassedinQ124.Thepaceoffibreupgradeactivity
acrosstheexistingVMO2footprintcontinuestoincrease.Inmobile,investmentin5Gcoverageandcapacitycontinued,
asnextgeneration5Gstandalonewasswitchedonin14citiesacrosstheUK.
VMO2announcedthatO2Recycle(initiativewheredevicesarerepaired,refurbished,resold,orrecycled,leavingzero
parts going to landfill) has expanded its scope to further devices. In addition, together with environmental charity
Hubbub, VMO2 is providing hundreds of recycled tablets and smartphones to help peoplein need powered by free
O2mobiledata.
Thecontractmobilebasefell-134kinQ124(-21kQ123),withthereductionofhandsetsalesasprimarytradingdriver.
Thetotalmobilecustomerbaseachievedarobust35.4m,supportedbygrowthinIoT.O2mobilecontractchurnstood
at1.2%inQ124,stableq-o-q.
InQ124,IoTaccessesgrewby+413k(+425kinQ123).
Fixed broadband net additions totalled +5k in Q1 24 (+29k Q1 23), on continued demand for fast and high-quality
connectivity.
Financialperformance
Revenuegrew+2.6%y-o-yinQ124,withhandsetsalesdeclining(-22.1%y-o-y)astheprimarytradingdriver,offsetting
anotherquarterofgrowthinmobileservicerevenue.Consequently,totalmobilerevenuedeclined-1.7%y-o-yinQ124,
asconsumerscontinuedtotightentheirspend.Fixedrevenuegrew0.5%y-o-yinQ124,asB2Bfell-16.2%y-o-ydriven
byareducedlevelofrevenuerelatedtolong-termleasesofaportionofthefixednetworkandpricingheadwinds.Other
revenueincreased+39.8%y-o-ydrivenbyincreasednexfibreconstructionrevenue.
EBITDA*grew3.3%y-o-yinQ124,withgrowthinmobileservicerevenuepartiallyoffsetbyB2Bfixedheadwindsand
investmentinITanddigitalefficiencyprogrammes.
Q1 24 CapEx increased by 17.1% y-o-y with a Capex/Revenue ratio of 22.1%. As such, EBITDAaL*-CapEx decreased
-15.3%y-o-ywithEBITDAaL*-CapEx/Revenueat12.7%.
(*)Adjusted:Excludesrestructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts.
17
APPENDIX
Selectedconsolidatedfinancialstatements
TELEFÓNICACONSOLIDATEDINCOMESTATEMENT
Unauditedfigures(Eurosinmillions) Q124 Q123 y-o-y%Chg
Revenue 10,140 10,045 0.9
Otherincome 289 284 1.6
Operatingexpenses (7,213) (7,202) 0.2
Impairments&lossesondisposalofassets (11) (6) 92.3
EBITDA 3,205 3,121 2.7
Depreciationandamortisation (2,163) (2,151) 0.5
Operatingincome(OI) 1,042 970 7.4
Shareofprofit(loss)ofinvestmentsaccountedforbytheequitymethod 45 (188) c.s.
Netfinancialincome(expense) (359) (266) 35.0
Profitbeforetaxes 728 516 41.1
Corporateincometax (165) (162) 2.0
Profitfortheperiod 563 354 58.9
AttributabletoequityholdersoftheParent 532 298 78.9
Attributabletonon-controllinginterests 31 57 (46.0)
EBITDA* 3,205 3,145 1.9
EBITDA*margin 31.6% 31.3% 0.3p.p.
Weightedaveragenumberofordinarysharesoutstandingduringtheperiod(millions) 5,633 5,682 (0.9)
BasicearningspershareattributabletoequityholdersoftheParent(Euros) 0.08 0.04 101.6
Basic*earningspershareattributabletoequityholdersoftheParent(Euros) 0.10 0.09 8.0
-TheweightedaveragenumberofordinarysharesoutstandingduringtheperiodhasbeenobtainedapplyingtheIASrule33"Earningspershare".Thereby,
theweightedaverageofsharesheldastreasurystockhavenotbeentakenintoaccountasoutstandingshares.
- Basic earnings per share ratio is calculated dividing Profit for the period Attributable to equity holders of the Parent, adjusted for the net coupon
corresponding to “Other equity instruments” (-€69m in January-March 2024 and -€66m in January-March 2023), by the weighted average number of
ordinarysharesoutstandingduringtheperiod.
(*) Adjusted: Excludes restructuring costs, significant capital gains/losses from the sale of companies, goodwill impairment charges and material non-
ordinaryimpacts.
18
TELEFÓNICACONSOLIDATEDSTATEMENTOFFINANCIALPOSITION
Unauditedfigures(Eurosinmillions) Mar24 Dec23 %Chgvs.Dec
Non-currentassets 83,332 83,568 (0.3)
Intangibleassets 11,190 11,370 (1.6)
Goodwill 18,596 18,708 (0.6)
Property,plantandequipment 22,948 22,944 0.0
RightsofUse 8,015 8,448 (5.1)
Investmentsaccountedforbytheequitymethod 8,778 8,590 2.2
Financialassetsandothernon-currentassets 7,629 7,268 5.0
Deferredtaxassets 6,176 6,240 (1.0)
Currentassets 20,988 20,756 1.1
Inventories 999 929 7.5
Receivablesandothercurrentassets 10,026 10,132 (1.0)
Taxreceivables 1,306 1,193 9.5
Othercurrentfinancialassets 1,586 1,078 47.1
Cashandcashequivalents 6,391 7,151 (10.6)
Non-currentassetsanddisposalgroupsheldforsale 680 273 149.3
TotalAssets=TotalEquityandLiabilities 104,320 104,324 0.0
Equity 27,208 27,096 0.4
Equityattributabletoequityholdersoftheparentandotherholdersofequity
instruments 22,967 21,852 5.1
Equityattributabletonon-controllinginterests 4,241 5,244 (19.1)
Non-currentliabilities 53,963 53,829 0.2
Non-currentfinancialliabilities 34,122 33,360 2.3
Non-currentleaseliabilities 6,112 6,708 (8.9)
Payablesandothernon-currentliabilities 3,683 3,605 2.2
Deferredtaxliabilities 2,848 2,702 5.4
Non-currentprovisions 7,197 7,454 (3.4)
Currentliabilities 23,148 23,399 (1.1)
Currentfinancialliabilities 3,867 3,701 4.5
Currentleaseliabilities 2,185 2,239 (2.4)
Payablesandothercurrentliabilities 13,432 13,957 (3.8)
Currenttaxpayables 1,671 1,869 (10.6)
Currentprovisions 1,582 1,596 (0.9)
Liabilitiesassociatedwithnon-currentassetsanddisposalgroupsheldforsale 412 37 n.s.
-Theconsolidatedstatementoffinancialpositionincludesapositivevalueofthederivativesportfolioforanetamountof€526m,€2,073mincludedasfinancialliabilities
and€2,599mincludedasfinancialassets.
19
TELEFÓNICACONSOLIDATEDCASHFLOWSTATEMENT
Unauditedfigures(Eurosinmillions) Q124 Q123 y-o-y%Chg
Cashreceivedfromoperations 12,390 12,070
Cashpaidfromoperations (9,464) (9,169)
Netpaymentsofinterestandotherfinancialexpensesnetofdividendsreceived (565) (474)
Taxesproceeds/(paid) (149) (126)
Netcashflowprovidedbyoperatingactivities 2,212 2,301 (3.9)
(Payments)/proceedsoninvestmentsinproperty,plantandequipmentand
intangibleassets,net (1,530) (1,394)
Proceedsondisposals/(paymentsoninvestments)incompanies,netofcashand
cashequivalentsdisposed (25) 948
Proceeds/(payments)onfinancialinvestmentsnotincludedundercashequivalents (74) 289
Netproceeds/(Payments)fortemporaryfinancialinvestments (359) (27)
Netcashflowusedininvestingactivities (1,988) (184) n.s.
Dividendspaid (144) (145)
Proceedsfromsharecapitalincreasewithminorityinterest — 114
Proceeds/(payments)oftreasurysharesandotheroperationswithshareholders
andwithminorityinterests (899) (635)
Operationswithotherequityholders(1) (66) (126)
Proceedsonissueofdebenturesandbonds,loans,borrowingandpromissory
notes,andotherdebts 1,953 915
Repaymentsofdebenturesandbonds,andotherdebtsandrepaymentsofloans,
borrowingsandpromissorynotes (1,163) (1,496)
LeasePrincipalPayments (658) (623)
Financedoperatingpaymentsandinvestmentsinproperty,plantandequipment
andintangibleassetspayments (28) (32)
Netcashusedinfinancingactivities (1,005) (2,028) (50.4)
Effectofchangesinexchangerates,cashreclassifiedtoassetsheldforsale,effect
ofchangesinconsolidationmethodsandothers 21 3
Netincrease(decrease)incashandcashequivalentsduringtheyear (760) 92 c.s.
Cashandcashequivalentsatthebeginningoftheperiod 7,151 7,245
Cashandcashequivalentsattheendoftheperiod 6,391 7,337
(1)Includesissuanceandcouponsofundateddeeplysubordinatedsecurities
20
Alternativeperformancemeasures
The Group's management utilises a range of Alternative Performance Measures (APMs) alongside those expressly
defined in the IFRS to gain additional insights into the Group's performance, solvency, and liquidity. However, it's
importanttonotethatthesemeasuresshouldnotbeviewedinisolationorassubstitutesforIFRSmeasures.
From2024TelefónicaischangingsomeofitsAPMsforvariousreasons.Thismoveaimstosimplifyguidancebyaligning
it with the reported consolidated results, enhancing comprehension. Additionally, these adjustments enhance user-
friendliness, facilitating easier navigation through results and better tracking of performance against guidance.
Furthermore,theinclusionofnewguidanceKeyPerformanceIndicators(KPIs)allowsformorestraightforwardtracking,
including reported revenue split between B2C, B2B, and wholesale/partners and others, reported EBITDA,
EBITDAaL-CapEx,CapExtoSales,adjustedfigures,andtheleverageratiotarget.
Inrecentyears,EBITDA(formerlyOIBDA)hasbeentheprimaryoperatingmetricforourguidance.WhilebothOIBDA
andEBITDAarenon-GAAPmeasures,wenowguideonEBITDAtoalignwithmarketstandards.Thistransitionreflectsa
naturalevolutioninourreportingapproach,asOIBDAhistoricallyservedasaninternalmetric.
Additionally,thecompanyprovidesguidanceonCapExandEBITDAaL-CapEx,implicitlyindicatingEBITDAaLinlinewith
sector trends. Recognising the significance of leases in daily operations, Telefónica aims to simplify reporting and
mitigatevolatilitybyfocusingonEBITDAandEBITDAaL-CapEx,whichserveasreliableproxiesforoperatingleverage.
Tofurtherstreamlineourreportingandenhanceuser-friendliness,wehavedecidedtodiscontinuereportingOrganic
figures. This decision aligns with industry standards and simplifies our reporting structure, enabling stakeholders to
navigate our results more effectively and track performance against guidance. Moreover, by incorporating new
guidanceKPIs,westrengthenourabilitytotrackkeymetricsandgaindeeperinsightsintoourperformancetrends.
EBITDA(formerlyOIBDA)andEBITDAaL(formerlyOIBDAaL)
Earningsbeforedepreciationandamortisation(EBITDA)iscalculatedbyexcludingsolelydepreciationandamortisation
fromOperatingIncome.EBITDAaLiscalculateddeductingamortizationofrightsofuseandinterestofleaseliabilities
fromEBITDA.EBITDAandEBITDAaLareusedtotracktheperformanceofthebusinessandtoestablishoperatingand
strategictargetsofTelefónicaGroupcompanies.EBITDAandEBITDAaLarecommonlyreportedmeasuresandarewidely
usedamonganalysts,investors,andotherinterestedpartiesinthetelecommunicationsindustry,althoughnotexplicitly
defined in IFRS, and therefore, may not be comparable to similar indicators used by other companies. EBITDA and
EBITDAaLshouldnotbeconsideredasasubstituteforOperatingIncome.
ThedetailedcalculationofTelefónicaGroup'sEBITDAandEBITDAaLcanbefoundintheselectedfinancialinformation
containedinhttps://www.telefonica.com/en/wp-content/uploads/sites/5/2024/04/rdos24t1-data.xlsx.
EBITDAaL-CapEx
EBITDAaL-CapExisdefinedasEBITDAaLreducedbyaccruedcapitalexpendituresexcludingthoserelatedtospectrum
acquisitions.
Webelievethatitisimportanttoconsidercapitalexpendituresexcludingspectrumacquisitions,togetherwithEBITDAaL
inordertohaveamorecompletemeasureoftheperformanceofourtelecommunicationsbusinesses.Weusethese
measuresinternallytotracktheperformanceofourbusiness,toestablishoperatingandstrategictargetsoftheGroup's
businessesandinourinternalbudgetingprocess.
EBITDAaL-CapExisnotameasureexpresslydefinedinIFRS,andthereforemaynotbecomparabletosimilarindicators
usedbyothercompanies.Inaddition,EBITDAaL-CapExshouldnotbeconsideredasubstituteforOperatingIncome,the
most comparable financial measure calculated in accordance with IFRS, or any measure of liquidity calculated in
accordancewithIFRS.
AdjustedEBITDA,AdjustedEBITDAaL,AdjustedEBITDAaL-CapEx
“Adjusted”resultorresultsin“adjusted”termsintendtopresentaresultadjustedbycertainfactorswhichdistortthe
analysisofthebusinessperformance,butwithoutadjustingforexchangeratesorhyperinflation.Theadjustedresultis
calculated for EBITDA, EBITDAaL and EBITDAaL-CapEx. The "adjusted" result provides useful information for the
companyandmarketagentsbecause:
• It provides additional information on the adjusted performance of the Group's operations, removing the
distortingeffectsofcertainfactors,astheyarespecifictoacertainmomentandnotassociatedwiththeordinary
performanceofthebusiness,facilitatingtheadjustedanalysisofthebusiness.
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• The inclusion of the business adjusted performance is used both internally and by the various agents in the
markettoconsistentlymonitortrendsandoperatingperformanceofthebusiness;thisdataalsofacilitatesthe
relation between the business performance of Telefónica and that of other operators, although the term
"adjusted"isnotatermdefinedinIFRS,andthe"adjusted"measuresincludedhereinmaynotbecomparableto
similarmeasurespresentedbyothercompanies.
For the purposes of this document, "adjusted" result is defined as the reported result as adjusted by the following
factors: capital gains/losses from the sale of companies (for significant impacts) write-offs, material non-recurring
impactsandrestructuringcosts.
Forthepurposesofthisdocument,AdjustedEBITDA,AdjustedEBITDAaLandAdjustedEBITDAaL-CapExaredefinedas
the EBITDA, EBITDAaL and EBITDAaL-CapEx adjusted by the following factors: restructuring costs, significant capital
gains/lossesfromthesaleofcompanies,goodwillimpairmentchargesandmaterialnon-ordinaryimpacts.
Furthermore,theGroupusestheEBITDAmarginmeasure,whichistheresultofdividingAdjustedEBITDAbyrevenue,
andEBITDAaL-CapExmargin,obtainedbydividingAdjustedEBITDAaL-CapExbyrevenueandservingasameasureof
operatingleverage.
ReconciliationbetweenreporteddataandAdjustedEBITDA,AdjustedEBITDAaLandAdjustedEBITDAaL-CapExcanbe
found on the selected financial information contained on https://www.telefonica.com/en/wp-content/uploads/
sites/5/2024/04/rdos24t1-data.xlsx.
Debtindicators
a. NetfinancialdebtandNetfinancialdebtplusleasesandNetfinancialdebtpluscommitments
As per the Group calculation, net financial debt includes: i) current and non-current financial liabilities in our
consolidatedstatementoffinancialposition(whichincludesthenegativemark-to-marketvalueofderivatives),ii)other
payables included in “Payables and other non-current liabilities” and "Payables and other current liabilities" (mainly
correspondingtopayablesfordeferredpaymentofradiospectrumthathaveanexplicitfinancialcomponentandthe
supplier financing for the customer financing of terminal sales) and (iii) financial liabilities included in “Liabilities
associatedwithnon-currentassetsclassifiedasheldforsale”.
From these liabilities, the following are subtracted: i) cash and cash equivalents, ii) current financial assets (which
includeshort-termderivatives),iii)thepositivemark-to-marketvalueofderivativeswithamaturitybeyondoneyear,
iv) other interest-bearing assets (components of “Receivables and other current assets”, “Tax receivables” and
“Financialassetsandothernon-currentassets”intheconsolidatedstatementoffinancialposition),v)cashandother
currentfinancialassets includedin“Non-currentassetsclassified asheldforsale”,vi) mark-to-marketadjustmentby
cashflowhedgingactivitiesrelatedtodebt,andvii)fairvalueofderivativesadjustmentusedfortheeconomichedging
ofgrosscommitmentsrelatedtoemployeebenefits.In"Receivablesandothercurrentassets"weincludethecustomer
financing of terminal sales classified as short term, and "Financial assets and other non-current assets" includes
derivatives,instalmentsforthelong-termsalesofterminalstocustomersandotherlong-termfinancialassets.
Netfinancialdebtpluscommitmentsiscalculatedbyaddinggrosscommitmentsrelatedtoemployeebenefitstonet
financialdebtandthefairvalueofthederivativesusedfortheeconomichedgingofsuchcommitmentstonetfinancial
debtanddeductingthevalueoflong-termassetsassociatedwiththosecommitmentsandthetaxbenefitsarisingfrom
the future payments of those commitments. Gross commitments related to employee benefits are current and
non-current provisions recorded for certain employee benefits such as termination plans, post-employment defined
benefitplansandotherbenefits.
Netfinancialdebt,netfinancialdebtplusleasesandnetfinancialdebtpluscommitmentsaremeaningfulforinvestors
andanalystsbecausetheyprovideananalysisofGroupsolvencyusingthesamemeasuresusedbyGroupmanagement.
They are used to calculate internally certain solvency and leverage ratios. Nevertheless, none of them should be
consideredasasubstituteforgrossfinancialdebtaspresentedintheconsolidatedstatementoffinancialposition.
The reconciliation of Telefónica Group's gross financial debt according to the consolidated statement of financial
position, net financial debt and net financial debt plus leases can be found in the financial information contained in
https://www.telefonica.com/en/wp-content/uploads/sites/5/2024/04/rdos24t1-data.xlsx.
Net financial debt is also defined in the consolidated financial statements of the Group for 2023 (see "Alternative
measuresnotdefinedinIFRS"inNote2).
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b. Leverageratio
The leverage ratio is calculated as the ratio of net financial debt over Adjusted EBITDAaL for the past 12 months,
includingorexcludingtheadjustedEBITDAaLofthecompanieswhichareincorporatedorremovedfromtheperimeter
ofconsolidation.
The reconciliation of the leverage ratio can be found in the selected financial information contained in
https://www.telefonica.com/en/wp-content/uploads/sites/5/2024/04/rdos24t1-data.xlsx.
FreeCashFlow
TheGroup’sfreecashflowiscalculatedstartingfrom“Netcashflowprovidedbyoperatingactivities”asindicatedinthe
consolidatedstatementofcashflows;deducting(payments)/proceedsoninvestmentsinproperty,plantandequipment
andintangibleassets(excludingspectrumpayments),dividendspaidtominorityinterestsandleaseprincipalpayments.
Toenhancetheaccuracyandcompletenessofourfreecashflowcalculation,wenowonlyconsiderdividendsstemming
fromfreecashflowgeneratedbytheUKJV,excludingpotentialrecapitalizationswhicharedecidedannuallybasedon
market conditions, and any other potential cash available for distribution. Additionally, hybrid coupon payments are
incorporated for a clearer view of available recurrent cash generation. On top of that, personnel commitments
paymentsarealsoincludedtoensurecomprehensiveanalysisandalignmentwithoperationalrealities.
Webelievethatfreecashflowisameaningfulmeasureforinvestorsandanalystsbecauseitprovidesananalysisofthe
cashflowavailabletoprotectsolvencylevelsandtoremuneratetheparentcompany’sshareholders.Thesamemeasure
isusedinternallybyGroupmanagement.Nevertheless,freecashflowshouldnotbeconsideredasasubstituteforthe
variousflowsofcashaspresentedintheconsolidatedstatementsofcashflows.
The reconciliation of net cash flow from operations, according to the consolidated statement of cash flows (on a
straight-line basis) and the Group’s Free cash flow according to the above definition, can be found on the selected
financial information contained in https://www.telefonica.com/en/wp-content/uploads/sites/5/2024/04/rdos24t1-
data.xlsx.
AdjustedNetIncome(formerlyUnderlyingNetIncome)andAdjustedEPS
AdjustedNetincomeandAdjustedEPSaredefinedasthereportedNetIncomeandEPSasadjustedbythefollowing
factors:
• Restructuringcosts,significantcapitalgains/lossesfromthesaleofcompanies,goodwillimpairmentchargesand
materialnonordinaryimpacts,inlinewiththeAdjustedEBITDAcalculation.
• Amortisationofintangibleassetsfrompurchasepriceallocationprocesses.
• The positive or negative impact in Share of Results of investments accounted for by the equity method of FX
differencesandchangesinthefairvaluesofVMO2’sderivativesrecordedinitsfinancialresults.
TheAdjustedNetIncomeandAdjustedEPSmeasuresprovideusefulinformationforthecompanyandmarketagents
because:
• It provides additional information on the underlying performance of the Group's operations, removing the
distortingeffectsofcertainfactors,astheyarespecifictoacertainmomentandnotassociatedwiththeordinary
performanceofthebusiness,facilitatingtheunderlyinganalysisofthebusiness.
• Theinclusionofthebusinessunderlyingperformance is used bothinternallyandbythevariousagentsinthe
markettoconsistentlymonitortrendsandoperatingperformanceofthebusiness;thisdataalsofacilitatesthe
relation between the business performance of Telefónica and that of other operators, although the term
"adjusted"isnotatermdefinedinIFRS,andthe"adjusted"measuresincludedhereinmaynotbecomparableto
similarmeasurespresentedbyothercompanies.
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DISCLAIMER
ThisdocumenthasbeenpreparedbyTelefónica,S.A.(hereinafter“Telefónica”or“theCompany”,andtogetherwithits
subsidiariesthe“TelefónicaGroup”)exclusivelyfor its use during the presentationoffinancialresults.TheCompany
doesnotassumeanyliabilityforthecontentofthisdocumentifusedforanypurposesdifferentfromtheoneoutlined
above.
This document may contain forward-looking statements, opinions and information (hereinafter, the “Statements”)
relating to the Telefónica Group. These Statements may include financial and other forecasts and estimates and
statementsregardingplans,objectivesandexpectationsregardingmatterssuchasthecustomerbaseanditsevolution,
growth of the different business lines and of the global business, market share, possible acquisitions, divestitures or
other transactions, the outcome of recently completed transactions and the Telefónica Group’s results and its
operations, including its environmental, social and governance commitments and targets. The Statements can be
identified, in certain cases, through the use of words such as “forecast”, "expectation", "anticipation", “aspiration”,
"purpose", "belief", “may”, “will”, “would”, “could”, “plan”, “project” or similar expressions or variations of such
expressions.
TheseStatementsreflectthecurrentviewsoftheTelefónicaGroup’smanagementandmaychangeovertime.Further
theydonotintendtobeexhaustiveandtheyhavenotbeenverifiedbythirdpartiesoraudited,therefore,Telefónica's
opinionsandaspirationswithrespecttofutureeventsdonotrepresent,bytheirownnature,anyguaranteeoffuture
fulfilmentorprofitability,andaresubjecttorisksanduncertaintiesthatcouldcausethefinaldevelopmentsandresults
tomateriallydifferfromthoseexpressedorimpliedbysuch Statements. These risks and uncertaintiesincludethose
identified in the documents containing more comprehensive information filed by Telefónica with the different
supervisoryauthoritiesofthesecuritiesmarketsinwhichitssharesarelistedand,inparticular,theSpanishNational
SecuritiesMarketCommission(CNMV)andtheU.S.SecuritiesandExchangeCommission(SEC).
Exceptasrequiredbyapplicablelaw,TelefónicadoesnotassumeanyobligationtopubliclyupdatetheStatementsto
adapt them to events or circumstances taking place after the date hereof, including, among others, changes in the
Telefónica’sGroupbusiness,changesinitsbusinessdevelopmentstrategyoranyothercircumstances.
Thisdocumentmaycontainsummarized,non-auditedornon-IFRSfinancialinformation(includinginformationreferred
to as “organic” and “underlying”). Such information may not be prepared in accordance with the financial reporting
requirements established by the SEC, is presented for supplemental informational purposes only and should not be
consideredasubstituteforauditedfinancialinformationpresentedinaccordancewithIFRS.TheCompany’snon-IFRS
financialmeasuresmaydifferfromsimilarlytitledmeasuresusedbyothercompanies.Inaddition,therearematerial
limitationsassociatedwiththeuseofnon-IFRSfinancialmeasuressincetheyexcludesignificantexpensesandincome
that are recorded in the Company’s financial statements. Information related to Alternative Performance Measures
(APM)usedinthepresentdocumentareincludedintheAppendix“Alternativeperformancemeasures”,page21ofthis
document. Moreover, the information contained herein should be considered only together with Telefónica’s
consolidatedfinancialstatementsandconsolidatedmanagementreportfortheyear2023,submittedtotheCNMV,in
Note2,page14ofthe.pdffiled.Recipientsofthisdocumentareinvitedtoreadit.
Neither this document nor any of its contents constitute an offer to purchase, sale or exchange any security, a
solicitation of any offer to purchase, sale or exchange any security, or a recommendation or advice regarding any
security,orasolicitationforanyvoteorapprovalinanyotherjurisdiction.
FOLLOWUS:
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