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Reasons to invest in Telefónica

Telefónica is a wonderful company with great opportunities ahead. The Company has very strong and hard to replicate assets and capabilities

Strengths

  • Four strong core markets with strong operations. We lead in two of our core markets.
    • Spain: Fifth telco market in Europe, with highly developed convergence and network infrastructure.
    • Brazil: Largest market in LatAm, with high growth and three national mobile players.
    • Germany: Largest telco market in Europe with untapped opportunity in fibre.
    • UK: Second telco market in Europe, and largest B2B Digital Services market.
  • Experts in network operations with robust, advanced infrastructure.
  • Pioneers in convergence strategy.
  • Highly talented and professional team.
  • Deep know-how in most areas.
  • Strong culture: pride and sense of belonging.

Transform & Grow is the plan Telefónica needs to capture the opportunities ahead, improve financial flexibility and generate sustainable value for all shareholders.

As an additional upside to the Plan, we will pursue in-market Telco consolidation to unlock profitable scale and enable value-accretive investments.

Six strategic pillars to become a ‘best-in-class European Telco’, with profitable scale.

  1. Deliver best-in-class customer experience
  2. Expand B2C offering
  3. Scale B2B
  4. Evolve technological capabilities
  5. Simplify Telefónica’s operating model
  6. Develop talent

Guidance anchored on specific levers across 6 pillars.

  • Revenue: expected to grow at CAGR of 1.5-2.5% over 2025-2028, accelerating to 2.5-3.5% CAGR between 2028-2030.
  • Adjusted EBITDA: CAGR of 1.5-2.5% for 2025-2028 and accelerating to 2.5-3.5% for 2028-2030.
  • CapEx/Sales will decrease to ~12% in 2026-2028 period. Further decline to ~11% by 2030.
  • Adjusted OpCFaL (EBITDAaL minus CapEx) CAGR of 1.5-2.5% for 2025-2028 and accelerating to 2.5-3.5% for 2028-2030.

Financial Strategy based on de-risked FCF and disciplined capital allocation.

  • De-risked FCF
    • FCF base for guidance expected in the range of €2.9-3.0bn in 2026, with a CAGR of 3-5% for 2025-2028.
  • Disciplined capital allocation
    • Anchored investment grade and appropriate balance sheet (Leverage reduction to ~2.5x Net debt/EBITDAaL by 2028, supporting a solid investment grade balance sheet).
    • Sustainable remuneration (2025 DPS of €0.30, 2026 DPS of €0.15, 2027-2028 target remuneration based on 40%-60% payout of FCF base for dividend).
    • Value accretive M&A.
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