Reasons To Invest


Backed by the optionality of €106bn in assets and the scale of operations serving more than 340m total customer accesses, growth, operational execution and debt reduction continue to be the main drivers of value creation at Telefónica.

We are making significant, sustainable progress to reduce debt, supported by solid free cash flow generation and asset optimisation and monetisation. In parallel, we are growing and retaining our core base of high value customers through improving the customer experience and leveraging our best-in-class networks across the group, while unlocking the significant incremental growth and value creation potential in our Infrastructure and Tech businesses.

Our investment case reflects the five pillars of our strategy:

  1. Our attractive core businesses in Spain, Germany, UK and Brazil are a platform for sustainable growth and value creation
    • We are well positioned in our large, attractive markets with the scale, best-in-class networks and high-value customer services and strategies in each to capture and monetise ever rising demand for data and connectivity, through improving our operating leverage over time
      • 207m retail accesses plus 12.7m wholesale accesses
      • 14.7m retail fixed broadband accesses of which 7.7m (52%) are FTTH (+9.6 p. p. y-o-y)
      • 39m FTTH homes passed (+19% y-o-y)
      • 166.1m retail mobile accesses, 51% contract
      • 94% LTE mobile network coverage (+2.4 p.p. y-o-y)
      • 5G networks launched in all 4 core markets, rollout supported by #1 FTTH position in Europe and Brazil and network virtualisation through our UNICA platform which combines multiple physical networks into one virtual, software-based network
    • These businesses are, or are well on their way to being, our free cash flow and capital generation engines. Our operations are well invested with CapEx spend either largely complete or well covered by cashflows OIBDA-CapEx CapEx OIBDA OIBDA Mg OIBDA-CapEx - ingresos
    • They are our conduits for value optimisation:
      • Enabling a balanced finance strategy, allowing for further investment in profitable growth or return of cash to shareholders dividend policy
      • Driving continued organic de-leveraging Net Debt
  2. Our growing global Infrastructure and Tech businesses are building the world of tomorrow
    • We provide parallel exposure to additional streams of revenue growth and value creation, both within and beyond our operating footprint
    • Through Telefónica Tech, we are building on the carve-outs of our Cloud, Cybersecurity and IoT & big data operations to enhance our agility, focus and capabilities to better capitalise on the global growth in demand in each market
    • Together, these already represent a €1.1bn revenue business (9M 2020), growing 15.4% organically y-o-y
    • Through Telefonica Infra, we are focused on unlocking and monetising the value of our infrastructure expertise and asset base while building a leading global infrastructure business with interests across towers, submarine cables, datacentres and fibre
    • Telefonica Infra also brings agility and optionality to the Group’s new fibre infrastructure investment plans, leading the creation of neutral fibre vehicles and companies in joint venture with partners or co-investors, including the creation of our wholesale fibre joint venture with Allianz in Germany and the pursuit of similar initiatives in Brazil and several of our Hispam markets
    • Our holding in Telxius provides the group with significant optionality for value realisation, including different ownership options to enable faster growth where it makes financial sense. In January 2021, Telxius has announced the sale of its telecommunications towers division in Europe (Spain and Germany) and in Latin America (Brazil, Peru, Chile and Argentina) to ATC for €7.7bn, with an implied multiple over OBIDAaL pro forma of 30.5x and the capital gain attributable to Telefónica estimated to approximately €3.5bn. Once the transaction is complete, T. Group's net financial debt will be reduced by approximately €4.6bn and the leverage ratio (Net Debt/OIBDAaL) by approximately 0.3x.
  3. Our non-core Hispam portfolio is increasingly self-sufficient and ready for separation
    • We are optimising our attractive national market operations for collective or individual divestment, spin off or other M&A alternatives to streamline our structure and core market focus, reduce our regional exposure and contribute to Group de-leveraging
  4. Our simplified, streamlined and digital operating model is driving increasing efficiency
    • We are implementing a new organisational model to accelerate the simplification, efficiency and digitalisation of our Group operations
      • 78% of total business processes digitalised (up from 67% in Q3 2019)
  5. Our commitment to creating a more sustainable future is providing value for all of our stakeholders
    • We are leaders in sustainable development in our industry, delivering benefits for our customers, providers, employees and shareholders
      • Included in the CDP A list for the 6th year running
      • Achieved an A rating from MSCI
      • Sustainalytics #1 Global ESG Ranking in telco industry
      • 1st ever green bond issued in the sector
    • We are a key actor at the heart of society’s efforts to build-back-better after Covid-19


NOTE: Figures from the latest publication available for each year, except for Net Financial Debt, redefined since 2019 and restated for comparison purposes for the previous years since the entry into force of IFRS-16.