• Free cash flow generation accelerated its growth and reached 1,030 million euros in the first nine months of 2024, 27.7% more than the same period of the previous year.
• The group increased its number of hits to 393 million thanks to the acceleration of commercial activity in its key markets, especially in Spain, where it achieved the highest net customer additions in the last six years.
• Telefónica is making progress in infrastructure deployment and reaching 71% 5G coverage in its four main markets, meeting its goal of exceeding 70% more than two years ahead of schedule.
• The company reiterates its guidance for 2024: revenue growth of approximately 1% and EBITDA and EBITDAaL-CapEx growth between 1% and 2%; a CapEx/Revenue ratio of up to 13%; and free cash flow growth of more than 10%.
• The Group also confirms the 2024 dividend of €0.30 per share, payable in two installments of €0.15 each, to be paid in December and June 2025.
• “Our GPS Action Plan is ambitious and continues to deliver to move in the right direction and strengthen profitable growth. In the first nine months of the year, in a global context of uncertainties, Telefónica achieved a net income of almost one billion euros and reiterates all its financial objectives for the whole year. In addition, we confirm the remuneration of our shareholders for 2024,” said Telefónica President José María Álvarez-Pallete.

Madrid, November 7, 2024. Telefónica today presented its results for the first nine months of 2024, which were marked by the confirmation of the financial targets set for the year and the achievement of a cumulative net income of 989 million euros. In adjusted terms, net income reached €1,914 million in the first nine months, up 16.8%.

These results allow Telefónica to reiterate all of its financial targets for 2024. These targets consist of revenue growth of around 1%, EBITDA growth between 1% and 2% and EBITDAaL-CapEx growth between 1% and 2%, a CapEx for revenue. a ratio of up to 13% and free cash flow growth of over 10%. Telefónica also confirmed shareholder remuneration for 2024 consisting of a cash dividend of €0.30 per share payable in two installments: December 2024 (€0.15) and June 2025 (€0.15).

“Our GPS Action Plan is ambitious and continues to deliver to move in the right direction and strengthen profitable growth. In the first nine months of the year, against a global backdrop of uncertainty, Telefónica posted a net income of almost 1 billion euros and reiterated all of its financial targets for the full year. We also confirmed our shareholder remuneration for 2024. We continue to transform networks with a strategic focus on quality and robustness, and do so with higher customer satisfaction. The future opportunities are enormous and Telefónica will continue to leverage its resources effectively to drive growth in the service of our shareholders and customers,” said Telefónica President José María Álvarez-Pallete.

Currency impact

Favorable commercial activity in all markets and local currency growth rates were affected in Q3 results by the evolution of exchange rates, especially the Brazilian real. Currency depreciation had a quarterly impact of EUR 429 million on revenues and EUR 159 million on operating income before depreciation (EBITDA). Thanks to the hedging strategy implemented by the company, the effect of exchange rate movements on cash flow was limited to 25 million euros in the first nine months of the year.

Free cash flow was 4.2 times higher in the quarter than in the last three months at €866 million, 89.5% more than in the third quarter of 2023. During year to September, it reached 1,030 million euros, 27.7% more than the previous year. -year and therefore above the annual target of over 10%.

As a result of currency performance, third-quarter revenue fell 2.9% to €10,023 million to reach a total of €30,418 million in the first nine months.

Additionally, 60% of quarterly revenue came from the residential market (B2C); 21% of the business segment (B2B); and the remaining 19% from wholesale, partner and other revenues.

Due to the currency impact, EBITDA decreased by 2.5% in the quarter to EUR 3,260 million. In the first nine months of the year, operating income before depreciation amounted to EUR 9,684 million, up 0.4%. CapEx at the end of September was €3,642 million (-4.8%) and represents 12% of revenues, in line with annual forecasts. Operating cash flow (EBITDAaL-CapEx) was €1,253 million in the third quarter, in line with the same period in 2023, and reached €4,001 million in the first nine months, up 2.2%.

Increased growth and loyalty in Spain

By country, Telefónica España’s EBITDA confirmed its return to growth, rising by 1% in the third quarter to €1,155 million and by 0.6% in the first nine months to €3,387 million.

This performance occurred against a backdrop of accelerated business growth, with the highest net customer additions in Spain over the past six years; higher customer satisfaction with a Net Promote Score (NPS) of 34 points, up 2 percentage points from June; and greater loyalty with a churn rate of 0.8%, the lowest level in history. In addition, average revenue per customer (ARPU) remained above €90.

In Germany, EBITDA rose 3% in the quarter to €694 million and 3.9% between January and September to €2,027 million. Customer loyalty in the German market also improved, with loss down to 1%.

In Brazil, EBITDA fell 5.9% in the quarter to 1,030 million euros due to the impact of exchange rates, but in the first nine months it rose 2.2% to 3,066 million euros. In the UK, VMO2 confirmed its full-year financial targets, including a commitment to pay dividends to shareholders, and Hispam maintained its strategy to reduce capital exposure in the region and continue to operate more efficiently and at lower costs small.

Evolution of the main global units

Telefónica Tech reported revenues of 470 million euros in the third quarter, for a total of 1,453 million euros in the first nine months of the year, 9.5% more than in the same period of the previous year, in -a context of sustainable and commercial growth. dynamism reflected in a 40% increase in orders. Telefónica Infra, which continues to drive growth and accelerate digital inclusion through the efficient deployment of next-generation infrastructure, ended September with 24 million fiber locations. Telxius, the submarine cable management company, reported year-on-year traffic growth of 12% in the first nine months and maintained its high profitability rate (48.9%).

Favorable competitive positioning

Telefónica ended September with 393 million hits, up 2%. Fiber and mobile contract customers continued to grow, with cumulative growth of 11% and 3% respectively compared to September 2023. These good trading figures are supported by, among other factors, the quality and strength of the company’s networks. In terms of network rollout, Telefónica maintained its global lead in fiber, so that the international footprint of ultrafast networks in September stood at 178 million premises (+4%), of which 81.6 million were FTTH (+13%). This figure includes a total of 24.1 million premises from the Group’s various fiber vehicles (+19%). Also, at the end of September, 5G technology covered 90% of the population in Spain, 97% in Germany, 57% in Brazil and 68% in the UK. Cumulative deployment in the Group’s four main markets reached 71% of the population, which is more than two years ahead of the target set in the GPS strategic plan to reach 70% by 2026.

Sustainability

During the third quarter of 2024, Telefónica led a Climate Maturity Assessment implemented through the Telco JAC (Joint Alliance for CSR) to address scope 3 (value chain) emissions. This includes customized training for approximately 1,000 key suppliers. The company also launched the “Connected Living” report, which details how connectivity has helped the company’s customers in Brazil, Germany and Spain avoid 69 million tonnes of CO₂ in 2023.

Socially, Telefónica advances diversity, with 33.6% of female executives making solid progress towards the target of 37% by 2027. In addition, during the quarter Telefónica was included as an “FT Diversity Leader” for the fifth consecutive year and scored 81/100 in the latest EcoVadis assessment, placing the company in 99^th percentile of all evaluated companies (approximately 130,000). Finally, in terms of governance, Telefónica actively participated in the development of the AI ​​Office Code of Practice and joined the EU AU Pact to promote the development of reliable and secure AI. In addition, last October, Telefónica was awarded the highest award in the Reporting and Transparency category of the Reuters Sustainability Awards 2024.