In This Article:
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Revenue Growth in Spain: Domestic revenue grew by 1.7% year-on-year.
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EBITDAaL in Spain: Accelerated by 1% quarter-on-quarter.
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Operating Cash Flow in Spain: Improved by 2% due to CapEx reduction.
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Revenue Growth in Brazil: Rose 6% above inflation.
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EBITDAaL minus CapEx in Brazil: Increased by 14.5% with margin expansion.
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EBITDAal minus CapEx in Germany: Grew by 4.8% year-on-year.
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EBITDAal minus CapEx in UK: Grew by 15.2%, with margin improvement.
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Revenue in Telefonica Tech: Increased by 6.6% year-on-year.
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Free Cash Flow: Totaled minus EUR205 million, affected by seasonality.
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Net Financial Debt: Decreased by EUR0.1 billion in the first three months.
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Net Debt to EBITDA Ratio: Increased to 2.67 times due to free cash flow seasonality.
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Average Cost of Debt: Reduced from 3.64% in March '24 to 3.49% in March 2025.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Telefonica SA (NYSE:TEF) reported strong customer engagement with high NPS scores, particularly in Spain, Brazil, and Germany.
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The company achieved significant progress in fiber and 5G rollout, with 1.5 million premises connected to fiber and 75% 5G coverage in core markets.
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Telefonica SA (NYSE:TEF) successfully reduced net debt and maintained a stable free cash flow outlook, despite seasonal fluctuations.
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The company executed strategic sales in Hispam, including operations in Argentina and Peru, which improved financial flexibility and reduced exposure.
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Telefonica SA (NYSE:TEF) reiterated its 2025 guidance, expecting revenue, EBITDA, and EBITDAaL minus CapEx to grow in organic terms, with a confirmed cash dividend for 2025.
Negative Points
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The company's financial metrics were negatively impacted by intense competition and foreign exchange fluctuations.
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Free cash flow from continuing operations showed a decline in Q1 due to seasonality and higher financial payments.
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Telefonica SA (NYSE:TEF) faced challenges in the wholesale revenue segment in Spain, which declined as anticipated.
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The company paused the NetCo sale process in the UK, creating uncertainty around future fiber expansion plans.
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Hispam operations experienced a drop in revenues and EBITDAal minus CapEx, partly due to the launch of a single mobile network in Colombia.
Q & A Highlights
Q: Can you provide insights on the decision to pause the NetCo process in the UK and the potential for fiber expansion? A: Lutz Schuler, CEO of Virgin Media O2, explained that the NetCo process is paused in line with the strategic review timeline. However, fiber network expansion and upgrading continue, and discussions with alternative networks (altnets) are ongoing, independent of the NetCo creation.