Madrid, May 9, 2024 Telefónica today presented results corresponding to the first quarter of 2024, a period in which it achieved a net profit of 532 million euros, 78.9% higher than the same period in 2023. In this first quarter of implementation of the GPS plan – an acronym in English that stands for growth, profitability and sustainability – the company continued the favorable development of its business activities and recorded strong growth and profitability, as well as progress in its sustainability strategy. All this allows the Group to confirm the financial targets set for the year.
“We started the year with a strong strengthening of our business, supported by the implementation of our new roadmap, the GPS strategic plan that will guide Telefónica until 2026. Revenues are growing, business is improving and the quality of service we provide is improving. we provide to our customers and their satisfaction. “Telefónica moves forward confidently into its centenary year, following our principles of integrity, commitment and transparency, creating value for shareholders,” says Telefónica President José María Álvarez-Pallete.
In relation to its 2024 targets, the company expects revenue growth of approximately 1%, EBITDA of 1-2% and operating cash (EBITDAaL-CapEx) of 1-2%. In addition, it assumes an investment rate of return of up to 13% and an increase in free cash flow of more than 10%.
Regarding the shareholder remuneration corresponding to 2024, the company will distribute a cash dividend of €0.30 per share, payable in two tranches: December 2024 (€0.15) and June 2025 (€0.15). In addition, it is complemented by a reduction in share capital in April 2024 due to the depreciation of 80.3 million treasury shares.
Telefónica showed strong growth in the first quarter of the year, with revenue increasing by 0.9% to €10,140 million, driven by services revenue (+2.3%).
Of the total revenue, 61% comes from the housing market (B2C); 22% comes from the business segment (B2B), and the remaining 17% corresponds to wholesale business, partners and other income.
In this wholesale context, and as proof of the superior quality of Telefonica’s national network infrastructure and the confidence of its partners in the ability to provide high-quality services through the said infrastructure, the company has signed a non-binding Memorandum of Understanding with DIGI for the duration of a long-term mobile network agreement. The terms and conditions have been agreed in principle and the agreement is expected to be concluded, subject to final documentation, in the coming weeks.
Operating result before depreciation and amortization (EBITDA) strengthened the Group’s profitability, more than doubling compared to revenue in the first quarter. In particular, it increased by 1.9%, to 3.205 million euros.
Investments for the quarter reached €1,056 million, an increase of 2.7%, resulting in an investment-to-income ratio of 10.4%, fully in line with the 2024 closing target of 13%.
Telefónica Tech started the year with strong revenue growth. Telefónica’s digital and technology business unit generated revenue of €476 million, up 11% compared to the first quarter of 2023.
Telefónica Infra, as a global communications platform, ended the quarter with 22 million real estate units transmitted through various fiber optic vehicles and more than 100,000 kilometers of international communications via submarine cable. Cable TV operator Telxius maintained strong profitability in the quarter, with an EBITDA margin of 50.8%.
During the first quarter, Telefonica received long-term financing amounting to €4,008 million. Two green hybrid bonds, issued in January and March, stand out.
Financing activities allowed the group to maintain a strong liquidity position of EUR 19.337 million. At the end of March, the company had maturities for the next three years, and the average debt maturity was close to 11.7 years.
Telefonica ended the first quarter of the year with a base figure of 388.3 million calls (+1%). Fiber access and mobile contract access held on for another quarter, rising 12% and 3% respectively.
The period from January to March was characterized by great commercial activity in various markets and the achievement of a very high degree of customer satisfaction: NPS (“Net Promoter Score”) amounted to 31 points. This commitment to customers is also reflected in the fact that Spain and Brazil recorded their best churn rates ever, falling to 0.9% and 0.97% respectively.
In terms of networks and systems, Telefónica is implementing an artificial intelligence program to accelerate the application of AI by increasing the number of solutions from the 650 currently existing use cases. This will reduce complexity and increase automation, efficiency and customer experience. It was in the first quarter that the company launched an AI Center of Excellence, present in every business unit, to ensure privacy and promote the adoption of AI-based applications throughout the company.
On the other hand, network transformation based on increasing degrees of virtualization is accelerating the deployment of fiber to the home (FTTH) and 5G, as well as progress in copper switching off in Spain.
Telefónica, which maintains its position as a global leader in fiber, had 175 million properties connected to ultrafast networks at the end of March, of which a total of 76.6 million are FTTH, including devices from various fiber transports. In terms of 5G, Telefonica’s networks cover 63% of the population of its main markets: 89% of the population of Spain, 95% of the population of Germany, 48% of the population of Brazil and 53% of the population of the UK.
Telefonica also made progress on its ESG goals this quarter. In terms of environmental issues, the company was named to the CDP Supplier Leaders list for the fifth year in a row and its Eco Smart portfolio was recognized Champion project ITU.
In the social sector, Telefonica continues to promote talent attraction and retention through diversity. Compared to last year, the company employs 858 more people with disabilities, and more than 33% of managers are women.
In the area of governance, the General Meeting of Shareholders held in April gave the green light to all agreement proposals put forward by the Board of Directors. Plus with a green bonus older By issuing two tranches and hybrid green bonds this quarter, the company takes another step towards its goal of having approximately 40% of its financial activities linked to sustainability criteria by 2026.
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