The following is a summary of the Telefónica, S.A. (TEF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Telefónica reported Q1 revenue growth of 0.9% year-over-year with an EBITDA rise of 1.9%.

• Commercial momentum and ongoing capital expenditure discipline resulted in a CapEx over revenue ratio of just 10.4% for this quarter.

• The company had a free cash flow of minus €41 million in Q1 2024 caused by the one-time €75 million benefit from the monetization of a tax asset in Brazil in Q1 2023. Without these non-recurring items, Q1 2024 free cash flow could have shown a year-over-year increase of €43 million.

• Telefonica has a net financial debt of €28.5 billion, causing a net debt-to-OIBDA ratio of 2.71 times.

• The company expects increased cash flow throughout the rest of 2024 to achieve its full year guidance.

Business Progress:

• Telefónica's operating model has shown strength with positive commercial dynamics in key markets such as Spain, Brazil, and Germany.

• In Spain, the completion of the copper network switch off is imminent, establishing Telefonica as the first European Union operator to accomplish this.

• There has been a remarkable contract churn of 1% in Germany.

• There has been an accelerated rollout of fixed infrastructure, passing an additional 9 million premises with fiber-to-the-home in the last year with Telefonica Infra contributing around 7 million of these new premises.

• The 5G coverage of the company now extends to 63% of the population across core markets with Spain and Germany above 90%.

• In the German market, the company has made significant 5G coverage gains and increased its market share with core brand O2.

• The company has shown interest in maximizing network utilization in both Spain and Germany and is exploring partnerships to leverage growth.

• Telefonica is on track with the design and carve-out of the NetCo venture in the UK and is in the process of negotiating with potential wholesale partners.

More details: Telefonica IR

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