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The operator consolidates its leadership in Spain, Brazil, and Germany, reduces its exposure in Latin America, and strengthens its technological and sustainable profile ahead of a key year
Telefónica has begun the 2025 financial year meeting expectations and steadily advancing its strategic roadmap. According to results presented this Wednesday, the company achieved a net profit of 427 million euros in its continuing operations during the first quarter. Additionally, it has reaffirmed its financial goals for the year and maintained its commitment to a cash dividend of 0.30 euros per share.
Organic Growth Despite Currency Impact
The group’s revenues reached 9.221 billion euros, with an organic growth of 1.3% year-on-year, driven by the dynamism in the enterprise business (+5.4%) and the residential segment (+1.8%). However, reported revenues have decreased by 2.9%, due to the negative impact of currency exchange rates, especially in Latin America.
The adjusted EBITDA has grown by 0.6% in organic terms, reaching 3.014 billion euros, while the operating cash flow (EBITDAaL – CapEx) also showed an organic improvement of 0.4%, with an investment-to-revenue ratio of 10.1%. These figures reflect a disciplined management of expenditures, in line with Telefónica’s commitment to keep CapEx below 12.5% of annual revenues.
Strong Performance in Key Markets: Spain, Brazil, and Germany
In Spain, Telefónica has strengthened its resilience with a 1.7% revenue growth and a 1.0% EBITDA increase, thanks to its customer focus, the launch of new solutions for SMEs (such as Fusion Digital 5.0), and enhanced customer value. The Net Promoter Score (NPS) has reached historic highs (35 points) and the churn is at a minimum, reflecting a more loyal and profitable customer base.
In Brazil, growth has surpassed inflation both in fixed (+6.2%) and mobile (+6.5%). The company maintains its leadership in the contract segment and has increased its EBITDA by 8.0%, with an EBITDAaL-CapEx growth of 14.5%, confirming the strength of its operational and commercial structure.
In Germany, Telefónica has achieved a 4.8% improvement in EBITDAaL-CapEx, thanks to commercial impetus and a focus on efficiency. The company has attracted a greater number of contract customers (+4.5%) and maintains stable profitability despite competitive pressure.
In the United Kingdom, the subsidiary VMO2 has shown positive signs after completing network integration. 5G coverage now reaches 77% of the population, while the fixed ARPU has increased by 1.6%, supported by rate increases and greater penetration of convergent services.
Strategic Divestments in Latin America: Less Risk, More Focus
Telefónica has taken decisive steps in its plan to reduce exposure in Latin America (Hispam). During the first quarter, it closed the sale of Telefónica Argentina for 1.2 billion euros and signed a binding agreement for the sale of its stake in Telefónica Colombia, which is currently pending approval. Additionally, in April it completed the sale of Telefónica Perú, eliminating future financial and regulatory risks in that region.
These operations, which are already accounted for as divestments in the quarter’s results, have resulted in an accounting loss of 1.731 billion euros, placing the total net result of the Group at -1.304 billion euros, but generating positive impacts on free cash flow and financial leverage, strengthening the group’s balance sheet.
Financial Stability and Investment Discipline
Telefónica maintains a strong financial position. Net financial debt has been reduced to 27.049 billion euros, and total liquidity exceeds 20.4 billion euros, with maturities covered for more than three years and contained financing costs. The average life of the debt is 11.5 years, with over 70% of it at a fixed rate, protecting the group against financial market volatility.
As for the free cash flow (FCF) from continuing operations, it stood at -205 million euros, in line with the seasonal nature of the first quarter, but a gradual acceleration is expected throughout the year, as anticipated by the group’s CFO, Laura Abasolo.
Reaffirmation of the Dividend Policy
Telefónica has confirmed the 0.30 euros per share cash dividend for 2025, which will be paid in two installments of 0.15€: on December 18, 2025, and in June 2026. Additionally, the second tranche of the dividend corresponding to 2024, also of 0.15€, will be distributed on June 19, 2025.
Advances in Sustainability and ESG
Telefónica continues to lead in ESG criteria. In the environmental sphere, the Power Purchase Agreements (PPAs) now cover 30% of the group’s electricity consumption, with new agreements signed in Germany. In the social aspect, the company has blocked 7.8 million cyber threats in Spain, enhancing digital protection for B2B and B2C customers. Regarding governance, the Board of Directors includes 40% women and 53% independent directors.
Moreover, Telefónica has paid 8.4 billion euros in taxes globally in 2024, contributing to local economies and reinforcing its commitment to fiscal transparency and sustainable development.
Outlook: Technological Transformation, Customer Focus, and Sustainable Value
Telefónica views 2025 as a key year in executing its strategic transformation plan, focused on four pillars: putting the customer first, enhancing operational and technological excellence, maintaining a rigorous industrial discipline, and generating value for all stakeholders.
“Our performance is in line with expectations, and the ongoing transformation will allow us to grow more efficiently, sustainably, and with a focus on value,” said Emilio Gayo, CEO of Telefónica. “During the second half, we will share the conclusions of our strategic review.”
With 354 million accesses, 80 million homes passed with fiber, and 75% 5G coverage in its main markets, Telefónica consolidates its role as a key player in digital connectivity in Europe and Latin America.
Source: Telefónica S.A. – Financial results Q1 2025 and Financial News