Telefónica (TEF) Q4 2024 earnings summary

Executive summary

• Achieved all 2024 guidance metrics, with revenue up 1.6% to €41,315 million and EBITDA up 1.2% year-over-year, driven by growth in core markets and improved operational efficiency.

• Free cash flow increased 14.1% to €2,634 million, exceeding guidance and supporting a well-covered €0.30/share dividend.

• Net financial debt reduced by €1,537 million to €27,161 million, leverage at 2.58x EBITDAAL, and liquidity over €20.8 billion.

• Strategic review underway, focusing on core markets, capital efficiency, and reduced exposure to Hispam, with completion expected in H2 2025.

• Portfolio optimization advanced with the sale of Argentina for €1.2 billion and insolvency filing in Peru, reducing Hispam exposure.

Financial highlights

• Revenue grew 1.6% year-over-year; service revenue up 2.5%, B2B revenue up 4.8%.

• EBITDA rose 1.2% to €13,276 million; CapEx-to-revenue ratio at 12.9%, with total CapEx of €5,318 million.

• Free cash flow reached €2.6 billion, up 14.1% year-over-year, with Q4 FCF up 68% sequentially.

• Net loss of €49 million for the year due to over €2 billion in asset impairments.

• Dividend of €0.30/share in two tranches; leverage at 2.58x ND/EBITDAAL.

Outlook and guidance

• 2025 guidance targets organic growth in revenue, EBITDA, and EBITDAAL minus CapEx, with CapEx/Sales below 12.5%.

• Free cash flow expected to remain similar to 2024, supporting a €0.30/share dividend and further deleveraging.

• Strategic review to conclude in the second half of 2025, focusing on disciplined execution and capital allocation.