Telefónica(US:TEF)2025-07-30 09:00Financial Data and Key Metrics Changes - Revenue reached almost EUR 9 billion in Q2 2025, growing 1.5% organically, while EBITDA was nearly EUR 3 billion, up 1.2% [14][15] - Free cash flow turned positive at EUR 5 million in Q2, an improvement of EUR 718 million compared to Q1, with a total of EUR 291 million in the first half [14][44] - Net financial debt decreased by 5.5% year on year to EUR 27.6 billion as of June [15] Business Line Data and Key Metrics Changes - In Spain, the company achieved its best Q2 net adds since Q3 2018, with a convergence churn rate of 0.8%, the lowest in over eleven years [16][23] - Brazil reported a 6% increase in contract accesses and a 42% increase in revenue from cloud services, with overall revenue growth of 7% [28][29] - Germany faced challenges due to the B2B transformation, but maintained solid consumer momentum with stable contract churn at 0.9% [32] Market Data and Key Metrics Changes - Spain and Brazil together represent 70% of group EBITDA, showing improving trends in Q2 [15] - The UK market remained competitive, with O2 contract churn improving to 1% [35] - The Hispan region posted positive contract net adds for the second consecutive quarter, driven by improved network quality in Colombia [39] Company Strategy and Development Direction - The company is focused on customer-centric strategies, operational excellence, and creating value through disciplined financial management, prioritizing Europe and Brazil [8][10] - A strategic review is underway, with plans to unveil conclusions in the second half of the year [8][48] - The company aims to simplify its organization and concentrate resources in select markets where it has competitive advantages [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation at Telefonica, which is expected to create shareholder value and strengthen competitive positioning [8][10] - The company reiterated its full-year 2025 guidance across metrics, expecting revenue and EBITDA to continue growing [17][18] - Management acknowledged foreign exchange headwinds but remains optimistic about free cash flow improvement in the second half of the year [14][18] Other Important Information - The completion of the copper shutdown in Spain marks a significant milestone, allowing for resource reallocation [10][11] - The company has been recognized for its sustainability efforts, being named the second most sustainable company in the world by Time Magazine [46][47] Q&A Session Summary Question: Expectations for growth in Spain and the UK - Management aims for revenue growth in Spain to exceed 2024 levels, driven by improved customer experience and B2B momentum [51][53] - In the UK, management noted various opportunities but could not disclose specifics regarding M&A plans [55] Question: Cybersecurity and tech investments - Management highlighted the changing landscape for cybersecurity in Europe, driven by political will and defense investments [60][64] - The company sees potential in capturing opportunities in cybersecurity due to its experience in integrating and managing such products [66] Question: EBITDA outlook for Germany - Management indicated that the migration of the one on one customer base is a two-year journey, with expectations for EBITDA stabilization and growth thereafter [112][117] Question: Infrastructure ownership - Management emphasized the importance of owning core infrastructure for operational efficiency and service offerings [118]