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Telefónica Unveils 'Transform & Grow' Plan, Halves Dividend, Confirms Exit From Most of LatAm

Future dividends will track free cash flow to free up cash for growth as the group retrenches to Europe and Brazil.

Overview

  • Telefónica reported a €1.08 billion attributable loss through September, driven by €1.909 billion in discontinued-operations charges tied to Latin America disposals, with reported revenue down 2.8% and net financial debt at about €28.2 billion.
  • The company will focus on four core markets — Spain, Germany, the United Kingdom and Brazil — and confirmed planned exits from Mexico, Chile and Venezuela, with the Colombia sale subject to closing conditions.
  • The board will keep the 2025 dividend at €0.30 (two payments) and cut the 2026 dividend to €0.15, payable in June 2027, with payouts thereafter guided to 40%–60% of free cash flow.
  • Targets include annual revenue growth of 1.5%–2.5% for 2025–2028 and 2.5%–3.5% for 2028–2030, plus efficiency savings of up to €2.3 billion by 2028 and up to €3.0 billion by 2030.
  • Shares fell roughly 10%–13% today on the plan and dividend reset, while the strategy secured unanimous backing from strategic shareholders SEPI, CriteriaCaixa and STC.