Telefónica will reveal its strategic plan for the next three years today, within the framework of the “Capital Markets Day” -Investor’s Day-, while still waiting to see if the company STC Group enters with 9.9% of its capital and if the State Society of Industrial Participations (SEPI) decides to buy shares, and in the midst of restructuring that could see hundreds out of work.
All this in a market like the Spanish one, with a plurality of actors and downward price competition, in which the main operators are carrying out merger and acquisition operations.
Orange, the second largest operator in the Spanish market, is merging with MásMóvil, the fourth; while Vodafone, the third, has just been acquired by Zegona. Telefónica is the first.
In this context, Telefónica will present its strategic plan for 2023-2026 on the 8th at the “Capital Markets Day”, a meeting that it will hold with investors and that it has not organised since 2012.
This event is organised in a day in which the operator will present the results for the first nine months of the year, which will predictably be announced mid-morning, rather than the normal time before the start of the stock market session, around seven thirty in the morning, as sources from the operator have said.
On this occasion, and in the absence of a specific time, the results will be posted at the National Securities Market Commission (CNMV) around twelve noon. It will be later when they reveal the strategy to the investors who attend the event.
This new strategic plan will replace the one approved in 2019, which had the objective of increasing its value on the stock market after a ‘black’ August in which the share price fell to around 6 euro, the lowest value in 22 years. That objective was not achieved. Now, its titles are around 3.7 euro.
From that, a plan was designed focused on five axes: prioritising the operator’s activity in its main markets (Spain, the United Kingdom, Germany and Brazil), and the creation of a business unit for its centres in Latin America.
In addition, it was agreed to create Telefónica Tech and Telefónica Infra, as well as redefine the company’s Corporate Centre.
Some details are known about the new strategic plan, such as that it will be based on three main pillars: growth, profitability and sustainability and that it will place customers at the centre, through technology and automation.
This new strategic plan will be supported by the growth in free cash flow recorded by the operator as a result of the increase in income experienced since the second quarter of 2021, according to the president of Telefónica, José María Álvarez-Pallete, last July in the conference with analysts during the presentation of first semester results.
In the first half of the year, the operator obtained 1,3 billion euro of Free Cash Flow – the money it generates from its activity and with which dividends and debt are paid – and is confident of closing the year with approximately 4 billion, it has announced.
Telefónica earned 760 million euro in the first half of the year, 25.9% less than in 2022, despite having earned 3.7% more and as a consequence of last year’s capital gains.
The Spanish multinational increased its income in all its markets, except in its Latin American unit, where it reduced it by 0.8%, to 4,5 billion euro.
In parallel with Telefónica unveiling its strategic plan, we are waiting to see if STC Group enters as the operator’s main shareholder, and if Sepi finally decides to buy shares.
The entry of Sepi into Telefónica would mean the return of state capital in the operator. Telefónica, which in the past was a monopoly in Spain, ceased to have public capital in 1997.
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