Telefonica S.A. — Investor Presentation 2022

Nov 4, 2022

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Q3 22 Results

Mr. Ángel Vilá COO

Steady execution of our strategy

Revenue & OIBDA reported growth improving sequentially

On track to deliver full year guidance Managing current macro challenges

Streamlined, leaner operating model Stable OIBDA margin (y-o-y org.) despite cost headwinds

Actively managing our balance sheet Well covered maturities over the next three years

Reinforced leadership

• Spain ongoing commercial momentum on Mi Movistar offering; progress on OIBDA y-o-y improvement
• Brazil; unrivalled operating performance, double-digit revenue growth and OIBDA margin up y-o-y
• Germany; M4M with revamped O2myHome tariff; accelerated revenue and OIBDA growth y-o-y
• VMO2: accelerating OIBDA growth y-o-y; synergies kicking-in (30% of £540m run rate by 22E)

Opportunities

• T. Infra, fibre vehicles contributing to growth, 12m PPs (Sep-22); opportunities to crystallise value
• T. Tech, growth story; added capabilities and partnerships, potential source of value
• T. Hispam, modulate exposure, keeping optionality
• Spain; in-market consolidation and ERF
• Progressing on network leadership (focusing on environment & efficiency, new open networks)
• New opportunities for Telcos in the new Web 3 environment (5G, NaaS, Edge computing,…)
• ESG; net-zero emission by 2040; >25% of Spain COs closed; saving 1,513 GWh

Ongoing sustainable growth; strong balance sheet and FCF

Q3 Revenue y-o-y organic	Q3 OIBDA y-o-y organic	Net debt Stable q-o-q	FCF 9M
+3.8%	+3.1%	€28.9bn	€2,474m
Growth across most segments	Trends improving in core markets	Deleverage in 2022 despite M&A (2.52x)1	Solid FCF growth +68.2% y-o-y

High-value accesses growing strongly (fibre +17% y-o-y)

• Expanding UBB: 166.3m PPs (+6% y-o-y)

Transforming revenue mix

• 72% BB&SoC revenue/service rev, ; +1.7 p.p. vs. Q3 21
• Remarkable Q3 B2B revenue performance (+6.5% y-o-y org.)
• Building digital ecosystems; smart home, e-health, fintech, education

Accelerating trends in reported revenue & OIBDA growth (y-o-y)

• Second consecutive Q of revenue growth; +10.5 p.p. vs Q2
• Back to growth (OIBDA underlying Q3 +8.5%)

Improvement of FCF throughout the year

• +34.7% q-o-q

Prudent debt management and solid liquidity position

• Avg. debt life 13.0 yrs; fixed rates 74%

€1.3bn tax refund to enhance Q4 FCF and net debt reduction

Financial update

	9M 22		Q3 22
€ in millions	Reported + 50% VMO2 JV	Organic y-o-y	Reported + 50% VMO2 JV	Organic y-o-y
Revenue	34,228	4.1%	11,825	3.8%
OIBDA	11,264	2.9%	3,799	3.1%
OIBDA-CapEx (ex-spectrum)	6,389	0.9%	1,910	(7.5%)

	9M 22		Q3 22
€ in millions	Reported	Reported y-o-y	Reported	Reported y-o-y
Revenue	29,793	0.6%	10,343	11.2%
OIBDA	9,593	(53.5%)	3,249	(13.0%)
OIBDA Underlying	9,521	(2.8%)	3,293	8.5%
Net Income	1,486	(84.1%)	460	(34.9%)
FCF (incl. leases principal payments)	2,474	68.2%	1,125	100.8%
Net Financial Debt ex-leases	28,918	13.5%1

¹y-o-y change with reported net debt in 9M 21 adjusted for Q4 21 Telxius transaction impacts.

	Positive FX impact 9M FCF €176m			Changes to the perimeter (T. UK, TLXS towers, C. Rica, El Salvador)
€ (m)	9M 22	Q3 22	€ (m)	9M 22	Q3 22
Revenue	1,262	494	Revenue	(2,755)	(47)
OIBDA	470	188	OIBDA	(983)	16

Effectively managing inflationary pressures

Operating in high-inflation markets for decades in LatAm Pricing power in most markets: inflation-linked in Brasil, Hispam and UK …M4M in Spain, revamping of O2myHome in Germany Strong B2B & wholesale positioning provides protection T. Tech revenue +68.6% y-o-y in Q3

Efficiencies, cost savings and simplification on track Labour costs 13% o/Group rev., below peers; SP best-in class access/employee ratio

Energy costs 2% o/Group rev, >60% consumption LT hedged for 2023

• Long terms PPAs; 100% electricity renewable in core markets, PER and CHL
• Efficiency projects to stabilise costs and fight climate change (FTTH 85% more efficient than copper; 5G +90% vs 4G)

Accelerated digitalisation; 81% of processes digitised

CapEx peak behind, up to 15% CapEx/Revenue guidance reiterated

Legacy shutdowns to provide additional buffer (SP cooper decommission in 2024)

Active tax management adding to FCF

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¹Average CPI for T. Group in countries of operations, ex VZ and ARG. T. Group CPI weighted by OIBDA weight in each country 2 OIBDA Underlying

2022 guidance and dividend confirmed

2022 guidance

organic including 50% of VMO2 in 2022 and 2021

Targets	2021 Base		Updated 2022 guidance	9M 22
Revenue	€42,452m		"High-end of low single digit growth"	4.1%
			(Upgraded in H1 from "Low single digit growth")
OIBDA	€14,127m		"Mid-to-high-end of low single digit growth"
			(Upgraded in H1 from "Low single digit growth")	2.9%
CapEx/Sales (ex spectrum)	14.7%		Up to 15%	13.8%
Shareholder remuneration
2022 Dividend		€0.30/share	2022 calendar payments Jun/22 €0.15/sh.; voluntary scrip
Interim Dec-22		€0.15/sh. (cash)	Dec/22 €0.15/sh.; cash
Final Jun-23		€0.15/sh. (cash)	139m treasury stock cancelled April 22

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1. The adoption of the corresponding corporate resolutions will be proposed to the AGM for the cancellation of the shares representing 0.4% of the share capital held as treasury stock (June 30th, 2022).

Progressing on ESG agenda

Environmental Social Governance

• Net-zero by 2040 (scopes 1, 2 & 3)
• Zero-waste by 2030
• >50m tCO² avoided customer emissions by 2025

Reducing emissions & curbing OpEx:

• T. Chile 100% renewable energy joining Brazil, Germany, Peru, Spain and UK
• T. Hispam c50% of consumption with renewablysourced energy by year-end
• 43 distributed generation plants already in operation in Brazil (of >80 planned)

Demonstrating alignment on EU Taxonomy

• 1st in sector to publish detailed Life Cycle Assessment report

• 90-97% MBB rural coverage by 2024¹
• 33% female executives by 2024
• Zero gender pay gap by 2050

Connecting the underserved:

• New FibreCos in Spain & UK will connect more communities
• Affordable access for UK customers with price reductions in social tariffs

Driving diversity and inclusion:

• Group Equality Policy approved

• 'Women in Network' (T. Hispam) awarded best practice by UN Global Compact.

• Zero-tolerance of corruption

• ~25% financing² linked to sustainability by 2024
• Parity³ in top governing bodies by 2030

More sustainable financing:

• VMO2 refinanced syndicated loans according to sustainability indicators

Sustainability across the supply chain:

• Founding member of JAC, the telco alliance, now formally constituted, to drive ESG with ICT suppliers

Workforce trained in ESG & business ethics:

• Business Principles course: 74% uptake 3 months after launch

1 Includes Spain, Germany and Brazil ²Financing includes balance-sheet debt, hybrids and undrawn committed credit lines ³ Parity defined as not less than 40% of each gender represented

Examples of our progress

Spain

Revenue & OIBDA growth (y-o-y organic)

Sound positioning in a more rational market (leading NPS and churn) FBB positive again, contract back to growth Revenue y-o-y growth for 6th straight Q

Commercial and OIBDA trends

OIBDA q-o-q trend improved on lower energy drag and content costs

Potential in market consolidation

EcoSmart P&S driving digital transformation

Germany

Mobile accesses (m)

Postpay net adds (k)

Revenue & OIBDA organic growth

Strong operational traction and financial performance

Sustained commercial momentum driven by core O2 brand

Continued revenue expansion driven by mobile strength

OIBDA growth supported by revenue quality & efficiencies

5G population coverage 75%

Virgin Media O2

Fixed network build (k)

Postpay net adds (k)

Revenue & OIBDA growth (y-o-y organic)

Strong strategic and operational progress

Solid commercial momentum, 1m Volt converged customers

16m PP and 5G in over 800 towns & cities

OIBDA growth accelerating

On track to reach 30% of synergies by YE22

Driving affordability as part of ESG strategy

All organic according with Telefonica criteria

Accesses growth (y-o-y) 9% 8% 7% 20% 18% 39% 36% 29% 25% 21% Contract FTTH Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 9%¹ 8%¹

Revenue & OIBDA growth (y-o-y organic)

¹ Excluding Oi's mobile assets acquisition

71% share of contract net adds in Jul & Aug Steady FTTH growth: +9% q-o-q +29.0% revenue / +16.7% OIBDA (in € terms) Organic y-o-y OIBDA margin expansion OIBDA-CapEx +4.4% in 9M 22 Top 100 company in Refinitiv D&I Index Double digit growth

Tech, consistent delivery, sustainable and resilient growth engine

• Strong commercial activity across the board
• New partnerships and capabilities
• o Aruba, McAfee, Sateliot, TeamViewer & Sherpa.ai
• o AWS and Netskope Specialisation
• o Digital skills training and employment
• Recognised by Partners and Industry Analysts
• o Fortinet Partner of the Year MSSP
• o Strong by Forrester "European Managed Security Services"
• o Champion by Kaleido "Private Network Solution & Management"

Adding value to B2B with a differential customer journey

High value profile

Skilled Diversified Team Portfolio

Strong Delivery Capabilities

B2B large	5.5m	1 Digital Operation Centre
customer	TELEFÓNICA
base	B2B Customers	+ 12 SOCs (Security)

T. Infra, unique portfolio of best-in-class assets

TEF is building a leading portfolio of FibreCos Critical infrastructure

Total FTTH Premises Passed (m)

• Accelerated OIBDA³ growth:

• Maintained strong commercial momentum (9M 22 y-o-y):
• o +46% bandwidth provisioned for capacity services
• o +17% in value of contracts signed with third parties

• Profitability and high cash conversion:

• o Strong cash conversion in hard currencies (mainly USD)
• o Fully invested state of the art network

• 70% TEF | 30% Pontegadea²

• o Reinforced investment on a critical infrastructure
• o Regulatory and competition approvals expected in early 2023

² After receiving regulatory and competition approvals

³Constant perimeter (excluding tower business)

Q3 22 Results

Mrs. Laura Abasolo CFCO & Head of T. Hispam

Hispam

FTTH & Cable premises passed (m) 9% 8% 6% 5% 5% 26% 25% 22% 19% 18% Contract FTTH & Cable Q3 21 Q4 21 Q1 22 Q2 22 Q3 22

Growing in contract & FTTH Revs +16.2% & OIBDA +12.6% (€) (1) OIBDA-CapEx +15.1% in 9M 22 Capital employed: -34% since Dec-19 Telefónica: Best corporate reputation in Latam by Merco Building a sustainable future

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(1) OIBDA adjusted for organic criteria ex. FX related impacts

Prudent management, contained cost and sound liquidity

advance, the acquisition of an additional stake in Telxius and impacts from the fibre assets acquisition by FibreCo Chile.

Conclusions

Mr. Ángel Vilá COO

Ongoing sustainable growth

Sequential improvement in reported revenues and OIBDA trends (y-o-y)

Managing inflationary & macro environment; sustained revenue and OIBDA growth with stable margin (y-o-y org.) FCF and net debt reduction to accelerate in Q4 (confirmation of tax refund of €1.3bn)

Commercial actions supporting growth (price actions, higher NPS, churn management, best value proposition) Network leadership, focusing efforts and investments in fibre and 5G driving customer journey

Strong balance sheet and FCF position us well for uncertain times

Well on track to meet 2022 guidance; 2022 dividend confirmed

Critical role in the digital world; active on collaboration as an industry to ensure open standardised APIs Helping society thrive

Results presentation and Q&A Session

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Telefónica's management will host a webcast on 4 November at 10:00 AM (CET), 9:00 AM (GMT), and 5:00 AM (EDT)

Participants from Telefónica

• Ángel Vilá l COO
• Laura Abasolo l CFCO & Head T. Hispam

• Lutz Schüler l CEO Virgin Media O2

• Eduardo Navarro l Chief Corporate Affairs & Sustainability Officer

• Adrián Zunzunegui l Global Director of Investor Relations

• To access the webcast: click here

• The webcast replay will be available on Telefónica IR's website after the event

• To participate in the Q&A session, please register using the following link to receive the dial in and PIN details. click here.

For further information, please contact: Investor Relations Adrián Zunzunegui (adrian.zunzunegui@telefonica.com) Isabel Beltrán (i.beltran@telefonica.com) Torsten Achtmann (torsten.achtmann@telefonica.com) Tel. +34 91 482 87 00 ir@telefonica.com www.telefonica.com/investors

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