Telefonica S.A.

Investor Presentation • Nov 8, 2023

CAPITAL MARKETS DAY 2023

A Stronger Company with a Higher Ambition

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In any case, these Statements do not intend to be exhaustive, nor have been verified by third parties or audited, therefore, Telefónica's opinions and aspirations with respect to future events should be considered indicative, provisional and only for illustrative purposes. For this reason, these Statements do not represent, by their own nature, any guarantee of future fulfilment or profitability, and are subject to risks and uncertainties that could cause the final developments and results to materially differ from those expressed or implied by such Statements. These risks and uncertainties include those identified in the documents containing more comprehensive information filed by Telefónica with the different supervisory authorities of the securities markets in which its shares are listed and, in particular, the Spanish National Securities Market Commission (CNMV) and the U.S. Securities and Exchange Commission (SEC).

Except as required by applicable law, Telefónica does not assume any obligation to publicly update the Statements to adapt them to events or circumstances taking place after the date hereof, including changes in the Telefónica's Group business, changes in its business developmentstrategy or any other circumstances.

This document and any related conference call or webcast (including any related Q&A session) may contain summarised, non-audited or non-IFRS financial information (including information referred to as "organic" and "underlying"). Such information may not be prepared in accordance with the financial reporting requirements established by the SEC, is presented for supplemental informational purposes only and should not be considered a substitute for audited financial information presented in accordance with IFRS. The Company's non-IFRS financial measures may differ from similarly titled measures used by other companies. In addition, there are material limitations associated with the use of non-IFRS financial measures since they exclude significant expenses and income that are recorded in the Company's financial statements. Information related to Alternative Performance Measures (APM) used in this presentation are included in Telefónica's condensed consolidated interim financial statements and consolidated interim management report for the six-month period ended June 30, 2023, submitted to the CNMV, in Note 2, page 12 of the .pdf filed. Recipients of this document are invited to read it.

Neither this document nor any related conference call or webcast (including any related Q&A session) nor any of their contents constitute an offer to purchase, sale or exchange any security, a solicitation of any offer to purchase, sale or exchange any security, or a recommendation or advice regarding any security, or a solicitation for any vote or approval in any other jurisdiction.

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Agenda

2:00pm	A Stronger Company with a Higher Ambition José María Alvarez-Pallete
2:25pm	Growth, Profitability, Sustainability	Angel Vilá
2:45pm	FCF Focus	l aura Abasolo
3:00pm	Guidance and Closing Remarks	José María Alvarez-Pallete
3:15pm	Q&A	All

3

A Stronger Company with a Higher Ambition

José María Álvarez-Pallete | Chairman & CEO

Key takeaways

• Accelerated through differential operational leverage 8
• Double digit FCF growth 1992년 1992년 1992년 1992년 1992년 1992년 1992년 1992년 1992년 1992년 1992년 1992년
  1980년 1992년 1992년 1992년
  1980년 1992년 1992년 1992년
  1980년 1992년 1992년 1992년
• Debt reduction target
• Sustainable dividend

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Delivered on 5-pillars strategy set in 2019

• Core OBs1 are in a stronger position
• T.Tech the cornerstone of our B2B transformation
  • T.Infra supporting rollouts and reinforcing infra value
  • Reduced exposure to HispAm
• New operating and capital allocation model

Massive transformation eleion

Massive transformation

Cutting-edge NETWORK

Increased CUSTOMER relevance

Optimised and future-proof OPERATIONS

Committed to SUSTAINABILITY

***This document is classified as PUBLIC by TELEFÓNICA.

***Este documento está clasificado como PUBLICO por TELEFÓNICA.

DAY 20

Cutting-edge network | Massive network transformation driving efficiency

Telefónica

Cutting-edge network | Preparing our networks for the future

Increased customer relevance | Solid customers engagement

More customers1

(+14% vs 2016)

More loyal²

1.1% churn

(vs 1.5% 2016)

More satisfied

29 NPS

(+10pp vs 2017)

More digital

4776

App users3 on regular basis (vs 0% 2016)

and Germany: 3) % App users during last 90 days, including convergent customers in Spain and mobile postpaid in the rest of the Group

Increased customer relevance | Evolved revenue mix

� Telefónica

CAPITA MARKE DAY 20

Optimised and future-proof operations | Benchmark efficiency

Pioneers in shutdown	Leaner structure	More sustainable network	Foundations for Al
Spain retail Copper shutdown in 2024	84% processes digitized	-5% energy consumption (despite 6x traffic growth)	650 Al use cases implemented (partially impacting on 25% of company processes)
3G/2G thin- layer in all OBs	=18% headcount1	100% from renewable sources in Core OBs + Chile + Peru	Deployed Kernel abstraction layer
2/3 OSS systems decommissioned	-31% executive positions1	(82% at Group level)

Increased operating leverage (+3.8pp EBITDA-CapEx margin2 2016-9M 23)

CAPITAI DAY 2

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Massive transformation | Capital allocation shift

M&A1

CapEx1

€57bn

Shareholder remuneration2

€18 bn

Debt reduction3

€22bn

1) 2016-9M 23 curnulative from at Group level, Capes including spectrum; 2) 2016-9M 23 cumulative figure including dividents and share buction from De-2016 to Sep-23

DAY 2

Efforts already improving metrics

000 Telefónica

We are back to Growth

With increased Profitability

In a more Sustainable way

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The future of the Telco industry

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An exciting vision | New wave of digital services emerging

CAPITA MARKETS DAY 20

An exciting vision | Demanding new capabilities from us

The increase in traffic and the need for enriched performance will require access to more distributed computing capacity, beyond the current Cloud

CAPITAL MARKETS DAY 2023

An exciting vision | Future-ready TELCO

UBB & Low Latency

Programmable & Al-based

Cloud & Edge Computing

An exciting vision | Redesigning a Telco

Legacy networks (copper, 2G, 3G)

HW-based Reactive Networks

From customized tailormade integrations...

Global platforms interconnected with open APIs

Traditional telco experience

One size fits all offering

An exciting vision | Embedding connectivity in services

An exciting vision | Open Gateway

Open Gateway

Telefónica is ready la aron

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Telefonica is ready | To create a new generation of API-based services

Powered by Open Gateway GSMA" & CAMARA

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Telefónica is ready | To double-down on segmented capital allocation

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Telefónica is ready | To lead the sector towards higher sustainability

Double-down on collaboration

Advocate for a more balanced regulatory framework

Lead the key industry debates OTT Fair Share. Open Gateway Keep being at the forefront of the ESG

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Creating significant shareholder value

2.2-2.5X (2026) Leverage reduction

€0.30 floor DPS (2023-26) Shareholder value creation

Improved strategic optionality

Growth Profitability Sustainability

Ángel Vilá | COO

5 lines of action to accelerate Growth, Profitability and Sustainability

Sustain B2C revenue growth

Growth Profitability Sustainability

Keep above-industry B2B momentum

Evolve wholesale and partners' revenues

Drive efficiencies to reduce OpEx

5) Sustain differentiation while reducing CapEx

9M 23 revenue mix1

B2C deep-dive

Annual growth year on year, reported

-1.7%

+1.9%

2019

9M 23

B2C accesses3 260m

CAPITAL MARKETS DAY 2023

1 telco brand in Spain

1 telco brand in Brazil

Closing the gap with #2 in Germany

2 telco brand in UK

MARKE DAY 20

Best experience

CAPITAL MARKETS DAY 2023

1 Sustain B2C revenue growth | Enriched offering

Digital ecosystem around connectivity

Expanding market and increased loyalty

Addressable market1: €40bn (+7% CAGR 23-26)

ARPU (%)

Churn (%)

Customer Lifetime Value (€)

C

CAPITAI MARKE DAY 202

് Telefónica

1 Sustain B2C revenue growth | Delivering results

Maximise engagement

Convergent customers'

Enhance loyalty Post-paid & convergent churn²

B2C revs 2023-26 CAGR

60%

2026 (vs >50% Sep-23) < 1.0%

2026 (vs 1.1% 9M 23)

~1.5%

DAY 2

1) Convergent Clients over total FBB base in Spair (niv Total); 2) Convergent churn in Spain, mobile contract churn in Brazil and Germany

9 Keep above industry B2B momentum

9M 23 revenue mix1

B2B deep-dive

Annual growth year on year, reported

-3.0% +6.1%

2019

9M 23

B2B clients3 5.5m

� Keep above industry B2B momentum | Leading position in growing market

B2B revs 2023-26 CAGR

~5%

CAPITAL MARKETS DAY 2023

€ Evolve wholesale & partners' revenues

9M 23 revenue mix1

Wholesale (partners) deep-dive

Annual growth year on year, reported

+3.9% =0.9%

2019

9M 23

GDS 48

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€ Drive efficiencies to reduce OpEx | Transforming efficiently

Shut-down	Sharing	Hyper automation	Scale	Efficiency
· Copper April 2024	· Network sharing · Optimised	Massive Al initiatives	· Shared platforms	· Lease optimization
(retail) · 2G or 3G	rollouts	Zero touch network management	· Local / global services optimisation	· Freed up spectrum capacity
2 2026-27		Open and cloud-based architectures		· Energy cost reduction
		API-fication		· Right-sizing the organization

CAPITAL DAY 2023

2 Drive efficiencies to reduce OpEx | Efficiencies leading to EBITDA expansion

DAY 2023 9 Sustain differentiation while reducing CapEx | Consolidated leadership #3 2 6 #1 FF-2 R 5G coverage ~90% ~60% ~70% ~99% 2026 SA (42%) (92% ) (49%) (87%) (vs Sep-23 NSA) FTTH PPs2.3 ~2 m3 ~30m ~38m ~1m! 2026 of which 15m FTTH (29m) (25m) (vs Sep-23) (17m2, o/w 2m FTTH)

5G spectrum secured

1 fiber network in the world (excl. China)4

CapEx peak well behind

1) Longer term target remains 2m Pr. In addition c.1.5m P P including owned (fully/partially) + co-investment with third partes; 3) h UK, includes HFC; 4) According to Analysys Mason Ranking Data

CAPITAL MARKETS

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***This document is classified as PUBLIC by TELEFÓNICA.

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Sustain differentiation while reducing CapEx | Forward-ready infra

CapEx intensity

2000 2023 guidance™

< 22% 2026

2026 CapEx

Implementing GPS in TEF Core OBs

Growth Profitability Sustainability

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Improved organic EBITDA path across the board

All Core OBs are experiencing a sustained growth

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***Este documento está clasificado como PUBLICO por TELEFÓNICA. ***This document is classified as PUBLIC by TELEFÓNICA.

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Sustain B2C revenue growth	GPS
Keep above industry B2B momentum	Reported CAGR 23-26
Evolve wholesale and partners' revenues	200
Drive efficiencies to reduce OpEx	Revenue	EBITD
Sustain differentiation while reducing CapEx	~5% EBITDAaL-CapEx	> 0% FCF

CAPITAL MARKET DAY 2023

FCF Focus

Laura Abasolo | CFCO & Head of T. Hispam

Derisked T. Hispam, building a self-sustained model

Strengthening profitability in a highly competitive environment

Carve-out V Efficiency focus executed Organic Commercial rationalization / digitalisation Non-core / Avoid overbuild / legacy shut-down independent / · Lead rational spectrum auctions regional model Invested capital 2021 2022 2023 2020 Sep-23 vs. Dec-19 CAM NetCo AT&T FiberCo FiberCo 10) - ( ) FiberCo sale > 7x with Tigo agreement EBITDA Inorganic Debt in local / FiberCos with KKR currencies Mobile deals V Monetising brownfield Asset light networks Accelerating deployment Network sharing Lower CapEx, higher returns

2696

CAPITAL MARKETS DAY 2023

T. Hispam, a separate entity with strategic optionality to crystallize value

... while keeping optionality

Further focus on FCF growth ...

Growth ahead

Disciplined capital allocation

Focus on efficiency & returns

Telefónica

Asset-light model

Co-invest / NetCo models

Ready for:

Seek in-market consolidation options

Gauge divestment opportunities

Structural partnerships

EBITDAaL-CapEx

Invested capital reduction

~ 15%. 2023-2026

Stronger and resilient financials with simpler reporting

Strict capital allocation

Solid B/S with leverage target

Profitability Sustainability

Proactive management of FX / interest rates

Simpler reporting

Financial section

Growing FCF

DAY 20

Strict and prioritised capital allocation policy in place

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***This document is classified as PUBLIC by TELEFÓNICA.

***Este documento está clasificado como PUBLICO por TELEFÓNICA.

Solid Balance Sheet to face any market environment

GDC

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***Este documento está clasificado como PUBLICO por TELEFÓNICA. ***This document is classified as PUBLIC by TELEFÓNICA.

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Simpler reporting, more comprehensive guidance

Double Digit FCF 23-26 CAGR

***This document is classified as PUBLIC by TELEFÓNICA.

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Guidance and closing remarks

José María Álvarez-Pallete | Chairman & CEO

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Monetisation of advanced network capabilities

New wave of digital services emerging

Requiring high performance and differentiated network

UBB & Low Latency

Programmable & Al-based

Cloud & Edge Computing

GSMA

~ CAMARA

MARKETS DAY 202

Massive transformation

Cutting-edge NETWORK

Increased CUSTOMER relevance

Optimised and future-proof OPERATIONS

Committed to SUSTAINABILITY

Telefónica is ready

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2023 guidance reiterated

83

	Initial 2023 guidance	Upgraded 2023 guidance	9M 23
Revenue yoy organic	"Low single digit growth"	"~4% growth"	3.5%
OIBDA yoy organic	"Low single digit growth"	"~3% growth"	2.6%
Capex/Sales yoy organic	~14%	~14%	13.4%
		FCF 2023 ambition: ~€4bn ex-spectrum
· Telefónica

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What to remember from today

FCF >10%

CAGR 23-26

2.2-2.5x

ND / EBITDAaL 26

€0.30 floor

DPS 23-26

Improved returns

Leverage reduction

Value creation

Key takeaways

Accelerated through differential operational leverage

Double digit FCF growth

Debt reduction target

APPENDIX

Methodology note / Basis of preparation

Current

As from January 1st 2024

Reporting: organic including 50% VMO2	Reporting = statutory, not including 50% VMO2
Reporting: OIBDA	Reporting: EBITDA & EBITDAaL
Guidance: organic, constant FX, including 50% of VMO2, excluding contribution VEN & ARG, constant perimeter. Capex ex-spectrum	• Guidance: reported, current FX, ex VMO2, constant perimeter, includes cost to capture !. Capex ex-spectrum
Adjustments: excluding gains/losses (material), write offs, material non-recurring impacts and restructuring	· Adjustments: excludes restructuring charges and assumes no significant exceptional items
Former guidance KPls: - Organic revenue & OIBDA, 1yr Capex/sales Qualitative leverage commitment	New guidance KPIs: - - Reported EBITDAaL - Capex, 3-yr CAGR Capex/sales 3-yr Leverage ratio target 3-yr FCF 3-yr CAGR
Leverage: net financial debt over OIBDAaL (OIBDA after leases) for the past 12M, constant perimeter and excluding certain non-ordinary factors	• Leverage: net financial debt over EBITDAaL (EBITDA after leases) for the past 12M, constant perimeter and excluding certain non-ordinary factors
2023 FCF (incl. leases principal payments): ex-spectrum, pre hybrid coupons, pre commitments includes VMO2 recaps.	· New reference FCF (incl. leases principal payments) : ex- spectrum, includes cost to capture ', hybrid coupons, commitments, excludes VMO2 recaps

CDS

CAPITAL MARKET DAY 2023

Growth Profitability Sustainability