Telefonica S.A.

Investor Presentation • Nov 7, 2024

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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, among others, changes in the Telefónica's Group business, changes in its business developmentstrategy or any other circumstances.

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Q3 24 Summary

Mr. Ángel Vilá COO

Q3: a quarter of strong operating and strategic progress

Highlights

State-of-the-art network deployment maintains rapid pace (81.6m FTTH PPs, 71% 5G coverage in core markets)

Strong underlying performance; Spain best net adds in 6 years with record-low churn; sustained LC growth in Brazil

Accelerating FCF growth, +89.5% y-o-y in Q3, +27.7% in 9M, trending above target of >10%

Industry-leading CapEx intensity at 12% of revenue (9M), optimising investments, increasing operating leverage

On track to fulfill 2024 guidance despite FX headwinds

✓ Signed FibreCo agreement with VOD Spain ✓ LT FTTH IRU agreement with MasOrange

Execution delivery

✓ Anatel/Ministry of Communications agreement on fixed voice concession to authorisation model migration expected in Q4

✓ Expect BNetzA update on details of spectrum extension in early 2025 ✓ New W/S agreement with Lyca and contract renewal with Lebara

✓ NetCo progressing according to plan, greater focus on fibre upgrade

Stronger Telefónica

Next Generation NETWORKS

Enhanced CUSTOMER experience focus

Leaner OPERATIONS

• Expanding fibre: 81.6m PPs, +2.7m q-o-q
• 5G coverage +6 p.p. q-o-q in core markets (2026 coverage target of 70% reached 2yrs in advance)
• Network differentiation reducing CapEx
• AI driven solutions progressing
• Open Gateway, alliance with global telcos to provide network APIs
• Customers +1m q-o-q to 393m
• Spain record low churn (0.8%)
• NPS hits new highs (34; +5 p.p. y-o-y)
• AI improving customer experience; Perplexity investment / commercial deal
• Asset optimisation, copper shutdown, 7.7k Spain COs closed (Oct-24)
• FCF sequential acceleration
• Hispam, exploring inorganic opportunities
• AI, prioritised 6 clusters of use cases

Strong FCF and consistent underlying performance

Local currency y-o-y	Q3	9M	+89.5%
Revenue
Spain	+1.0%	+1.0%
Brazil	+7.1%	+7.0%
Germany	-1.6%	-0.6%	2.1% 866
EBITDA
Spain	+1.0%	+0.6%
Brazil	+6.9%	+7.0%	(0.1%)
Germany	+3.0%	+3.9%	Q3 9M Q3

• In local currency terms, Spain, Brazil and Germany maintain or improve growth trends
• Q3 FX impact reduced revenue and EBITDA growth; still, 9M EBITDAaL-CapEx reported growth exceeds 2024 target
• FCF grew significantly y-o-y in Q3 and 9M, largely shielded from FX volatility through natural hedging

Telefónica Group: consistent underlying performance

	Q3 y-o-y reported	9M y-o-y reported	9M y-o-y guidance FX
Revenue	-2.9%	-0.3%	+0.3%
Service revenue	-2.2%	+0.7%	+1.3%
B2B revenue	+0.6%	+2.8%	+3.3%
B2C revenue	-1.6%	+0.4%	+1.1%
EBITDA	-2.5%	+0.4%	+1.2%
EBITDAaL - CapEx	-0.1%	+2.1%	+2.5%
CapEx/Sales	13.4%	12.0%
FCF	+89.5%	+27.7%

EBITDA is adjusted and CapEx ex-spectrum Operating leverage: EBITDAal-CapEx margin

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Q3 24 Geographies & Units

Mr. Ángel Vilá COO

Spain: improving commercial momentum, accelerating EBITDA growth

Highlights

• Best quarterly net adds in 6 years
• Churn historic low (0.8%); highest ever NPS (+3 p.p. y-o-y)
• CLV increases. Premium positioning in B2C/B2B market
• EBITDA growth accelerates to +1.0% y-o-y
• EBITDAaL y-o-y turns positive

Uncertainties over wholesale dispelled All existing agreements extended; new deals signed Deregulation opportunities (MARCo consultation open)

Brazil: sustained growth, expanding profitability

Revenue & EBITDA growth (y-o-y)

Revenue EBITDA

Q3 23 Q4 23 Q1 24 Q2 24

10.8% 9.5% 10.7%

10.4%

3.3%

3.3%

Rev +7.4% EBITDA +7.3%

(6.4%)

Local currency

(5.9%)

Rev +7.1% EBITDA +6.9%

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

6.8% 7.5%

FTTH Premises passed (m)

Margins

7

Highlights

• Largest FTTH network in Latam
• Accelerating contract accesses with higher ARPU (+2%)
• FTTH connections growing (Q3 192k; +5% y-o-y)
• Higher margins despite increased weight of digital services
  • 44.6% EBITDA (+0.2 p.p. y-o-y)
  • 17.8% EBITDAaL-CapEx (+2.1 p.p. y-o-y)
• LC growth momentum intact; >2x above inflation
  • Revenue: +7.1%
  • EBITDA +6.9%
  • EBITDAaL-CapEx +20.7%

Concession to Authorisation process well advanced Final agreement expected in Q4 24

Germany: continued commercial traction on core business strength

Revenue & EBITDA growth (y-o-y) Margins

Contract net adds (k)

Fixed ARPU (y-o-y)

Highlights

• Consistent q-o-q growth in contract net adds
• Simplified O2 new tariff portfolio from Nov-24
• O² network rated "excellent" (Magazine test)
• 5G pop coverage ~97%, 1 st anniversary of '5G Plus`
• O² contract churn remains at low levels; 1.0%
• Revenue mainly reflecting MTR-cut and change of the 1&1 business model
• Sustained EBITDA growth on cost efficiencies

Strengthened B2P re-filling freed-up network capacity (i.e. contract renewal with Freenet, Lebara and new agreement with Lyca)

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VMO2: commercial momentum and targeted investments

Revenue & EBITDA growth (y-o-y) Margins

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

Fixed network build (k new PPs) Mobile contract churn (%)

Highlights

• 5G and fibre rollout continues at pace (9M CapEx/Sales 20.5%)
• Contract churn at low levels (-0.1 p.p. q-o-q)
• Return to positive net FBB adds (16k) + value growth (retail fixed ARPU +2.2% y-o-y)
• Stable combined consumer fixed & mobile revenue ex handsets
• Stable y-o-y operating leverage (EBITDAaL-CapEx/Revenue), both Q3 and 9M
• Pivotal investments in 2024 for growth in 2025 and beyond

Reinforced tower infrastructure

• Long term partnership with Cellnex UK
• Partial monetisation of CTIL, retaining co-control

Tech: the B2B commercial growth driver

• Commercial acceleration in Q3 24, further revenue growth in Q4
  • Strong growth in bookings, mainly in the private sector
  • Customers demand multiple projects combining technologies & solutions
• Larger & higher value projects increases business' sustainability
  • More recurrent and predictable revenue
  • Committed to €3bn revenue target for 2026
• Further SME opportunity in Spain, key provider in the Kit Consulting (ERF)
• Global Services Lines reinforcing operational capabilities in key markets
  • AI & Data: 10 specialised new centres in Spain, UK, Central Europe, Brazil and HIS
  • BizApps in Spain & Cyber in the UK gain momentum

Infra: a worldwide connectivity network

Accelerating FTTH deployment

̴30% of 23-26 of TEF's FTTH rollout executed Driving value whilst increasing differentiation and capabilities

Agreement to acquire Infrafibre Germany Data Centres Strengthening fibre expansion in rural areas

>1m PPs deployed or under construction Accelerating planned expansion to ~2m PPs target Among top 5 FTTH altnets in Germany

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

Q3 24 Hispam / Financials / ESG

Mrs. Laura Abasolo CFCO & Head of Telefónica Hispam

Hispam: preserving operating leverage

Revenue & EBITDA growth (y-o-y)

Accesses growth (y-o-y)

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

FTTH & Cable PPs (m)

Margins

Highlights

• Aiming for a more rational industry

• Exploring inorganic opportunities
• FTTH vehicles avoiding infrastructure overlap
• Q3 results hit by FX, competition and Peru
  • Non-cash €314m impairment in Peru
• EBITDAaL-CapEx (-0.1%)
  • Leases (-7.3%), CapEx (-11.1%); 9M CapEx/Rev 7.1%
• Technology renovation: >30k copper tons in 2022/23

FCF aligning with reiterated 2024 guidance

Back-end loaded growth trajectory

• FCF acceleration, x4.2 q-o-q, +89.5% y-o-y in Q3 and +27.7% in 9M
• Natural BRL hedging proves FCF focus
• >10% growth ambition reiterated for 2024 and 2023-26

Solid balance sheet, contained costs and long average life

Solid progress across the pillars of ESG

• Decarbonise the economy, helped avoid 69m tCO² for B2C customers
• Reducing Scope 3, Led industry climate maturity assessment of ~1k suppliers, offering tailored training

• Advancing in diversity, 33.6% of executives are women (37% target in 2027)
• Well placed for B2B customers, ranked percentile 99th of all companies (130k) evaluated by EcoVadis

• #1 in Reporting & Transparency, Reuters Sustainability Awards 2024
• Leading Ethical AI, signed the EU's AI Pact and actively participated in developing the Code of Practice

Key takeaways

Mr. Ángel Vilá COO

2024 guidance confirmed despite FX depreciation in Q3

	2024 Guidance	9M 24
Revenue y-o-y reported	~1%	-0.3%
EBITDA y-o-y reported	1% to 2%	+0.4%
EBITDAaL - CapEx y-o-y reported	1% to 2%	+2.1%	✓
CapEx / Sales	Up to 13%	12.0%	✓
FCF y-o-y reported	>10%	+27.7%	✓
Cash Dividend	€0.3/share 2 tranches €0.15; 19th Dec-24, Jun-25	Improved coverage	✓
Leverage	Reduced	2.76x

Under guidance FX assumptions, 9M well within guidance > 1% service revenue, > 1% EBITDA and >2% EBITDAaL-CapEx growth

Controlling the controllable Delivering strong FCF Majority of FCF well protected through hedging strategy

On track with 2023-26 guidance

Maximising performance through focused execution

• Solid business momentum, both commercial and operationally across Spain, Brazil and Germany 1
  • Strong FCF growth allowing reaffirmation of >10% ambition for both 2024 and 2023-26
  • Hedging strategy mitigates FCF exposure to currency fluctuations
  • Focus investments on FTTH and 5G deployment, high-value customers and premium services driving customer satisfaction
  • Disciplined balance sheet and capital allocation, delivering on targets, sustainable dividend and growth-focused CapEx
• 6 Opportunities ahead, authorisation regime in Brazil, deregulation and reducing sector fragmentation in EU

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Results presentation and Q&A Session

Telefónica's management will host a webcast on 7 November at 10:00 AM (CET), 9:00 AM (GMT), and 4:00 AM (EDT)

Participants from Telefónica

• Ángel Vilá l COO
• Laura Abasolo l CFCO & Head Telefónica Hispam
• Markus Haas l CEO Telefónica Deutschland
• 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

Climate A List 2023

Bloomberg GEI 2023

Member of DJSI Europe

1 st in sector 2022

1 st company worldwide in 2023

Digital Inclusion Benchmark

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

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

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