20th February 2020 - MADRID, SPAIN: The company starts 2020 advancing on the execution of its new strategy, focused on creating long term value

Highlights:

Sustainable growth: Telefónica revenues grew in organic terms for the sixth consecutive year, up +3.2% to 48,422M€ (-0.6% reported), mainly due to the sustained revenue growth in its main markets. Digital service revenues grew 17.1% in 2019.

Profitable growth: OIBDA grew +1.9% in 2019 in organic terms (€15,119M, -2.9% reported), backed by revenue growth and efficiencies from digitalisation and simplification. Telefonica captured more than €420m in digital transformation savings in 2019 and reached two-thirds of the €1bn target committed for the 2017-2020 period.

Responsible growth: Telefónica reported a stable accesses base of 344 million and improved customer satisfaction, which translated into an improvement in ARPU of 4.3% and a stable churn.

Net income, excluding extraordinary impacts of €2,432m, reached €3,574M (€1,142M in reported terms). The main impact comes from a €1,614m provision from restructuring expenses, mainly in Spain.

Free Cash Flow grew 20.6% up to €5,912M, reaching the highest level since 2013.

Net debt reduction for the 11th consecutive quarter, €37,744M, 8.1% below the level at December 2018, and close to €15,000M below June 2016. Including post-closing events, debt would be approximately €37,000M.

Guidance and shareholder remuneration:

The Company confirms shareholder remuneration for 2019 and announces the remuneration policy for 2020, a dividend of €0.40 per share, to be paid in December 2020 (€0.20 per share) and in June 2021 (€0.20 per share)1.

Telefónica met 2019 financial guidance and announces new guidance for 20202 of stable revenues, OIBDA and OIBDA-CapEx to revenues Telefónica announces financial guidance for 2019-20222 related to the action plan presented in November 2019:

Revenue growth.

More than €2,000M of additional revenues in Telefonica Tech (Cloud, IoT/Big Data and Cibersecurity) in 2022. 2 p.p. increase in OIBDA-Capex to revenues by 2022.

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