Telefonica: Q2: Headline figures ahead; Spain and Brazil underpin OpCFaL upgrade; M&A discipline reiterated

研报英文原文证据摘录

Telefonica: Q2: Headline figures ahead; Spain and Brazil underpin OpCFaL upgrade; M&A discipline reiterated

efficiencies. The

company remains on track to deliver ~€250m of savings from the Spanish redundancy

programme in FY26, having achieved close to €90m in H126, implying a meaningful

acceleration in benefits through Q3/Q4. Despite ongoing competition at the value end of the

market, management highlighted resilience across both premium and value segments,

supported by strong customer engagement, market-leading ARPU and record-low churn.

UK: Headline figures remain weak, though broadband trends continue to improve (see

our Virgin Media O2 reports here and here). Revenues declined 7.9% y/y in Q2, primarily

affected by reduced nexfibre build activity, with service revenues down 3.9% y/y, reflecting

pressure in both Consumer and Business, partly offset by growth in Wholesale service

revenues. Mobile contract net losses were 63k in Q2 (Q1: -60k; Q4: -165k), while fixed

broadband line losses deteriorated sequentially to 31k (Q1: -6k; Q4: -17k) against a

challenging market backdrop. The fixed network footprint expanded to 18.8m UBB premises

passed, with Nexfibre’s acquisition of Netomnia moving to a Phase 2 CMA review. Adjusted

EBITDA declined -2.9% y/y during the period but remained at the top end of full-year

guidance, reflecting lower nexfibre construction activity, partially offset by cost efficiencies,

while capex declined 15.3% y/y with capital intensity of 19%. Management reiterated that

Virgin Media O2 remains a strategically important asset for the Group; adding that

they are fully aligned and committed to the success of the business. Leverage of ~5.8x

remains above the targeted (4-5x) range, the parents are committed to proactive management