Telefonica slightly lifts 2026 core profit, cash flow targets (updated)

Telefonica SA

Yesterday 06:45

Rewrites with upgraded 2026 guidance, adds details throughout
MADRID, Nov 12 (Reuters) - Spain's Telefonica TEF.MC on Thursday upgraded its 2026 core profit and free cash flow targets after posting faster growth and reducing leverage in the third quarter, although it also lowered its revenue-growth forecast for the year.
The telecoms group said earnings before interest, tax, depreciation and amortisation (EBITDA) should increase by slightly more than 2.5% this year, compared with its prior 1.5%-2.5% range
Telefonica also expects free cash flow of €3.1 billion  ($3.4 billion) instead of the previous €3 billion
It sees adjusted operating cash flow after leases growing more than 3.5% by year-end from more than 3% previously
However, Telefonica now expects revenue to rise 1%-1.5% this year at constant exchange rates, compared with a previous outlook of 1.5%-2.5% growth
The revised targets come as Telefonica aims to translate a simplified operating model and cost efficiencies into cash generation and lower debt, while navigating subdued growth across its core markets of Spain, Britain, Brazil and Germany
The company had already raised its OpCFaL target in July, citing stronger operating momentum in Spain and Brazil
Third-quarter revenue rose 2.2% on a constant-currency basis to €8.43 billion, accelerating from the pace posted earlier in the year and supported by 1.8% growth in service revenue
Between July and September, adjusted EBITDA increased 2.8% at constant exchange rates to €3.08 billion, while adjusted OpCFaL rose 7.2% year-on-year
Telefonica's leverage ratio fell by 0.05 times from June to 2.63 times in September, as it works towards a target of around 2.5 times by 2028
The company confirmed a cash dividend of €0.15 per share, payable in June 2027

($1 = 0.9018 euros)


 (Reporting by David Latona; Editing by Christopher Cushing and Mrigank Dhaniwala)
 ((david.latona@thomsonreuters.com; +34 918 35 68 13;))