MS | The general feeling is that Telefónica’s message at the TMT 2022 was more bullish than on other occasions. The most important elements:
- Telefónica is managing the current volatile macro environment well.
2. A generalised hike in prices: the company’s prices are linked to inflation in Brazil, HISPAM and the UK. In Spain, the message has been very direct, speaking about raising prices to levels of inflation as well (affecting the front book as well as the back book).
3. Inflation remains important, but the message has been reassuring. Telefónica has experience managing inflationary pressures. In Spain, energy costs are hedged in 2023 (having negotiated the PPAs before the spike in prices).
4. Balance sheet under control: after Q3, consolidated leverage is 2.5x Net Debt/OIBDAaL, with almost 75% of total debt at a fixed rate, and an average maturity of 13 years.