Telefonica Brasil S.A.

Good morning. Thank you for standing by and welcome to Telefonica's January-December 2025 results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you'd like to ask a question, please press star followed by one, one on your telephone keypad. You will then hear an automated message advising your hand is raised. To whistler your question, please press star, one, and one again. we will kindly ask you to ask a maximum of two questions per participant. As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. Torsten Achtmann, Global Director of Investor Relations. Please go ahead, sir.

Good morning and welcome to Telefonica's conference call to discuss January to December 2025 results. I'm Torsten Achtmann from Investor Relations. Before proceeding, let me mention that the financial information contained in this document has been prepared under international financial reporting standards as adopted by the European Union. This financial information is unaudited. This conference call and webcast, including the Q&A session, may contain forward-looking statements and information relating to the Telefonica Group. These statements may include financial or operating forecasts and estimates or statements regarding plans, objectives, and expectations regarding different matters. All forward-looking statements involve risks and uncertainties that could cause the final developments and results to materially differ from those expressed or implied by such statements. We encourage you to review our publicly available disclosure documents filed with the relevant securities market regulators. If you don't have a copy of the relevant press release and the slides, please contact Telefonica's investor relations team. Now let me turn the call over to our chairman and CEO, Mr. Mark Murtra.

Good morning, everyone, and welcome to Telefonica's fourth quarter and full year results call. I am here today with Emilio Rayo, Chief Operating Officer, Juan Azcue, Chief Financial and Corporate Development Officer, and Lutz Schuller, CEO of Virgin Media O2. Last November, at our Capital Markets Day, we presented our strategic plan, Transform and Grow, that had the clear challenge to provide citizens the best access to digital technologies. The fundamental access on a high level are clear for us. We are committed to offering additional and enhanced customer services to drive growth in our core markets. We are building a more innovative and competitive company, simplifying business units and shifting operational responsibility to markets. with an ambitious and effective management focused on growth and efficiency, absolute commitment to guidance and financial discipline, and we are building a stronger, more competitive European operator. These axes and purpose fit our 2025 results, where we delivered on our commitments and where we achieved important milestones. Let me highlight the 2025 results where we have delivered on our financial commitments in 2025. At the same time, we made significant progress setting the business up for a stronger future. Importantly, we exited the year with improving momentum. In the quarter, momentum continued with adjusted EBITDA and operating cash flow after leases accelerated. Adjusted EBITDA, constant Forex growth, reached 2.8 percent and adjusted operating cash flow after leases grew nearly 13 percent b2b was particularly highlight growing 7.3 percent in the quarter our business performance was equally encouraging in spain we delivered the strongest growth in more than seven years on the back of our premium positioning and improved commercial performance in brazil our customer base grew to record levels. And in Germany, consumer perception of the O2 brand continued its positive trend. Beyond the financial results, we continued to both simplify and drive long-term value creation for the Telefonica Group. We accelerated the pace of our portfolio transformation, significantly reducing our exposure in Hispan, and have now more or less exited the region with 6% out of eight markets sold. We also reached a formal agreement with our labor unions to improve productivity in Spain. And this agreement is currently being implemented. This is an important step to build a leaner and faster moving organization. These are part of a broader efficiency drive that is already flowing through our cost base. Taken together, these achievements represent a solid foundation for 2026 execution. Moving to slide three, at the Capital Markets Day, we defined the six strategic pillars underpinning our transform and grow strategy. During the end of 2025, we have already executed on these pillars. The first three are delivering a best-in-class customer experience, expanding B2C offering and scaling B2B. Let me highlight some of our achievements here. that we are looking to build on in the future. In 2025, our network leadership drove commercial results. We want customers, retain them longer, and delivered services they value, as our NPS and customer lifetime value reflected. We also secured our leading position with, for example, the renewal of La Liga and the UEFA rights in Spain. In Brazil, VivoTotal represents 43% of FTHH customers, and we believe that we will grow that as we expand the customer proposition. We are building out the ecosystem into smart home, security, fintech, and consumer electronics. In Germany, fixed broadband expansion is the path to converge our strong mobile voice. The fourth pillar, evolving technological capabilities. We continue to invest in the best network experience for our customers. Beyond building networks, we are changing how we operate them with advanced automation, for example. The fifth pillar is simplifying our operating model. A goal is making a leaner, more agile Telefónica, ensuring our investments deliver improved returns. Copper switch-off in Spain was a milestone this year and has already started in Brazil. The workforce transformation agreement is concluded and on track to deliver approximately 0.6 billion euros in run rate savings by 2028. We made clear progress on portfolio management execution, completing four ISPAM exits in 2025. Let me now turn to the priorities for 2026 in a transform and grow plan that will drive the next phase of growth. Delivering best-in-class customer experience is one of the clearest ways to drive long-term value. When interactions are simpler and more tailored, satisfaction increases, leading to greater loyalty, higher ARPU, lower churn, and higher customer lifetime value. At a group level, we are focused on ensuring faster incident resolution, and we are also rolling out AI-based hyper-personalization across key channels. This effect is included in the 2026 CAPEX of the group. In B2C, we are further driving convergence and deepening customer relationship by bringing more into each household. Customers who bundle multiple service, such as connectivity, content, devices, and other services, stay longer, spend more, and churn less. This creates a structural opportunity to grow ARPU efficiently. In B2B, we are scaling our digital services portfolio across the group, with a particular focus on cybersecurity and cloud, as well as defense in Spain. Our trusted position with enterprise and public sector clients give us a strong foundation to grow recurring revenues. 2026 is already a significant year for cost efficiencies. We are accelerating the simplification, optimizing leases, renegotiating vendor contracts, and streamlining structures. In Brazil, we're now shutting down our copper network to concentrate our resources on a single modern infrastructure. We continue to focus on ISPAM exit, already have closed two transactions in the year to date. Last week, NextFiber announced the acquisition of Netomnia to become the largest full-fiber altnet in the UK and will reach 8 million premises passed. We achieved this without a significant equity contribution from Telefonica. These initiatives show how transform and grow comes to life. We enter 2026 with a focused portfolio, stronger commercial momentum in core markets, and a clear set of priorities already in execution. Moving to guidance for 2026. We expect constant revenue and adjusted EBITDA growth of 1.5 to 2.5% and CAPEX to sales ratio of around 12%. We expected an adjusted operating cash flow after leases growth of more than 2%, demonstrating operating leverage at the adjusted operating cash flow after leases level. We expect free cash flow of 3 billion euros, an upgrade to the upper end of the range given at the capital market state, supported by the Q4 momentum. We continue to expect leverage to progress towards our target of 2.5 times net debt divided by adjusted EBITDA in 2028, to which we are fully committed to. We reconfirm our 15 euro cents dividend per share in 2026, We also reconfirmed all of our three and five-year targets outlined at the capital market stage. Now, let me hand over to Emilio to take you through our operation performance in more detail.