Telefónica is worth almost half as much as in 2019 when it launched its strategic plan

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The Spanish multinational Telefónica (BME:TEF) is worth 46% less than in 2019 (21,097 million euros), when it launched a new strategic plan marked by the low share price, which then reached minimums, and which is three years old today, Sunday.

The Spanish multinational has invested in 2022 (until September) 24.68% less than then, has entered 4.98% more, has reduced its debt by 24.49% and its share has fallen almost half, all in a competitive sector in falling prices, according to the data provided by the operator to the National Securities Commission (CNMV) and data from BME (Spanish Stock Exchanges and Markets (BME:BME)).

Gone is that November 27, 2019, when its president, José María Álvarez-Pallete, summoned the press as a matter of urgency to announce a plan that was going to mark the future of the company, after a summer in which the value of the share was at minimums that it had not seen for 25 years. below 6 euros.

Three years later, with a pandemic in between and the war in Ukraine, Telefónica’s share has gone from 6.77 euros at which it closed on November 27, 2019 to 3.65 this Friday.

At that time, Telefónica had a capitalization of 35,187 million euros and was the fourth in theIbex, compared to 21,096 million now. Today it is the tenth by capitalization.

That plan is still in force and, although it was published that the operator planned to launch a new one in November, to date this has not happened.

LOWER INVESTMENT HIGHER REVENUES

Before approving that strategy, Telefónica entered from January to September 2019 36,023 million euros, 4.98% more than in the same period of this year 2022, when it invoiced 34,228 million (including 50% of what was invoiced by VMO2, the ‘join venture’ created in the United Kingdom together with Liberty Global (NASDAQ:LBTYA)).

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In terms of capital investment (Capex), Telefónica allocated 6,657 million euros for this concept until September 2019, compared to the 5,014 million euros recorded on the same date in 2022, also including the part of VMO2. (VMO2 accounted for 39.6% of the investment: 1,987 million euros).

In 2019, Telefónica launched a strategic plan that prioritized investments in its four main markets (Spain, Germany, the United Kingdom and Brazil), created a unit in Latin America, which would allow it to value its investments in this region. In addition, it launched Telefónica Infra and Telefónica Tech.

INVESTMENT IN LATIN AMERICA FALLS BY 34%

Three years later, Telefónica has invested in Latin America (until September) 34.43% less than in 2019, when it invested 1,005 million.

As for its revenues, in Latin America, the teleco invoiced 7,665 million euros in the first nine months of 2019, while in 2022, the figure fell to 7,036 million.

In three of its four main markets it also reduced its investment: In Spain, it went from 1,194 to 1,045 million; in Germany, from 2,207 million to 902; and Brazil, from 1,486 to 1,297. However, it multiplied its investment in the United Kingdom, from 652 million to 1,987.

Revenues fell in Spain from 9,501 in September 2019 to 9,283 million in 2022 and in Brazil, from 7,536 to 6,509; meanwhile, they grew in Germany, from 5,429 to 6,034 million; and the United Kingdom, from 5,184 million to 9,013 million.

REDUCE YOUR DEBT BY A QUARTER

One of Telefónica’s challenges was to reduce its debt, which has gone from 38,393 million euros at the end of September 2019, to 28,918 million euros in 2022, 24.49% less.

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All this after selling its Telxius tower division -in which it participated 49%- to American Tower for 7,700 million euros, its Costa Rica unit for 445 million euros; and implement two job suspension plans, for more than 5,000 employees, one in 2019 and another in 2022), among other measures.

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