Published by Global Banking and Finance Review
Posted on February 27, 2025
By David Latona
MADRID (Reuters) - Telefonica's newly-appointed chief Marc Murtra said on Thursday the company would complete a strategic review before the end of this year as he championed Europe's "strategic autonomy", which he said required the sector's consolidation.
Murtra's remarks came after the Spanish firm posted its annual results, which saw a 2.8% drop in adjusted profit and a fourth-quarter hit from the impairment of Latin American assets.
"At a European level, there's a very broad consensus for strategic autonomy," Murtra told Reuters, adding that regulatory changes allowing operators to merge for bigger scale were needed to end the sector's fragmentation.
He said Telefonica saw an opportunity to lead that effort.
Murtra, who was appointed on January 18 amid some concerns of political meddling, said the company wanted to adapt to a changing global environment, citing growing rifts between NATO partners and geopolitical conflicts.
Murtra said Telefonica would review its strategy in the second half of 2025 and hold off on giving mid-term guidance to allow for more flexibility until then. He added the firm would prioritise its core markets - telecoms and infrastructure - with an eye on fiscal discipline.
He declined to comment on plans to sell Telefonica's units in Mexico and Colombia, part of efforts to gradually reduce its exposure to Latin America.
Asked about potential interest in buying Indra's tech unit Minsait, he said it "isn't on the table" for now.
Telefonica said it met its 2024 guidance and reduced its leverage by 2.8 times as of December.
This year, it expects organic growth for revenue and adjusted EBITDA, with free cash flow seen remaining similar to 2024 levels.
Telefonica shares were down 0.4% at 1420 GMT, recouping earlier losses. Blue-check index was down 0.7%.
The company has been shedding assets to cut a previously crippling debt pile and raise cash for new 5G tech investments. Earlier this week, it sold its Argentina unit for $1.25 billion.
GOVERNANCE UNDER SCRUTINY
Murtra previously helmed Indra, an IT and defence group owned 28% by Spanish state vehicle SEPI. The same entity, which owns 10% of Telefonica, was the driving force behind his predecessor Jose Maria Alvarez-Pallete's ouster.
Spain's government, which considers Telefonica of strategic importance, entered the company as a counterweight to the acquisition of a similar stake by Saudi Arabia's STC.
Murtra said there was "continuity, coherence and respect" with regards to Telefonica's history.
"We won't enter into any disputes, here (in Spain) or in any other market ... It's business as usual."
($1 = 0.9551 euros)
(Reporting by David Latona; Additional reporting by Emma Pinedo; Editing by Himani Sarkar, Mrigank Dhaniwala, Susan Fenton and David Evans)
