Telefónica balance sheet cleanup & strengthens Spain&BrazilTelefonica SABME_DLY:TEFActivTradesTelefónica cleans up its balance sheet and strengthens Spain and Brazil despite accounting losses in 2025 Ion Jauregui – Analyst at ActivTrades Telefónica closed 2025 with net losses of 4.318 billion euros, a result conditioned by extraordinary items linked to the ERE in Spain, the impairment of assets in Hispanoamérica (Hispam), and the negative impact of currencies. Without these non-recurring effects, profit would have stood at 2.122 billion euros, confirming that the deterioration responds more to a clean-up process than to a structural weakening of the business. From an operational standpoint, the figures reflect a company that accelerated in the fourth quarter and consolidated its recovery in its key markets. Revenues grew by 1.5% to 35.120 billion euros, while adjusted EBITDA reached 11.918 billion, with 2% organic growth. Operating cash flow increased by 5.7%, showing strength in resource generation. Spain and Brazil once again acted as growth engines. The Spanish subsidiary recorded its best financial year since 2008, with revenues of 13.012 billion euros (+1.7%) and EBITDA growth of 1.1%. Brazil, meanwhile, maintained solid commercial momentum and growth in local currency. In contrast, Germany and the United Kingdom showed greater competitive pressure and margin adjustments. In financial terms, net debt was reduced to 26.824 billion euros, supported by free cash flow generation. The company maintains its dividend of 0.15 euros per share, reinforcing its commitment to shareholder remuneration in a context of financial discipline. Technical Analysis Telefónica (Ticker AT: TEF) Looking at the chart, the stock maintains a medium-term recovery structure, while the long-term movement remains a range fluctuating between 4.430 and 3.535 euros, with the area of greatest confluence located around the point of control in the lower zone at 3.745 euros, slightly above the current price. As long as the share preserves the key supports it has recovered, with the 50- and 100-period moving averages turning positive above the lower end of the range and seeking to regain the 200-session moving average, the bias could be considered constructive. A recovery of 3.930 euros could mark a turning point in the bullish evolution, opening the door to a new upward leg, with the market now focused on organic improvement and the gradual reduction of leverage. Indicator analysis shows that RSI still maintains some overbought inertia at 61.59%, while MACD signals a bullish bias. Projecting the evolution of the European market through the ActivTrades Europe Market Pulse, we can observe that it stands in a neutral/mixed zone with a tendency toward risk-on. New Year, Clean Balance Sheet Telefónica faces 2026 with a cleaner balance sheet and with Spain and Brazil as strategic pillars. The key will be to transform accounting clean-up into sustainable growth. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.