Jose Maria Alvarez-Pallete Lopez: Thanks for your question. I’ll start taking part of the first one, and I’ll hand it over to Angel to contribute on a business-by-business point of view. In terms of EBITDA guidance, I mean, for 1% to 2%, primarily, but we are starting from a stronger, I mean figure in 2023, which is good news, with stronger traction in the businesses in terms of revenue B2C, B2B and wholesale. And remember as well that we are guiding in reported terms and we are embedding a devaluation of the Argentinian peso that was not there at the time of the Capital Markets Day. And in spite of that, we stick to the commitment that we have been given. Also, you were right in mentioning the impact of workforce reduction in Spain, that will be incremental over the year jointly with the switch-off of copper. So you will see an accelerated trend in EBITDA overall the year, and we are fully committed to the guidance that we gave at the time of the Capital Markets Day.
Angel Vila: Yes. And to elaborate a bit more on the outlook by [indiscernible], Spain expects for full-year both revenue growth and EBITDA growth for the first time since 2019. Germany’s guidance as issued yesterday is slightly positive revenue growth and low — to low mid-single digit EBITDA growth. Brazil’s intention is to maintain both a strong revenue growth and EBITDA growth. So here you can see that the hard currency revenues and EBITDAs are guided or have an outlook of growth and Brazil ex FX, but the Brazilian reais is behaving very nicely, should be showing growth above at least aligned or above the group guidance. In Hispam, which is an EBITDAaL-CapEx story, Jose Maria already commented on some FX pressures that we are experiencing and we are reporting from this year onwards on reported basis.
By the way, just to complete the outlook, CapEx intensity, CapEx on sales, we’re guiding for the group for declining intensity. In Spain will be declining intensity, in Germany the guidance, as issued yesterday, in a range of 13% to 14%. Brazil also indicated that they will reduce capital intensity. Hispam will maintain the same levels than in 2023.
James Ratzer: And Angel, do you expect it hard to grow in 2024, excluding the new 200 gigabytes gain from the accounts savings?
Angel Vila: Sorry, I didn’t get the question. Could you repeat it, sorry?
James Ratzer: Sorry. That Spanish EBITDA for this year will grow, but would it grow if you didn’t do the headcount savings of €200 million, which I suppose is a new benefit for this year?
Angel Vila: Yes. We expect the Spanish EBITDA growth for the year. We see also that trend building out across the quarters. It will be progressing along the year because we have several elements that kick in at different moments in the year. So the capital — the people reduction plan kicks in from the 1st of March, because employees will be exiting on the 29th of February. Price increases that we are putting forward also don’t kick in for the full first quarter, but they gradually built up across the quarter. We switch-off the retail corporate network in April and this will accelerate savings across the year. But for the full-year, EBITDA growth is the outlook that we have and with growing momentum quarter-on-quarter. Going to the second question, which was on the NetCo that we are building in the U.K. Alongside our partners, it’s all about focus and optionality.
Focus, we are creating a 100% owned NetCo under Virgin Media O2 that will be able to provide more emphasis, more focus on the fiber upgrade and the wholesale revenue through a dedicated team, through having a dedicated strategy and a dedicated balance sheet. So focus on this fiber migration and upgrade. And second, optionality, this vehicle can give us with our partners, optionality to accelerate this upgrade and both passing and connecting if needed. It gives us optionality to find new financing options and to raise money in order to and also gives us optionality to consolidate. This can create a currency for consolidation in the space. So it’s a project that we clearly obviously support. We are very excited about and it’s about focusing on this fiber upgrade and giving us optionality going forward.
All of these, by the way, without affecting the financial commitments of the joint venture to its shareholders.
Laura Abasolo: And finally, on the James, on the question on balance sheet impacts, as you know, we carry out the annual goodwill impairment test at the end of the year. The future cash flows used in the value for this calculation is the business plan approved by the Board of Directors of VMO2. On that business plan, we have guided on 2024 already. We do not provide longer-term guidance, but we have positioned 2024 as a transitional year, better prospects from 2024 onwards. The impairment is a consequence of this new business plan, but even more of the increase in the discount rate. We have applied a discount rate of 7.5% after taxes compared to 7.3% the previous year. We are reflecting the macroeconomic conditions, competitive environment in the U.K. and also the increase in the financial rates.
Growth to perpetuity remains the same at 1%. You have all the detail in our annual accounts. And I just wanted to point it out that this is very sensitive to WACC. So should that 7.5% WACC decrease, which I think it could be definitely the case in the midterm, that implied valuation could improve significantly. Just for — I think you have all the sensitivities in our annual accounts, but a 50 basis points improvement in WACC, it could imply a higher valuation just at Telefonica’s side of €1.4 billion. So extremely sensitive and this is the main reason behind the balance sheet impact that you have seen.
James Ratzer: Great. Thank you so much.
Adrian Zunzunegui: We have time for one last question, please.
Operator: Thank you. One moment please. Our last question comes from the line of Keval Khiroya from Deutsche Bank U.K. Please go ahead.
Keval Khiroya: Thank you. I’ve got two questions, please. So firstly, you’ve had a bit more time to think about your plan for Germany once one-on-one leaves your network. TAFTA yesterday suggested a retail centric approach in ’25 and ’26 would be key. But what gives you the confidence that such an approach won’t be disruptive to the wider German market? And secondly, you implemented 4 percentage point lower price rise in Spain than the prior year. Can you comment on whether this should lead to lower revenue growth than the 1.6% service revenue growth seen in Spain in 2023? Or are there any other offsets which should be mindful off? Thank you.
Jose Maria Alvarez-Pallete Lopez: Thank you, Keval for your questions. In Germany, we are completely focused in the recovery plant, what we call our accelerated growth and efficiency plan. This has several elements. We have an element of using the capacity of the network that has been or will progressively be freed by one-on-one. And here, we are going to work once we are not bound by the remedies of that arose from the A plus transaction. We can grow both on retail and yes, we are aiming to retain our own — to grow our own customer base and also deepening some wholesale partnership relationships that we already have. We are doing this and you have seen last year we were the only ones to propose price increases in mobile. The market did follow.
So we have been looking at value over volume approach. And now we are seeing also opportunities with the family plans to grow in convergence. We have always been rational, but we aim to grow and this is behind the guidance that was given yesterday by Telefonica Deutschland of slight growth in revenues. Regarding the price rises in Spain, we are increasing slightly below inflation, 3.1%. Our revenues — our prices for the Movistar bundles, not the O2 bundles and some of the components. So it’s a lower price increase than last year. But we are seeing and we are experiencing very strong commercial momentum. We are growing in all accesses, all type of accesses. We’re getting net adds with higher ARPU, better NPS, record low churn. This is in a big part the result of how we modified the offer and made it more flexible with Movistar compared to the previous fusion packages.
And it’s when you look at Slide 7 in our presentation in Spain, if you look at the trend of retail revenues and acceleration that we achieved 2.7% growth in the last quarter. But this has been accelerating over the last quarters. This is what underlies our expectation of revenue growth to continue in Spain for 2024.
Keval Khiroya: That’s clear. Thank you.
Jose Maria Alvarez-Pallete Lopez: Thanks.
Operator: Thank you. At this time, no further questions will be taken.
Adrian Zunzunegui: Thank you very much for your participation, and we certainly hope that we have provided some useful insights for you. Should you still have further questions, we kindly ask you to contact our Investor Relationship department. Good morning, and thank you.
Operator: Telefonica’s January-December 2023 results conference call is over. You may now disconnect your line. Thank you.
