Emilio Gayo affirms that Telefónica needs to be the “Harley-Davidson” of telecos | Companies | EUROtoday

The CEO of Telefónica, Emilio Gayo, acknowledged that the numerous inventory market fall skilled by the corporate – a depreciation of 15.4% till the market shut on Tuesday – after the presentation of its new Strategic Plan 2026-2030 was a “foreseeable scenario.” However, Gayo insisted on the necessity for the corporate to “abstract” from this fast impression, which he thought-about a pure consequence of the “complex decisions” adopted inside the framework of a profound transformation course of, as a result of the first goal is to take care of a imaginative and prescient centered on the medium and long run.

“It is evident that the first reception has been with a drop in the stock. When you carry out a transformation process, it has implications. We knew it could happen, it was a foreseeable scenario,” he said throughout his participation within the discussion board Metafuture from Atresmedia.

Despite these falls on the inventory market, the CEO offered an formidable imaginative and prescient for the longer term, in order that Telefónica turns into “the Harley-Davidson of telecos” and “the most beloved brand” in Spain. A considerably distinctive instance for those who take note of the intense monetary difficulties that the long-lasting American motorbike producer has been going by way of for a decade, which has led it to promote this summer season a part of its historic headquarters in Milwaukee to the Central Standard Craft distillery to avoid wasting prices.

Gayo defined that the magnitude of the adjustments at Telefónica – together with adjustments in shareholders, administration groups and geographical imaginative and prescient – implies that the selections made will essentially have a short-term impression. The focus, nonetheless, is on consolidating an organization that, though it can’t ignore the quick time period as a result of it’s a listed firm, orients its technique in the direction of a broader time horizon. “The profile of investors changes and that has turbulence, you have to try to abstract yourself a little and maintain your medium-term vision and be constant,” he stated.

The impression on the corporate’s worth has been notable: the worth went from 4.29 euros per share on the shut of November 3, on the eve of the presentation of the plan, to three.63 euros on the shut of this Tuesday, reflecting the aforementioned drop of 15.4%. The inventory falls one other 2% mid-session this Tuesday. This depreciation translated into a discount in market capitalization of shut to three.5 billion euros.

According to Gayo, the telecommunications sector has typically sophisticated the lives of shoppers, one thing that the corporate goals to right to be seen not solely as the most effective telcohowever because the one that gives the most effective complete providers. “We want to become the best operator in those fields we are in. On the organic growth side, we have made a realistic plan, it is based on six pillars, three that have to do with the client and another three that are enablers. We believe that Telefónica, with this plan, can become one of the largest operators in the world and that we contribute to technological development in Europe,” he indicated.

European regulation

Finally, Gayo was optimistic relating to the European regulatory context. He trusted that the multinational will be capable of improve its investments and networks with the assist of an enchancment within the sector’s consolidation coverage. In his opinion, the European Commission is exhibiting indicators that “old Europe is moving” in the direction of a extra favorable stance in the direction of mergers after the Draghi and Letta experiences, though it acknowledged that these adjustments is not going to materialize within the “very short term.”

“The competition laws that govern Europe seek other consumer development objectives. These prevent this other thing from happening, which is also necessary. We have built a plan with which we can anticipate. This plan has several areas,” he added.

The CEO of Telefónica didn’t miss the chance to reiterate the message that whereas in markets akin to China and the United States three operators cowl 97% of cellular prospects, in Europe there are 38. This excessive fragmentation, he said, prevents reaching the economies of scale required by a enterprise characterised by excessive investments in infrastructure.

“To do something you have to make large investments. While in the US operators invest an average of 11,000 million euros annually in networks, and 6,000 million in China, in Europe it is 700 million,” he insisted.

Telefónica’s new roadmap entails a sequence of far-reaching measures that search effectivity and monetary restructuring. One of essentially the most delicate choices for buyers is the halving of the dividend for the yr 2026, establishing it at 0.15 euros per share. For the years 2027 and 2028, shareholder remuneration will not be fastened and can be established in a variety between 40% and 60% of free money move, instantly linked to the corporate’s efficiency.

The plan contemplates reaching effectivity that enables chopping as much as 3,000 million euros till 2030 (2,300 million in 2028). These measures embrace the implementation of an Employment Regulation File (ERE), the precise magnitude of which can be introduced subsequent week.