Good morning, and welcome to Telefonica's conference call to discuss January-March 2024 results. I'm Adrian Zunzunegui from Investor Relations. Before proceeding, let me mention that the financial information contained in this document has been prepared under International Financial Reporting Standards as adopted by the European Union. This financial information is unaudited. This conference call and webcast, including the Q&A session, may contain forward-looking statements and information relating to the Telefonica Group. These statements may include financial or operating forecasts and estimates or statements regarding plans, objectives and expectations regarding different matters. All forward-looking statements involve risks and uncertainties that could cause the final developments and results to materially differ from those expressed or implied by such statements. We encourage you to review our publicly available disclosure documents filed with the relevant securities market regulators. If you don't have a copy of the relevant press release and the slides, please contact Telefonica's Investor Relations team in Madrid or London. Now, let me turn the call over to our Chief Operating Officer, Mr. Angel Vila.

Thank you, Adrian. Good morning, and welcome to Telefonica's first quarter results conference call. With me today are Laura Abasolo, Markus Haas, Lutz Schuler and Eduardo Navarro. As usual, we will first walk you through the slides, and we'll then be happy to take any questions. We are pleased to report a solid start to the year with accelerating revenue and EBITDA growth momentum. Our performance demonstrates the continued strength of our operating model and our strategic execution. Across our key markets, Commercial dynamics remained favorable. In Spain, we saw further improvement in EBITDA as our growth and efficiency efforts continue to bear fruit. Meanwhile, our operations in Brazil and Germany sustained consistent profitable growth, reaffirming the solid fundamentals and our execution in these important markets. Notably, we achieved record low churn levels in both Spain and Brazil, reflecting our superior value proposition and helping maintain robust commercial momentum across the business. In Germany, contract churn stands at a remarkable 1%. On the network front, we are deploying fiber and 5G as per our plans. We continued to invest significantly in next-generation networks to support best customer experience, helping maintain commercial momentum. In Spain, we are on the verge of a significant milestone by nearing the completion of the copper network switch off. We will be the first European Union operator to do so. We are making good progress and we remain confident in achieving our financial outlook for the full year 2024. And in addition, we see near-term catalysts and positive opportunities in all our core markets. In Spain, we have already signed an MOU for a new long-term mobile network agreement with DiGi, which we expect to complete in a few weeks. In Brazil, negotiations are underway to potentially migrate to an authorization regime. In Germany, spectrum extension is the expected scenario. And in the U.K., fiber build is accelerating as projected, NetCo receives strong interest from infra investors. Going into greater detail on slide 3, we continue building a stronger Telefonica. We accelerated the rollout of our fixed infrastructure, passing an additional 9 million premises with fiber to the home in the last 12 months. Telefonica Infra played a key role here, contributing around 7 million of these new premises. Our 5G coverage continues to progress rapidly with coverage now extending to 63% of the population across our core markets with Spain and Germany above 90%. Our customers remain at the center of our transformation journey. By evolving a long winter needs through AI power tools and over 650 use cases, we are reshaping our revenue mix towards higher value, digital services, and connectivity solutions. This customer-centric approach is paying off with a group Net Promoter Score of 31. Wider and better networks allow us to continue expanding our global customer base. We ended Q1 with 388 million total accesses, adding 0.5 million new customers. Simplifying our operations and corporate structure is another integral part of our transformation. We successfully concluded the delisting process for Telefónica Deutschland achieving an ownership stake of nearly 97% to enable full operational integration going forward. Profitable growth remains our key priority. The workforce restructuring program in Spain now complete will start yielding further cost savings from Q2 onwards, fueling higher EBITDA growth in Spain. In parallel, we continue the nationwide switch off of our legacy copper network with more than 4,000 central offices now closed since 2014. This is a process that is almost completed and another source of past and future efficiencies. In summary, our strategic initiatives around building next-generation networks, putting customers first and creating leaner future feed operations are bearing fruit. This bodes well for delivering on our growth profitability and sustainability ambitions. Moving to slide 4. We show how all of this translates into tangible financial results. Growth. Our commercial momentum is underpinned by high-quality customer additions across our fiber and mobile accesses. This allowed us to accelerate our top line growth to 0.9% year-over-year, increasing by 1.4 percentage points sequentially from the fourth quarter. Revenue growth was fueled by robust service revenue performance as well as our market-leading B2B segment, which typically sees further uplift in the coming quarters due to seasonality. Profitability. Importantly this healthy top line expansion drove profitable growth with our EBITDA rising 1.9% year-over-year. We continued enhancing our operating leverage through diligent cost management initiatives mentioned previously. This future cycle of growth and efficiency flows through to operating cash flow. Our EBITDA minus CapEx margin remained stable year-on-year supported by our ongoing capital expenditure discipline with CapEx over revenue ratio of just 10.4% for the quarter. Sustainability. Under the new free cash flow definition, our Q1 performance was growing year-on-year once adjusted for a €75 million positive nonrecurring received in Brazil working capital in Q1 2023. As anticipated, Q1 free cash flow is seasonally the lowest but we expect it to ramp up through the remainder of 2024 to achieve our full year guidance. Laura will provide more details on this later. Our growth and profitability factors reinforce the sustainability of our financial model and we remain fully focused on our commitment to enhance ESG standards across the organization. Our Spanish operations, which we review on slide 5, again, showed a solid commercial performance during this quarter. We grew the main accesses, and now for three quarters in a row have been adding customers in all segments. In fact, during the last nine months, we have turned around customer losses in conversions and Pay TV. In the latter case, we went from 130,000 customers lost in the prior nine months to positive net adds of 16,000 in the last three quarters. In convergence, we posted net adds, thanks to an all-time low churn rate of 0.9%. This within a quarter of tariff upgrades and returned to gross ads growth for the first time since the second quarter of 2021. All this resulted in growing revenue despite declining handset sales and wholesale and improving EBITDA growth. While we still saw limited contribution from the redundancy program savings, we expect to see further positive impact from this initiative starting in Q2. Accordingly, you should expect Q1 EBITDA growth to be the lowest in the year. Finally, and as a proof of the superior quality of our nationwide network infrastructure and confirming the confidence partners have in our ability to provide high-quality services over such infrastructure, we can confirm that we have made very substantial progress through the negotiation of a new long-term network agreement with DiGi. We have already signed a non-binding MOU with DiGi, under which terms and conditions are agreed in principle. We expect to conclude this agreement, subject to definitive, final long-form documentation in the next few weeks. Brazil, on Slide 6, maintains its very strong performance in all lines. A rational marketplace allows for sustained growth in accesses 12% more fiber-to-the-home customers and ARPU where we continue growing our digital ecosystem and OTT subscriptions raised 14% year-on-year. With outstanding results in mobile contract where we simultaneously show double-digit growth in ARPU and our lowest churn rate ever at below 1%. Accordingly, our revenue grew well above inflation with service revenue growth in the quarter of more than 10%. As for EBITDA growth, once again, OpEx growth remained below top line growth. Despite rising costs in digital services, resulting in double-digit EBITDA increase year-on-year. Operating cash flow also continues to expand nearing an 18% EBITDA minus CapEx margin. Our German operations saw a solid start into the year, as shown on Slide 7, supported by executing well on the accelerated growth and efficiency plan with front-loaded efficiencies and growth in outer years contributing to GBS strategy. Our core business continued to perform strongly, adding more than 150,000 in the quarter, leveraging on improved 5G coverage within a quarter of repricing action resulted into ARPU growth year-on-year. Hence, solid mobile service revenue momentum with above 2% growth was temporarily offset by decline in handset sales on a tough comparison base effect. Nevertheless, this flattish top line growth translated into a 5% EBITDA growth, showing improved operating leverage. In fact, the retail minus CapEx grew more than 14% year-on-year with more than 1 percentage point improvement in margin. Moving to Slide 8 to review our U.K. JV VMO2. The growth of the U.K. telco market remains subdued, but we have been able to show improved service revenue growth across both mobile and consumer fixed with ARPU stabilization for the latter and low levels of churn in mobile contract. Furthermore, and despite short-term pressures, we remain committed and we continue deploying fiber with field base up 80% year-on-year in the quarter. Telefonica Tech on Slide 9, again showed strong double-digit growth in sales. Usual business seasonality and phasing means year-on-year growth will accelerate throughout the year, supported in addition by a strong backlog with bookings showing growth higher than 30% during the first quarter of the year. Bookings growth was driven by the private sector, with large contracts awarded in the financial, health care and manufacturing sectors. Growth is also coming in a more balanced way with increased contribution from higher value-added services and a better currency mix. We continue to gain relevance in higher growth markets, a performance that continues to be recognized by industry leaders. Telefonica Infra remains a key driver for our improved CapEx intensity with adding coverage that results into revenue growth. The FTTH base accelerates as much as 60% from last year contributing to increased network differentiation and capabilities under optimal investment models. In parallel, Telxius, our best-in-class international connectivity infrastructure maintained a high profitability above 50% and is opening a new route connecting to the Dominican Republic. I will now hand over to Laura, who will guide you through brand performance, main financial topics and ESG.

Thank you, Angel, and good morning, everyone. Before reviewing this quarter's financials and ESG performance, let's go through each brand performance. As shown on Slide 11, we continue taking steps towards a more rational environment. We are consistently delivering growth in accesses both in mobile contract and FTTH cable connections, leading the market with more than 17 million fiber-to-home premises passed. Back in 2021 and 2022, we set up neutral wholesale FTTH carriers in Chile and Colombia. In Chile, three years later, we have been able to incorporate first and dell and now ClaroVTR, fostering a more rational environment and a boiling overlap. This together with a cooling down approach in terms of commercial activity seems to be finally translated into healthier competition in which we are starting to see early signs. In the meantime, we remain focused on cash generation and the Q1 financials so large hits both from FX and handset sales with stable underlying trends, we expect a marked improvement in the second half of the year. Moving on to free cash flow on Slide 12, we think it's important to provide some context, even we have now moved to the new stricter free cash flow definition. In the first quarter free cash flow came in at minus €41 million, slightly below the minus €9 million during the same period last year on an apples-to-apples basis. However, this year-over-year comparison is impacted by one-time €75 million benefit related to the monetization of the tax asset in Brazil, which boosted our free cash flow in the first quarter of 2023. Excluding these non-recurring items as third quarter 2024 free cash flow could actually show an increase year-over-year of as much as €43 million. This free cash flow seasonality in the opening quarter, is very much in line with our expectations and what we have said during our fourth quarter call, we expect free cash flow to ramp up as we progress through 2024 consistent with prior years. And most importantly, we remain fully on track to deliver our communicated target of more than 10% free cash flow growth for the full year. Moving to our capital structure on Slide 13, Telefonica maintains a robust balance sheet position to navigate any market environment. As of March 2024, our net financial debt stood at €28.5 billion, translating to a net debt-to-OIBDA ratio of 2.71 times. This anticipated increase from year-end 2023, was primarily driven by a strategic move to raise our stake in Telefonica Deutschland and to a lesser extent free cash flow seasonality in the first quarter. Despite this temporary up-tick in leverage, we remain firmly on track to align with a outlining target range for 2026. We continue optimizing our debt stack and tapping diverse funding sources. We maintain ample liquidity covering debt maturities, through 2026. Furthermore, over 80% of our debt is insulated for rising rates by being long-dated fixed rate and primarily euro denominated. Our proactive liability management has partly reduced the average cost of debt to 3.51% through timely refinancing exercises, allowing immunization to, raise in rates environment. We have demonstrated our excellent market execution this year have been active in the capital markets raising €3.2 billion long-term financing at the group, mainly through a €1.75 billion Dual Transgene green bond and in new green hybrid amounting to €1.1 billion, reinforcing our position as one of the leading issuers of ESG capital market financing in the International Telco Sector. Ultimately, we are managing our balance sheet to fuel our capital allocation priorities. We remain focused on investing for sustainable growth, putting our Board in a great position to pay the dividend with €0.30 per share as a floor, steadily deleveraging towards our target range of 2.2 times to 2.5 times net debt to EBITDAaL by 2026 and evaluating all opportunities including share buybacks to create shareholder value with any excess cash. We believe that by progressing across the pillars of ESG, we can advance our GPS agenda. On the environmental side, we are seeing growth opportunities via our EcoSmart portfolio which has been recently recognized by the ITU. We are also working to review Scope 3 emission and as a result CDP has included us in the Supplier Engagement Leaderboard for the fifth consecutive year. On the social side, we see the importance of diversity in attracting and retaining talent and our progress is evidenced by our results. Since last year we have 858 additional people with disabilities working with us and a third of our executives are women. Finally, with regards to governance, All Board of Directors propose solutions were approved at the AGM and the issuance of the two-tranche senior green bond and green hybrid this quarter reaffirms our commitment to sustainable financing. I will now hand back to Angel, who will, wrap up.

Thank you, Laura. Moving to slide 15. We are well on track to achieve our 2024 guidance. We had a solid start to the year, delivering accelerating revenue and EBITDA growth in Q1. Looking ahead we expect the EBITDAaL minus CapEx to resume its upward trajectory from Q2 onwards. This will be driven by two main factors; realizing the full benefits of cost savings from the Spanish workforce program and moving past the big impact from lease inflation and accelerated 5G deployment that impacted Q1. Consistent with prior years our free cash flow generation is back-end loaded. And as such we anticipate acceleration over the remaining three quarters of 2024 and we are confident in our full year guidance. This will translate into a resumption of our deleveraging trajectory. After the anticipated Q1 uptick, we expect both net debt levels and leverage ratios to resume the declining path, keeping us firmly on track towards our 2026 targets. Importantly this free cash flow growth allows us to more than cover our dividend. Overall, our Q1 performance reinforces our confidence in delivering our full year guidance across the board. To summarize on slide 16, Telefonica's first quarter 2024 performance demonstrated solid execution as we continue delivering against our strategic road map. We reported a solid set of results to start the year, keeping us firmly on track to achieve our full year 2024 guidance across all key metrics, as well as our overarching GPS plan targeting more than 10% free cash flow growth CAGR between 2023 and 2026. Across our core markets, we witnessed robust operational trends starting with an altered good commercial momentum. Our growth and efficiency efforts in Spain drove an EBITDA recovery while Brazil and Germany maintained consistent profitability growth. Our strategic investments in fiber and 5G infrastructure elevate Telefonica's customer experience proposition further, positioning us for continued commercial momentum and top line expansion. In parallel, we continue to streamline our operations by digitally transforming processes, optimizing our workforce and shutting down legacy networks. Our capital allocation priorities remain firmly focused on deleveraging towards our target ranges, sustaining our dividend by growing free cash flows and investing in focused growth areas. And finally we see positive near-term opportunities ahead in all our core markets as mentioned at the beginning of the presentation, including a mobile network MOU agreement within Spain, potential change in regime to authorization in Brazil, expected extension of spectrum in Germany, and in the UK whilst fiber build and NetCo about progress, interest from infra investors is mounting. Thank you very much for listening. We are now ready to take your questions.

Thank you. [Operator Instructions]

Excuse me, operator and all audience, I mean we will take the usual two questions per participant as always. Thanks.

The first question comes from the line of Andrew Lee from Goldman Sachs. Please go ahead.

Good morning, everyone and thanks. Adrian [ph] Andrew. I’ll ask three questions. So I'll use this full quote if possible. First question was on leases. So there's a clear kind of distinction between your EBITDA growth in Spain were flattish this quarter year-on-year and EBITDAR minus 3.5% and your Spanish leagues, it’s looked to have gone up relatively meaningfully on a year-on-year basis. They've been going up kind of 20%, which is a reasonably high level anyway on average and look to have gone up around 30% in the quarter. Could you just take us through the key drivers of your expanding lease costs and maybe give us some help in terms of understanding where they go from here? Thank you. And then the second question is just on VMO2 fixed broadband net ads. We also had Liberty Global report them last week and the negative net ads remain I guess a concern for investors. So I wonder if you could talk through your confidence or in some form of recovery and whether the negative trends on the fixed line side represent any risk to your confidence in the dividend out of VMO2. Thank you. Lutz Schüler: Thank you for your two questions. I'll take the first one on Spanish leases and Laura, please feel free to compliment. First, as you know, since this year we got on EBITDA minus CapEx and we just reaffirmed that we are reiterating all the group 2024 guidance, of course, including this EBITDA minus CapEx growing between 1% and 2% in the year and by 5% CAGR in the 2023-26 period. So the Q1 is aligned with expectations here that we have two factors to affirm that both EBITDA and EBITDAaL in Spain in Q1 are the weakest and you will see this improving across the year now. First is the workforce savings barely contributed to Q1 EBITDA, just one month in the quarter, there will be a full impact from Q2 going forward. Then there is an element in phasing. Leases themselves in Q1 are affected by volume additions and the larger rate of mobile sites for 5G, also by inflation as contracts renewal in Q1 is a large one and then higher rates that affect the accounting of leases, an impact that is already softening and may even reverse later on in the year. Also, with software comparison spaces going forward will lead to improving EBITDA in Spain starting from Q2 and going forward. So again, all guidance reiterated including EBITDAaL minus guidance and Spain will be contributing positively going forward on this.

If you want me to -- we are definitely working on its optimization, monitoring the evolution of our businesses, situation of markets, macro context. I think in 2022 there was definitely an impact in leases going up due to Tower Deal, OE sites, FX revaluation, higher rates, inflation adjustments, but definitely we do expect more normalized trends with higher correlation to the evolution of the lease liability balance. In the GPS plan, you know, we have high growth in EBITDAaL minus CapEx. For this year, 2024, the guidance was one to two and Angel just confirmed it and I think when you look at our leases going forward, there will be some increase but it's fully embedded in the free cash flow guidance of 10%. It's distributed differently across geographies. You will see some increase in Germany driven by B2C obligations, site expansion as well in Brazil, but Spain should maintain a broadly flat lease position with all additions in line with principal payments and Spain is going to show declining leases. So, a lot of focus on this and this is just quarter affected by seasonality and we reiterate our short and mid-term guidance regarding EBITDAaL minus CapEx.

Thanks both. Can I just make sure I've understood that, Laura, on what you're saying on Spain going forward. So you're expecting it to be, for leases to be broadly flat going forward. What is a normalized trend in leases once we get rid of these subcomps, et cetera.?

The flat position is more across the line of the plan. So, here we are talking long term and we do not disclose our lease evolution nor for the group. It's part of the free cash flow growth nor for a specific region, but over time, Spain will not be increasing leases. This is being more a one-on effect and the liability, it will be quite -- raw additions will be very much in line with the principal payments.

Okay. But more normal trends from Q2, even this year, not flat, but more normalized.

The normalized, again, is I was talking long term in the GPS plan 2024 to 2026. One quarter has seasonality and is not showing a trend. I wanted to focus on the long-term trend which I think is the more valuable comment.

That's helpful. Thank you. And on VMO2?

Yes. On VMO2, if you could, please Lutz comment on the net ads and the corresponding question. Lutz Schüler: Sure. Good morning. So, compared to a year ago, we made 50,000 less net adds. Where is that coming from? Two drivers I would say, one, is that the market is simply smaller this year compared to a year ago according to our data 9%. Second, we have obviously more aggressive offers from Outnet they are impacting us slightly but not really a lot. And third, we are now selling, obviously, fiber in our network expanded area. And this is a new technology a new product and we are doing better month-over-month-over-month. Now, second part of your question will the evolution of the fixed P&L have an impact -- a negative impact on the dividend? I would say the opposite is the case. We have when you look at our ARPU, the two years before the ARPU was shrinking month-over-month. And then we did a price increase and then it kept shrinking. Since six months, our fixed ARPU is flat before the price rise and now obviously in April the price rise kicked in and therefore you will see a growing ARPU. The reason for that is that we put everything now in place what we plan for 2023, understanding each household coming up with personal pricing and personal offering and that helped us to maximize the retained revenue, which is nothing else when ARPU. So, therefore if I compare to my budget, we are doing better in fixed not worse. So, we are very confident on the fixed P&L. Thank you.

Thank you.

Thank you. We will now take the next question from the line of Ondrej Cabejsek from UBS. Please go ahead.

Hi everyone. Good morning and thank you for the presentation. Two questions from me as well please. So, just on the Digi [indiscernible] understanding I know you said its early days, but can you just conceptually speak about how the fundamentals of that might be different because obviously we have a different situation in the case of in the form of remedies basically being given for Digi. We have an experience in Germany that obviously is momentum. You have got maybe two competitors, now one with a fallback option the Digi as part of the remedy than the other one openly talking about one thing to get did onto their network. So, just in the context of all of this, how long-term is the deal for example longer than the previous one, conceptually how different that might be compared to the current one? That's one question please. And then the second question just I guess on the Spanish market where again we've got some deals happening, some consolidation and some further potential consolidation, we've got plans for further fiber builds. So, again conceptually just talking about wholesale costs I think the same way that you're seeing in the U.K. What do you think that are the -- or is the outlook in terms of wholesale cost on fiber in Spain, are you likely to see further pressure to basically prevent overbuild and drive further consolidation or some kind of stabilization in the market towards a more number of infrastructure players? Thank you very much.

Thank you for your questions. The line was a bit cut, but I think I got them. The first one on Digi. As I said during the presentation, we have already signed an initial MOU agreement, which is pending the long-form documentation that we expect to complete in the next few weeks. As you can understand the terms under negotiation are subject to confidentiality agreements. But in any case, I can share with you some principles or some high-level comments. First, this is a mobile network collaboration agreement that goes beyond roaming to include, some sharing. Second, the deal is a long-term agreement initially aimed to last for longer much longer than the existing agreement. It's a contract that goes way beyond traditional roaming agreements. Third, that under the agreed unit costs and the projected volumes over the life of the agreement, we expect revenue flow to be equivalent at least that what we received in the existing contract with is. And this is a max, I can say other commercial terms are under confidentiality agreements and when the contract is completed, we will be able to share potentially order details. This should be a win-win. This is going to be a win-win agreement for both parties. We have a long-standing relationship with Digi as a partner. We have excellent relationship with them. We have lots of respect for this partner. And this confirms, the confidence that partners have in the superiority of our nationwide infrastructure, and our ability to provide high-quality services over that infrastructure. This will add sustainability and long-term visibility to our wholesale activities in the Spanish market, which is a relevant line. On your second question, regarding the evolution of if I understood right, of the market environment what could apply to wholesale according to the recent deals overbuilt and so on? But as we have stated in the past, we think that the map of the Spanish telco sector is being redefined with the birth of Maserang, the new status of Digi as remedy-taker and now continued partner with us, and then the proposed transaction between Vodafone and Zegona. We believe that this reconciliation of the sector. We have lived through previous scenarios similar to this. And we have been -- and we have a proven track record of adaptation to conditions. We will have conversations with Maserang also regarding our wholesale contracts with them. Again, with the mentality of a win-win approach. And regarding Vodafone and Zegona -- well we in the past, have been open to conversations with Vodafone regarding possibility of the migrating their totally or partially their fiber into our fiber infrastructure and these type of options and structures would be available for conversations with Zegona when that will complete.

Can I just clarify, did you can you just confirm that the Digi deal goes beyond [ph] sharing yes, you basically, said?

It goes beyond pure roaming and it will include sharing components. We will give more details when the deal is, with affinitive agreement.

Thank you very much.

Thank you. We will now take the next question from the line of Nawar Cristini from Morgan Stanley. Please go ahead. Q – Nawar Cristini: Thank you very much for taking my question. When you have provided your Capital Markets Day targets back in November, there were a number of unknowns including the confirmation of the Orange Masmovil remedy package. And of course, the outcome of the review of the Digi contract that you've just discussed. So today, you have a clarity on both. So I was going to hear how these have landed versus the initial assumptions that you have baked in the guidance? And you just discussed, how the terms compared to the previous contracts, but it will be interesting as well to give us a bit of color on how these terms compare to the assumptions that you have baked in the guidance? Thank you so much.

Thank you, Nawar for the question. Well, we had been stating all along last year and in the Capital Markets Day that we didn't see the need for remedies in the Orange past mobile transaction. Now we have a shortage with us with some remedies that entail this acquisition of spectrum by Digi and the option for a national roaming agreement with Mas Orange. We also have been stating that we would be very active in negotiating with Digi to maintain them with us to continue the relationship, which we can confirm that we are going successfully in that direction. In the Capital Market Day we were making assumptions on some erosion or dilution that we could have in the renewal of some wholesale contracts, which we maintain the guidance that we have stated to the market if at some point, we need to change or upgrade that guidance. It's too early. It's too early to know. There are still lots of moving pieces. We are progressing very well with Digi, we have conversations with MasMovil now that they have closed and we will be open to have conversations with Vodafone Zegona when they close. Again, in the Digi contract, I cannot be very explicit at this stage. But with the unit cost the term and conditions that we have in the MOU and the projected volumes, we expect revenue flow to be equivalent at least to what we have in the current contract and with a much, much longer extension than the current contract in that. So this should provide visibility and stability to a key component in the wholesale revenue function in Spain.

Thank you very much. I have just a follow-up on Digi renewal. So the competition over this year seems intense. In particular, when it comes to price because other competitors or also trying to make a proposal of this business. And if we look at the previous MVNO renewals across Europe, it seems to be that the main driver of this is price. So could you discuss the key ingredients which drove success for you guys here, given the competitive pressure that was over this contract from a price perspective?

Again, the agreement is pending definitive final form. So I cannot share more details but this is not a pure roaming. It's not a pure roaming agreement. It also entails component of sharing, which have not necessarily the same dynamics as pure roaming conversations have.

Thank you very much. Looking forward to hear more.

Thank you.

We will now take the next question from the line of Georgios Ierodiaconou from Citi. Please go ahead.

Hi, good morning and thank you for taking my questions. There are both follow-ups on Spain, please. The first one is a big link between the Digi extension and also what we've seen around leases. I'm just curious Angel you mentioned the revenue flow is expected to be similar. If you can give us an indication as to what affects any arrangements you could have on run sharing or net slicing or whatever you may agree with another partner could have on lease cost or OpEx, whether that is also neutral or maybe positive just to get a bit of a feeling around the bottom line implications? And then my second question is on your comments around wholesale arrangements in FTTH. If you can give us an idea in terms of the timing or any processes that are still pending for you to start agreements and negotiations about fiber arrangements in what used to be the non-competitive areas in the past? Thank you.

Thank you. On your first question, I'm afraid I need to increase that agreement is pending the definitive final form. So, I cannot give more details, but we are -- we'll be wholesaling to DiGi any lease obligations probably would appear on their side rather than on our stope. With respect to other conversations, we're already in conversations with Mas Orange, of course, we had to wait until they would complete the transaction, have plenty of existing wholesale relationships with them coming from the former Orange, from the former MasMovil, this entail fiber, this entail soccer content. So we have plenty of elements that we are working so that we can achieve a win-win situation for both players in these contracts. With respect to the other proposed combination until that completes, of course, we cannot start the conversation because it would imply -- possibly can jump in from one of the size on that transaction which we are not part of.

Very clear. And can I check in terms of your ability to execute these contracts, there are no pending regulatory hurdles to reaching these agreements at this point? Or do you have to wait for any technical changes?

These are commercial agreements. We have -- we don't need to go through antitrust reviews of commercial agreements. Our wholesale commercial agreement has is common practice as has been always in the market. Furthermore, one should expect that once we have is being the larger subscriber base in the Spanish market, we should be seeing the regulation on our activities in Spain, because current regulation was designed when Telefonica was dominant and this is no longer the case. Of course, it depends on the CNMC, but the regulation should apply to issues such as the fiber wholesale pricing, access to that commercial flexibility of our offers and so on. And this is -- this will provide us more flexibility and more competitive levers to establish even a stronger position in the market.

Thank you.

Thank you. We will now take the next question from the line of David Wright from Bank of America. Please go ahead.

Yes, thank you. My two questions are, first of all Germany, there was I think some discussion around the operators that you had pushed a little harder in Q1 into especially the family segment looking for kind of the second third SIMs beyond the primary SIM. I wondered, if you could talk a little about your momentum there? And also, how you are using your fighter brand in Germany right now, whether just pushing a little harder? And then my second question and I'm sorry about this Angel. It might just be another question on DiGi that you can't answer. But I think what we're all trying to understand is to what extent this is kind of a pure wholesale deal or when you say sharing? Could this include some of the DiGi spectrum, shared infrastructure, shared lease costs, et cetera? I don't know, I guess, you're not going to be able to give us any more on that. But is -- rather than just I guess put fuel under the fire of speculation, is there anything you can say? So yes, my second question is a bit clumsy, but just anything else you can give on us I think we're all scratching our heads a little? Thank you.

So Markus, please with the first one.

Good morning, everyone. So the German market remains rational with dynamic promotions. We tested in the first quarter, clearly, the sensitivity on family activities. And you have seen we have a solid momentum in the first quarter, a good start into the year. So from that perspective, we clearly want to capture more of the household budget, also including fixed. And we clearly saw a fair share trading with our core brand, the O2 and also our no-frills brands in the market. So, as I said, a very rational market, and we clearly see sensitivities and a way for us in order to capture more of the household budget of the German market.

Markus, could I just quickly ask you, are you feeling any pushback from competition as you sort of push into those additional SIMs? Has there been any competitive reaction of note?

From our perspective, I think we follow the market very carefully last year, especially what competition was doing. And we clearly see with a very good network quality that we clearly can gain more share in households. So I think as you've seen, we further accelerated our 5G coverage. The network is performing on level with competition. So we are a clear alternative in mobile for more than one family member. And secondly, also, while we can offer every household in Germany a fixed offer with our mix of cable, VDSL fiber, we are in a very good position, as said, to really leverage the huge customer base that Telefonica has in Germany in order to gain more of the household volume.

Okay. Thank you for that.

And regarding your further question on DiGi, again, we cannot comment, we have been -- the market knows, and we have been stating that the spectrum transferred by MasMovil and DiGi does not allow to build a new network. So -- and is placed in high-frequency bands. So this implies that DiGi would need a national roaming agreement. They have the option through the remedies of during the Orange one. But when can be ambitious and aim for not a pure roaming agreement that has all these renewal dynamics and so on that we're asking a previous question, but something a bit more structural that stabilizes and gives long-term visibility to the wholesale relationship, and this is the direction that we have done, which is good for both ourselves and for and for our partner.

May I just ask one brief detail, we can see our wholesale revenue, I guess, Q1 wholesale and others were showing about €20 million, €22 million in Spain. Are you able to give us any kind of indication of what amount within that is the DiGi contract and potentially the sub contract for mobile right now? Is it a €200 million ballpark? Is that what we could be thinking?

Again, we do not disclose this figure. Wholesale and others in this quarter has declined but nothing to do with this. It has declined because of MTR prices declining and then the end of the Formula 1 cycle, we used to have that content and we resolved it. We are not having that contact. We are not selling it anymore. We are buying it from the zone. So any dynamics that you have seen in the first quarter on the wholesale line is completely unrelated to this contract. Actually, the MVNO line of wholesale is growing in the first quarter. Thank you.

Okay. Thank you so much.

Thank you. We will now take the next question from the line of Keval Khiroya from Deutsche Bank.

Thank you. I've got two questions also following up on Germany as well. So Germany obviously had the strong EBITDA performance of 5% growth versus the guidance of low to low mid-single-digit growth for Germany. Do you see that 5% growth sustainable? Or are there other OpEx phasing impacts we need to think about? And could you elaborate on those if so, please? And then secondly, with all the DiGi on wholesale discussion, you've shown that you're trying to maximize network utilization in Spain? Germany on the other way with the loss of one and one, should we still think about retail being the main lever to plug that gap? Or are you starting to talk to other wholesale partners or even thinking more strategically with network JVs or even consolidation? Thank you.

Thank you. Let me start with Germany. I think first of all we had a very solid start on profitability into the year and it's clearly a mix of levers. The first one is clearly strong gross margin contribution from the trading we did last year. Also with the family offers we clearly see lower subscriber acquisition costs because we sell more into the base is more profitable for us and it was good to see the sensitivity also going forward. So it makes us also confident that in a mix of accelerated own customer growth within the base and additional products that we're going to sell and clearly leveraging the partner landscape that we have that we will be able in the mix of accelerated growth, profitable growth and also efficiencies that we already started to capture from the beginning of the year onwards that we will deliver the plan as it has been presented last November by Telefonica. So overall we expect clearly also profitability growth within the guidance that has been given. So from that perspective high confidence. As said on the wholesale side, we delivered a growth in a mix asset on customer growth where we now see the possibilities. Secondly, B2B growth. We also had a good momentum in this new segment in the first quarter where we accelerate step-by-step. It's clearly a smaller P&L but overall it gains really momentum and contributes to the overall plan. And finally with the existing partnerships that we have we have all the optionality in order to push more or push less depending on the current phase of the market. So we have here we are well-positioned. As you know we have access to all sales channels in the German market with own or with branded resellers that gives us as said all the opportunities to push a little bit harder if needed in the quarter or to clearly accelerate the product portfolio in these channels in order to capture the growth.

That’s clear. Thank you.

We have time for one last question, please.

Thank you. We will now take the last question from the line of Fernando Cordero from Banco Santander. Please go ahead.

Hello. Good morning. Thanks for taking my two questions. The first one is related to the Spain not in this case we hope about retail and I would like to understand obviously at least on a qualitative basis the performance of the upon the rest of the year we have seen a minus 6.4% in the third quarter. Just to understand the drivers for this performance and also development on the rest of the year on retail B2C ARPU? And the second question is on the UK. And I would like to understand if there is any recent pressure on the potential materialization of the fiber wholesale opportunity in that market? In that sense how is the current use of from a [indiscernible] to tackle the wholesale but the fixed market in that? Thank you.

Thank you, Fernando. On the Spain ARPU the conversion ARPU in the quarter reached €92.2 it's €1 higher than the previous quarter. Thanks to the price increase that we applied in January to the Movistar portfolio. Year-on-year the ARPU declined minus 0.5% mainly on higher penetration of in our base versus Memo Vista. If one looks at the sequential difference in the quarter compared to one year ago the mean reason is that this increase is lower is that the tariff upgrade in January 2024 has been 3.1% and this was softer than the one year ago which was 6.8%. So we are comfortable and with the ARPU evolution. But I should say that more and more we should not look at ARPU individually. We look at it in a whole set of conversion KPIs. First the net adds and the commercial momemtum which is very positive. This is correlated to a very positive evolution of customer satisfaction through the NPS with a minimum churn that we are in the slide putting slitting 0.9%, but we are in the 0.8% high leading to 0.9%. So it's the minimum history and then the ARPU. These results in the largest subscriber lifetime value that we continue growing and we'll continue widening resource our competitors. The second question on the UK regarding -- I understand the Fiberco. We are progressing as well as discussing Liberty Global scholar few days ago. We have already appointed advisors for the design and carve-out of the NetCo. Simultaneously, we'll continue building at pace and accelerating the pace of fiber build and fiber migration, and we have been receiving strong inbound interest for this asset in the case that we would be open to invite investors into it. I don't know if this answers your question or you need any deeper detail on the fiber in the UK.

In the UK, you say, it's basically looking also on the potential wholesale agreement that your potential wholesale clients, that you may onboard on the network to understand you are close or not over what's your views on materializing this opportunity?

Okay. Lutz, can you take this one please? Lutz Schüler: Yes, sure. I mean there are three possible big wholesale partners one Sky, one is Vodafone and one is TalkTalk. And I mean, as you can expect, we are in negotiation with all of them. With one party, we are advanced but it's too early to disclose any details here.

Great. Thank you very much for the opportunity.

Thank you. At this time, no further questions will be taken.

So, thank you very much for attending this call. We hope we have been able to provide useful answers to your questions, and please contact Investor Relations for further follow-up conversation. Thank you.