In 2023, we not only achieved our updated guidance, but also and importantly, over delivered in terms of free cash flow generation. We are growing revenues with B2B remaining a differential engine, growing 6.3% year-on-year in organic terms, significantly above the overall 3.7% top line organic growth. OIBDA also grew more than 3%, and we reduced CapEx by another 3%, allowing us to expand our OIBDA-CapEx margin to 19%. In turn, this higher OIBDA and lower capital intensity contributed to the very strong free cash flow of €4.2 billion, €200 million above what we guided to in July. We are delivering solid results across all our markets, driving exceptional performance in Brazil and Germany and improving trends in Spain. These successes are underpinned by our investment in the latest technologies, which have enabled significant growth in our customer base, who now enjoy the benefits of our advanced fiber and 5G networks.

As we progress, our strategy of reducing exposure to legacy networks is paying dividends, allowing us to streamline operations and drive our efforts in simplifying the business. We have now reached more than 94% ownership of Telefonica Deutschland following our tender offer, reinforcing our confidence in the German market. Our journey towards simplicity and efficiency is ongoing, and you can expect us to continue to optimize our business structure. As we look ahead, our path is clear. We are seeing momentum in our business and we are ready for 2024 as the first year of our growth, profitability and sustainability plan. We remain committed to driving growth, enhancing our customer experience and leading the digital transformation that will shape the future of telecom.

We will share more details on guidance. But in 2024, we will grow revenues, EBITDA and EBITDAaL-CapEx, and our capital intensity will continue to decline. Importantly, despite a stronger 2023, we expect that free cash flow will grow by more than 10% this year. This strong free cash flow generation supports our key capital allocation priorities, including our dividend, our expectation to deleverage over time and our path to creating significant shareholder value. I'm confident in the direction of our business and the opportunities that lie ahead. As you heard on our Capital Markets Day, Telefonica is on a mission to be at the forefront of the telecommunication industry. Our journey has been and is guided by three pivotal pillars in addition to sustainability.

Firstly, our investment in future proof networks has been transformational. With the deployment of FTTH to an additional 10 million premises globally, increasing our footprint by 15% over 2022 and achieving 62% of 5G coverage in our core markets, we have expanded our infrastructure to revolutionize the connectivity landscape. Our networks are not merely conduits of communications. They are the backbone of innovation for the service and products of tomorrow. This provide us with new opportunities to monetize our network and enhances our ability to increase our return on invested capital. Secondly, our focus on an enhanced customer experience and being customer centric organization has generated considerable rewards. We are not just adding customers, we are fostering relationships, growing our customer base to 388 million.

And our satisfaction metrics are growing. By example, our NPAs expanded by 31 this year, and we continue to be focused on improving the overall experience. Ultimately, trust, reliability and superior service are the backbone of Telefonica. Lastly, our pursuit of leaner and more efficient operations has propelled us into the new level of operational excellence. We've refined our organizational structure, stripping away complexity to reveal a more agile organization which has improved our operating levels back to 19%. At the same time, we have optimized our structure with many employees joining our redundancy program, a strategic move that aligns our workforce with our future needs. Moreover, we have made significant progress in phasing legacy networks, including the shutdown of almost 2,000 copper central switches central offices in Spain, with full retail copper network shutdown to be finished by April of this year.

This shift reduced cost and reallocates investment to more advanced efficient technologies, ensuring our infrastructure needs, the evolving demands of connectivity and sets the stage for future service innovation. This is not just about cost savings. It's about crafting a business that is as resilient as it is dynamic. With a robust network infrastructure in place, a customer centric approach with a growing base and a relentless focus on efficiency, we are well positioned to be a global leader in fiber and 5G and ultimately to unlock value for shareholders. Our strategic initiatives has allowed us to deliver on our updated 2023 guidance, which we said in July in organic terms. Revenue grew by 3.7% and OIBDA grew by 3.1% year-on-year. Our capital intensity continues to decline.

CapEx to sales declined year-on-year to 14%. Bottom line free cash flow ended up stronger than anticipated, reaching more than €4.2 billion above our guidance of €4 billon, in other words, we are delivering. The financial strength secures our dividend for 2023 of €0.3 per share comfortably funded by our free cash flow of €0.75 per share. And even with the updated free cash flow calculation, we maintain a healthy free cash flow per share of €0.41 more than covering our dividend payment. And whilst we deliver on organic terms, year '23 also shows our GPS plan ambitions and are already kicking in, in reported terms too. We are back to growth in reported terms in both revenue and OIBDA by between 1% and 2% year-on-year despite FX headwinds such as the Argentinian peso devaluation.

This is even more pronounced in our EBITDAaL-CapEx, which grew more than 5%, demonstrating the tangible benefits of efficiency measures and declining CapEx. The driving forces behind the growth were Brazil, Germany and Spain, with the former being the biggest contributor to operating improvement. Looking forward and starting in 2024, we expect Spain to increase this contribution to EBITDA growth, adding to continued growth for Brazil and Germany. I will now hand over to Angel to give you an overview of the progress across our core business during the last quarter of 2023.

Angel Vila: Thank you, Jose Maria. Starting with Slide 6, you can see momentum has strengthened in the fourth quarter of the year. Most notably, we saw sequential acceleration in growth across our six key financial metrics. Organic revenue growth stood at 4.1% year-on-year in the quarter, 1.7 percentage points more than in Q3, driven by better service revenue performance and again strong B2B, a truly differentiating factor of Telefonica. OIBDA ramped up 1.5 percentage points to +4.5% year-on-year with all geographies growing, Spain reaching stabilization and Brazil and Germany seeing robust growth. Worth noting the sharp improvement in operating leverage in Q4 '23, with OIBDA-CapEx up by 19% year-on-year in organic terms, adding more than two percentage points to our operating cash flow margin.

This all fits into our strong free cash flow generation in the quarter of more than €1.5 billion more than €400 million higher than in the previous quarter. Moving to Slide 7, Telefonica Espana confirmed its commercial and financial recovery path in 2023. The improvement in commercial trading was consolidated. And for the first time in four years, we have posted two consecutive quarters with net adds in all accesses. We did this in face of industry competition. This is thanks to our superior platforms and smart commercial strategy, adapted to changing market dynamics. Moreover, whilst continuing to show benchmark low churn, the lowest in a decade and industry leading ARPU. All of these continued to fuel retail revenue growth to +2.7% year-on-year in the fourth quarter.

As we had committed, OIBDA stabilized in Q4, even showing slight year-on-year growth, supported by solid retail revenue and further efficiencies in network transformation, digitalization and energy consumption. In Q4, we recognized a €1.4 billion provision associated with the announced restructuring plan, which will generate around €285 million of direct savings in personnel costs from 2025 with positive impact on cash generation from day 1. 2023 CapEx increased slightly as we remain focused on the rollout of fiber and 5G to reach the target of switching off retail copper network by April this year. Despite this, OIBDA-CapEx margin remained at benchmark levels and above that of the same quarter previous year. Telefonica Espana is hence stronger, better positioned and ready to capture growth opportunities ahead.

Moving to Brazil on Slide 8, where we review how Vivo keeps up with strong commercial, operating and financial momentum. Vivo ended 2023 with a clear leadership position. Its differential value proposition, superior network quality and the growing demand for bundles led to the highest mobile ARPU in four years. In addition, Vivo's fiber is now present in 443 cities, with 26.2 million premises passed, resulting in a 13% year-on-year increase in fiber connections. Revenue grew by 6.9% and OIBDA by 8.9% year-on-year in the quarter, both well above inflation. Thanks to our strong commercial activity, price adjustments and ongoing operating efficiencies. And this operating leverage further improves down the line, with OIBDA-CapEx margin reaching an all-time high in 2023 of 27%, as CapEx intensity declined.

Moving to Germany on Slide 9, which overachieved the fiscal year '23 outlook, driven by robust commercial performance on value over volume focus and its successful return to low churn levels. O2 Postpaid ARPU grew +1.9% year-on-year in Q4, reflecting customer demand for high value tariffs. Telefonica Deutschland made steady progress with the densification and further rollout of its 5G network, with pop coverage already at around 95% at year end, up from more than 80% last year and well on track for nationwide 5G coverage by year-end 2025. Furthermore, Telefonica Deutschland's O2 network has been awarded a very good rating for a fourth year in a row by Connect Magazine, reflecting the continuous investments into network quality. At the same time, CapEx intensity declined to 13% in 2023.

Stronger and more advanced networks allowed for strong operating performance. In Q4 '23, revenue accelerated to +4.6% year-on-year growth, while the OIBDA grew by 3.7% year-on-year, driven by on brand momentum, another record quarter of handset sales and successful cost management. We now move to Slide 10, to the U.K. and our joint venture Virgin Media O2, which delivered resilient trading performance, expanding its fixed mobile and convergent base throughout the year, despite a challenging macroeconomic backdrop. The fixed network rollout progressed at an unprecedented pace, reaching 17 million premises passed, with a record 833,000 increase in 2023. In mobile, the target of 50% U.K. outdoor 5G coverage has been reached. In Q4 '23, revenue grew by 3.7% year-on-year, while OIBDA growth accelerated to 10.6% underpinned by the realization of synergies, price rises and cost efficiencies.

We expect to reach full run rate synergies of £540 million by mid-2026. Slide 11 reviews Telefonica Tech, the cornerstone of our B2B transformation. Telefonica Tech has completed its first three year cycle with a consistent over delivery, its revenue growth double that of the market. Revenue grew by 27% year-on-year in 2023, or 22% in constant perimeter to reach around €1.9 billion on strong foundations, a highly skilled workforce and a well established reputation for delivering with a sizable scale advanced IT services for B2B digital transformation. Momentum is robust, as qualified commercial Funnel & Bookings are growing double-digit versus 2022. Its new organizational model continues to progress and Tech has expanded cybersecurity capabilities in the U.K. over the Q4.

As such, Telefonica Tech faces a new growth cycle well positioned to deliver additional value. This will be underpinned by its strong sales pipeline, enhanced capabilities and the realization of operational synergies. Telefonica Tech has proven to be a strong player in the IT market and a key engine for the superior growth of Telefonica's B2B revenue. Moving now to Slide 12. Telefonica Infra strengthening Telefonica's infrastructure to support growth and efficiency. We are accelerating fiber deployment with around 60% year-on-year growth to 21 million premises passed, with a target in 2026 year-end of 30 million approximately 30% of Telefonica's group future fiber to the premise deployment. The portfolio of joint ventures across our footprint are advancing in their deployments and delivering value.

As such, Telefonica Infra is allowing us to maintain Telefonica Group differentiation. Telxius, with more than 100,000 kilometers of international fiber to grow to more than 110,000 in 2026, maintained a high profitability, boosting an OIBDA margin above 50% in 2023 and is joining Fermina subsea cable providing three redundant routes to connect U.S., Brazil and Argentina. I will now hand over to Laura, who will guide you through Hispam performance and the main financial topics.

Laura Abasolo: Thank you, Angel. Moving to Hispam on Slide 13. We continue to move towards an asset light model in the region, resulting in a decline in the average invested capital of 37% since December 2019. Following the regulatory approval of the mobile network JV between Movistar and Millicom in Colombia, the two companies obtained 80 megahertz in the 3,500 megahertz band last December. On top of that, we expect to obtain the regulatory approval of Pangea deal in Peru later in the year. We continue growing in high value customers, whilst continuing in our efforts to cool down competitive intensities in more -- in most markets. OIBDA-CapEx fell 5% year-on-year in 2023, a significant sequential improvement on improving OIBDA and full-year CapEx over revenue ratio, reducing 1 percentage point year-on-year to 9.4%.

On Slide 14, we wanted to briefly address our bottom line performance. Our ongoing transformation process implies non-cash one-off charges. As you know well, we have completed a workforce reduction program in Spain and carry on less sizable restructuring programs in several other countries. This coupled with goodwill impairment change in the U.K., led to reported losses in 2023. Nonetheless, and once adjusting for all these non-cash items, underlying net income grows by more than 17% year-on-year to almost €2.4 billion. And once we continue canceling own shares, underlying EPS grows even further, but as much as 19% to €0.30. Moving to our balance sheet. We feel comfortable with the strength of it. Telefonica has demonstrated robust financial help this year, as evidenced by the solid free cash flow, which was comfortably covered shareholder remuneration and employee commitments.

The increase in net financial debt from €26.7 billion in December '22 to €27.3 billion in December 2023 was mainly due to our strategic decision to increase our stake in Telefonica Deutschland. Excluding such impact, net debt to OIBDA ratio would have decreased from 2.54x in December 2022 to 2.52x in December '23. Despite the temporary uptick, we remain on track to align outlying leverage target for 2026. We maintain a strong liquidity position of €19.5 billion, which together with the line maturity profile, allow us to cover debt maturities over the next three years. Simultaneously, we have reduced our debt related interest costs from 3.96% to 3.80%. Thanks to the active refinancing exercise undertaken in previous years and the robust position at fixed interest rate in strong currencies, allowing immunization to raising rates environment.

Telefonica maintains over 80% of its debt linked to fixed rates, primarily in Europe with an average life or 11.6 years, which puts us in a comfortable position to navigate in any market environment. Overall, we have a very strong balance sheet that allows us to support our key capital allocation priorities. And our capital allocation priorities are underpinned by the strong balance sheet as well as our focus on reducing capital intensity, as we have previously discussed. Early on, we saw the potential of fiber and invested in int when it wasn't a popular choice. Today, we are beginning to see the substantial benefits of these early investments. To reiterate, peak CapEx is well behind us. Capital intensity has consistently decreased in 2017 from 17% then down to 13.3% in 2023.

Looking ahead, we are looking for a further drop to up to 13% in 2024 and for it to continue to fall below 12% by 2026. This reduction in capital intensity is one of the main drivers behind free cash flow on growth of more than 10% CAGR between 23% and 26%. But it's not the only lever behind free cash flow expansion. EBITDA growth will also play a major role. Thanks to the flow through of top line growth as well as realizing efficiencies, the biggest component of which we now have certainty on. Around €285 million annual EBITDA savings from the Spanish workforce reduction program are now secured. Hence, a very relevant part of the needy delta to move free cash flow from a slightly more than €2 billion in '23 to around €3 billion in 2026 makes us feel even more comfortable than last November that will meet our commitments.

Our capital allocation priorities are crystal clear. Even as we bring down CapEx, we are continuously investing in our networks, enhancing our fiber and 5G capabilities to stay ahead of the curve. We are committed to putting our Board in a great position to pay the dividend with €0.30 per share asset floor. And I want to stress that our dividend are well supported by growing free cash flow. At the same time, we remain on track to deleverage to 2.2x to 2.5x net debt to EBITDA range by 2026. And lastly, any excess cash in the future will be carefully evaluated for opportunities such as share buybacks. To summarize, we have a robust balance sheet. We are committed to our investment grade credit rating, and our capital allocation priorities are clear.

I will now hand back to Jose Maria, who will wrap up.

Jose Maria Alvarez-Pallete Lopez: Thank you, Laura. Turning to Slide 17. We maintain our commitment to sustainability as a key part of our business. On the environmental side, I am proud to report that we have been included on the CDP Climate A-List for the 10th consecutive year. We have reduced our total emissions by 51% in the last eight years. Furthermore, in 2023, we helped our customers to avoid 86.1 million tonnes of CO2 in the last year through our connectivity and EcoSmart services. In terms of social impact, our latest SDG report shows our total annual contribution to society of more than €100 billion. Internally, we strive for gender equality against solid targets achieving 33% women executives and equal pay for equal work.

Regarding governance, our Board composition shows our commitment to best practices, with 40% women and 67% independents. Our rigorous measures in business ethics continue to uphold a zero tolerance of corruption. Finally, we remain leaders in our sector in sustainable financing with an additional green bond already issued in 2024. Following our strong 2023, we have even more conviction in our journey and are looking to continue to make strong progress in 2024. The massive transformation we have undergone, improving our networks, increasing customer engagement, making our operations more efficient and ensuring business sustainability, place us in a considerably improved position. Thanks to the increased relevance and loyalty from our customer base, the differential capabilities of our networks.

We are prepared to enlarge our addressable market. We are focused on reaching 70% 5G coverage in key markets by 2026 with some markets approaching 90% or beyond. Importantly, we are committed to increasing our return on capital, which is a key metric for our business. At the same time, we are looking to grow convergent customers to more than 60% and use more AI to support customer engagement as appropriate. We are also leveraging the transformation to double down on efficiency and boost customer experience. Fully benefiting from massive legacy switch off, streamlining our business model. We will be realizing the advantages of our proactive investment in platforms and artificial intelligence, which will manifest as highly automated operations and content managed, autonomous network management and cutting edge customer engagement strategies.

We will have rolled out a fully programmable network infrastructure that will reduce operating costs and introduce a new wave of personalized and real time services to our customers. This is opening up a new avenue for monetization and strengthening our value proposition, while reinforcing our ability to increase our return on invested capital. We have a clear strategy to enhance the growth of Telefonica, making us faster and more efficient. As we think about this year, we remain confident that the momentum that we have built in 2023 will continue in 2024. Importantly, our guidance for this year shows our high degree of confidence, not only in the medium term, but also in year one of the GPS plan. Despite 2023 successes setting a higher bar, we expect free cash flow to grow by more than 10%, even with a higher starting point.

That growth is driven by reported revenue growth of around 1%, EBITDA and EBITDAaL-CapEx growth of between 1% and 2% and lower capital intensity of up to 13%. The 2024 dividend in cash of €0.3 per share will be paid in two tranches of €0.15 in December '24 and June '25. As we shared at the Capital Markets Day, our ambitions going forward are even higher with revenue growth around 1%, EBITDA growth of around 2% and EBITDAaL-CapEx growing further to around 5%. Thanks to further decline in capital intensity to below 12% by 2026. Free cash flow will grow by a compounded rate of more than 10%, helping to reduce our leverage ratio to between 2.5x and 2.2x in 2026. And again, allowing us to commit to a floor dividend of €0.30 per annum in cash with improved dividend coverage.

So to recap the key takeaways for the year. In 2023, we delivered again on our guidance for the sixth year on a row. This is on a guidance we upgraded midyear and furthermore, we overdelivered in terms of free cash flow generation. Despite the stronger free cash flow in 2023, we reiterate our guidance of more than 10% free cash flow growth in 2024, showing our degree of confidence. This put us on track with our GPS plan to grow more than 10% CAGR between 2023 and 2026. Our markets, our healthier plan than ever. We turn around Spain, where EBITDA is already growing. Brazil performance remains stellar. These two alone make for 67% of our consolidated EBITDA. Germany, that makes for another 20% has again guided for EBITDA growth in 2024. And Spain is more and more self-sustained.

This momentum will last as we continue to smartly invest in best-in-class next generation networks, while we streamline our operations for the best customer experience. Remember, our Spanish workforce program has been successfully completed and have now full certainty of around €295 million run rate of EBITDA savings from 2025. This is close to 50% of the €600 million group efficiency we guided for in the GPS plan, not a small detail. And you can count on us remaining disciplined on capital allocation and prudently managing our balance sheet so we can continue to increase coverage of our dividend, while deleveraging remains our focus as capital intensity comes down. We are now ready to take your questions.

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