What happened? Telefonica has just released new guidance ahead of the CMD later today - key points are: *FCF forecasts: Key Slide below. TEF is lowering FY25 FCF guidance to EUR 1.9 bn (vs. EUR 2.6 bn previously, cons at EUR 2.4 bn) - in part due to timing of tax refunds etc. *The bigger downgrade is for outer years - TEF now targets EUR 2.9-3.0 bn in 2026 (and 3-5% CAGR out to 2028) but this excludes both restructuring costs (~EUR 1 bn p.a.) and VMO2 dividends (EUR 200m p.a.). *So the ''comparable'' FCF, vs old guidance, is now ~EUR 2.1-2.2 bn in 26 vs. cons at EUR 2.6 bn - i.e. ~20-30% cut to FCF. TEF also note that restructuring costs will increase further in 2026 before decreasing from 2027 onwards - hence the underlying FCF likely to be even lower in the near term. *Financial guidance: see table below - TEF is splitting the guidance period in two (25-28 and 29-30) with fatser growth expected in the latter period. Compared to the cons expectations outlined in our CMD preview, our initial take is that the revenue growth guidance is in line, EBITDA guidance slightly below, capex/sales in line and OpFCF Cagr slightly below. *Dividend: TEF is cutting the dividend to EUR 0.15 (from EUR 0.30) from 2026 onwards, and thereafter will target 40-60% payout of FCF *Leverage: TEF aims to reduce leverage from 2.9x today to ~2.5x by 2028 (note this definition excludes hybrids, employee commitments etc). *MandA: Lots of focus in the presentation on the need for in-market consolidation across TEF''s footprint, but no announcement today. *Other strategic priorities: Slide predominantly focused on improving customer relationship, growing B2C/B2B revenues and efficiency gains/ *3Q25 Results: Revenue/EBITDA slightly ahead of cons, FY25 FCF cut as referenced above BNPP Exane View: *We expect the FCF guidance and dividend cut to be the focus today and see TEF shares down 10-15% (despite recent weakness).