What happened? The Telefonica (-) CMD presentation has just concluded - shares are now -11%, but we expect to move lower given the size of the underlying FCF cuts (see below). See below for our 3x key takeaways - for more detail on the initial announcement and FCF cut this morning see here, and for our deeper dive on the leverage issues which TEF is still facing see Telefonica (-): Ready to push the reset button? . FCF downgrades - 40/50% for FY26, ~30% for FY28: As we noted this morning (see here), TEF''s ''new'' FCF guidance for ~EUR 3 bn excludes restructuring costs and VMO2 dividends. The restructuring costs are EUR 1bn this year and will grow next year - but mgmt. would not give guidance on how much the increase would be, nor say whether restructuring costs would fall EUR 1 bn during the guidance period (out to 2028). TEF did say that they expect to see step down from 2030, and that restructuring charges should be ''negligible'' from 2025). The company also confirmed that the FY26 FCF guidance includes EUR 300m one-off related to a tax refund. The lack of guidance on restructuring costs creates significant uncertainty around the ''real, recurring'' FCF for TEF in 2026. Given that restructuring charges have averages ~EUR 800m p.a. over the past 15 years, and TEF is embarking on a very significant restructuring programme in Spain, we would not be surprised to see restructuring charges of EUR 1.3-1.4 bn in 2026. This would imply a starting point for ''real, recurring'' FCF of ~EUR 1.3-1.4 bn. If we assume restructuring costs are still ~EUR 1 bn in 2028, the ''real recurring'' FCF number would be EUR 2 bn in that year as well. Taking all this together - we think that today''s guidance implies a 40/50% cut to cons FCF next year and ~30% cut in FY28 (guidance here also looks ambitious given the lower starting point in FY26). That leaves limited/ no scope for dividend growth in the coming years, assuming TEF wants to leverage by ~0.4x as guided. . Leverage/...