FY26 Q&A Transcript

Vodafone Group Plc FY26 Q&A Transcript

Deutsche Numis

BNP Paribas Exane

Bank of America Merrill Lynch

New Street Research

Goldman Sachs

Morgan Stanley

Citigroup

UBS

JP Morgan

Berenberg

Robert Grindle Deutsche Numis

Good morning and thank you. Before we get into the full year results detail, I'd like to revisit the reinstatement, after quite some time, your mid-term targets to drive double-digit Free cash flow growth, which you just mentioned. In my mind, this is a step change in your confidence interval about prospects over multiple years. Why do you feel that now is the time to reinstate a longer-term outlook? What is underlying your raised level of confidence? Thank you. Thank you, Robert. I will reiterate some of what I was framing in my introduction. We think this is the right point in time because we are entering a new chapter. We have undergone in the last three years a really deep transformation. We have changed where we operate, we have changed how we operate, we have changed our capital structure. We are now opening this new chapter, as I was saying, a simpler and stronger business. You mentioned this is the first time in a long time. I would like to add that it's probably the first time in a very long time that we operate in markets only from strong scaled position, and this is true for each and every one of our markets today. Just as we have this new setup, we see the world around us also evolving for connectivity. We have, at this point in time, a more supportive environment for connectivity. If you think about demand, always strong, supply, and also regulation. Again, because of what we have done in the last few years in terms of setting our priorities and keeping driving operational momentum from Customers, Simplicity and Growth, we are stronger than ever before to take advantage of this new environment. You asked about the confidence in general. I would say when we look at our diversified and balanced portfolio and the growth opportunities that we have in each area, that's where we get our confidence for growth. Growth in FY27 and growth for the mid-term. That's great, thank you very much. I wanted to ask about the European EBITDAaL guidance for next year and the moving parts within that. In the UK, you've got an extra two months of VodafoneThree and synergy delivery, Other Europe is portfolio and normally fairly predictable, so the big swing factor there is Germany. Is it fair to say that the new guidance at the mid-point implies a kind of low to mid-single digit EBITDAaL decline in Germany next year? What is that implied decline underlying kind of ex. 1&1? Thank you.

Margherita Della Valle Vodafone

Carl Murdock-Smith Citigroup Margherita Della Valle Vodafone

Thank you, Carl. Maybe Pilar, you cover the big picture for Europe, and then I will give you the moving parts for Germany.

Pilar López Vodafone

Yes, definitely. Carl, thanks for the question. On the Europe outlook, our expectation reflects, to be honest, a balanced view of a range of potential outcomes and the mix of puts and takes for the different markets as you were suggesting in your question. First of all, in Germany, in FY27, we expect a decline. As the trends that we've seen in Q4, we expect those to continue into this year, into FY27. As you rightly mentioned, we expect a strong growth in the UK because of FY27 being the first year of the meaningful delivery of synergies, cost synergies in this case. Beyond that, we need to see how the competitive environment and the macro will evolve. As you can see in the mid-point of the range of the outlook, Europe is expected to be broadly stable. Which, if you allow me before I give the floor to Margherita for more on Germany, if I step back for a minute, when you look at the Europe mid-point and then take into account that Africa and Türkiye will continue to grow well, we expect a good growth in Adjusted EBITDAaL and Adjusted free cash flow for the Group as you've seen in the guidance for FY27. Margherita.