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Vodafone Group Plc FY26 Q&A Transcript
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Margherita Della Valle Vodafone
Yes, on Germany you are right. We expect EBITDAaL to remain under pressure in Germany in FY27. I can give you a sense of the key drivers for Vodafone, but also what we see from a market perspective that will determine these results. If I start from Vodafone, from a top line perspective, we have exited FY26 as you have seen with better trends, with in particular B2B returning to growth and also Consumer broadband growing. As we will move through FY27, we will see our top line results gradually converging to what is our retail service revenue growth. As of course we lap the wholesale migration of the prior year. As you can see, our retail service revenue growth is still negative, and this is driven by the fact that we don't see any meaningful changes in the mobile market and therefore we are continuing to see a flow-through of the price reset that happened in the last couple of years through our base. Beyond that, beyond the top line, on the cost front, we don't see any further pressure on commercial costs because as you know, our A&R has now fully annualised the past step up, so we expect this to be broadly neutral. We also expect to see the impacts of the various productivity initiatives that we are carrying through, showing up in terms of headcount, in terms of automation, in terms of IT simplification. Against that, of course, we will have a degree of inflation during the year. I mentioned the market earlier because I think ultimately where we sit in a range of outcomes in Germany will very much depend on the environment we are playing in and the environment we are playing in in Consumer. Today we see slightly different trends as you know. In broadband we are making good progress in a supportive environment. Of course, the market is dynamic, so we will have to see how it evolves. Conversely in mobile, we talked about are there signs of changes at the beginning of the year, but effectively we see the situation fundamentally unchanged and therefore as I mentioned before, this being the biggest swing factor for our retail service revenue growth, we actually see it, see it unchanged. So net-net, I would say what do we expect for the year? We expect that we will continue to make progress on the underlying health of the business as I was mentioning earlier. EBITDAaL will still decline. Morning. Thanks for taking the question. Just have a question on M&A and use of cash. How should we think about your appetite to do large deals? I think the prior commentary suggested a focus on bolt-on deals. Does the UK JV buyout for £4.2 billion mark a change of position? Can you remind us what you're targeting in terms of your leverage corridor, and how we should think about the evolution of your leverage profile going forward, given we've got the UK deal, Safaricom, but also the VodafoneZiggo deals that are in the pipeline. Thank you. Sure. Maybe I wrap it all up. M&A and leverage. If I start from leverage, as you know, we always intended to buy out the UK, always in the plan. We had the opportunity to do it earlier than expected. We might want to talk about this more later. In essence, it was planned. In terms of impact, our target remains the same. We always want to work in the current environment in the lower half of our leverage range. The UK deal, as you pointed out, temporarily brings us slightly above that, but it's only a temporary effect, and by the end of FY27, we will be back within the lower half, and this is the result of course, the proceeds from the Netherlands as well as the growth we are guiding for today. Actually, I think this growth point is important because we have an outlook of growth. We will grow this year, we will continue to grow beyond this year and therefore we will maintain a strong balance sheet going forward. Now this being said, I'm very happy with the shape of the group as it is today, and our focus is going to remain on our organic execution and driving our double-digit organic free cash flow growth as we introduced earlier.
Polo Tang UBS
Margherita Della Valle Vodafone
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