11 Vodafone Group Plc
Morgan Stanley
BNP Paribas Exane
Bank of America Merrill Lynch
New Street Research
Deutsche Numis
Forward-looking statements
Barclays
JP Morgan
Citigroup
UBS
Berenberg
Good morning, Margherita and Luka. We have not yet had a question on the dividend, I think. It would be great just to get an updated thinking on cash return for next year and beyond. Because I think in the past, you have set out you had an ambition to grow the dividend and to be progressive. You have now been more quantitative but just for this year, I think. You have just set out the 2.5% for this year, but really not beyond FY26. I mean it looks to me like leverage is going to end up right at the bottom end of your 2.25x to 2.75x guidance. So going beyond FY26, how are you then thinking about what progressive dividend could look like and potential scope for any share buybacks going into next year? Sure, James. I have to take this one in this round, given that this is going to be the last call from Luka. Let me give you a little bit the broader picture on how we think about returns as you are saying. First of all, we have given you good visibility on one component, which is dividends. We are talking about a progressive dividend policy, which means that we expect growth year after year going forward. The first year is expected to be 2.5%. so we have been quite detailed. Of course, we will have to assess this every year from now on. Why progressive dividend policy? It is simply because you have heard us say when we reshaped the Group and we rightsized the dividend according to the new shape, we were very clear from the beginning that our ambition was to grow the dividend over time. In this half year, we have completed the reshaping with the UK. And so the time is now. You know that we have an outlook supportive in terms of mid-term free cash flow growth. So it was appropriate to bring the ambition into reality. As far as buybacks, clearly, these are also a component of our toolbox for shareholder returns. We are 3 billion into the 4 billion that we had communicated at the time of the various transactions. And starting today, the penultimate tranche. So in the next six months, we will be busy on delivering another billion. Beyond that, we will have to assess our position. We will assess our position - and I think you are spot on - depending on where we will be, as a company, where the market environment will be at that point, and we will clearly assess it through the lens of our capital allocation policy that you were referring to earlier, which I think is very well known. So full visibility on the dividend decisions on the buyback when the time is right. I just had a question around the Skaylink acquisition. We have seen a lot of excitement in the sector around data centres, AI, cloud services, cybersecurity, you name it. Obviously, Deutsche Telekom, announcing a pretty high-profile partnership with Nvidia to build a data centre and Telecom Italia having a recent event looking at their AI capabilities. Just a brief broad question about, is this really a material revenue driver for your business looking forward? And could we expect more similar acquisitions to Skaylink in some of your other geographies? Sure. Paul, let me try and give you a bit of an overview on how I look at this. First of all, digital services are now over a quarter of our B2B revenue. So it starts to become quite material and it is growing really well. We continue to use the word double-digit. It is basically double-digit everywhere. It is double-digit in Germany. And overall, I think there is a lot of potential for us to grow in B2B in these domains. That is why we have, even before the acquisition of Skaylink, continue to invest. I mean two years ago, for those of you who remember, I was talking again for the long-term health of the business, stepping up the investment in B2B in these areas, and it has all been about building capabilities to essentially respond to the demand of our customers. Now in terms of all the points that you have raised, I think it is really important for us to assess where there is demand, where this demand is best served by Vodafone as opposed to other areas, and where there are also good returns. We certainly see big opportunities to continue to grow in IoT. We could go on and talk for hours about IoT. We see equally very good growth for us, already today, in cloud, where Skaylink operates. Cloud is a big contributor to our double-digit growth, and also security with cyber in mind.
James Razter New Street Research Margherita Della Valle Vodafone
Paul Sidney Berenberg
Margherita Della Valle Vodafone
Powered by FlippingBook