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Vodafone Group Plc H1 FY27 Q&A Transcript
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Hi, good morning. Thanks for taking the question. I've got a question, Margherita, on the guidance upgrade that you talked us through just now. There's two quick parts to it. The first is that you were previously guiding to the upper end of your former ranges and the upper end of your former range is now the midpoint of your new ranges. So, I guess I'd love to understand what the messaging is here. Is it optimism that is the upper half of this range? And can you sort of talk us through specifically where the greater optimism is in the business as a whole? And the second piece of it is in the mix, you've left the European guidance unchanged. H1 EBITDAaL was down 1%. The implied H2 is anywhere from -2% to +6%. So, it's quite a big range implied for H2. Maybe you could help us understand what are the key swing factors for H2 that determine where you come out for Europe? Thanks a lot.
Akhil Dattani JP Morgan
Thank you, Akhil. And maybe, Pilar, you can build on where is the optimism coming from?
Margherita Della Valle Vodafone Group
Thank you, Akhil. Thank you for the question. And as you rightly said, in July, we were already expecting to deliver at the upper end of the previous ranges. And since then, we've really seen a strong momentum in our execution. We've seen it in the UK, which is performing strongly with top line delivery and the synergy delivery. We are seeing in Germany consistent growth in consumer broadband and in B2B. And this has allowed us to absorb the impact of the European Court of Justice ruling, remember, earlier in the quarter, which has had an impact of €100 million euros on our EBITDAaL. And that has allowed us to reconfirm the Europe outlook. Beyond Europe, you've seen the strong performance in Africa and Türkiye in the first half and we are expecting that good growth to continue. And you've also seen the fast start we've made to the efficiency programme overall. So, with that, we now expect that acceleration in growth, as Margherita was referring to, and at the midpoint of the guidance, of the new guidance range, we are expecting to grow organically Adjusted EBITDAaL 7% and Adjusted free cash flow over 20%. You mentioned the European guidance. We are very confident at the midpoint of the guidance, where Europe is stable. And in fact, we were able, as I mentioned, we were able to stay in the outlook, because the UK and Germany were performing better. And they allow us to, again, as I said, to reconfirm and absorb the impact of the ECJ. Maybe if I can build on that, Akhil, I think the key word for us is acceleration. In May, as a result of all the changes we have been driving and we are driving in the Group, whether it's portfolio, whether it's investment on customer and simplicity, I talked about we are opening a new growth chapter. And by that, that's what we mean. We mean acceleration of growth. And this is where we see very much the 7% and the 20%, or 21%, that we are announcing today as a good first step but the optimism is coming really from the midterm. In May, we said we were expecting to have double digit growth from now on in our organic cash flow generation. And again, this is the result of the changes. I will reiterate what I just said earlier, right. We have structural actions in Germany with progress quarter after quarter, unique opportunities in the UK.
Pilar López Vodafone Group
Margherita Della Valle Vodafone Group
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