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Vodafone Group Plc H1 FY27 Q&A Transcript
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We now have a cost reduction programme that is worth net to the bottom line, 13% of European EBITDAaL. So, a very nice push that makes us confident on Europe. And whether it's in Europe or beyond Europe, I think you will agree that now across our markets, we are in strong position. I talked earlier around breadth of opportunities because wherever you look, you see reasons to expect growth in Europe, growth in Africa, growth in B2B. So, pleased to have done a strong start, guidance upgrade today, but our focus is all around acceleration for the midterm.
That's really clear. Thanks so much.
Akhil Dattani JP Morgan
Thank you. Morning. I'd like to ask about Germany, please.
Carl Murdock-Smith Citigroup
You made the comment this morning that you have much more to do in Germany. You've had to make the non-cash impairment to the German business today. You're facing the impact of the recent ECJ ruling that you've mentioned, and Deutsche Telekom was making some positive comments last week about its ability to take further share in the MDU market as some access bottlenecks get resolved going forward. Can you expand a bit more on your earlier comments about what you're doing to turn the business around, but also to protect your MDU business in the face of potentially greater pressures going forward? Thank you.
Thank you, Carl. Maybe one liner from Pilar on the accounting, and then I'll talk about the business.
Margherita Della Valle Vodafone Group
Yeah. I mean, you mentioned non-cash, and as you know, we regularly review the current value of all of our assets, and now in the context of higher interest rates. The mechanics of the impairment close to three quarters of the charts have to do with higher government, German government bond yields, and that impacts the discount rate. You've seen in the release the discount rate we are applying is 8% now versus 7.5% in the last disclosure. So, really, the impairment has to do with the higher interest rates and the impact of the ECJ, as you mentioned in the introduction. On Germany more broadly. I think beyond the headlines, you will see in all the data points that we are giving that quarter after quarter, we continue to see structural progress, and in the last year, this has been exemplified by the fact that we are now consistently growing in Business and we are also consistently growing in Consumer on the broadband part of our business. These, for us, were really important shifts, and as we just mentioned, actually, if it had not been for the ECJ ruling, Germany, like the UK, were both tracking ahead, which is why we have completely reconfirmed the European guidance for the year, absorbing the €100 million impact.
Pilar López Vodafone Group
Margherita Della Valle Vodafone Group
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