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Vodafone Group Plc H1 FY27 Q&A Transcript
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Good morning. Question on cost efficiencies for both of you. It seems you're more confident in achieving those cost efficiencies today than you were six months ago. So, I just wanted to ask, is that simply just the pace of achieving cost efficiencies? Or have you gained in confidence in the scope to maybe even raise those ambitions at a gross and net basis? That's the question. And if you can give any colour on what you're seeing that's giving you confidence, that would be helpful. Thank you. Sure. I was smiling, Andrew, when you were asking me about cost, because it reminded me of when we started working together, which was at the beginning of the first wave a few years ago of our cost transformation programmes. And now we are on wave three. I would say Pilar can give us an update of what we see in terms of action but we are just at the beginning of the wave three, and we are effectively executing on what we presented to you in May, which is what we are very simply working on. And from this half year onwards, we will keep updating you on the progress. Pilar? No, definitely. And just maybe to put in context the targets we said we committed in May, which Margherita had in her introduction, there were €2.0 billion annual cost savings. This is effectively a 30% reduction of our addressable cost base across Europe and set operations. And this will translate into over €1.0 billion of net opex savings. We like to set net targets that we can track, you can track on our EBITDAaL. And effectively, this is 13% of our Europe EBITDAaL. So, that's just to put it in context. And then in terms of the confidence, well, in the first six months, you've seen there is a fast start with €200 million euros of gross savings delivered in this first half. Where are we delivering those savings? It's a combination of the UK synergies, €50 million euros gross savings this half, simplification. And you've heard about the 3,000-role reduction in the first half after the 11,000 we reduced in the past and the announcement we made in Germany yesterday, another 2,300 over the next couple of years.There are a number of examples of how we are simplifying with our set operations across the board. And then the third lever is AI. And there is, is great to see how the scaled platform that we have built is already delivering savings.And there are a number of areas where we are being pretty innovative. I mean, you have some of the examples in the presentation, and those are already delivering real savings and contributing to the net target that we set. What else to say there? Well, there are headwinds and we also need to be very aware of those in terms of inflationary pressures on payroll, on energy, on the cost of the tower leases. But despite the headwinds, we have made a faster start in the first half and we will continue accelerating in the delivery. And we expect to deliver over €200 million euros of net cost reduction already this fiscal. As Margherita said, I mean, there is a long track record of delivering against targets. And as we have more visibility and progress on our delivery, we will update on progress, of course, and also, we will update on further opportunities as we've done in the past. But the short summary is a billion to the bottom line in Europe, and roughly a quarter of that will be delivered on the first year of the plan. So, a very sort of logical phasing.
Andrew Lee Goldman Sachs
Margherita Della Valle Vodafone Group
Pilar López Vodafone Group
Margherita Della Valle Vodafone Group
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