Vodafone H1 FY25 Results Presentation
H1 FY27 Results Video Transcript
Introduction
Margherita Della Valle
Hello everyone.
Vodafone Group, CEO
For the last few years, we’ve talked a lot about change at Vodafone.
As you know, we’ve reshaped our portfolio to operate at scale, with strong positions in every market.
And we’ve fundamentally changed how we operate.
Today, this transformation is providing a strong foundation for our growth chapter as you’ve seen in our results.
Our focus remains clear: deliver a better experience for customers, simplify our business, and drive sustainable growth.
And in the first half of FY27, it is clear from our results today that we continue to make good progress across all three priorities.
While I’m very pleased with our overall performance, our financial performance in Germany over the last few years has been disappointing. But we have not stood still.
Beneath the headline numbers, we’re seeing clear progress, including consistent growth in important areas of our business such as consumer broadband and B2B.
We know what we need to do, and we’re taking further steps to move faster in delivering a market leading customer experience and in simplifying our operations.
Across the Group, we have made a strong start to Vodafone’s new growth chapter.
After the first quarter, we said we were tracking towards the upper end of our guidance. And today, with the momentum we are seeing across the business, we are upgrading Group guidance for both profit and cash flow for the year.
At the mid-point of our new guidance range, this would represent more than 20% growth in Adjusted Free Cash Flow this year, a strong start to our multi-year double-digit cash flow growth ambition.
Which takes me to our financial performance. Pilar, could you provide a summary of the highlights from the first half of the year?
Financial Update Pilar López
Thank you, Margherita, and hello everyone.
Vodafone Group, CFO
As you've just heard, our progress is clear in our results.
Our performance in the first half demonstrates the benefits of our diversified portfolio and growth opportunities.
Group service revenue growth accelerated to 6.4% in Q2, one of our highest ever growth rates, and together with our continued focus on productivity improvement, supported Adjusted EBITDAaL growth of 6.4% in H1.
What I find particularly encouraging is that we’re seeing contributions from across the business with service revenue growth across every segment in the first half.
Europe continues to grow, although Germany remains a key focus. Africa maintained its strong momentum with continued double-digit growth. And Vodafone Business delivered its highest-ever service revenue growth of 6.6% in Q2, as our digital services portfolio is now growing more than 20% year on year.
As a result, we are upgrading our guidance today for both Group Adjusted EBITDAaL and Adjusted Free Cash Flow, reflecting the strong start we have made and the momentum we are seeing across the Group.
With that, I’ll hand back to Margherita to call out the key actions supporting our performance.
Customers
Margherita Della Valle
Thank you, Pilar.
Vodafone Group, CEO
Let’s start with our number one priority, our customers.
We’re building stronger networks, creating better experiences and developing propositions that give customers more reasons to choose and stay with Vodafone.
And we’re seeing the impact.
Customer satisfaction continues to improve across our markets, and Vodafone now holds leading positions in customer satisfaction in 12 markets.
A big part of our success is making Vodafone simpler to deal with.
Across our markets, we’re using AI, digital tools and our people’s relentless determination to remove friction and resolve customer issues faster.
Our TOBi chatbot handles over one million customer interactions every single day, almost half a billion per year, with a resolution rate of 85% and strong impact on customer satisfaction.
We’re also using AI to support our customer care teams, helping resolve issues more quickly. Germany is the first of our markets where AI-enabled agent-assist tools are now supporting customer service requests, helping improve customer satisfaction even further.
But customer experience goes beyond customer care.
It’s also about delivering better connectivity and propositions to give customers more reasons to choose Vodafone in the first place.
In the UK, we’re leveraging our network progress to differentiate our customer proposition.
At the start of September, we launched Vodafone SuperMobile giving customers access to the full benefits of our 5G standalone network, with enhanced speed, reliability and security.
In a UK first, we have guaranteed minimum speeds for our SuperMobile customers. We’ve been really encouraged by the early response, with the majority of new iPhone customers choosing SuperMobile.
And it’s not only consumers who are benefiting.
The same customer focus extends to Vodafone Business, where our managed services bring together everything from connectivity and cloud to security and AI, reducing complexity and making their employees lives simpler.
So, whether it’s removing friction from customer care through AI, investing in next-generation networks, differentiating our mobile offerings or helping businesses embrace new digital technologies, the objective remains the same: to enhance our customers’ experience.
We are turning our customer strategy into action and driving greater value for the Group.
Simplicity
Margherita Della Valle
If Customers is about creating better experiences, Simplicity is about creating a stronger Vodafone.
Vodafone Group, CEO
Over the last few years, we’ve taken decisive action to strengthen both our portfolio and how we operate.
In the first six months of this year, we’ve continued to make progress with simplifying our portfolio.
In H1, we took full ownership of VodafoneThree in the UK, giving us greater flexibility to move faster and capture all the value created by the combination.
We’re already seeing the benefits, with our annual synergy target increasing from £700 million to £800 million by FY30 and operating free cash flow expected to more than triple by FY32.
We’ve also increased our stake in Safaricom, strengthening our exposure to one of Africa’s leading telecommunications operators and our world-leading financial services platform, M-Pesa.
Our portfolio actions have created a more focused Vodafone, with greater exposure to markets with structural long-term growth opportunities.
But Simplicity is first and foremost about what happens inside Vodafone.
This is particularly important in Germany, where we’re encouraged by the progress we’re seeing, but we’re taking further structural actions to improve the business. This includes further simplification of our operations, continued investment in customer experience, with a focus on faster, consistent execution.
More broadly, we have a long track record of driving efficiencies and transforming our cost base.
In May we announced a new phase in our cost transformation. As we have now entered our next chapter, one of our most significant opportunities comes from our next wave of productivity growth and margin expansion.
Across Europe and our shared operations, we’re targeting over €2 billion of annual gross opex savings, translating into over €1 billion of annual net savings by FY30.
You’re already familiar with our synergy programme in the UK, but there is much more going on. Across the Group we are simplifying processes, increasing automation, expanding the use of AI and leveraging the benefits of our scaled shared platforms. These activities have given us the confidence to target a reduction of 30% of our addressable spend.
In Europe, thanks to the more predictable level of inflation, our initiatives will translate into over 10% more absolute EBITDAaL through a net absolute opex reduction reported in the P&L. While in Africa and Türkiye, revenue continues to outpace our cost base, supporting further margin expansion.
We’re only six months into the four-year programme but have already delivered initiatives worth over €200 million in Europe gross savings, with line of sight on a larger figure by the end of this financial year.
Growth
Margherita Della Valle
Our third strategic priority is growth.
Vodafone Group, CEO
Taking advantage of areas where Vodafone has a clear competitive edge and long-term structural opportunities.
In Europe, as I’ve described, we’re focused on deepening customer relationships through stronger networks, better propositions and convergence.
In Africa, we are both benefiting from and fostering strong structural growth across connectivity, financial services and digitalisation.
Organic service revenue continued to grow double digit in the first half, with growth across every market, with Adjusted EBITDAaL growing 18%.
Egypt is a great example of how expanding connectivity and digital adoption can create multiple sources of growth within a market.
Service revenue grew 36% in the first half, supported by continued customer growth, strong demand for data and financial services expansion: Vodafone Cash is growing rapidly, with revenue up over 74% and 17 million customers.
Last but not least, Vodafone Business is another key growth engines across all our geographies.
We’re expanding our B2B portfolio around our Smart, Secure and Sovereign propositions which is now delivering over 20% growth in digital services revenues.
This year, we have launched new AI services for SMEs through our AI Concierge that allows businesses to automate customer interactions and improve productivity. We have also expanded our cybersecurity services across Europe to protect our customers with our new dedicated Security Operations Centres in Germany, Portugal, Ireland and Romania.
And through new cloud capabilities, we’re making it easier for customers to manage and migrate critical workloads as they accelerate their digital transformation and AI adoption.
These aren’t standalone products.
They’re examples of how Vodafone is evolving from a connectivity provider into a broader technology partner for our business customers to help them operate, compete and grow in a digital world.
Together, these opportunities across Europe, Africa and Business give us a diversified set of growth engines, supporting our ambition to deliver double-digit organic growth in adjusted free cash flow over the medium term.
Closing
Margherita Della Valle
At the full year I said Vodafone was entering a new chapter, as a simpler, stronger and growing business.
Vodafone Group, CEO
In the first half, the actions we’ve taken are showing through in both our financial performance and the strategic progress we’re making across the business.
We’re building stronger customer relationships, simplifying how we operate and driving growth.
This progress gives us confidence in our outlook.
With the momentum we’re building, we are upgrading our Group guidance ranges for both profit and cash flow this year.
And at the mid-point of our new guidance range, that would represent more than 20% growth in Adjusted Free Cash Flow this year, a strong start to our multi- year double-digit cash flow growth ambition.
There is more to do, and we remain focused on maintaining our momentum.
Thank you for watching.
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