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Vodafone Group Plc
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Goldman Sachs
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J uly 24, 2025/10:00am Vodafone Q1 FY26 Q&A VODAFONE PARTICIPANTS Margherita Della Valle Vodafone Group Chief Executive Luka Mucic Vodafone Group Chief Financial Officer ANALYST PARTICIPANTS Robert Grindle Deutsche Numis Maurice Patrick Barclays Carl Murdock-Smith Citigroup Andrew Lee Goldman Sachs James Ratzer New Street Research Paul Sidney Berenberg Akhil Dattani JP Morgan David Wright Bank of America Merrill Lynch Joshua Mills BNP Paribas Exane Ottavio Adorisio Bernstein Societe Generale Javier Borrachero Kepler Cheuvreux
Good morning, everyone. We performed well across the Group in the first quarter, in line with our expectations, with good service revenue growth of 5.5%. Most importantly, we are starting to deliver the planned service revenue improvements in Germany, and we have completed our merger in the UK at the start of June, launching VodafoneThree, the country's leading mobile operator. I will come back to both Germany and the UK shortly. Our other European markets growth has slowed due to competitive pressure in Portugal, but we see good performance continuing across the region. Our emerging market portfolio has delivered strong growth in euro terms. Turkey continues to perform very well, and in Africa, we have further accelerated our growth across the footprint. So overall, good revenue growth, which delivered good EBITDAaL growth for the quarter of 4.9%. This is in line with our expectations, and today we are reiterating our growth guidance for both EBITDAaL and cash flow. Combined with our significant buyback programme, this guidance delivers strong, double-digit free cash flow growth per share for our shareholders. Coming back to Germany, the market has remained very competitive in mobile, but we are seeing tangible results from the actions we have taken. Whilst headline net customer additions are negative, we continue to see improvement on our most valuable customer base. In Consumer, our branded contract churn is now single-digit, the lowest it has been for the last four years, thanks to the ongoing improvement of our customer experience. In fixed, we continue to score well in independent network tests, retaining our leadership position as the best network in the country. As the market penetration has now plateaued, our focus is on driving value, and we have taken proactive actions to increase ARPU for new acquisitions. And we secured a significant win for our brand in time for the 2025-26 football season, as we become the main sponsor of the Borussia Dortmund club. Now turning to VodafoneThree in the UK. With the joint venture now operational, we are working to deliver a significant step-change in experience for our customers. We are making a fast start to integrate our Consumer multi-brand strategies across VodafoneThree, VOXI, SMARTY and Talkmobile, with a particular focus on the net customer losses of the Three brand. We now have the opportunity to make a real impact by transforming network quality and overall experience for all customers. On the network front, we have already seen the first integration benefits. All Three customers are benefiting from more mid-band spectrum, with up to 40% higher 4G speeds across the country. And we have started integrating our networks to allow all our customers to seamlessly use both the Vodafone and the Three networks across the country. We have also launched a new customer promise called 'Just Ask Once.' Vodafone UK was already leading the industry on the customer service side, and this new commitment aims to resolve any query quickly and painlessly with a dedicated advisor who proactively updates the customer. But, of course, this is just the beginning of a multi-year integration. We are well on track with our original financial guidance for the merger in this financial year, and you all know that we expect to deliver at least £700 million of cost and capex synergies per annum from the fifth year. Our growth trajectory in the UK, combined with strong positions in growing markets across Europe, Africa and Turkey, as well as improving trends in Germany, give me confidence that we now have the right mix of markets, capabilities and financial capacity to drive good growth over the medium term. Of course, we still have more to do, and our focus will be on continuing to improve our customer experience across Europe and Africa and further simplifying our internal operations. Luka and I will now be pleased to take your questions. Margherita Della Valle, CEO Vodafone Group
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