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Vodafone Group Plc
Morgan Stanley
Goldman Sachs
BNP Paribas Exane
New Street Research
Bank of America Merrill Lynch
Bernstein SocGen UBS
Deutsche Numis
Forward-looking statements
JP Morgan
Citigroup HSBC
Joshua Mills Exane Luka Mucic Vodafone
Thanks. Maybe just to follow up. If we could have a ballpark figure on the revenue and EBITDAaL exposure to the B2B segment, that will be helpful.
Yes, absolutely. Sorry for that. Yes, we are approaching 30%. We are still slightly below that. But it is a decent piece of business for us, close to 30%. In terms of the EBITDAaL performance, the structural margins in the B2B business are slightly lower because digital services comes with a lower EBITDAaL margin than core activity. However, and that is the more important point for me and what I am really excited about, obviously, the capital intensity of this business is very low. We have an asset-light business in this space. So we are relying, in addition to some own capabilities also on our strong strategic partnerships to bring the solution capabilities to the market. This is actually, from a returns from a cash flow perspective, very positive for us. This business is not only measured, in my eyes, at least from an EBITDA perspective, but in particular, from a cash flow contribution perspective. Margherita, as you are kind enough to tee it up, I will step in and ask. One of the highlights of today's guidance was the strength at the Group level, largely due to Africa and Turkey. What gives you confidence of the medium-term growth opportunity in those markets in euro terms? What has driven that step change in growth in cash flow generation? What synergies are there across the Group and what options might you consider in the medium term if investors continue to apply different weightings to euro of free cash flow from Europe versus the euro free cash flow from elsewhere in the Group? I would call out the fact that when I talk about 66% of cash flow generated within our current growth portfolio, it is not just Turkey and Africa, but it is going to be increasingly the UK and of course the consistent position of our other European markets for completeness. Now if I look then at Turkey and Africa and the reasons behind the performance that you have seen where we have demonstrated hard currency growth in all our geographies. I would say a two-part answer. The first is the discipline where you have high inflationary environment to grow revenue ahead of inflation and costs below inflation applied in the day- to-day execution in these markets. This is a muscle I think we have trained quite well by now. But it is not just that. There are also two other aspects. One is the quality of our performance and the second is the actual market potential per se. If I maybe start from the market potential, I mean it is visible to everyone that these are markets where connectivity has still potential to grow. The population is growing. Data is growing. Data is being monetised. But what is most attractive is that there are also what we would call non-linear growth opportunities in these markets that we are exploiting, again, talking about digital services, right. Whether you are talking about financial services, of course, for Africa or whether you are talking about other digital services. For example, sovereign data centres in those territories are already making an impact. There is a broad range of services where Vodafone in those markets is effectively the provider of choice. That give us confidence on a multi-year growth. And then on top of that, we are pleased with our execution in those geographies, whether you look at Turkey, whether you look at Egypt, whether you look at Africa more broadly.
Carl Murdock-Smith Citigroup Margherita Della Valle Vodafone
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