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Vodafone Group Plc. FY25 Q&A Transcript JP Morgan
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Joshua Mills Exane
I wanted to shift back slightly and move to the B2B segment. I think in the report, you called out some headwinds from the UK B2B market and specifically Managed Services, and also some ARPU pressure in the Mobile space. I wondered if you could give us a bit more colour on what is happening there and maybe broaden the question into how you are seeing the B2B landscape more broadly across your different geographies and what you are assuming about the B2B growth in your FY'26 guidance? Then perhaps just more specifically, could you remind us now what percentage of Vodafone Group service revenue and also Group EBITDAaL is coming from the B2B segment? Yes. I guess if you do not mind, I will take those questions. First of all, we are actually very happy about the growth trajectory that we have achieved with our B2B business during FY25. You have seen that we have shown quarterly acceleration every quarter as we had expected at the Q1 earnings call. We exited with 5.1% growth in Q4, and we continue to believe into that potential and actually would expect this good growth at the Group level to continue. Now in terms of the markets performance, it was obviously differing by market in the UK. We had a decline in the full year. Q4 was actually positive. But for the full year, it was slightly negative. There are a couple of reasons for that. One is that the same actually year-over-year price increase pressures apply to B2B that we also saw a bit in Consumer, where essentially the annual price increases came in due to lower inflation at lower rates. That has been weighing on the growth in B2B. From a go-forward perspective, yes, we have outlined that we are losing a couple of pretty old, I have to say, and also relatively low-margin managed services contracts in the UK. Otherwise, the performance in the UK as elsewhere in Europe will clearly differ between a core connectivity business, which will be lower growth, and then additional support from our digital services business that we are investing into where we have been adding additional agents, where we continue to build out our product portfolio and where we are clearly expecting continued growth opportunities. So yes, UK will be challenged in FY26 from a B2B perspective. But in the broader sense, we continue to expect positive growth in B2B from a Group perspective and certainly see the strength of our portfolio, in particular in what we call beyond connectivity as a strong underpinning of that where we have much higher growth rates than in core. Just maybe a quick build on this point of the digital services. I would say the way that our demand is moving, we have always had strong demand across Europe and Africa for digital services. The recent geopolitical-induced focus on sovereign technology services on defence areas is also something that will be supportive for continued good digital services growth for us. 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.
Luka Mucic Vodafone
Margherita Della Valle Vodafone
Joshua Mills Exane Luka Mucic Vodafone
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
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