Deutsche Numis
New Street Research
Bank of America Merrill Lynch
Morgan Stanley
Goldman Sachs
Vodafone Group Plc. FY25 Q&A Transcript JP Morgan
14
Bernstein
UBS
Exane
Citigroup
HSBC
Adam Fox-Rumley HSBC
I would like to ask a question on the share buyback, please. I wondered if you could reflect a bit on the value that the buyback is bringing to you and your shareholders at the moment. You have spent €2 billion. We have got another €2 billion to go. It is a huge portion of the market cap. There is no reference to per share data in your presentation anywhere. So presentationally at least, you are not really linking that huge commitment to the narrative that you are trying to tell us. The stock has got a 5% dividend yield so it is not providing much valuation support. I guess I would just like to check, are you still certain this is the right allocation of capital? To that sustainability point, clearly, given the free cash flow you generate at the moment, the dividend that you have got, looking into the medium term, €2 billion is unlikely to be the right number going forward. I will let Luka talk to the strategy around buybacks and returns more broadly. But there is one number, Adam, that I think is really important. Your question is a really valid one. If you look at our adjusted free cash flow guidance for FY26, at the midpoint of the guidance, we are growing adjusted free cash flow per share by 17% year-on-year. I completely agree with you that the per share element of these KPIs is really important. But, Luka? I would agree, it is unappreciated. But when you ask about the capital allocation strategy more broadly, I think when we first talked about this when I was coming in around two years ago, we were single-mindedly focused on dividend that was back then considered as not properly covered by underlying cash flow and with no kind of fantasy for growth for the future. We had, in the meantime, two significant value creation events through the sales of Spain and Italy at a point in time where, from our perspective, clearly the share price levels did suggest that there was value in putting some of this capital to work by making sure that things like the ones that Margherita has talked about, and that is growing the free cash flow contribution on a per share basis could come to fruition. So in that sense, I think we have followed through on the commitment that we have given and we have rebased the dividend, but with an ambition to grow it over time, and we stick by that commitment. In terms of the capital returns through share buybacks, I think we are executing on them because we believe it is from a value perspective, a positive and accretive investment. Certainly, I am still a believer in the value accretion potential. That is why not only has Vodafone started a share buyback programme today. I have also decided to buy back some more shares for my own personal account. I think in that respect, it is for me a logical thing to do. Let us see what the future brings. The current programme will probably take us roundabout through the end of the current fiscal year. Then we will reassess together as well, obviously, on the appropriate dividend levels.
Margherita Della Valle Vodafone
Luka Mucic Vodafone
Powered by FlippingBook