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Vodafone Group Plc. FY25 Q&A Transcript JP Morgan
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David Wright Bank of America Merrill Lynch
It is a question that might actually follow on a little bit from James. But just on the UK, a couple of clarifications. You have talked about EBITDAaL boost of €0.4 billion I think it is. In your original deal presentation, you talked about pre-IFRS 16, Three EBITDAaL of £612 million. That obviously looks like it is broadly halved. I suspect that is mostly handset accounting. But if you could clarify that first, Luka. You also mentioned, I think your words earlier in the presentation, that the free cash flow dilution stated was including restructuring spend. But I do not think it is, is it? Because your free cash guidance is ex. restructuring. What is the restructuring spend we could expect on top of that? I guess this just flows through to James' point really, is your free cash flow guidance is before restructuring, which has been a significant amount for every one of the last, and I might even say, 10 years. Telefonica more recently broke down their free cash flow into, at the end of the day, what is distributable. I just wondered if you could start giving us some visibility of free cash flow after restructuring, given that is essentially what is distributable. I appreciate spectrum is a lot more commercial. But those dynamics would really help us. If I might just add, Margherita, why is the deal not closed yet? We all thought it should have done. If there is just anything you can add there. Yes. Maybe I will take that. I would say watch this space. I mean, we got the approvals from Ofcom and the CMA during the month of April. We have then been able to lock down the joint business plan, which is done. We are now going to the customary closing adjustment. But watch this space. Yes. Then on the €400 million, yes, of course, this represents the EBITDAaL contribution under our preliminary view under the Vodafone accounting policies. There are various puts and takes there, lease accounting, service accounting and so on. I think it is probably better for the details then and the puts and takes to be followed up on an IR call. But it is our best view of how the results would present themselves under our accounting policy. You are right. I have not been talking about restructuring. I have been talking more broadly about integration investments. That is not necessarily all restructuring. From a restructuring perspective, first of all, I think we had in FY25 compared to the prior year, relatively calm year from a cash perspective. We were at around about €250 million, I believe, of restructuring expenses. There will be a moderate step-up as we go into FY26 on the restructuring, not only from the UK, but also from the fact that in Germany, we still have to fully complete the second wave of our restructuring programme that we have there. When you think about only the impact for the UK, it will be actually broadly neutral because we also will, upon the closing, benefit from the spectrum sale proceeds to VMO2. So, the merger per se is from below the AFCF level broadly neutral in FY26. The £500 million restructuring guide, that still applies though and we should probably assume that is quite heavily phased at the first couple of years. Correct?
Margherita Della Valle Vodafone
Luka Mucic Vodafone
David Wright Bank of America Merrill Lynch
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