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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
Summary of Forward-looking comments
Looking forward, our guidance for FY26, which is on a pre-UK merger basis, is that we expect to deliver continued underlying growth both for adjusted EBITDAaL and adjusted free cash flow. We expect Adjusted EBITDAaL for the Group to be between €11 billion and €11.3 billion. (…) We also expect to deliver an acceleration in Group adjusted free cash flow growth to a range between €2.6 billion and €2.8 billion. Page 3 (…) on a pre-UK merger basis (…). Within this, we are targeting between €7.2 billion and €7.4 billion for Europe.
FY26
Group
Guidance
Adj. EBITDAaL guidance
FY26 FY26
Europe
Page 3 Page 4
And we have assumed in our guidance for reference in our forecast that the [German pricing] environment now stays where we are. I think it is the appropriate set of expectations for financial reasons, which means that we will continue to see ARPU pressure in mobile within our numbers for the remainder of the year
Group & Germany Guidance
As for the UK merger, we expect the proforma FY26 impact to be roundabout €400 million of EBITDAaL contribution and around about €200 million of adjusted free cash flow drag on a full year basis, due to front-loaded investments into the committed post-merger network buildout, integration investments and interest payments on the debt of Three UK that we will consolidate post-merger. We still expect, as Margherita has said, to reach a full run rate of £700 million of annual cost & CAPEX synergies by the fifth year, and free cash flow accretion of the merger by the fourth year Page 3 This all adds up to good growth in adjusted free cash flow for FY26, and of course, even stronger growth on a per share basis. Page 3
UK merger impact: Adj. EBITDAaL & Adj. FCF
FY26
Group
FY26 FY26
Group Group
Adj. FCF Adj. FCF
(…) performance of Vantage Towers, which includes INWIT, (…) will actually provide a special dividend in FY26. [So, you would expect to extract around €300 million of dividends from Vantage going forward annually?] There is no reason to not expect the same dividend levels from Vantage. As a result of the transformation done in the last two years, we are now well positioned to grow our adjusted free cash flow over the medium-term, with two thirds of our adjusted free cash flow coming from growing assets, while the remaining third is generated from Germany, which we are turning around. From a restructuring perspective (…) 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.
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Medium term Group
Adj. FCF
Page 2
UK merger impact: Free cash flow
FY26
Group
Page 12
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