Vodafone Group Plc

Good morning everyone, and thank you for joining us today. As you will have seen from our results, our performance in FY25 has been in line with expectations. But before we move to Q&A, I want to provide an update on what has driven the results, the actions we have taken, and the key priorities for FY26 and beyond. Two years ago, I set out a transformation agenda centered around three key pillars, customers, simplicity, and growth. Whilst we still have much more to do, two years on, Vodafone today has changed. We have reshaped the structure of the group, simplified how we operate, and improved our customer experience, therefore not only changing where we operate, but more crucially, how we operate. Looking closer at each of these three areas, We have right-sized our portfolio with the sales of Spain and Italy and the merger of Vodafone and 3UK. We've also taken actions in a number of areas within our investments portfolio, including the further monetization of Vantage Towers and the simpler ownership structure in India. With these actions, we have reset our capital structure, strengthened our balance sheet and returned 2 billion to shareholders through buybacks, on top of 1.8 billion of dividends over the last year. And the first tranche of the next 2 billion buyback program is starting today. On customers, we have refocused the culture of Vodafone on delivering the seamless and consistent experience our customers expect. And we have changed. Just two examples. In the UK and Germany, we have achieved the number of best-evers on customer experience. In the UK, our market-leading NPS has been driving the lowest-ever levels of churn for both mobile and broadband. And in Germany, where there is clearly more to do, we have made a real step change, delivering our best ever net promoter scores and halving the gap to the incumbent in the market. At the same time, we are becoming a leaner organization. We have actioned the planned 10,000 role reductions and the introduction of commercial models in our shared operations will now enable us to accelerate productivity and efficiency gains. Financially, we have delivered our transformation and the MDU transition within the adjusted free cash flow outlook communicated in May 23. 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. Let me start with Germany. Over the last two years, we have faced a number of challenges with the declining broadband base, the massive task of implementing the MDU transition, and more recently, heightened competition in mobile. Against this backdrop, we have been single-mindedly focused on driving a structural reset of our operations, centered around delivering a better service to our customers. Two years on, with a new management team, investments in our networks and customer experience, and a company-wide restructuring heading towards completion, we are looking at a number of positive trends in our structural leading indicators. Reversing the inertial decline in our customer satisfaction, we have now delivered our best Net Promoter scores with dramatic improvements across all products. And whilst we are still far from where we want to be, we are already seeing the benefits in terms of increased loyalty. We will continue to invest in our operational transformation throughout FY26. And whilst we expect market conditions to remain challenging, our results will benefit from our now stable customer base and from the growing contribution of the one-on-one customer base migrating onto our network. But whilst Germany is our priority market, we should not lose sight of the fact that two-thirds of our adjusted free cash flow is generated across what we can call our growth footprint. In the UK, we have had a strong performance in FY25, both in terms of KPIs and financials. We delivered strong EBITDA growth of 8% and are now the NPS leader in the market across both mobile and fixed, resulting in record low level of customer churn. Looking ahead through our merger with 3, which will complete soon, we will be uniquely positioned for EBITDA and adjusted free cash flow growth as leaders on all dimensions in mobile and leading challenger in fixed broadband. As you know, we will also benefit from our integration with 700 million annual cost and capex synergies and additional revenue synergies, for example, in FWA. Across Africa and Turkey, we have strong local positions in each market and significant growth opportunities beyond core connectivity. We will continue to go cash flows in euros through the cycle alongside delivering good returns. And finally, we should not forget our Vodafone Investments division and its operational infrastructure and innovation businesses. These provide a mix of dividend flows to us and the potential for value realization when appropriate. And with that, I'll pass over to Luca to discuss our financials.

Yeah, thank you very much, Margarita. So first off, I'm obviously pleased to report that we delivered our FY25 group guidance for both EBITDA and adjusted free cash flow. Looking forward then, our guidance for FY26, which is on a pre-UK merger basis, is that we expect to deliver continued underlying growth, both for adjusted EBITDA and adjusted free cash flow. We expect adjusted EBITDA for the group to be between 11 and 11.3 billion euros. Within this, we are targeting between 7.2 and 7.4 billion for Europe. We also expect to deliver an acceleration in group adjusted free cash flow growth to a range between 2.6 and 2.8 billion euros. As far as the UK merger is concerned, we expect the pro forma FY26 impact to be around about 400 million of EBITDA contribution and round about 200 million euros of an adjusted free cash flow drag on a full year basis due to front-loaded investments into the committed post-merger network build-out, integration investments, and interest payments on the debt of free UK that we will consolidate post-merger. And last, but certainly not least, I'm happy to say that our detailed work with Hutchison around the validation of our joint business plan for the merger in the last few months has reconfirmed our expectations from the time when we agreed the original deal. We still expect, as Margarita said, to reach a full run rate of 700 million pounds of annual cost and capex synergies by the fifth year and free cash flow accretion of the merger by the fourth year. And with that, back to you, Margarita, to close us out.

Thank you, Luca. So to summarize, alongside delivering on our financial commitments in the last two years, Vodafone has changed. we can now look forward to a new markets mix. Across two thirds of our portfolio, we have a solid growth track record, strong assets in good positions, and significant potential for further growth with clear execution plans. Within this, the UK business, which will now represent a quarter of our service revenue, is well positioned for growth as we roll out our best in class 5G network and deliver our merger synergies. Separately, in Germany, we will continue to drive our turnaround in what is fundamentally a good market, delivering better financial performance. 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. but most importantly, puts us on a new growth trajectory for the years ahead. And with that, let me open to you all for questions.