Vodafone Group Plc

We performed well across the group in the first quarter, in line with our expectations, with good service revenue growth of 5.5%. Most importantly, we are starting to deliver the planned service revenue improvements in Germany and we have completed our merger in the UK at the start of June, launching Vodafone 3, the country's leading mobile operator. I will come back to both Germany and the UK shortly. Our other European markets growth has slowed due to competitive pressure in Portugal, but we see good performance continuing across the region. Our emerging market portfolio has delivered strong growth in Euro terms. Turkey continues to perform very well and in Africa we have further accelerated our growth across the footprint. So overall, good revenue growth, which delivered good EBITDA growth for the quarter of 4.9%. This is in line with our expectations and today we are reiterating our growth guidance for both EBITDA and cash flow. Combined with our significant buyback program, this guidance delivers strong double digit free cash flow growth per share for our shareholders. Coming back to Germany, the market has remained very competitive in mobile, but we are seeing tangible results from the actions we have taken. Whilst headline net customer additions are negative, we continue to see improvement on our most valuable customer base. In consumer, our branded contract churn is now single digit, the lowest it's been for the last four years, thanks to the ongoing improvement of our customer experience. In fixed, we continue to score well in independent network tests, retaining our leadership position as the best network in the country. As the market penetration has now plateaued, our focus is on driving value and we have taken proactive actions to increase ARPU for new acquisitions. And we secured a significant win for our brand in time for the 25-26 football season as we become the main sponsor of the Borussia Dortmund club. Now turning to Vodafone 3 in the UK. With the joint venture now operational, we are working to deliver a significant step change in experience for our customers. We are making a fast start to integrate our consumer multi-brand strategies across Vodafone, Tree, Voxy, Smarty and TalkMobile, with a particular focus on the net customer losses of the Tree brand. We now have the opportunity to make a real impact by transforming network quality and overall experience for all customers. On the network front, we have already seen the first integration benefits. All three customers are benefiting from more mid-band spectrum with up to 40% higher 4G speeds across the country. And we have started integrating our networks to allow all our customers to seamlessly use both the Vodafone and the three networks across the country. We have also launched a new customer promise called Just Ask Once. Vodafone UK was already leading the industry on the customer service side, and this new commitment aims to resolve any query quickly and painlessly with a dedicated advisor who proactively updates the customer. But of course this is just the beginning of a multi-year integration. We are well on track with our original financial guidance for the merger in this financial year and you all know that we expect to deliver at least 700 million of cost and capex synergies per annum from the fifth year. Our growth trajectory in the UK, combined with strong positions in growing markets across Europe, Africa and Turkey, as well as improving trends in Germany, give me confidence that we now have the right mix of markets, capabilities and financial capacity to drive good growth over the medium term. Of course, we still have more to do and our focus will be on continuing to improve our customer experience across Europe and Africa and further simplifying our internal operations. Luca and I will now be pleased to take your questions.

Thank you, Margherita. As a reminder, please only pose one question to give everybody a chance to speak. Our first question this morning comes from Robert Grindle at Deutsche Numis. Robert, your line is open. Please go ahead.

Good morning, Margarita and Luca. It was good to see the improved service revenue growth trend in Germany, which is approaching stable ex the MDU effect. How are you feeling about the prospect for getting back to Germany growth anytime soon? Commercial activity is a bit softer in Q1, however, with broadband net ads going backwards. Please, could you say something about what the dynamic is in the market at this point? Thank you. Mm-hmm.