Vodacom Group Ltd Ord

Welcome to our interim results highlights for the six months ended 30th of September 2025. The group's performance was excellent. The encouraging trends we saw in the first quarter continued into the second quarter, with results that showcased progress on our bold Vision 2030 ambitions. The period was also characterized by a more stable macroeconomic and currency backdrop, which supported strong RAND and hard currency growth. As a purpose-led company, Vodacom is committed to connecting for a better future. Our initiative seeks to empower people, protect the planet and maintain trust. We believe that inclusion starts with opportunity. Through Code Like a Girl, we've trained almost 23,000 girls. We connected 3 million learners through our e-learning and connectivity platforms, train teachers and invest in schools of excellence. Our latest skills-based initiative is called Tech Start and is very ambitious. We aim to upscale 1 million young people by 2027. We actively pursue connectivity in under-serviced areas. To this end, we added 1,881 4G sites and 3,524 5G sites across the footprint over the last six months. We plan to spend more than R23 billion in capital expenditure across our markets this financial year, which will see our reach continue to grow. We want to see people thrive, particularly the most vulnerable in our society. Our EMAMA emergency health care program has already saved 6,500 lives. In DRC, we train women with disabilities as M-PESA agents. In Egypt, we recently launched the Maki program to empower 1 million rural women over the next three years. This program was created in association with Egypt's micro, small, and medium enterprises development agency, the Care Egypt Foundation, and Samsung. It is designed to foster digital and financial inclusion by equipping rural women with skills and tools to utilize Vodafone Cash services and engage in digital education. Trust is like Wi-Fi. It's invisible. But you most certainly feel it when it's gone. In addition to our ethics, privacy, and procurement programs, we are committed to protecting the planet. Our HERO projects are focused on achieving net zero for Scope 1 and 2 greenhouse gas emissions by 2035. In the prior year, 100% of our usage on grid electricity was matched with renewable energy sources and we continue on this journey to reduce our carbon footprint. Most recently, we partnered with the National Business Initiative in South Africa, mapping strategic technologies to enhance water security and climate adaptation with the use of AI, big data, and IoT. Our Tech for Good solutions play a vital role in us delivering on our purpose pillars and addressing challenges across key sectors, including energy, healthcare, education, and agriculture. In healthcare, we're transforming frontline care. In Egypt and Kenya, we have partnered with the government and National Health Insurance to digitalize healthcare journeys, providing a blueprint for our other markets. In an ever-changing environment, we remain committed to doing what is right. We have emerged as an ESG leader and we expect to be even more progressive with our initiatives in the years to come. Our purpose to connect for a better future drives our strategic direction and is embedded in how we operate. Our strategy, called Vision 2030, is founded on this purpose and builds on the achievements of Vision 2025 and our system of advantage. Vision 2030 is designed to accelerate growth, deepen our positive impact across Africa and deliver sustainable value for our shareholders. In this slide, we set out the how, what and why of our strategy. Beginning with the why, I've already talked to the power of our purpose. The other crucial element of our why is our customer, which is the reason that we exist. Our focus on customer makes up the first of our three strategic initiatives. With our footprint's population projected to reach 650 million by 2030, we have a significant opportunity to expand access, drive innovation, and provide affordable services. As we grow our customer bases, we will deliver an exceptional customer experience focused on simplified propositions and loyalty. Our second imperative is innovating for growth as we diversify our revenue beyond mobile. This imperative answers the what we are going to do over the next five years. We aim to achieve market leadership across all forms of connectivity. In fixed, we plan to leverage partnerships and co-builds to scale our ambitions. As we innovate beyond mobile, we are committed to driving inclusion. Smartphone penetration is a priority, unlocking opportunities for digital services and financial inclusion. Our financial services empower millions across Africa to participate in the formal economy by providing accessible, reliable and innovative digital payment platforms. We expect to meaningfully grow our financial services customer base and deepen our product suite. As we pull together our scale and leadership in connectivity, digital and financial services, we will be an integrated solution provider of choice for our customers. This will power our growth into beyond mobile services. As we expand our talent pipeline, embed generic training at scale, and foster an engaged frontline first culture, we will support exceptional customer experience. We are one of Africa's largest tower owners. We have to recognize the value of infrastructure sharing and strategic partnerships to expand coverage and enhance efficiencies. We also see opportunities to harness synergies and scale from Vodafone and across our group to achieve operating model efficiencies and optimize assets, services and capabilities. For each of these ambitions, we have set ambitious 2030 targets. The key outcomes for you, our shareholders, are listed on the right. I'm very pleased to report that we have delivered handsomely on each of these in the first six months. In addition to exceeding our double-digit EBITDA target, we also reported a meaningful step up in return on capital employed. This should highlight our focus on enhancing shareholder returns. Our geographic diversification and increased scale were key milestones of Vision 2025. We are leveraging this scale into the next five years of our strategy. We now serve 223 million customers across a footprint that includes the DRC, Egypt, Ethiopia, Kenya, Lesotho, Mozambique, South Africa, and Tanzania. Over the last six months, we added 12 million customers with commercial momentum that provides clear upside to our Vision 2030 target of 260 million customers. Our geographic diversification has driven a meaningful change in our operating profit mix. In financial year 2020, our markets outside South Africa contributed 29% of operating profit. In the current period, this weighting increased to 58%, reflecting the rapid growth of our markets outside of South Africa. Central to Vision 2030 is digital and financial inclusion. We target 75% smartphone penetration by 2030. Pleasingly, we reported a nice step up to 65% penetration over the last six months. This reflects the significant opportunity we still have to connect so many more people to the internet by using prepaid device financing bundles and low-cost devices to bridge the gap for the remaining 78 million customers on our base without a smartphone. Prepaid handset financing allows a customer to repay the phone daily or as they generate income. Our financial service business is driving financial inclusion across our markets. We are rapidly approaching the 100 million milestone, having reached 94 million customers in the period. Vodacom's ability to connect is underpinned by scale. With over 49,000 sites across the continent, we are one of Africa's largest tower owners. Owning our infrastructure helps us manage costs, but it's also a strategic lever we can use in partnerships to accelerate rural coverage. In addition to our footprint, our growth ambitions are also supported by product adoption. As part of Vision 2030, we intend to grow the contributions of our Beyond Mobile services to 30% of service revenue. This segment includes fixed, cloud, hosting, security, digital and financial services and IoT. In the Fibre space, we are working on co-investment models to accelerate rollouts across our markets. In South Africa, we are very excited about the long-awaited massive transaction. Given that Fibre is a critical enabler of inclusive economic growth, we remain steadfast in our belief that this transaction holds significant public interest and pro-competitive benefits. In financial services, which is the largest component of our Beyond Mobile, we are growing across our markets with products that cut across consumers and merchants. Vodacom's success in this segment is a function of strategic focus. In the slides to come, I will talk you through our roadmap for financial services, which we believe will see this revenue compound at a healthy rate. Prepaid data makes up 31% of service revenue, almost double the contribution of prepaid voice. We continue to complement the structural growth in data traffic demand with network coverage, increased smartphone penetration and improved data monetization. This supported excellent growth of 25.6% in the period. Our contract revenue is largely from South Africa and Egypt and contributes 25.6% of service revenue. While all our customers demand the best-in-class experience, this is a non-negotiable focus area for our contract customers. We have managed to apply inflationary price adjustments but with more value for our customers. Our value proposition in contract is further enhanced with loyalty, insurance, device and content offerings. Finally, to prepaid voice. Having contributed 31% of service revenue in financial year 2020, prepaid voice now makes up 16.6% of service revenue. In the period, Prepaid Voice was broadly flat with growth in DRC, Egypt and Tanzania offsetting pressures in South Africa. We expect Prepaid Voice to remain an important contributor to the group and we will manage its contribution over the medium term. Pulling together our connectivity, digital and financial services offerings, we partner with businesses to accelerate their growth and with governments to drive efficiencies. We are transforming the ways of working through digital technology in high-growth areas like cloud, hosting, managed security, managed services and IoT. This is reflected in the double-digit growth we reported for Vodacom Business in the period. Turning to the group's results, we reported a strong first half highlighting our hard currency earnings potential as we move past recent currency devaluations. Our customers are the foundation of our growth. Pleasingly, we grew customers by 8.6%, increasing our customer base to 223 million customers. This commercial momentum was evident in our revenue, which reached 81.6 billion rand, up 12.1% on a normalized basis. The reported growth was also impressive, a double digit of 10.9%. Group service revenue grew 12.2%, to R65.8 billion. Normalized growth was 13.6%, tracking favorably against our double-digit medium-term target. This result reflected excellent growth from Egypt of 42.3% in local currency, a stable performance in South Africa, and a strong recovery from our international business. Group EBITDA was 30.5 billion rand and increased 14.7% in rands. Egypt delivered healthy operational leverage and generated 53.7% EBITDA growth in rands. Our international business lapped once-offs in the prior year and benefited from improved service revenue growth to deliver 35% growth. On a normalized basis, EBITDA growth was 14.8%, comfortably above our medium-term target. Net profit attributable to equity holders grew 33.1% to 9.1 billion rand in a period. Consistent with the net profit result, our headline earnings per share improved significantly to 467 cents per share, up 32.3%. Our capital expenditure intensity was below our guided range of 13 to 14.5% of revenue, having spent R9.4 billion in the period. We will be catching up in the second half of the year and expect to lend within our guidance range. Finally, looking at the dividend, the Board has declared an interim dividend of $0.330 per share, up 15.8%. This again represents an excellent growth outcome. Vodacom's geographic mix balances growth opportunities and strong cash generation. A look at our customer split shows that we have four similarly sized segments. Of our 223 million customers, 79% are outside South Africa. From a revenue perspective, South Africa remains the largest component and grew 1.3%. International revenue of R17.3 billion was up 12.6% on a reported basis, supported by excellent growth in data and in PESA. Egypt delivered revenue of R19.9 billion, contributing 24.4% to the group. On a reported basis, growth was 39.6%. Safaricom is having another excellent year with revenue up 7% in rands. Turning to operating profit, the group reported 20.2 billion rand for the period, up 25.5% on the reported basis. In South Africa, operating profit declined 11% to 8.8 billion rand, reflecting pressure on EBITDA and a once-off cost. This was more than offset by growth across the rest of the portfolio. Still in South Africa, the long-running Please Call Me Matter has been settled by the parties out of court. Both parties are glad that finality has been reached in this regard. Back to the results. Egypt contributed R7.8 billion to group operating profit and was up 66.5% on a reported basis. International business operating profit doubled to R2.1 billion. The result was supported by strong EBITDA performance and lower losses from the segments Associates and Joint Ventures. which includes Vodacom's stake in M-Pesa Africa and Safaricom Ethiopia. On a reported basis, Safaricom contributed R2.1 billion to group operating profit, increasing 65.3%. Safaricom's result was supported by an excellent performance in Kenya and lower losses in Ethiopia. Shifting to a product lens and looking at the contribution of our Beyond Mobile services to each of our geographic segments, These high-growth services include financial and digital services, IoT, FIX, cloud and hosting. In South Africa, 18.3% of service revenue is now attributable to Beyond Mobile, up from 17.7% in the prior period. This reflects ongoing good growth in financial services and good growth in FIX, cloud and hosting services. Egypt's Beyond Mobile contribution is supported by Vodafone Cash, digital and FIX. The contribution of these services continues to increase and reach 17.4% in the period. Across our international business, the contribution of Beyond Mobile was 33.3%, while Safaricom continues to set the benchmark at 48.9%. Under Vision 2030, we intend to scale each of these Beyond Mobile revenue streams into successful businesses. Turning now to more detail on financial services, the key driver of Beyond Mobile. This slide sets out our growth roadmap for financial services under Vision 2030. We already made a meaningful contribution to financial inclusion across our footprint. Once financially included, we provide customers with an ecosystem that deepens their access to financial services with products like international remittances, global payments, bill payments, savings, wealth, lending, and insurance. Tanzania is a prime example of how we've deepened financial inclusion. Today, 38% of our M-Pesa revenue is from peer-to-peer and cash-out, whereas four years ago, this was 83%. The contribution swing is driven by Tenzinia's growth in merchants, loans and savings products. Looking ahead, the next step of our financial services roadmap is unlocking economic growth through financial services. We want to partner with like-minded companies to create a savings culture for consumers through wealth products and an environment for SMEs to thrive. This is where our super apps play a critical role. They create an open platform where we can integrate our own products with thousands of external service providers. As we execute on this roadmap, we expect to meaningfully scale our financial services customers to 120 million customers. Similarly, we expect to scale financial services revenue. Across our consolidated markets, we target between 15% and 20% compound annual growth to financial year 2030, supporting the Group's earnings profile. In this slide, we set out our proof points for our financial services ecosystem. We refer to it as dual-sided, as it caters for both merchants and consumers. Our M-Pesa merchant base increased 29.7% to more than 1.5 million. This growth helps expand our addressable commissions pool beyond peer-to-peer payments and withdrawals into both online and offline commerce. In South Africa, our merchant acquiring business is also growing steadily with over 11,300 merchants. In the consumer space, our super apps are scaling across the group. Our PESA app users are at 8 million, up 53.8%. As our customers are migrating to the apps, we are seeing increased product penetration, supporting higher ARPUs. In Egypt, Vodafone Cash is the go-to mobile wallet in the country, with half of our customer base on the Vodafone app. A key use case for the one app strategy is the distribution of airtime. In South Africa, on VotoPay, our direct airtime sales has reached 10% of prepaid airtime sales. As users come into the app to top up, we leverage the rest of the marketplace to sell one more service. On the right-hand side of the slide, we call out key growth drivers for financial services in this financial year. Across our footprint, we will deepen financial inclusion, such as savings and loans. For our international markets, these services have already reached 46% of M-Pesa revenue. South Africa's financial services growth was fuelled by insurance, which achieved double-digit revenue growth in the period, and we expect this to remain a key driver into the future as we expand our insurance portfolio, both in terms of products but also in terms of geographies. As we see product success like insurance in the market, we leverage this into the rest of the group. This is also true for global payments, e-commerce, lending, wealth and savings, which we are scaling across our footprint. As a group, including Safaricom, we have grown our financial services customers by 13.1% to 93.7 million customers. The scope for future growth is material with penetration of our base only at 43%. The scale of our financial service business is reflected in the transactional value and volumes processed through our mobile money platforms. We processed 477 billion US dollars of transaction value over the last 12 months, which equates to 1.3 billion dollars every day. Our financial services revenue from our consolidated entities reached 8 billion rand in the year, up 20.3% in rands. The underlying growth trend of 21.5%, which adjusts for foreign exchange, reaffirms how quickly we are scaling in financial services. With an additional 12.2 billion Rand generated by Safaricom, this implies a combined fintech footprint that annualizes close to 40 billion Rand or 2.2 billion US dollars. This is really a formidable business. Overall financial services contributed 12.2% to the group's consolidated service revenue. This was supported by rapid revenue growth in Egypt. At Safaricom, which is an associate, the contribution increased again and reached 44% of Safaricom's service revenue. Then looking at the contribution to profit before tax, which includes Safaricom, the weighting is about 25%. This bottom line contribution of financial services means that Vodacom's investment case offers something quite different to a typical emerging market telco. Our South African business demonstrated continued resilience despite the challenging macroeconomic environment and increased competitive noise. South Africa's service revenue grew 2.2% to R31.7 billion, supported by the contract segment and beyond mobile services. Beyond mobile services, which include financial and digital services fixed in IoT, were up 5.6% and contributed R5.8 billion, or 18.3% of service revenue. In the second quarter, service revenue growth of 1.4% was impacted by pressure in prepaid. Customers were down 6.3% to 46.1 million as we optimized prepaid gross edge quality and churned inactive customers in prior quarters. In the second quarter, we added 319,000 prepaid customers. Data traffic increased 31.1% for the year, reflecting the investment we've made into the network and spectrum. Looking at our key revenue drivers, mobile contract revenue increased by 3.7% to R12.5 billion. This was supported by good growth in consumer as we implemented another round of more for more pricing. Prepaid mobile customer revenue decreased 1.6% to R13.2 billion. The result was impacted by pressure on consumer wallet and incremental competitive intensity. In the second quarter, prepaid revenue declined 2.9% despite healthier APU of R57 up 3.6%. Vodacom business service revenue increased by 5.1%, supported by Beyond Mobile. For example, cloud hosting and security revenue increased 27.1%. South Africa's EBITDA declined 5.3% to R15.5 billion as a result of pressure on prepaid revenue and a once-off cost incurred in the period. For the second half of the year, we will target growth but expect the prepaid environment to remain challenging in the near term as we transform our prepaid offerings. We invested R4.1 billion to support network resilience, leverage our spectrum assets, and enhance our IT platforms to maintain our competitive edge and remain South Africa's most reliable network. We anticipate investment levels of around 11.5 billion to 12 billion rand for the full year in South Africa, implying a clear step up in the second half spend. Egypt delivered another stellar performance. Egypt reported service revenue of 17.6 billion rand, contributing 26.8% to the group. Service revenue was up 42.3% in local currency and remained strong at 40.9% in the second quarter. The performance was broad-based and supported by a strong summer campaign and a well-executed 5G launch. The commercial momentum was evident in the growth of the customer base to 51.1 million, up 6%. Data traffic was up 21.9% and was supported by data customer growth of 7.7% to 33.2 million. Smartphones on the network were up 8.4%, with penetration in Egypt reaching 80%. Egypt continued to scale its Beyond Mobile services for the year. Financial service revenue was R1.4 billion, accounting for 7.9% of service revenue. In local currency, Vodafone Cash service revenue was up an impressive 48.3%. This was supported by customer growth of 32.5% to R12.7 million. Egypt also posted good growth in fixed and IoT. Egypt contributed R9.5 billion to Group EBITDA, or 31.3%. The reported EBITDA margin of 47.8% was up 4.4 percentage points, reflecting healthy operational leverage and some foreign exchange and once-off benefits. Adjusting for Forex and once-offs, clean EBITDA margins were still in excellent 46.8%. We do not anticipate further margin expansion into the second half as the business will lap price ups in the fourth quarter. Operating profit growth was 74.2% in local currency, supporting net income growth of 77.8%. In rands, net income was an equally impressive 69.9%. Capital investment was 2.7 billion rand and represented a capital intensity ratio of 13.7%. In June 2025, we launched 5G services in Egypt, leveraging existing investments into 5G-ready sites. Consistent with our approach to 5G in our other markets, this technology rollout will be accommodated within our existing capital expenditure framework for the market. Service revenue for our international business increased 12.2% on a reported basis to R16.7 billion, supported by excellent M-Pesa and data growth. This quarter also represented an important milestone for the segment, with data revenue surpassing voice for the first time. From a market perspective, we delivered local currency service revenue growth of 23.1% in Tanzania, 11.6% in Lesotho and 12.6% in DRC. Mozambique had a better first half of the year and returned to growth in the second quarter as it lapped repricing initiatives. In fact, all four markets accelerated growth rates in the second quarter, suggesting good momentum into the second half. Customers were up 13.6% to 63.7 million, supported by double-digit customer growth in DRC, Tanzania, and Lesotho. International business data revenue was R5.1 billion, up 20.7%, and contributed 30.5% to service revenue. The growth in data was supported by strong commercial momentum. We added 1.9 million data customers in the period to end at 29.7 million data customers. Data traffic growth of 32.1% was supported by an 18.1% growth in the number of smartphones to reach a penetration level of 38.7%. M-Pesa revenue was up 20.9% to R4.8 billion, contributing 28.7% of international business service revenue. Growth was supported by an excellent performance in all of our markets with double-digit normalized growth across our opcos. Our new growth areas for M-Pesa, referred to as Beyond Core, which includes lending, savings and merchant services, continued to gain traction. In the period, this contributed 46% of M-Pesa revenue. Loans facilitated across our international business reached 38.6% to R14.1 billion, highlighting the traction of our dual-sided M-Pesa strategy, which provides solutions for both consumers and merchants. International EBITDA was R5.9 billion and increased by 35%. This growth reflected strong operational leverage and prior-year period once-offs in the DRC. Tanzania's growth of 44.6% was particularly strong given it absorbed once-off costs in the period related to a radio access network swap-out. International business EBITDA margins increased to 33.9% from 28.2% in the prior-year period. We anticipate continued momentum for international EBITDA into the second half of the year. Capital expenditure increased 18.7% to R2.6 billion, representing an intensity ratio of 15.2%. We continue to invest into 4G coverage and performance, adding 644 new 4G sites over the six-month period. 4G sites are up 20.4% year-on-year. In the period, we also acquired 50 MHz of 3.6 GHz spectrum in Tanzania. Safaricom delivered an excellent performance in Kenya, while net losses in Ethiopia moderated as the business continued to scale. For the Safaricom group, service revenue increased 11.1%, with the Kenyan business reporting another excellent period of growth. The group reported EBITDA growth of 34.9% in shillings. At a net income attributable to equity holders level, Safaricom reported growth of 52.1%. This result was driven by Kenya's operational excellence and lower foreign exchange losses in Ethiopia. For Kenya, the service revenue was up 9.3%, underpinned by excellent M-Pesa revenue growth of 14%. The M-Pesa result was driven by strong customer growth of 13.3% and ongoing platform engagement. For M-Pesa, we continued to scale our wealth products with assets under management reaching 15 billion Kenyan shillings. Business payments were also strong with large and micro merchants reaching 2.4 million, up 55.2%. Kenyan mobile data revenue grew 13.4% and surpassed the shilling value of voice revenue for the first time. The growth was supported by customer and traffic growth with strong adoption of our 4G services. Kenyan EBITDA grew 10.6% with margins reaching 57.3% up another 2.2 percentage points. Wow, a really impressive result. Ethiopia reached 11.1 million customers, up 83.7%, with sites reaching 3,306. The site rollout was supported by capital expenditure for Ethiopia of 9.5 billion Kenyan shillings. EBITDA losses reduced 67.4% in shillings, lapping foreign exchange losses and benefiting from improved scale. Safaricom Ethiopia continues to see progress towards EBITDA break-even in financial year 2027, while targeting a medium-term customer base of 15 to 20 million customers.

It really gives me a great pleasure to unpack our results for the six months ended 30 September 2025. The extent of our earnings growth in the period prompted us to release trading statements ahead of these results. On the 5th of November, we revised our expected earnings range to account for a legal matter that could not have been predicted at the time of the initial trading update which was on the 31st of October. Pleasingly, with the overhang related to Please Call Me Meta removed, we still reported excellent results that showcase the execution of our strategy, Vision 2030, and a more stable economic backdrop. While I will only speak to a handful of my slides today, I urge you to download the full slide deck from our website. Fortunately, the message across my slides is a consistent one and we have had an excellent period with healthy improvement across all our key metrics. My opening slide captures the key financial metrics for our group. We achieved 10.9% revenue growth to reach 81.6 billion rands. This reflects strong commercial momentum and a limited impact from Forex movements. Group service revenue and EBITDA, which increased 12.2% and 14.7% respectively, reflecting a clear acceleration in our growth profile. This level of rent growth also represents an impressive hard currency performance. Our Beyond Mobile services continue to grow pleasingly, underpinned by financial services. As we move into our next strategic phase, our Vision 2030, we set an ambition of reaching a 30% contribution from Beyond Mobile. The group EBITDA margin was 37.3%, up 1.2 percentage points year-on-year, as we reported good operational leverage in Egypt and international. While our EBITDA margin in South Africa was down 2.3 percentage points, largely as a result of the one-off cost, Egypt reported a margin improvement of 4.4 percentage points. International business margins recovered to 33.9% as the service revenue accelerated and we leapt prior year one-offs. Headline earnings per share grew an impressive 32.3% to 4.67 cents per share. Egypt, our IB and associates contributed to the strong Enix growth. I was particularly pleased with our return on capital employed result. Our ROKI over the last 12 months was 26.3%, up 3.9 percentage points. This reflects good capital allocation and a widening gap to our cost of capital. As a reminder, we have included ROKI in our management's LTI targets. our balance sheet remains in a healthy position. Leverage measured as net debt to EBITDA fell year-on-year to 0.9 times. This was supported by excellent free cash flow generation over the last 12 months and the growth of our EBITDA. The second quarter represented excellent reported and normalized service revenue growth as the impact of Forex moderated. We expect this strong momentum to continue through the second half of FY26. For the quarter, group service revenue grew by 13.4% on a normalized basis, well above our inflation footprint. South Africa's service revenue grew 1.4% in the second quarter, reflecting a more challenged quarter for prepaid business. Service revenue for our international business grew 14.7% to 8.6 billion rands. Pleasingly, Mozambique returned to growth in the quarter, and with the other markets still reporting healthy growth, the segment accelerated normalized growth by 14.2%. Egypt delivered service revenue of 9 billion rands in the quarter, with the reported growth approaching the normalized growth trend. It was another excellent quarter for Egypt, supported by a strong summer campaign and a launch of 5G. As a reminder, we expect Egypt's growth rate to moderate into the fourth quarter as we lap price adjustments. Our group-free cash flow was 2.7 billion rands in the period. This is equivalent to equity-free cash flow and accounts for dividends paid to minority shareholders of the groups of course. The free cash flow result represents a significant improvement from recent years. The improvement was supported by excellent growth in EBITDA, but also well-contained working capital and finance costs. Our working capital seasonality is a key focus area for us to address over the medium term. However, for FY26, we expect that our cash flow generation will still be skewed towards the second half of the year. Herbs grew 32.3% to $0.467 per share, supported by an excellent operating performance in the period and lapping of prior year one-offs. The prior one-offs totaled 55 cents per share and those were related to DRC and Ethiopia. In the current period, Egypt, our international business and associates reported strong underlying growth as evidenced in the chart on the right. Egypt posted net income growth of 77.8% in local currency and just under 70% on a reported basis in rents. South Africa detracted from HEB's growth in the period. However, this was largely as a result of the one-off already called out. If we exclude the one-off impact from both reporting periods, our underlying earnings growth was in the mid-20s. The board declared an interim dividend of 330 cents per share, which is up 15.8%. This is consistent with the group's dividend policy of paying at least 75% of the headline earnings and is consistent with the underlying HEPs result. As a reminder, in our prior year period, the board elected to adjust the payout ratio to 86% to account for the phasing of Ethiopia losses, which were skewed to the first half. In the second half of the prior year, the payout ratio was lowered to 71% to balance out this phasing. At a 75% payout, we are one of the highest dividend payers on the JSC, reflecting our excellent cash generation and strong balance sheet. Additionally, the policy provides scope for the group to invest within its 13 to 14.5% capital intensity target and to deliver the balance sheet and accommodate the upstreaming of dividend payout profiles of Safaricom as well as Egypt. Four years ago, we announced a proposed investment into a South African fiber vehicle, Massive, and the approval process, while drawn out, is in the final stages of its completion. We believe the transaction will drive fiber expansion opportunities for South Africa, helping to bridge the digital divide. As part of the conditions, we have committed to passing an additional one million homes over the next five years. We also see exciting opportunities to connect more sites and businesses to fiber through Dark Fiber Africa. From a financial perspective, we also set out a few of the key pro forma considerations. Based on the initial 30% deal, we'll contribute 4.9 billion rands of fiber assets and 7.9 billion rands of cash. On this basis, we expect a modest impact on earnings, leverage, and return on our capital employed respectively. While modestly dilutive in the short term, we believe that the assets growth prospects and exposure to a highly durable asset will prove an incremental positive to our investment case. For completeness, the cash outlay for this transaction may be higher than the 7.9 billion rands I called out earlier, but this will depend on a number of uncertain events. For example, subject to regulatory approval, Massive will acquire an additional 49.9% interest in Girotel. Vodacom will pay 800 million rands to facilitate this transaction consistent with our 30% stake in Massive. Additionally, BorderCom has the option to increase the 30% stake to 35% based on a fair market value to be determined in future. In my concluding slide, I set out our medium term targets. As we execute on Vision 2030, we are well positioned to attractive growth and returns with a portfolio of market leading assets across Africa. We target double digit growth for both service revenue and EBITDA. These targets are on average over the next three years based on prevailing economic conditions. In prior results, we have highlighted macro outlook uncertainties in the context of giving our targets. While we cannot discount a swift change to the prevailing economic backdrop, inflation and foreign exchange rate conditions have substantially stabilized across our footprint. As evidenced in this period, we are well positioned to generate double-digit reported growth in the absence of foreign exchange shocks. For the remainder of FY26, we anticipate a stable performance from South Africa, with strong EBITDA growth from Egypt and international business. Safaricom, an associate of the group, delivered an excellent performance on the back of another strong performance in Kenya and is continuing to scale in Ethiopia. In Ethiopia, losses at our Greenfield operation continue to moderate while the business scales with customer numbers reaching 11.1 million, up 83.7%. Safaricom reported net income growth of 52.1%. Safaricom provided its own guidance for FY26 and continues to target meaningful growth this year, which should continue to support our earnings trajectory. On that note, I will conclude and thank you for your attention.

Vodacom is structurally well positioned for growth as evidenced by these results. We are market leader across our footprint with a unique opportunity to drive digital and financial inclusion. Our asset rich portfolio is another point of differentiation as we own most of our towers and mobile infrastructure. The combination of our connectivity and financial services scale means we are consistently able to deliver returns above our cost of capital. Looking ahead and leveraging these attributes, we have set clear targets for Vision 2030. Our customer base is at the heart of why we exist and key to our long-term success. To earn customer loyalty and deliver an exceptional experience, we will focus on simplified propositions. As we execute on this priority, we will strive to obtain NPS leadership in all our markets and reach a target of 260 million customers by 2030. Vodacom has always been an innovative company. It's part of our DNA. As we innovate beyond mobile, we remain committed to driving inclusion and retaining market leadership. Smartphone penetration is a key enabler of inclusion and a priority for us. We have set ourselves a target of 75% smartphone penetration by 2030. We also want to diversify our revenue mix, reflecting our role as an integrated solution provider of choice with the contribution of Beyond Mobile Services approaching 30% of group service revenue by 2030. Market leadership also extends to Fintech where we will increase our financial service customer base to 120 million by 2030. Finally, we believe that investing in our connectivity scale, differentiated platforms and a future-ready workforce are strategic enablers for growth. Our commitment to diversity remains strong with ambitious gender targets aimed at increasing female representation at management levels to 50% by 2030. We will continue to reduce energy consumption through efficiencies, alternative energy and innovation. Our target is to achieve net zero operations for scope one and two emissions by 2035. As we leverage all of these opportunities, we set ourselves a target to generate double digit EBITDA growth over the medium term. Above all else, our next strategic phase, we will focus on simplifying and scaling our existing operations as we relentlessly pursue our purpose to connect people for a better future. We look forward to engaging with you over the coming weeks in our Investor Roadshow. This concludes my presentation. Thank you for your attention.