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| Significant part of that mix should also be in the future the accelerating growth in Vodafone business because that has a much lower capital intensity and actually, therefore, a higher potential also in the short-term to improve the cash flow generation |
| It was actually outperformed slightly on the organic side through the strong revenue performance and also through continued focus on OpEx savings |
| And in that respect, on top of being now well invested and delivering very strong performance, it is worth noting that we have just put into our live network, high split DOCSIS in Germany, which, as you know, allows us to achieve multi-gigabit speeds |
| And that is the right investment to make from a long-term perspective because it will, at the end of the day, result in better retention, lower churn, and that will drive profitability |
| And then, of course, the underlying growth that we are seeing in the business should translate into stronger EBITDA growth than what you have seen in H1 |
| Beyond Germany, we have delivered a broad-based improvement in service revenue in Q2 with 14 of 17 markets growing, and we have reiterated our financial guidance for the year |
| If anything, I would say I’m very confident that based on the cost leadership that Vodafone has always exhibited, we will continue to drive successfully for the €1 billion in OpEx savings and going forward, thinking about the next business year and further on, as we have righted the ship and focused appropriately on a customer experience, you will also see more of that translating then into further EBITDA growth |
| So we are making our shared operations fully commercial with effectively MSAs in place between the group center and the countries to drive more efficiencies there and also to be more effective in selling to third parties, which could be JVs, which could be other partners in the industry so that we continue to benefit from our scaled strength |
| We probably mentioned this before, but we continue to be rated as the best fixed broadband product in the market, thanks to our network performance and our speed performance and it is competitively priced |
| We are outperforming also because we are very strong on the business side of things |
| We have a strong brand, a strong network |
| I also must say that I’m very pleased with the strength of the balance sheet of Vodafone |
| You know that our trend of growth in Germany is actually improving and will continue to improve, if you set aside the MDU transition |
| However, based on what I can see is, obviously, we are around about looking now for €3.3 billion in free cash flow for FY 2024, we are on a positive track towards achieving that |
| So cable itself has its own strong technology road map |
| On broadband, we will definitely see an improvement on the volume trends |
| We have a very strong company in Italy |
| Actually, as I have been diving deep into it, it is actually quite remarkable |
| Our scale has been a great source of efficiencies for Vodafone |
| On the positive side, half year one results in the U.K |
| And I really want us to focus on the market where we can drive the best growth and the best returns |
| In [ALF 1] (Ph), our NPS position relative to competitors improved in almost all markets |
| As you know, you will have seen from the latest results that also this quarter, as we do consistently quarter in, quarter out for years, we have been outperforming all the other established players in terms of service revenue growth |
| We are confident because we have anticipated what we are looking at now in H1 at our full-year cash flow generation |
| As I said, I mean, I will be really strongly focused on sustainable cash flow generation |
| We returned to service revenue growth in Germany this quarter, supported by our commercial model reengineering and our broader broadband price actions |
| So clearly, you believe the turnaround to be successful |
| Sure, I mean, at the end of the day, it is, of course, the focus on reversing all of the trends that you have seen at play in H2, you typically have a much better positive impact on trade receivables and from a working capital perspective, that is what we will certainly look to drive and to achieve the corresponding outcomes |
| It is really a very, very strong focus from our organization in Germany right now |
| So implicitly, you are guiding for a substantially better free cash flow development in the second half than in the first half |
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| We are really single-mindedly obsessed with winning customers trust every day |
| Just any plans there because that business looks very unlikely to pay dividend next year, given its leverage and poor operational performance |
| We have just chosen to exit Spain because it is a very challenged market |
| Your free cash flow for the year, you are guiding for it to be down by about €1.5 billion from 48 to 33 who is down about €1 billion in H1 |
| You are absolutely right in half year one energy was a €300 million drag on EBITDA |
| That doesn’t change the fact that it remains a very challenging market |
| were negatively influenced by the roll-off an MVNO agreement with Virgin Media that is now lapping and therefore, will also not affect the U.K |
| James Ratzer I was wondering if we could talk a little bit about the EBITDA growth phasing going ahead? You have just reported flat organic EBITDA growth, but I think you are saying there is about a five-point drag in there from energy headwinds |
| As I was mentioning earlier, I think the situation of the Spanish market will remain challenging, whether or with or without a merger between Orange and MASMOVIL because of the position it is in, which is why at the end of the strategic review, having examined all options and discussed with a range of counterparties, we have taken the decision we have taken, and we have chosen the deal that was giving us the best combination between value creation and transaction certainty |
| I think Germany, for its 1% service revenue growth delivered about 1% EBITDA decline out energy |
| Therefore, you will be participating in any potential downside if the turnaround is not successful |
| Prices are below cost |
| So on the EBITDA and the gearing side of the house, I think what you need to take into account is that we have not only the EBITDA challenge by energy at the moment |
| There is been a significant reduction in losses this quarter |
| And in those markets where this operational excellence focus will not be sufficient as we have just now seen in Spain because of the market structure, then we will not shy away from taking decisive action, either through market consolidation or through an exit |
| In Germany in turn, first of all, we will face the initial impact MDU transition, how much it will be a little bit hard to assess |
| The sale of Spain will, of course, reduce this cash flow a bit |
| So fiber networks of the incumbents are moving to new levels of capital efficiency and OpEx efficiency over the coming years, which I think will massively outstrip the ability of cable |
| In your response to James’ question, you said it is not coming through from better EBITDA growth |
| And clearly, there are no quick fixes on customer satisfaction |
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