Vodafone Group (VOD) Q4 2022 Earnings Call Transcript

For the period ending March 31, 2022

May 17, 2022 5:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Nicholas Read

Good morning and welcome and thank you for joining us for our results call. Before we take your questions, I thought I would just cover four key points related to our results. Firstly, our financial performance in the year was good and our results were in line with both the expectations for the year and the medium-term financial ambition we set out earlier in this year.

We grew revenues both in Europe and Africa. We grew adjusted EBITDA by 5%. We grew adjusted free cash flow to €5.4 billion and delivered a real inflection point in returns with 170 basis points increase in return on capital to 7.2%, well on the trajectory for returns to be above our weighted cost of capital. Second, this good performance is a direct result of all the execution we have been doing on our organic strategy. And alongside that long-term strategy, we have very clear operational priorities, which obviously include Germany.

Third, we are not immune to the macroeconomic challenges in Europe and Africa, but we are very well structured to deal with it. We covered a number of those actions in the presentation that give us confidence in setting our FY ‘23 guidance of €15 billion to €15.5 billion adjusted EBITDA and maintaining our adjusted free cash flow at around €5.3 billion. And fourth, we remain fully committed to improving returns for shareholders through both a sustainable organic growth strategy, and at the same time, targeted actions to strengthen and simplify our portfolio.

We clearly have a very full agenda. And it’s a tough macroeconomic environment that we face, but both the board and management feel very sure to drive forward on the plans that we have both organically and for our portfolio.

And on that, let me hand over to questions.

Questions and Answers:

Operator

Thank you very much. Our first question today comes from Maurice Patrick from Barclays. Maurice, please go ahead.

Maurice Patrick

Yes, hi, guys. You hear me okay. Thanks for the question. Maybe if you could start off with the elephant in the room, which is the progress on in-market M&A or rather the lack of progress. It’s been 6 months since you have laid out your priorities for mobile level consolidation. We haven’t seen the visible progress yet. I mean, the slides you do talk about German fiber and Spain options, but you seem to miss out on Spanish M&A with Orange and Masmovil turning down Iliad. Is mobile M&A still the same focus it was in November? Maybe you can update us on your latest thinking on that? And then in the prepared remarks, you did talk about a number of live opportunities, where generally are we in terms of that progress? Thank you.