Vodafone Group PLC (VOD) 2025 Q2 法說會逐字稿

Good morning, everyone, and thank you for joining us today. Before going to Q&A, I'd like to outline the key highlights of our half one results, as well as the progress we have made on our strategic priorities.

Overall, our results are in line with our expectations and consistent with our full year guidance, which we have reiterated today. Group EBITDAaL grew by 3.8% in the first half despite the impact of the MDU transition and our decision to invest more commercially in Germany. This was supported by strong EBITDAaL growth the rest of our footprint, with the UK growing at over 8%, other Europe at over 3% and with Turkey growing by circa 50% in euro terms. As expected, service revenue trends slowed in Q2, reflecting the big impact from the MDU transition in Germany.

Moving on to our strategic priorities of Customers, Simplicity and Growth, I'm pleased by the progress we are making to deliver the transformation of Vodafone. Our main area of operational focus this year is, of course, Germany. We have now completed the formation of our new management team, with new directors for business, consumer and IT.

With an experienced team in place and having successfully navigated the MDU transition, we now need to make even faster progress with our number one priority, our customers. Our commercial KPIs are gradually improving and the investments we have made in our networks have delivered what is consistently recognized as the best fixed network in Germany.

Together with our new wholesale agreements, we are now delivering gigabit-capable broadband to 75% of German households. This will underpin our ability to start delivering on our target of taking at least our fair share of market growth.

Looking at our other main areas of focus, in business, we have seen a good re-acceleration in trends in Q2 with the drag from project phasing unwinding. Growth in digital services was particularly strong at 18%, and this is where we continue to expand our capabilities and product set. We are also continuing to take significant steps to simplify our business.

We've now actioned and communicated over 80% of our role reduction program and have also commercialized our shared operations, having finalized our partnership with Accenture.

On our portfolio actions, we are close to completing the reorganization of the group as we work towards securing in Italy and the UK in the next few weeks. And finally, in our newly created Vodafone Investments division, there has been a significant amount of activity, with us most notably selling down a further stake in Vantage Towers for EUR1.3 billion, in order to deliver the co-control structure we originally planned.

In summary, our performance is in line with expectations as we move through this year of transition. The actions we have been taking will deliver growth for Vodafone this year and support a further acceleration into FY '26.

With that, Luka and I are looking forward to your questions

(Operator Instructions) Maurice Patrick, Barclays.

Good morning, guys. Hopefully, you can hear and see me well. Maybe just to start off with a question on Germany, please. Hardly a surprise, given the size. Clearly, a lot of moving parts in the German business. I mean your results, as you show in the presentation, they're clearly impacted by the MDU TV migration, to a lesser degree, the lapping of the price increases from a year ago.

Your historic comments suggest a U-shape recovery, I think, in Germany, and you talked about the market being healthy overall. I know you've got the 1&1 wholesale coming, I think, from the third quarter, sort of EUR100 million a year run rate once it's fully there, and you still have broadband that has negative.

So curious to understand trajectory in phasing, specifically of broadband net adds service revenues and EBITDA over the next couple of quarters in this next year. That would be helpful. Thank you.

Thank you, Maurice. I'll take the net adds and then hand over to Luka for service revenue and EBITDA.

As you will have seen in the results today, we have seen an improvement in our net adds performance in fixed. And this is because the overhang that we had been suffering from the price increases we've done on our base is now behind us.

In the quarter, you will have seen that the cable net adds are only marginally negative. DSL on the other hand, is still negative. And there, we are starting that within the markets, there are some first signs, I would say, of migration towards fiber.

So at our end, what you should expect is two things. First of all, we have, as I was just mentioning, changed perimeter of what we sell in Germany. In addition to our 25 million cable households, we have now opened to fiber wholesale, which is bringing on board with Vodafone another 5 million households of footprint today.

Obviously, this will continue to grow as the rollouts grow and OXG grows. But call it now 30 million households, so it's 75% of German households to which we will now be able to market gigabit products. And obviously, this is a very good level of penetration ahead of any other player.

And you should expect us, that's the second point on your sort of forecast trends, you should expect us to see net adds continuing to improve through the course of this year. We have seen this already in October. And stepping back, obviously, our target is our fair share of market growth.

And we have now in place, I think, all the tools to deliver on our target with the well-invested and fiberized cable network and the footprint fiber that will allow our customers in the DSL areas to get also gigabit products. But on the very important service revenue and EBITDA trends.

Yeah. So obviously, that is quite a rich question, so -- but I'll try to give you a comprehensive answer. First of all, indeed, we've talked from the beginning of this year about Q2 being at the bottom of a U-shape of our performance in Germany and actually also beyond, honestly speaking, as a result of the weight of Germany.

And what we have seen in Q2 is indeed that we have reached the peak of the MDU transition impact with a 3.8% year-over-year headwind, 2.6% quarter over quarter. And in addition to that, as you rightfully mentioned as well, the lapping impact of our broadband price increases has contributed another 1.5% from a quarter-over-quarter perspective.

So what to expect now from here onwards? First of all, in Q3, you should expect a broadly similar performance in Germany as the one that you have seen in Q2 for a variety of reasons. One, the run rate of the MDU transition will obviously also stay with us in Q3, before we start to lap it in Q4, where we had last year the first smaller impact of the transition.

In addition to that, we will have another smaller cohort from last year that has been going through the price increase in broadband being added. On the flip side, we will see first smaller positive effects from our commercial performance improvement as well as an admittedly small impact in the quarter from 1&1.

Then in Q4, we will start to see an improvement in the performance as 1&1 is becoming a bigger part of the pie. In total, I would estimate a roughly EUR50 million benefit from 1&1 for this year, and most of it is going to actually land in Q4. And then again, the MDU impact will start to fade away, and therefore, Q4 will be better in Germany.

And then as we move into next year with, of course, the 1&1 effect coming to the full ramp from the second half year and the MDU impact fully lapping. That's, of course, where we expect Germany then to be back on a positive trajectory, as we had always talked about, together with the improved commercial trends that Margherita has also been highlighting.

We then take a look at the EBITDA performance, I would expect the second half year to also be broadly similar to the performance that we have seen in the first half year, because the MDU impact will be also pretty much the same. We will have less impact from the investment into the program because this is now fading off.

But on the flip side, we will have a higher absolute revenue drag in the second half year as we were just reaching the full run rate in the second quarter. So the impact from the MDUs will be pretty much the same. We will also have a slightly lower benefit from the energy expense unwind, which was bigger in the first half year against that, and we will have the increasing benefit from the 1&1 program.

And we will continue, frankly, to invest into our commercial performance, into our brand recognition in the market, as we have done in the first half as well. That aside, as we move into FY '26, basically the same applies as on the revenue front, we will see Germany back as a positive contributor to EBITDA growth, also because we will have additional help on the cost side from the ongoing workforce transformation program that will then reach its run rate contribution that we're expecting from it, plus, of course, some of the investments that we are taking this year, for example, into GenAI-driven productivity will actually pay off.

So from that perspective, Germany will certainly be back in positive growth territory on the EBITDA front.

Thank you for that.

Thank you, Maurice.

Emmet Kelly, Morgan Stanley.

Yes. Good morning, everyone. And thank you for taking my question relates to the service revenue trajectory for the remainder of the year, please. So as you flagged in Q1, there would be a slowdown in the group driven by Germany. You've obviously given the main moving parts there, Luka, on the German business. Can you maybe say a little bit about how do you see the rest of the group on service revenues, in particular what's happening in Vodacom UK and Turkey? Thank you very much.

Yeah. That's probably all mine, I guess. So if I start from the group perspective, also there, we have said in the past that Q2 would see us at bottom, and that's indeed true and remains true. So we would actually expect a slightly better growth in the second half year from a group perspective compared to what we have seen now in Q2. The main components of that will be, as I said, Germany in a broadly similar shape in Q3 and then with an acceleration into Q4.

In the UK, we would expect a continued small improvement in growth trends. You have seen that we moved from flat to plus 1.2% in the UK. In Q2, I would expect that we can continue to do slightly better than that. Our consumer business is doing very, very well. We expect a better second half in business as well.

So the UK should actually be quite positive for us in the second half. The rest of the European markets, they are, I would say, solid and predictable as they always are with similar growth profile, as you have seen it in the first half year.

And then between our emerging markets, in Africa, I would certainly expect an additional opportunity to drive for higher growth, in particular in South Africa, where we had a more difficult first half year from also a year-over-year comparison perspective. So Africa should do slightly better than in the first half.

Turkey, obviously, has been firing on all cylinders and has had a tremendous performance by the way, also in real euro terms and including the fact that they have been gaining market share. I think they will continue to do very well, but at some point, obviously, this growth rates will have to start to moderate. So when you then make the marks against all of the moving parts, I think we should see a moderate step-up in growth in the second half year for the group.

Yes, I take the opportunity to shout out to our Turkish team because we have just achieved the highest-ever market share of Vodafone in Turkey, so really excellent execution there.

Super, thank you very much.

Akhil Dattani, JPMorgan.

Great morning. Thanks so much for taking the question. If I could maybe just ask a question around the outlook, and there's two bits to it. One is just operationally. I guess the challenge with Germany has been tricky to understand really commercially what's going in the market and really how we should think about what that means for that U-shape recovery that you've talked about.

So could you maybe just unpack for us a little bit commercially what you've done already? Maybe what you need to do still? Just to give us a bit more comfort around the turnaround that you're talking to here.

And the second bit of it is, if I guess, I think more strategically, you've reshaped the group quite materially over the last 12 months. If we think going forward, how should we think about your priorities as a group? Is it about top line growth? Is it about cost cutting? Is it about return on capital?

Just if you could maybe frame for us really what are you looking for as you think about the group going forward? Thanks a lot.

Thank you, Akhil. Maybe I will start from the end first because my temptation to your question would be to say all of the above, but let me maybe frame for you a little bit how we are thinking about the future. As you said, there is a big transformation going on.

And Vodafone is changing in its shape, which is obviously very visible, but it's changing as deeply into its operations. We'll come to Germany in a minute, which tends to be obviously less transparently visible externally.

If I start from the portfolio side, we are now effectively in the home stretch of completing the reshaping of Europe. We are weeks away from the end of the approval processes in Italy and the UK. You will have seen that today we are talking about completion in early 2025.

So obviously, we look very much forward to FY '26 when the strategy will come into action in terms of operating in growth markets, and in markets in which in each and every one of them, we will have good local scale to deliver growth and returns. In terms of priority, I think the, if you want, most important aspect for me is the definition of timing.

We need to create good, strong, long-term growth to drive returns. And obviously, growth starts with the top line inevitably, but what drives return is growth into EBITDA and mostly cash flows at the end of the day. And that's the overarching objective.

And again, as we probably discussed at some point in the past, what we look at when we do our planning with our markets is always the evolution of return on capital over time. And this has been at the heart of the transformation we have just executed -- we are in the process of completing.

I'm talking about the time lines because if you think about the mantra we follow in Vodafone now, it's Customer, Simplicity and Growth, because for me, it's fundamental to have healthy, solid long-term growth based on the back of the customers choosing us.

And I think I need to make that answer shorter because, otherwise, I could go on for hours. But as you have seen, we report now our customer KPIs together with our financial KPIs, proud achievers of leadership in NPS in 9 out of 15 markets, the UK beating record after record. You see in the UK.

results what improving customer satisfaction means because we are delivering our highest-ever NPS in parallel with our lowest ever churn and a strong commercial momentum in the market.

And I think beyond the fluctuations quarter after quarter keep driving this fundamental of customer relationship, whilst managing the group simply, which is the Simplicity, is essential to create long-term value. So that leads me to Germany then and your question on -- so what's changing in Germany?

And I'll give you -- try to keep it like a quick snapshot of what's changing. But in Germany as well as elsewhere, what we are driving is structural change. And within our operations, I think it's good to see the momentum that is building.

Clearly, it's a transformation that will take time. But you will have noticed that in the last 18 months, we've made step changes in a number of areas.

Now you're asking commercially, we have now onboarded a new leadership team with a new director for consumer, a new director for business. These are all people which have deep industry expertise. It takes time to hire the right people, but now we have the right team in place in the commercial areas.

Two other commercial examples that will underpin our performance going forward. I mean, we are now putting to bed the MDU transition, which I need to say is a good thing for us, of course, even if the financial impact will continue.

But it wasn't necessarily the easiest task. Yes, we had to set up a massive sales machine to secure 4 million customer contract changes in the space of a few months. The team has done that successfully, which is why today we say nothing to see here.

It's in line with our expectation. And this, at the same time, as we are simplifying the company with 20% roles reduction, we are already midway through, which is also, I think, significant change in a country like Germany.

And then finally, I think I explained it enough in my previous answer. I think our approach to fixed broadband is fundamental for our commercial performance. And here, the changes in the last quarters have been keeping up the fiberization, which is why the network -- the cable network is well invested and being able to offer to all our customers wherever they are gigabit speeds, if cable is not there, with fiber so that we give them the best possible experience and don't get stuck into the DSL commercialization side.

Clearly, you will see more changes. I said this is a transformation that takes time. You will continue to see action in Germany. And we really look forward to move beyond this year of transition into FY '26.

Sorry, a bit long-winded, Akhil, but an important question.

That's very helpful. Thanks very much.

Siyi He, Citigroup.

Hello. And thank you very much for taking my questions. I just have a question on the UK. I was wondering if you can talk about the competitive intensities that you're seeing in the UK, because I think, especially in B2B, you are still seeing that UK. B2B service revenue is still in decline. And also following up on that, I understand that the first half of UK EBITDA growth is helped by the cost benefits and energy tailwinds.

I'm just wondering if you could kind of help us to understand what will be the moving factors that we should consider on the cost side in the UK when we think about the EBITDA trajectory in the second half? Thank you.

Thank you, Siyi. I'll take the competitive intensities, and then hand over EBITDA to Luka.

The UK is a competitive market. That's very clear. I think you see it in everyday numbers. Typically, it's a market that steps up with inflation on the front book, and the back book with the main operators, but there is continued competition triggered by the many brands that are now operating in the market.

I wouldn't be particularly concerned about B2B. You raised B2B, rightfully so, it was flat in the quarter. But we -- this is an area where we still have project phasing in play, and you should rest assure that you will see the growth rate stepping up into positive in the second half and overall for the year, B2B contributing to positive growth in our UK operations. More broadly, I'd say that it's a competitive market in which we compete very effectively.

I talked earlier about the benefits that we are seeing of our engagement with our customers and our record level of customer satisfaction. This translates into our commercial momentum. We have -- we are growing 50,000 net adds in broadband typically in a quarter, one of the fastest-growing operator in the market.

Slightly hidden because of some reclass, but the same is true actually this quarter in consumer mobile, yes? So we compete effectively and the focus is really, again, talking about structural support for our long-term growth is really about maintaining a strong brand and a strong engagement with our customers, and I think it's playing out pretty well.

But Luka, you can talk EBITDA.

Yeah, absolutely. And just to note as well as both of our primary competitors in the UK have already reported, I think you can also easily compare our performance in the UK with theirs, which I think should give you a good frame of reference of how competitive we are, both in consumer, but also in B2B. But on the EBITDA front, this was obviously a very good news story in half year one.

But I had flagged actually already at our Q1 results that there was also some level of OpEx phasing part of that mix. So in the second half year, you should not assume that the UK is operating at the same level of EBITDA growth. We should see a step-down in that growth due to two reasons.

First of all, the positive energy impact in first half year, which was contributing 2.7% to EBITDA growth in the half year, actually, is going to fade in the second half year, as we were seeing already a reduction in cost in last year's H2.

And there is also going to be some degree of OpEx phasing going into the second half year that was not around in the first half year. But still, the UK will end the year at a very solid and good performance in EBITDA growth. So think about it in terms of mid single-digit growth that should be a safe bet for you to rely on.

Robert Grindle, Deutsche Numis.

Good morning and thank you. My question is on the JVs, which is a big chunk of value on your balance sheet. You mentioned in the pre-comments that you are down to 50-50 in towers, and that's been a successful journey of monetization. Have we reached the end of that road? Or can you imagine further sell-downs or towers consolidation? With your balance sheet improving, has that seen the necessity to co-control towers dropped away. Thank you.

Sure. In a nutshell -- actually, sorry, you said something about the Dutch JV, there seems to be?

A proposal. Yes, the proposal with Liberty Global to combine VodafoneZiggo with Telenet, or perhaps by your mysterious look --

I see what you mean. I was trying to work out, yes, this is -- yes, an old discussion. I was trying to understand where you were coming from. I would say, no news. On VodafoneZiggo, you've heard me say, I think, a number of times before, a bit in the same vein that 50-50 JVs may not last forever.

But at the same time, I need to say we are very happy with being in a good market, with a strong asset, very good partnership with Liberty. So our focus now is to manage it for growth. It's managed under Vodafone Investments now. We have just onboarded a new CEO that you have perhaps met. So it's all about how do we accelerate our performance there.

We don't have any new plans on towers. We are now happily at this 50-50 position, and we have a lockup, which was set up at the time of combining the joint venture, which lasts until March '26. And then over time beyond that, I think we will always have to look at what's in the best interest of Vodafone, also considering the evolution of the tower market in Europe.

If I may just add, there is nevertheless one very visible opportunity for further value creation and that is increasing dividends over time, in particular, from Vantage Towers. We have seen already in the first half year a very nice step-up in dividends. So I would expect that, for this year, we will probably see EUR100 million more in dividends from Vantage Towers than we have seen in FY24. And as this business continues to develop in a solid state, I think that is certainly not the end of the possibilities.

Thank you.

James Ratzer, New Street.

Yes, good morning. Thank you very much. So I would like to ask a question, please, on Germany, maybe no surprise there, but this time actually on the mobile market rather than fixed line. In particular, if I look at the pricing environment in Germany, we've seen some more aggressive moves from Deutsche Telekom on some of their promotional offers.

We've seen more aggression, I think, from Telefonica. And then just today, 1&1 were saying that they see the need to be more aggressive on some of their pricing in the fourth quarter because of increased level of competitive intensity in the German mobile market.

So it seems like you're one of the few carriers at the moment that is actually holding firm on pricing in the market. But I would just love to get your views on how you're seeing the competitive environment in German mobile, some of these price moves from your competitors, something that worries you, do you think you need to respond. Thank you.

Thank you, James. If you go back to last May, I did flag that we were seeing the market in Germany becoming more competitive at the low end of the mobile spectrum. In those days, we were talking about competition on resellers.

We were talking about second brands, prepaid, that part of the market. Now it's fair to say that in the last month instead, we have seen one operator choosing to do a substantial more-for-less, I would say, move across the spectrum of its -- all the lineup, including on the main brands. So obviously, this means also the mid- to high-end side of the market.

Now this is very recent. I need to say, I struggle to rationalize it myself. This would be a question for other people. But from our side of the equation, I would say that we need to follow closely this evolution. We have seen the German market in the past as orders sort of going up, going down, and it's very, very early days in that respect, but it's something that you should expect us to follow very closely.

But you don't think that would lead to any deterioration at all in your German mobile service revenues in the second half.

I think what you should expect us to do is, as always, remain disciplined. You have called it out now yourselves. In terms of broader impacts on the market, I think it's a bit early to call it out, and it will really depend on the choices that will be made.

Great. Thank you.

David Wright, Bank of America Merrill Lynch.

Hopefully, I'm unmuted here. Thank you for taking the questions. So a question on German fixed. And I did notice your release a couple of weeks back when you stated you had the biggest fiber footprint in Germany.

But there was a very curious German -- comment in German in the release that said footprint without senseless overbuild. And I did wonder, Margherita, I feel like you've tried to introduce this strategy a little bit more on the call. Is the wholesale purely for the areas where you don't have cable?

Or could it be that you start to consider the likes of Deutsche Glasfaser, the more sort of rural and suburban areas, where the overlap with you is now building with your SDUs and where the cost to build is likely much higher?

Could we start to see this Vodafone fixed strategy in Germany now start to evolve a little more, and maybe a little bit more wholesale, maybe some JVs, maybe some own build. I do feel like you're trying to introduce a bit of a narrative here, so I'm keen to explore. Thank you.

Thank you, David. I would say we always start from the customers, and want to give our customers what's best for them. And with that in mind, we will ask our customers, what do they need, what type of service they will need.

And in the cable area, as you know, cable satisfies any customer need, so it will be cable. In the DSL areas, we are now in the position to actually offer them higher speed and not keep them contained to DSL, which is going to improve our service to them.

And that's -- it's on the back of that, that I was calling out the fact that we will give, in 3 quarters of German households, all the customers that want to be converged with us, we will have the opportunity to have gigabit products.

That's the starting point of what mostly matters to us. I was calling out the fact that in the DSL areas, the market is starting to see beginning of fiber churn. So we will clearly be there to allow our customers to choose fiber, and they have the best possible service. So that's in terms of the commercial offers and what will impact our net adds.

In terms of then our machines and how we will satisfy customer needs from an infrastructure perspective, our focus remains the same. The combination of continuing to fiberize the cable network as we discussed in the past, and, in parallel, driving the build where it makes sense to us through OXG and its 7 million households program. So that's our focus today.

So the current plan is the 7 million in the joint venture, right?

That's correct.

And that's -- there's maybe a little bit of greenfield in that. So what about the plan for the rest of the fiber footprint -- the cable footprint? Is there any ambitions today to fiberize any targets, any CapEx given?

Yes, you are correct. On the 7 million, there is 1 million which is also greenfield. And beyond that, we will be happy wholesalers of a range of providers, as we are doing now with Deutsche Telekom and Deutsche Glasfaser. Over time, this range could also change depending on where there are good business cases for us.

Okay. Thank you very much.

Javier Borrachero, Kepler Cheuvreux.

Good morning. Good morning, Margarita and Luca. My question is on regulation, let's change gears a little bit. At the European level, we have now a new commission, a new parliament. I'd like to have your thoughts on what we could expect from -- in this regulatory period, particularly in light of the report by Mario Draghi, the Future of European Competitiveness, he made a lot of proposals, single market harmonization, in-country consolidation, cross-border consolidation, cross-border services, networks, level playing field. So some may be more controversial, other may be more consensual. So maybe if we can have your thoughts.

And related to this regulatory point, I guess on UK, Italy, there's probably nothing new to report. You mentioned something in your press release about the -- your expectation that these two deals will be closed soon. But on Romania, I mean, maybe a question on Romania. This agreement with Digi leading also potentially to in-country consolidation, what do you expect in terms of regulatory review remedies in Romania? Thank you very much.

Thank you. I could go on regulatory for a while. So I start from Romania. Romania is a good opportunity for us to gain good returns by effectively driving synergies. There is one operator that needs to leave the market in mobile, and we have just done an MOU for a three-way deal where we would buy Deutsche Telekom Mobile together with Digi.

It's still an MOU at this stage, so early days. And it was the gate into detailed due diligence. In terms of then the execution and how it's going to play out, our expectation is actually, subject to the final structure of the deal, that the review should be in Romania because of the size we are talking about.

And it's also a deal that is quite immaterial, I would say, in the general context of the group. On the regulatory front, we have worked a lot, as you would expect, in the last year, and we'll continue to work and engage with European regulators.

Because Europe has been starved of investment in telcos for far too long. It was very good to see that the reports from Draghi and Letta, which had important recommendations for the telco industry, has been translated into the mission statement of the new commissioners that are now at work in Europe.

So I think that's been good progress, but I think we now need to see in the coming months how this mission statements will actually translate into action and you should expect us to continue to be on the front line of this engagement because, as I said, it's really important that investment is recognized as a force for good competition also within the EU as we are seeing at the moment in the UK.

Thank you very much, Margherita.

Thank you.

Polo Tang, UBS.

Hi. Thanks for taking the question. I just had a question in terms of other Europe. So it saw a solid performance in Q2, but how should we think about the impact of the Digi's launch in Portugal? If I'm not mistaken, I think that they've launched with a EUR4 per month tariff for 50 gigs of mobile data? Thanks.

Yes, Polo, launched last week, I would say, without surprises, the usual playbook with aggressive pricing. The important point about Portugal is that it's very different from other markets where we have seen Digi operating and it's also a market in which we have a position worth calling out. From the market perspective, it's mostly quad-play, very high percentage of contracts in the base and very low churn. But perhaps most importantly, it's an interesting market in the sense that the front book in Portugal is positioned higher than the back book.

And then as far as we are concerned, we have a very strong brand in Portugal. I was talking about customer satisfaction earlier. Our customer satisfaction in Portugal is, I don't know how to express this, but let's call it miles ahead any other player. And I think you will have seen it maybe if you ever traveled in the country. And therefore, we have very strong loyalty.

Now of course, there is competition ahead. We already have in the market an established first brand and second brand, and we look forward to compete.

Andrew Lee, Goldman Sachs.

Okay. Good morning, everyone. I'm just going to bring us back to Germany and just thinking about FY26. So you have stated your return to growth, but clearly, in that statement, also highlighted the 1&1 contribution. So when we're just trying to think about underlying growth that you'll be delivering in Germany in FY '26, will you grow without 1&1? And if not, why not? Thank you.

And I'll just say, I'll hand over to Luka. But it's early days to go into detailed guidance in FY '26 in Germany. There are a number of factors we will have to consider, including the competitive environment. But Luka?

I will go even one step further. I would also not include or introduce yet another derivative of growth underlying agreement that is a commercial agreement that is based on an operational collaboration that has convinced the players in the market to work with us.

And -- because if we were to start that, then where would we end. We are also not calling out individual MVNO wholesale agreements in the different markets. So for me, the performance of 1&1, unlike the situation of an external law change that we are suffering from at the moment with the MDU transition, is one that is an intrinsic part of our overarching performance in Germany. So I would not look at breaking out an underlying performance in that sense.

I couldn't agree more. Although I'm pretty sure that where we will end up doing the quarter-on-quarter movements of the next year, there will be, again, a lot of detail, but not on the headlines and far too early.

Yeah, I think it's another way of looking at, it is obviously to recognize that, as we onboard the 1&1 contract, there will, of course, be a step-up and the ramp. That's what we have been talking about already in the context of the second half year.

And that is obviously a valid question to us. I'm very happy to discuss this as we move into the next year. But at some point, we need to recognize that this is an operational agreement that we have won and that we will benefit from, and I wouldn't really kind of separate that from the rest of our performance.

Thank you.

Thank you, Andrew.

That was the last question, and I would now like to hand back to Margherita for any closing remarks.

Just thank you very much for being with us today and look forward to the meetings in the road show and beyond. Thank you.

Thank you very much.