Vodafone Group Public (LSE:VOD) — H1 FY25 Results

0:00 Good afternoon, ladies and gentlemen, and welcome to the VODAFONE Investor Presentation. Throughout today's recorded meeting, attendees will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review your questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company would be most grateful for your participation. I'd now like to hand over to CFO

0:31 Luca Budrich. Good afternoon. Thanks a lot, Mark, and thanks for having me. Yeah. Indeed, it's been six months since I've last appeared on this platform to give you an an update of the company and its transformation. Back then, we covered four key themes. One was that we were leaning into a broad based transformation of our market portfolio with our back then announced sales of our businesses in Spain and in Italy. And

1:07 the merger in The UK with up to obviously markets where we have good local scale and where we enjoy a good market structure. We talked about the operational excellence push across the company focusing on three strategic priorities, improving our customer experience, simplifying our operations, and setting ourselves up for growth in new areas of priority, like our b two b business, for example. I covered as well that in this journey, our current fiscal year, f y twenty five, would be a year of transition where we would face significant headwinds in our largest market in Germany from an ongoing transition of the legal framework around our TV business, and that would bring headline growth down in service revenues. But that at the same time, we saw a good prospects of increasing our profitability across the company, and we also guided for a positive growth in cash flows. And I was clear that once we are through this year of transition and from our next fiscal year, FY twenty six onwards, the full benefit of our market portfolio and operational excellence transformation would come to bear and that we would see accelerated growth again as a result of that. Now halfway through FY twenty five, I'm pleased to say that we have made good progress across all of those pillars. Our strategic portfolio

2:38 transactions in Spain have already closed in Italy and in The UK. We are nearing completion and will likely be in a position to close those early next calendar year. In terms of our operational excellence priorities, we're also making good progress, and it shows actually in terms of good performance with market share gains across most of our markets in Europe and the continued very strong performance in our emerging markets. And in the current fiscal year, the financial performance exactly reflects what we had anticipated, with us continuing to reiterate our guidance at the half year mark. So let's take all of those aspects in turn a bit and go into details. In terms of the financials, what you can see on the slide on the left upper hand side is indeed that due to the fact that in Germany, where we are the largest cable TV provider and have had eight and a half million of customers in multiunit apartment houses that are operated by housing associations where a law change has required us to recontract with those customers individually, where previously, they were subject to bulk contracting through the housing associations.

4:00 We have a significant headwind from a service revenue perspective. And that has brought headline growth down together with the fact that we are having a lower inflation environment, and therefore, also CPI index, I think price increases have come in significantly lower in FY twenty five compared to the prior year. And you see here the growth coming down to 4.2% in q two and four 0.8% for the first first half year. That was perfectly in line with our expectations. We expect a gradual reacceleration now at the group level from the second half year on. And within that, our b to b business that is one of our growth drivers has actually already started a reacceleration, and we expect it to further accelerate in the second half year. You can see that in the lower left hand corner that, of course, this growth is unevenly distributed. We continue to enjoy very high growth rates across our emerging markets with Africa continuing to grow just below the 10 mark in service revenues.

5:09 Turkey having a very strong performance, almost 50% growth in hard currency in euros. And then in Europe, where we are facing the full headwind of the German TV transition, we are actually down to slightly negative service revenue growth. The flip side of the lower inflation environment in a positive sense then shows, as I had already indicated half a year ago, in terms of the profit performance of the company. Our adjusted EBITDA was up 3.8% in the first half year. That's in terms of growth quite a decent step up from what we had seen last year in h one. Still under the old portfolio, including Spain and Italy, we were just above 0.8% growth.

5:59 Now the step up to 3.8%, I think, is a good precursor of the accelerating growth that we expect to be able to drive with the new set and more focused set of markets that we operate. And the same more focused market portfolio also shows in a step up of our returns. Our ROCE enjoyed a 1.4% step up from the disposal of Spain and Italy. With the rest of the markets, we are showing good progress, actually. You see a 0.4 percentage point performance step up in all of them combined except for Germany where, the TV law transition had a sizable headwind. Also on the return side, 0.5 percentage points, but the trend definitely is going into the right direction. Let's from there then turn to our strategic priorities and how we are doing against them. As I said, customer experience improvement, simplification through removing redundant roles across the company, commercializing our central shared operations so that it's easier for our markets to select which services they consider as valuable and also potentially gain external customers and then the growth opportunities that we have in particular in our b two b business. If we translate them into specific focus areas for the current fiscal year, then we are making a big push to invest in

7:31 the continued turnaround of our underlying German business with big focus on customer experience improvements, on establishing additional digital capabilities, AI capabilities, for example, in our chatbots supporting our customers on the ground, but also continued step up of investments in our b to b business and other areas. B two b, in general, is seeing a big investment plan, 250,000,000 in additional feet on the street, additional demand generation and expansion of our product portfolio. And then, of course, we want to complete our portfolio transactions and continue to gain value from our set of nonconsolidated investments that are now managed by a dedicated unit called VODAFONE Investments.

8:23 In terms of the strategic priorities though, if we want to take a double click, I'm pleased to say that we continue to see progress through all of our focus on managing a better customer experience on the reduction of deep detractors across our customer portfolio. This is actually pervasive and is happening across all of our markets. The resulting revenue market shares are also up in many markets in The UK, in our other European markets, in Turkey, by the way, as well. In Africa, market shares are broadly stable, but in Africa, we are leading the market by a wide margin. So the only market where we still need to complete the turnaround and transformation, I said before, is Germany where we have this idiosyncratic impact of the TB law change that is hitting us in an over proportional manner because we are by far the biggest TB provider in the market. Having said that, also in Germany, but in general, we keep making good strides in terms of improving and optimizing our network quality as, of course, one key pillar of driving customer satisfaction and our competitive position In the markets in Germany, we have actually just won the reward as Germany's best broadband offering by four

9:58 independent network tests. So our investments into the stability of our cable network have clearly paid off in this respect. And also across our mobile networks, we continue to meet very high quality standards. Actually, in Germany, again, have inched a bit closer to the market leading incumbent and have distanced ourselves a bit further from the third player in the market. So this is going into real good direction. In terms of simplicity, we have already taken out 6,300 roles across the company in our push towards simplifying our structures, operations, delayering the organization. There is another close to 2,000 pending that we have already announced in Germany, which will take us by the end of the year to more than 8,000.

10:51 So this is on a good path. We continue to focus on driving gross savings in operational expenditures, but we have taken the conscious decision as discussed previously to invest these savings in the current fiscal year in an accelerated improvement of our commercial performance in Germany. So brand and share of voice investments in Germany are intensified. Our b two b investments in Germany are continuing to progress, and we continue to focus as well on investments to improve the customer experience there. Next year, we expect that our significant programs that we have going on in the area of AI across the company, coupled with continued focus on productivity, will then actually make room for further OpEx savings.

11:48 And in terms of growth, you can see on the right side of the slide that actually the change of the portfolio and the focus on our strategic priorities is resulting in a step up of growth versus what we reported in the old market portfolio in the first half year. So service revenue growth up by 60 basis points, EBITDA

12:12 up by 3.5% over the growth that we show we've showed in the first half year of the last fiscal year. And also our adjusted free cash flow, which in the first half is always a negative number due to working capital unwinds from the previous year, is in a much better place than it used to be the year before. So all of this is actually

12:38 quite encouraging, but, of course, we also have jobs to be completed still. And now we are nearing very significant events for the group because our merger in The UK with free is now nearing completion with the final CMA ruling, so antitrust ruling for the merger being due by the December 7, perhaps a day prior or so because the seventh is on a weekend. And the good thing about it is that the CMA does not seem to see a need for structural remedies. It's rather proposing and discussing with us a set of behavior remedies that are well in line with what we had said all along from the outset of announcing the transaction.

13:24 We would be willing to do such as committing to invest significant amounts in network expansion, such as keeping prices for certain lower value tariffs stable for a period of time and also making a commitment for a reference offer to MVNOs in the market so that they continue to have an attractive route to utilizing the joint network of VODAFONE and three as an alternative to BTE and VMO two. If the CMA ruling comes in as we expect positively, we should be in a position to close the transaction in early twenty twenty five and then give to all of you and the rest of the the market a clean guidance for the next fiscal year, including the combined UK entity. The same can be said about our sale of our Italian business to Swisscom, which would be an 8,000,000,000 transaction for us, so very important from a deleveraging perspective.

14:34 Also here, the Italian Competition Authority is nearing completion of its review and will come up with a final decision by mid December. And that means if everything goes well, which we fully expect it will, that also the Italian sale will complete in early twenty twenty five, which would then allow us subsequent to the receipt of the cash inflows to also initiate in due course our next 2,000,000,000 share buyback program that we had already committed to when we signed the Italian transaction.

15:14 In terms of Spain, as you know, we have already received 4,100,000,000 of initial cash proceeds. We still have value locked up in 900,000,000 of redeemable preference shares, which might be, you know, giving us additional inflows if our acquisition partners, EGONA, can actually complete value adding transactions in the Spanish market and then utilize the proceeds in order to redeem the preference shares. That does not mean that we don't focus on small transactions to further improve our performance in other markets. For example, we have just recently announced that we are in discussions with DG and Deutsche Telekom's subsidiary in Romania about potentially consolidating the market further with acquiring the mobile assets from Deutsche Telecom. This would be a very small transaction, but important in the Romanian market context as it would give us better scale and an ability to also drive for better returns to reach our cost of capital in that country. And the share buyback program as a result of the sales transactions is well underway.

16:35 We have already returned more than 1,000,000,000 to shareholders so far, and we are well underway of completing the first 2,000,000,000 in this fiscal year with then the next leg starting when Italy is completed in the new fiscal year. With all of that, of course, we also want to make sure that we stay true to our capital allocation framework that we committed to shareholders in March this year.

17:07 And so far, we are perfectly on the path of doing that with our country level capital intensity broadly maintained at the level where it was last year with coming into our target leverage range. We had set a leverage policy of 2.25 to 2.75 times net debt to EBITDA. So a step down actually in net debt levels from the previous levels. And now with the Italian transaction completing, we expect to reach the bottom half of that range, perhaps even temporarily slightly below that until we launch our second leg of our share buyback program. The dividend had to be rebased, as you will recall, to $0.45 because we are losing quite some cash flow through the sale of Spain and Italy and commensurate with that. We have now the new dividend, but this dividend is well underpinned by our cash flow. So we clearly have the ambition as the cash flow is expected to grow over the next coming years then to grow the dividend as well over time. And from a capital returns perspective, after the 4,000,000,000 of share buybacks, we would still have some flexibility left because out of the 8,000,000,000 of the two transactions for Spain and Italy, we

18:39 actually need 6,000,000,000 for the deleveraging into our target range. We do the 4,000,000,000 of share buyback. So there are 2,000,000,000 left that could provide some room for further capital returns or value accretive transactions or could be employed for further deleveraging. So with that, I would say we are exactly where we wanted to be at the half year mark. We are looking forward to closing this year in line with our financial commitments and our guidance and then look forward to entering FY '26,

19:12 a year where then the full scale and scope of the transformation should yield the positive outcomes in accelerating growth that Margarita has talked about in her quote for our half year earnings as well. And with that, I will be happy to take your questions. That's great. Luca, thank you very much indeed for updating investors. Ladies and please do continue to submit your questions just using the Q and A tab situated on the right hand corner of your screen. And then I will pose those questions to Luca this afternoon. Luca, we've received an awful lot of questions throughout your presentations. Perhaps I could throw two to you at the same time, really regarding your progress and its relation and correlation to the share price. The first one is you and Margarita are doing an excellent job. What do you think the market is failing to understand or understanding about your transformation and hence not rewarding the progress made so far?

20:06 And the other question was, is the growth in revenue and EBITDA reflected in the share price, or are analysts still too cautious?

20:15 Mhmm. Yeah. Look. Those are good questions. And, obviously, sometimes it can also be frustrating a bit for us. However, I think we need to recognize that in a market environment in which you obviously have a lot of volatility, The typical theme of of shareholders and investors is, in particular, in an industry like telco, which has seen quite a declining trend over quite some time, that seeing only seeing is believing. And while we have made great progress on the portfolio front and we see that the fundamentals in terms of our market position in many of our markets is quite good, The one thing that shareholders have still not seen is obviously the completed transformation in Germany, which is by far our largest market, and the return of Germany to grow.

21:13 For now, at the headline level, they are seeing the service revenue performance in Germany deteriorate. It's a u shaped form of recovery that we have been talking about a lot, and that was mechanically unavoidable given this law change in RTB business, which had a significant negative head headwind effect. And so I think investors just want to see that as we are coming out of that trough, we can indeed produce accelerating growth. And then I'm pretty sure that they will actually also join the bandwagon. And I've seen that movie already also in the past. We are, at the end of the day, in a subscription business, and therefore, our commercial performance today only shows over time, in, in the numbers.

22:07 That was the same with my prior employer in the software industry. And then two years later, when all of your commercial efforts finally show in the revenues, then us just might regret not having joined earlier. But, again, we need to prove the case, and I think it's just the same story for the for for your second question on the revenue and EBITDA performance.

22:38 Even though I should say that the market should actually take a lot of comfort from the fact that we are growing, EBITDA despite the fact that in Germany, we are facing a 400,000,000, headwind, in, EBITDA due to the TV law issue. Actually, on cash flow, we are also guiding for growth and are delivering an improvement year over year. As you have seen, it's even 500,000,000, because there's an additional working capital, adverse effect from the MBU transition. So I sense that investors should actually gain confidence from this performance and then just, in their mind, frame a scenario in which this TV law transition is out of the prior year comparative figures and then making room for the improvement in the performance in Germany.

23:33 And it's almost mechanical that this needs to give rise to a much better growth performance in FY twenty twenty six. Six. I think as we move closer to the end of the year, this should start to shine through. That's great. Thank you. Got a question here from David, I guess, around capital allocation. What factors would need to align for VODAFONE to consider increasing the dividend again? Yeah. Again, for me, the dividend is really mainly a factor of how well we are able to produce sustainable cash flows that underpin the dividend. I am not a believer at all that you should actually tap into the substance of your business in order to pay a dividend. If you do that for too long, then you're actually weakening your business fundamentals.

24:24 So for me, the true measure of our ability to increase the dividend is how well

24:29 we are doing on the true free cash flow of the company. So below the adjusted free cash flow that we report and that we use as a guidance basis, We also have the ongoing costs for spectrum licenses and for restructuring. Luckily, those two elements rather tend to come down now as the years of significant spectrum auctions, at least in Europe, are pretty much behind us. So that gap between our adjusted free cash flow and the true underlying free cash flow should actually diminish over time. But this free cash flow needs to underpin the dividend. And as we then increase the free cash flow through our focus on operational excellence and the fact that we are operating in markets where we can actually accelerate profitability increases due to the soundness of the market structure and the strength of our assets, then we should also have scope to see increases in the dividend. In the meantime, I think it's worth noting that this year and next, we will actually return roughly 25% more capital to shareholders than we did under the previous dividend policy because the value of the share buybacks of 2,000,000,000 roughly per year actually significantly outweighs the reduction of the dividend.

25:51 So from that perspective, it's something to be kept in mind. And, of course, the more we reduce shares through the buybacks, the more also the earnings per share increase, which is also a countering effect. Thanks, Luca. Next question, I guess, around price increases and your ability to retain customers. It reads as follows: How has customer churn been impacted by price increases? Or any steps being taken to ensure customer retention?

26:20 Yeah, very good and very important question. For me, churn is one of the most important operational KPIs that I'm taking regularly and look at because the value of retained customers to drive also long term customer lifetime value and returns can cannot be overestimated. So luckily, I have to say that churn in the number of our markets is on a good path. So it's correlated with customer satisfaction. It's correlated with NPS and deep detractors. And, of course, every time that you enact a, a price increase, then you will see a short term spike in in churn. But in general, even in markets where we have had a long history of CPI driven price increases, like in The UK, for example, the trend is actually very positive if you focus at the same time at the right on the right customer experience and solving customer problems with agility, focusing on the quality of your networks. Those are all things that play also a significant role. It's not only the the the prices that you offer. And in The UK, actually, we have just reached a record low level of churn in the market, a level that we had never seen, and it's all coming on the

27:50 back of many years of focusing on providing the best customer experience in the market. And we are employing the same playbook, as I had said before, now across, our markets, and in many of them, actually are seeing a positive trend. The one market where this is not the case, again, is Germany. But in Germany, there is a combination of factors at play in our TV business. A lot of customers who were indirectly paying for their cable TV through their housing associations now that we have to recontract them directly. We find out that they have actually not been using basic TV at all. And in those cases, of course, you will then inevitably face a higher churn when your contracting model changes.

28:47 And then last year, we had done for the first time in quite a long time a price increase in our fixed broadband business, and that has led to elevated churn. But this churn is now also coming down and is stabilizing. So we are expecting continued improvements in our broadband net adds as a result of that. And therefore, as we move into next year, should also see definitely churn improvement in Germany. So that's a very, very important question to ask and one of our biggest priorities as a company. Thanks, Luca. Just, I guess, extending that around how things are progressing with five gs, particularly in Europe and The UK. Are there any timelines or perhaps milestones we should be aware of? Yeah. Honestly speaking, five gs is obviously a very heterogeneous technology in terms of its adoption and proliferation across the European country landscape.

29:42 Germany, for example, is quite advanced in the rollout of five g stand alone. We have, by all the three main players in the market, Deutsche Telekom, VODAFONE, and Telefonica, significant population coverage well in the nineties. We have actually deployed five g high band sites at the same level as Deutsche Telekom in the country. And so in in Germany, five g is essentially rolled out. There are some additional coverage obligations that are likely to be in place when the German regulator is extending the spectrum licenses for another five years, which is a move that is expected to come in spring twenty twenty five, but the step up is not as big as it is, for example, in The UK where we are really lagging behind in terms of five g adoption. And that's why the the merger of VODAFONE and FREE is so essential as it will give us finally the scope and the investment capacity, to really drive a broad based, adoption of five g on a nationwide basis where, for now, Vodafone has really been more focused on driving this rollout in the large urban centers. So it's a very, very important consideration as well in terms of value for the country for the merger between VODAFONE and three that

31:15 this will allow us to accelerate the deployment of five g. And then other countries in Europe are at different stages, but I'm really almost a bit embarrassed to say that The UK is really one that needs to now speed up urgently, and we want to be part of that solution. Outside of Europe, five g has not yet arrived. So in Egypt, we just closed a five g license arrangement with the Egyptian state as all of the other operators in the country did as well. So there, the five g rollout will begin next year in FY twenty five in calendar year '25.

32:01 And in Turkey, we're expecting a similar five g license transaction coming up driven by the Turkish government sometime in the next two years as well. And subsequent to that, we would also then see the rollout starting in Turkey. So it will take a while depending on the country, but I hope that The U. K. Will get a little bit more onto the front foot soon with the success of the merger. Thanks, Luca. We did have a follow on question, actually. Know we touched on client retention a few moments ago. But how is the rollout of AI driven digital assistance impacting customer engagement and operational efficiency? Mhmm. Yeah. Great question and a big focus area for us. I mean, you may have heard that we have been closing strategic partnerships with the two arguably most advanced AI tech companies that you can think of Microsoft and Google, and we are working with them in different areas. Google more around the network and with Microsoft more in the area of customer service.

33:11 And I have to say the results are very promising. Give you one example. We have started the rollout of a GenAI enabled much improved version of our famous chatbot, Toby, called Super Toby in a number of markets. Now we started this in Portugal and Turkey, in Italy, and now we're rolling out in Germany as well. It's actually quite amazing to see that with the JN AI enabled version, we achieved improvements in the first call resolution rate of up to 50% and a significant step up in high double digits in terms of NPS improvements. So this is really very promising. And if you have an improvement of 50% in first call resolution rates on a chatbot that is used, you know, forty, fifty million times a month, That's actually providing significant productivity benefits, but, of course, also experience improvements if you get your your problem resolved automatically and don't have to be transferred to a call center. In the call centers, by the way, we also have great use cases for GenAI.

34:23 Also, in conjunction with Microsoft, we have an assistant a digital assistant called SuperAgent that is available to all of our call center agents and can be utilized by them in order to get suggested solutions for customer problems as they are going through the calls with them. And it's actually quite helpful in order to bring up the quality of our call center agents to a similar level much more quickly, especially also for the newcomers. And this is important because you have typically a lot of attrition in those call centers, and so the super agent is extremely helpful in that respect. So I would say AI in our industry and AI at VODAFONE will give us scope for productivity improvements and cost savings definitely in the next two to three years, but perhaps even more importantly, will allow us to have a significant contribution to customer experience.

35:29 And that's where the jury perhaps is still out there. I even see scope for it to become a revenue contributor because as the demand will increase for AI interactions of consumers with large language models in data centers, I think so will potentially the demand for low latency, high performance connectivity access to those Gen AI capabilities, and that could give rise to interesting new monetization opportunities for telcos. That's great. Thank you very much indeed. Let's turn, I guess, to a different topic here around staff changes, I guess. There's been a lot of management churn recently, e g, the ex co in Germany. Why are you making all these changes?

36:20 Well, first of all, I think in Germany, the refurbishment and, I would say, step up of the management team is one of the critical enablers to our commercial success. We wanted to make sure that we have a setup where we can a, cross fertilize best practices and insights from our other markets where we have been driving successful transformations that go into the same direction as what we want to achieve in Germany as well. And then within Germany, wanted to make sure that we bring really seasoned industry veterans with a lot of experience into the company in order to drive the commercial and the underlying process transformation towards excellence in the market.

37:14 And therefore, it is very helpful that we have now a simplified ex structure if I and now also at the GROUP EXCO where Ahmed Esam, our former CEO for The UK, is now responsible as CEO for all of our European markets, and therefore, has now the opportunity to work very, very closely with the German management team and bring in some of his commercial experience and the best practices from other markets so that we can bring them to bear in Germany as well. So there's a much closer collaboration now between Germany and the German management team and the group level in this respect than perhaps what we had in place a couple of years ago. In Germany itself, we have just onboarded a new head of our b two b enterprise business, Harte Rickmann, joining us from Deutsche Telekom. He was responsible for the German b two p p and l for of Deutsche Telekom, is a massive business, obviously, as you can imagine.

38:17 And we are now onboarding a new head of our consumer business who's joining us from Telecom Austria, also a very experienced guy having a lot of transformation experience in B two C. And then very importantly as well, we are bringing in I have just brought in a new CIO, so head of digital and IT for Germany as the agile transformation of our customer experience relevant systems is a critical enabler for success in the market as well, and that will be Fernando's priority. So in this respect, we have now all of the key critical positions in the German management team filled with people who have been living and breathing telco for their entire professional life, who have lots of transformation experience as well. That's what you need together with Marcel Degrohe who was our CBU, so consumer business prior director previously and had a very seamless step up to the position of the CEO at the beginning of this fiscal year. And he obviously comes with a lot of success as well in his prior role, for example, by setting up the sales machine that has allowed us to go through the TV law transformation, recontracting 4,000,000 customers in just a few months, exactly

39:49 in line with our planning. So I think we have now the right team on the ground that will see through the success of the transformation. I'm very happy with this with this structure, but also with the simplified management team at the group EXCO level because we have now our African and European markets represented through two CEOs where we previously had five CEOs of different markets at our ex co level. So this allows us also to streamline and simplify our alignments at the group ex co level and come to simpler conclusions. So in all of this simplification is also an important consideration.

40:36 Thank you, Luca. Question here around CMA approvals. Why should the CMA approve the three UK merger Mhmm. In your opinion? Because it's good for the country, because it's good for customers, and because it's good for competition. That's what we always said, which is quite unusual statement to make for for a merger in the telco industry. I get that. But in this case, it's it's truly the case. Why is it good for the country? We have discussed this a bit as of today. Neither three nor Vodafone have enough scale to invest decisively in the nationwide five g rollout. Together, we can, and we are ready to commit for an 11,000,000,000 investment commitment to roll out five g across the country. This will be great for coverage across the country and for access of consumers to really robust connectivity anywhere in the country.

41:39 It will be good for competition because we are not really consolidating four players to three. As we are saying all the time, we are actually expanding the market in particular for MVNOs. So for the Leicas and Liberas, the skies of this world, to choose from network operators on which they want to roll and then position their services to customers from two to three because with the combination, we will be a very valid alternative for them. Today, close to 90% of the MVNOs in The UK market are actually on BTE or v m o two networks, and they are the ones that are really driving the competitiveness in the market by, you know, setting their price points in an attractive fashion. So if they have more choice, they can do so also in an even broader fashion. So it's very good for competition.

42:41 And for the customers, obviously, it's also good because we have given the commitment that we ourselves will keep certain of our tariffs stable for three years post merger, while those customers will benefit from greater quality through the higher investments that we will be able to make. So at the end of the day, it's a win win win for the for everyone, and I think that is exactly what the CMA has recognized as well. And that's why they have considered structural remedies as not appropriate in this case. That's why they have essentially said, okay. If you stay by stay true to your words, if you are ready to commit to us what you have officially told all of the market participants when you were announcing the deal, which we are ready to do, then this is a reasonable way and path forward.

43:38 I'm simplifying now, but this is exactly what we are working towards. And the CMA, I think, in its decision can be in this sense also a blueprint for other European places to follow either at the national level or at the EU commission level as I think it's a very constructive way of looking at the value of market consolidation for an entire economy. Luca, thank you very much indeed. And thank you to everybody for your engagement this afternoon and for all your questions. Luca, I know feedback is particularly important to you and to the rest of the board, and I'll shortly redirect those on the call to give you their thoughts and their expectations. But before doing so, wonder if I may, Luca, just ask you for a couple of closing comments, and then I'll send investors to give you their feedback.

44:26 Yeah. Thanks a lot. I'm happy to do that. First of all, thanks so much for your interest in VODAFONE, a company in transformation as we have discussed now twice. I wanna leave you just with a simple thought here. I think we are nearing the completion of the heavy lifting of our transformation. We are looking forward to closing FY twenty five in line with our financial commitments. From FY twenty six onwards, We really want to drive for accelerated growth across our business. Most of our markets are doing very well already. Next year, Germany will join the party and will return back to growth as well, and that inevitably will make for a very attractive backdrop.

45:14 So I remain confident that we will emerge from this transformation as a stronger and nimbler company with better operating leverage and accelerating free cash flows, which then over time will also translate into better shareholder returns. And I would very much appreciate if you stay close to this journey and hopefully join us as well. Thank you so much for listening in and for the engagement, and I look forward to being back on this platform soon. That's great. Luca, thank you for updating investors this afternoon. Companies ask investors not to close the session as we're now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of VODAFONE GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.