Vodafone Group Public (LSE:VOD) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen. Welcome to the VODAFONE GROUP PLC Retail Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please simply company may not be in a position to answer every question received during the meeting itself. However, 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. I'm sure the company will be most grateful for your participation. It gives me great pleasure to hand over to CFO, Luca Muczix. Good afternoon to you. Good afternoon. Thank you, and hi, everybody. I'm really thankful for your in VODAFONE, and I would like to begin with just giving you a brief overview of where we currently stand in our transformation,

0:49 how we are doing, and most importantly, why I believe that VODAFONE will be a promising case from here going forward. Now I joined the company close to one year ago just after Margarita had been named CEO, and I decided to become an investor as well, so I'm in the same boat hopefully with many of you because I was very confident that I could make an impact towards a very value accretive transformation. Margarita was very clear when she took over as the COO that as CEO that Vodafone must change. But what exactly had to change? Well, first of all, the company was operating in a very broad, and I would argue, complex set of markets.

1:40 Some of them were doing very well, like our African markets, Turkey, and also a large share of our smaller European markets. But we had challenges, in a number of our larger markets. We had a good and decent performance in The UK, but with an asset that had too small scale. We had operational challenges in Germany where we are actually facing a sound market structure with a decently sized assets, and we had businesses in Spain and Italy that were were really challenged by a very complex and difficult market structure. At the same time, there was also a need to redirect the attention across our different business segments. In consumer, which was always kind of the DNA of the company, there was a clear slowdown in growth, and this is something that we have seen improving in the last fiscal year, but there is very clearly a limit to growth opportunities in consumer in Europe.

2:45 In business, however, our enterprise b to b operations, we saw a great opportunity to scale up our growth. There is great demand in the market, but there was not enough attention and investment given to this area. So fast forward out of this, the executive management around Margarita has set a clear set of strategic imperatives, what needs to change, and where do we need to focus on. Moving from a more or less consumer dominated organization to a more balanced focus on b to b and b to c. Within b to b to c, focusing again on the heritage of VODAFONE.

3:31 VODAFONE became successful as a lean and agile challenger to the incumbents in many of the markets that we are operating in. And the key underpinning of this was a really simple customer engagement model. This has become too complex over time, and therefore, a strong reinvigorated focus on consumer experience, was very important as well as more commercial agility in crafting, for example, smart conversion plans across fixed broadband and mobile family plans and the like. We had also grown complex, honestly speaking, due to the growth of the last two decades. And as part of that, bureaucracy has crept into the corporate system with quite heavy central functions set up, sometimes duplicating functions that were also existing at the local level. So harmonizing and simplifying delegations of authority for maximum empowerment of local operations was an important theme, that we wanted to drive as well as simplifying, central operations and commercializing our shared operations for a more agile setup going forward. And last but not least, addressing the portfolio challenges that I highlighted before, there was a clear push of right sizing our portfolio by addressing needs to change market structures or our position in markets in three main markets in Spain and in Italy where we decided

5:02 for a sale and then in The UK where we are actually pursuing a merger, which is going to hopefully be approved by The UK authorities towards the end of this year. Now fast forward to the end of FY twenty four, my first full year with the company, I'm glad to say that the focus that we have placed on those strategic shifts and the focus on clear priorities prioritized actions around customer experience, simplification and spearheading growth in b to b are starting to burn first promising foods. You can see to the right of this slide that growth across the company has stepped up more or less across the board. Germany, while we're still not satisfied with the level of growth that we are seeing in this market has returned back to growth in FY twenty four. In Europe, we have seen a step up in service revenue growth And at the group level, we have actually had the strongest growth as we were exiting FY twenty twenty four that we have seen in many years. And VODAFONE business became a strong contributor to this growth with 5.4% growth in Q4 that actually was more than double the growth rates that we had seen the year prior.

6:22 In terms of our operational excellence focus, there was strong progress as well. And there is a deep focus on reducing detractors across our customer base, across the company where all of the markets have made improvements. We are now co leading a net promoter score, so customer satisfaction in five of our nine European markets. Actually, as I'm hosting this call from The UK, it's worth saying that in The UK, we took for the first time a COLI position in Net Promoter Score in FY twenty four. Simplification, we delivered OpEx savings in the last two years of 400,000,000. We have been simplifying the organizational structures.

7:07 We are in process of taking out 10,000 roles across the company as a result of that, and about 7,000 of those roles are actually already actioned or decided to be actioned. So we have well advanced on that journey. And on the portfolio side, I think those of you who are really following Vodafone closely will have noted that we have actually already completed the first significant disposal of Spain and we are well underway after having signed transactions for Italy and The UK to also complete those. Last but not least, the lifeblood for any CFO, you need to keep the promise, and I'm glad to say that in FY twenty four, we delivered slightly ahead of our guidance for both our EBITDA as well as adjusted free cash flow guidance metrics, which was a decent basis from which we now have the clear ambition to grow going forward.

8:11 Perhaps a quick word on the m and a disposal transactions. Spain, as I had as I had said, billion of enterprise value divided into 4,100,000,000 of upfront cash and 900,000,000 of preference shares that could still pay out in the coming years to go. We had committed to initiate a share buyback program of €2,000,000,000 upon the Spanish disposal completing and we have kept the word there as well and have launched this share buyback program when we had the last approvals coming in. Completion date was the May 31 and we are now well underway to spend the first $500,000,000 tranche of this $2,000,000,000 buyback program and we'll complete that program within a period of one year. So very successful outcome.

9:05 In Italy, we closed the straightforward sale transaction for 8,000,000,000 in upfront cash, still subject to completion. We need to go through the antitrust process. Of course, we expect the transaction to close in the first half of twenty twenty five as we are selling to Swisscom and their subsidiary Fastweb and those are very complementary businesses. Essentially, Vodafone as a mobile player coming together with Fastweb as primarily fixed broadband player. We think this should be a straightforward transaction through the eyes of regulatory antitrust lens. And then we will initiate a further EUR 2,000,000,000 share buyback with the remainder 6,000,000,000 going to deleveraging and then a little bit left in the tank for different purposes, including potentially additional capital returns for deleveraging or value accretive investments once we are done.

10:02 In The UK, we are currently undergoing the detailed Phase two regulatory review process with the CMA and are, you know, in constant dialogue with them. We are still confident that we will see this transaction complete around the end of calendar year 2024. It will come along in the midterm with significant synergies, actually round about 700,000,000 of annual cost synergies upon full integration benefits being achieved, we will be a majority owner of the joint venture with Free UK. And once we have gone through the initial integration phase in which we will actually see the transaction being slightly free cash flow dilutive then from year four onwards where we can then reap the full benefits, it will be positively accretive to free cash flow. If you go one step further, what does this leave us with?

11:08 Well, a much healthier structure in terms of combination of strong assets in sound markets. Essentially, you can think about our go forward business in four buckets. The largest one being Germany, a large market with decent market growth and a sound market structure as of today, free full fledged MNOs, so network operators with a fourth one in the making, but in a large market, that's actually quite a healthy composition. It will kind of result in roughly 35% of VODAFONE's revenues being driven out of Germany. And we have an asset with a decent market share far above the 20% mark and believe through the focus on operational excellence that we can bring this business back to higher revenue growth than 0.2% in the midterm.

12:09 So we are clearly in a transition year in Germany also in FY 2025, but beyond that, see a step up in growth. And then we have three almost equally sized businesses, the one in UK pro form a adjusted for the impact of the merger and the rest of Europe, including Turkey and Africa, all composing between twenty percent and twenty five percent of the revenue mix, very sound markets, mostly free player markets with good market growth and very strong growth of Vodafone where in most of those markets we are gaining market share and we continue to see excellent prospects. And this is also going to drive a much higher potential for returns in the midterm.

12:54 The sale of Italy and Spain pro form a has already resulted in a step up of ROCE of 1.4 percentage points with the focus on operational excellence, higher returns, in particular also in The UK in the midterm after the merger is coming to full fruition. There is clearly a pathway here of increasing

13:15 returns over time. Last but not least, we had the opportunity finally with the shape of the group being finalized to also devise a sustainable capital allocation framework. I know that this is super important, for our investors. It's important for us as well, for midterm planning purposes, and I'm very confident that we are now able, to offer a balanced framework that is going to be there for the foreseeable future. One, we are very confident that our current country level capital intensity levels are sufficient and will be broadly maintained as we move forward. Second, the liquidity that we are gaining through the disposals is giving us an opportunity to slightly adjust our target leverage range, bring it down to 2.25 to 2.75 times net debt to EBITDA used to be 2.5 to three times before, and we are targeting to be in the bottom half of the range and a sizable proportion of our disposal proceeds will go towards deleveraging as I briefly mentioned before.

14:28 Given the fact that we have now a smaller, nimbler size of the group with therefore a reduction in cash flow in the short term. We have decided to rebase our dividend from FY '25 onwards. So the FY '24 dividend that used to be at $09 will continue to be paid out and then going forward dividend will be $0.45 However, we have a very good dividend coverage now through our established cash flow. So this is providing great underpinning credibility into sustainability of this dividend. And of course, we have the ambition to grow this dividend over time as our operational excellence in these sound markets yields more profits over time. Last but not least, the share buyback commitment, of course, stands and will be executed, and we will subsequently review the potential for any further capital return or alternative uses based on the conditions that will then prevail once we are done with the sale of Italy and have brought in all of the proceeds. So to sum it up, transformation is never easy. I can tell you that from the experience of my former company, I was twenty seven years with SAP, but in the last, three years, the company, announced a significant shift towards an accelerated move

15:58 to the cloud and took a hit on the day of announcing that, of 20%, in a single day.

16:05 Fast forward three years later, the results of this investment driven strategy was tremendous. The share price of my former company has doubled since then. The transformation of VODAFONE has every opportunity to be highly value accretive as well because the company has been willing to disrupt itself and to really focus on a set of markets where we can really be successful and is now fully focused on driving operational excellence going back to its roots as a great operator in an agile and lean setup as a challenger to the markets that it is operating in and the incumbents in it. And I'm very confident that this will drive a lot of value, including for all of us fellow investors.

16:54 I'm looking forward to the next coming years, and would be great to have you with us on the right. And with that, that concludes my presentation. And back to the moderator. That's great, Luca. Thank you very much indeed for updating retail investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of the screen. But just while Luca and the team take a few moments to review your questions submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the Q and A, will be available via your Investor Meet company dashboard. Luca, we received a number of questions from investors throughout your updates. So thank you once again to everybody for engagement. I guess the first one's quite interesting given your distinguished background. Why did you just decide to join VODAFONE?

17:40 It's very simple. I've always been attracted by and motivated by learning and transformation. It's a great learning opportunity for me. I've been working for twenty seven years in the software industry, and I've been with the same company throughout that same time frame. I'm now in my early fifties. And if I don't want to continue doing what I'm doing all the time, full retirement, then now it's a great point in time. And I knew Vodafone quite well from the past because I was a board sponsor for the relationship between SAP and Vodafone. I knew Margarita extremely well from that time, and I knew that we would be working very well together. And, I'm perfectly aligned with the direction of travel of transformation here. And transformation is the second thing.

18:30 First of all, I'm a fundamental believer in, the fact that what you focus on in life expands. It's not always about, being a jack of all trades and being everywhere and planting your flag, on, on every place, on planet Earth. It's about really focusing on where you can differentiate, and that is, I think, a great opportunity for us now with the focus on a smaller set of markets and the focus on back to the basics. And this is something that I feel strongly about being able to contribute to as I'm coming from a company that has been selling business process excellence, for example, to its customers across 25 industries, including the telco industry.

19:15 I'm really passionate about driving

19:18 simplification through our process landscapes, joining forces with leading tech players in order to drive value for our customers both in terms of internal systems and process, but also in terms of the offerings that we have to the market. And last but not least, I see a great opportunity in b two b. VODAFONE business has a multiple of the number of customers that SAP has even though SAP was purely b two b centric. So there's a market here that is wide open. We have a great portfolio. We're asset light, and we are ecosystem centric in the approach how we tackle the b two p market. I think this is exactly the right strategy, and think I can contribute in this respect as well. So for me, it's a new horizon, but one that I think I can really have a great impact in together with a like minded team and in particular, a nimble team that wants to execute with the heart of lion, and that's just simply fun to work in such an environment.

20:19 That's great. Thanks ever so much, Luca. Let's turn to a question from Richard. Thank you, Richard, for your question. He asks, what are the three things you feel that the market is failing to understand or underestimating about the reorganization and hence not rewarding you for the fantastic progress both by you and Margarita? I guess that reflects in the share price. Yeah. That's a very good point.

20:41 And I would would say one is I think there is generally recognition that we have done well on setting the foundation in terms of the portfolio harmonization for the success of the operational excellence paradigm. But the one area where we still need to prove out that it actually works and yields results and brings us back to a strong position in the market that we deserve is Germany. As we have seen before, it is the biggest market that we have. It will be actually even bigger as proportion after the disposals. And so we have to prove out that we can get the underlying growth in particular discounting for the transition of the TV business in the country that has been publicized quite a lot and will result in a U shape of our revenue performance in Germany in FY twenty five that we can really get the underlying growth to develop favorably.

21:41 In the German market, there is also kind of still this underlying concern that the competitiveness of our fixed broadband offerings is suffering from the entry entry of fiber into the market. Honestly speaking, that's overplayed from my perspective, and we need to continue to work hard on kind of educating the market that first of all, in Germany, fiber penetration is at 10% roughly. Most of that is outside of our footprint and we have with our cable product actually the best performing offering in the market as confirmed by multiple quality tests as lately as last summer and fall. So from that perspective, we have to continue to demonstrate progress in Germany.

22:27 That's number one. The second one is the business opportunity in b two b, I think, is traditionally not well understood among telco investors. And I cannot really,

22:40 you know, criticize this because I think in the past, two b has not necessarily be a shining example of positive execution across telcos, but that was actually the traditional way of telcos of looking at the b to b business and essentially replicating in a me too approach the outsourcing and SI work that the tech players are also doing or specialized consultancies. That's a strategy that from my perspective was always doomed to fail. We are taking a different approach. We are bundling capabilities that we get from strong ecosystem partners like Microsoft, for example, which is one where we are one of the biggest resellers that that they have with own capabilities, for example, in managed services, next generation network capabilities, and traditional connectivity services.

23:31 And in the mid market, we can actually orchestrate this for customers that don't have a, you know, wide and heavy IT organization in a quite efficient manner, and that's differentiating us. But I think we have to educate the market more about the opportunities that are connected with that and also start to talk more about the returns that are connected with this. Again, with everything going on on the portfolio front, that would have been overkill to, you know, to a plethora of additional disclosures around that. Over time, I think we have to find dedicated ways of educating the market about the b two b opportunity. And the last one is that I think we still have undervalued elements in our portfolio outside of the fully consolidated 100% markets that we own. We have recently created VODAFONE Investments as a dedicated governance unit that is managing all of our minority and joint venture entities, and we have great assets in this portfolio like Vantage Towers, for example, our tower subsidiary where we have already crystallized a lot of value by selling to private equity certain chunks of our shareholding at very attractive multiples, 26 times EBITDA, and we still have an opportunity to monetize this asset a bit. We are currently in constructive dialogue with our private equity partners around potentially taking more shares from us. We have

25:02 other interesting assets in the portfolio that I think bring us at a minimum very decent dividend payment over time. And so this is an area that I

25:16 cannot add up the maths on honestly without concluding that the sum of the parts valuations are significantly undervaluing VODAFONE. So if I take those three opportunities in combination and assuming we deliver on the German turnaround, then I think the case for a significant value uplift is quite clear. That's great. Thank you, Luca. Couple of questions that I maybe think emerging into one, but I guess take this one firstly from Ben who asks, can you discuss any significant market trends that you expect perhaps Vodafone to be impacted by in the short term? Yeah. Well, this is, of course, a quite market specific question because the market dynamics are very different country by country. So let me try to, you know, think about the different clusters of markets that we operate. So in in Africa, there is no doubt that we continue to see a vibrant and dynamic environment in which we can grow service revenues at an expedited rate as far as the total region is concerned.

26:29 We have markets like Egypt with a high population density with still a lot of data volume growth with a business model that unlike in Europe is still monetizing data separately as opposed to here where it's simply part of your plan date. So those are high growth environments that will stay like that. A We We a very strong asset and so diversification diversification away from pure mobile into also fixed broadband fiber, for example, we are going through a merger process around the JV, fiber build out that would be a great growth opportunity for VODAFONE and South Africa.

27:22 Those need to come to fruition, but Africa in general will remain a high growth environment for us with lots of opportunities to grow. When you then come to Europe, we have a set of markets that have a very sound market structure and where VODAFONE is enjoying a premium positioning with very good growth and also high returns. Portugal, for example, would be one of these examples. I think in those areas, it's mainly on us to not drop the ball, and stay focused on delivering according to our true underlying capabilities. I have no doubt that we will be able to achieve that. And then, of course, making sure or at least hoping for the market structures remaining positive.

28:10 Every every additional market entrant in a market that is offering, you know, only a single digit million number of potential customers, like in a country, like in Portugal or perhaps Czech Republic and so on, is a challenge in terms of, know, upholding a decent profitability in the market. But when we have good offerings, in particular, when we have a strong convergent offering, like, for example, in Portugal, then actually we should be able to continue to drive for very decent business. We have a strong asset in Turkey, of course, a hyperinflation market, but where we have been able to grow significantly ahead of the inflation and of the currency devaluation in hard currency in euros.

29:00 In this environment, I expect us to continue to compete quite well. All of the players are constantly rising prices given the high inflation environment, but we have the advantage of a very agile and efficient digital and IT capability in country that allows us to actually employ quite smart nudging activities in order to, for example, convert a lot of our prepaid to postpaid customers on a continuous basis. We need to remain focused on this. And also in a market like Turkey, you have an opportunity in the sense that it's from a data perspective, a closed market data is not allowed to leave the country, and therefore, you have quite interesting opportunities as a telco, for example, in the business of offering data center capacities, which is what we are doing quite successfully.

29:52 Then you have the two big markets, Germany and The UK. They are the market dynamics are all around competition, And that's, I think, a strong argument for us to support the merger in The UK, for example, because in The UK, you have actually heavy competition despite the fact that the large network operators are continuously executing half term price increases because you have the so called MVNOs. So the players like Sky, Tesco, and so on who are piggybacking on a network operator and offering their own contracts to customers who are very price aggressive.

30:41 And I think for them having a third large scale option of a network operator to sit on top will actually rather enable them to be more ambitious from a competition perspective. And so that is a trend that I would expect to continue. And in Germany, we also see now intensified competition at the low end of the market. That is because we won in last year a sizable contract with the up and coming fourth player in the market, the one on one, to provide them with national roaming services. That was an agreement that they previously had with Telefonica O2. And now I think Telefonica certainly looking for ways to fill up the network again. So I would expect this to result in intensified competition.

31:34 Our strategy here is really to focus on value over volume, making sure that we drive growth in our VODAFONE branded offerings, which have a promise of a higher average revenue per user ARPU and we have indeed seen that in the next in the last coming quarters to increase. So that will remain our focus and our strategy. But very clearly in Germany in the last few months, we have seen intensified competition. And in fixed broadband, the German market is not really growing in as a whole anymore. Also the other players like Deutsche Telekom have highlighted this in their recent earnings calls. So in that respect in this narrow market, it will be important for us to continue to focus on providing a decent offering with a good quality and then over time actually making up on our net adds performance, which was turning negative in the last couple of quarters because we had executed a price increase in the last year, which has now ended in the last quarter. And so over time, we would expect our commercial trading performance to improve in fixed broadband.

32:53 That's kind of roughly the major trends, but we could talk for others, obviously, about this because every country is very different in this respect. That's great, Luca. Thank you very much, John. I hope that goes somewhere to answering your question. Turning gears slightly, we've got a question here around your share buybacks. Why the shares are so cheap and undervalued? Is it tempting at all to accelerate some of the buybacks, I. E, under 70p per share? By the end of the buyback, you might be paying 90 p for the shares you could have got at 70 p. It's a good question. It's part of the reason why I have personally been on my own account buying quite a few shares now because I believe it's a great opportunity. So I now stand at roughly about 4,100,000 shares. But, I mean, leaving that aside from a company perspective, it's a good question, but there are some constraints and what we can do and what time frame. First of all, there is a there is a legal constraint that we cannot go above a certain share of the daily trading volumes in terms of our own share buyback activities.

33:59 And in order to keep an efficient market, you also don't wanna exhaust this limit to its end. So we are currently buying back shares at a pretty equal level on a daily basis. We are making progress actually. So I am absolutely confident that we will get done with our $2,000,000,000 tranche well within the one year period that we have set ourselves given those limitations of the daily trading trading volumes that we can execute. So as tempting as it might be, just go ahead and do a big chunk upfront at least with a normal share ongoing share buyback, you're facing certain hurdles in growing much faster.

34:48 But you are spot on, I think, with the share buybacks. They will obviously have a very positive impact on the free cash flow per share. And free cash flow per share typically drives valuations out in the market. And so our expectation clearly is that at some point when we execute the Italian share buybacks, it will be already against the higher share price for sure. Thank you very much indeed, Luca. I know you've pretty touched on aspects of this, but really, what would you say the key strategic priorities for VODAFONE are right now? Yeah. Well, along the three lines of customer simplicity and growth, let me take them in turn. On the growth side, clearly, invigorating growth in enterprise b to b. There is a big investment program called Spark that we have initiated to invest into better account coverage, into digital demand generation, into product marketing and b two b across the markets that we are serving.

35:59 This is an annual €250,000,000 investment that we're planning to do over the next coming four years, so a sizable step up investment. And I think it will help to really materialize the full opportunity that we have out in the market for digital services as well as classical connectivity services. But digital services certainly are slated to grow in the double digits for quite some time to come. That's priority number one. On the simplicity front, it's clearly continuing to drive for productivity and operational excellence in order to drive for higher returns. I see a great opportunity, for example, in the space of Gen AI for telcos.

36:50 We have very positive results from POCs that we have run on things like in customer care and service providing a fully automated, much improved chatbot interaction capabilities all the way to empowering our call center personnel to have much better information at their fingertips through smart agent capabilities through GenAI. This can actually drive a lot of productivity across the company. Networks is another area where GenAI is providing real breakthrough capabilities. In addition, of course, to the continued focus on our simplification program and completing the 10,000 role reductions.

37:36 And in addition to that, of course, looking for ways to simplify also our central shared operations and adapting them flexibly to any changes in demand, which we are preparing for. We are leveraging these shared operations to provide services to our sold entities, Spain and Italy, for example. We are setting them up nevertheless in a way that should this demand after a while go down because our acquisition partners are deciding to go elsewhere for these services that we could adjust the cost base quite swiftly as well. And then very importantly, on the customer experience front, we are further stepping up our investment in FY 'twenty four. We had an incremental $150,000,000 spend on it. Now we're adding another $100,000,000 to this to drive further Deep Detractor revenues down to make sure that we have churn firmly in our sites that we talked across the board value accretive customer, value management processes that we invest into simpler capabilities for our store personnel and our call center personnel in order to respond to customer inquiries and needs swiftly.

39:01 Those are the key opportunities and priorities, And you see from me mentioning them that they're all focused on operational excellence. Because now our strategy from now on will really be focused on organic improvement predominantly as we have moved the big rocks of portfolio transformation out of the way. Thank you very much indeed, Luca. I'm going to turn to this as final question, I guess, just as we're coming up to the forty five minute time. It's a long question from Olli. Olli, thank you very much indeed for your question. He says in earlier years, the sales pitch of VODAFONE to investors was a telco with broad geographic span, which was supposed to achieve scale, cost efficiencies, tech leadership across the different markets, as well as being as well as being attractive to partners like Netflix.

39:48 After the sale of Spain and Italy, this model is clearly no longer valid. Why not then exit more market and return the cash with even more buybacks? There are no obvious synergies between, for example, The UK and Germany. In addition, the deal for Spain and Italy shows it's possible to get a pricing relative to sale and book value that is much better than the current pricing of the VODAFONE GROUP. That's from Ollie. That's indeed a very long question. I'll try to be a little bit brief in my answer. Honestly speaking, I'm not sure that the thesis behind VODAFONE being a player with multiple European markets and African markets is is flawed. We have synergies that are quite significant in areas like procurement. We're currently running the biggest radio tender in the industry across Europe and Africa, including our partner, E and as well in the mix. And there are clear synergies that we gain from that. Our commercial shared operations are clearly a benefit and that this is valuable can be seen from the fact that actually our m and a partners as part of the disposals have actually agreed to continue to utilize these services and pay for them for quite some time. And last but not least, the fact that they are leaving the group, which was really a function of the market structure being insufficient and not the lack of

41:20 of synergies at the group level by having them in the group has actually not taken away from the opportunity to leverage our unique partnership model, which we call partner markets, in order to continue to drive for joint business with them. These markets will continue to collaborate with us in the b to b space, for example. We will serve customers in all of those countries, for example, in IoT where we have already today the leading platform in the world outside of China and we will, of course, continue to have business in in those markets as well. So for me, the concept of the synergies of the group, if they are played out in the right manner, is still valid.

42:09 But we need to be very careful on not complexifying our setup by being active in markets that are really challenged from a market structural perspective and having to be engaged in potentially multiple rounds of repair and continuous portfolio transformation in country, we have to focus our attention on a fewer set of priorities that we can be really leveraged. And then actually, our strategy as a group is going to be very value accretive. So my ambition is actually to grow the value of the group with this nimbla set of assets, and I'm very confident that we will bring this to life as well while we have now separated ways from markets, so which were indeed pulling us down for a long period of time, but not because they were too many, but because we were in markets where the returns were just unattainable to come in above the cost of capital.

43:14 Luca, thank you very much indeed. Thank you once again for setting aside some time for retail investors. And thank you once again to everybody for your engagement. Luca, I know that investor feedback will be particularly important to you and the rest of the management team, and I'll shortly redirect those on the call to give you their thoughts and their expectations. But before doing so, wondered if I may, Luca, just come back to you for a couple of closing comments, and then I'll send investors for their feedback. Yeah. Thank you very much for for this opportunity. I really enjoyed the the dialogue, and thank you very much for your questions. And I hope that I was able to answer them at least directionally. I would be really pleased if you can continue to stay tuned in to the transformation of VODAFONE and being a part of it. I'm very confident that we will be able to crystallize a lot of value through the coming years. I'm committed to that.

44:07 I'm putting my own money to where my mouth is, and I thank you very much for your engagement and interest and the trust in VODAFONE. With that, I hope for a next opportunity to engage and interact with you very soon, and thank you very much for having me on this format. That's great. Luca, thank you very much. We look forward to welcoming you back. Ladies and gentlemen, if I could ask you not to close this session as we will now redirect you for the opportunity to provide your feedback in order management could better understand your views and expectations. May take a few moments to complete, but I'm sure 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.