Vodafone Group Public Limited Company (VOD) Earnings Call Transcript & Summary

Good morning, everybody. It is 10:00. We are correct, and I now declare our general annual meeting open. I'm delighted to welcome you again to Vodafone's U.K. headquarters at the Pavillon in Newbury. And before we begin, I would like to mention that in line with our standard practice, this meeting is being webcast live, and you may appear on video. I am the Chairman of your Board, Jean-François van Boxmeer is my name. To my left, is our General Counsel, Rosemary Martin; and I continue to my left, Crispin Davis, Amparo Moraleda and Dame Clara first. And to my right is our Chief Amite Chief Executive, Nick Read, David Nish, to his right, our Chief Financial Officer, Margherita Della Valle, and finally Valerie Gooding.. Deborah Kerr, who joined our Board on the first of March 2022 is unfortunately unable to be with us today due to illness and sents her apologies. And FeraMichel Demare is unable also to attend our meeting today and has sent his apologies As we announced on the 27th of September, Olaf Swantee decided to step down in light of a professional development, which impacted his ability to serve on the Board when he was appointed last year, unfortunately. Later, we will be inviting you to approve the election of Delphine Ernotte Cunci, Simon Segars and Stephen Carter, each of whom bring considerable telecoms technology and media experience to our board, and we welcome you, you're sitting on the first row here with us today. Other than that, our agenda today is as follows: firstly, in order to make our AGM as inclusive as possible for shareholders, both here in the room. And joining us online, we will show a video presentation covering our results for the financial year ended 31st of March 2022. We also have a suite of materials available online, including video interviews with some of my fellow board members. These materials are linked through the annual report with hyperlinks and QR codes. We will then answer your questions, including any questions that were submitted to us remotely in advance of this meeting before concluding with the resolutions. I should mention that we will only be referring to our annual financial results to the end of March 2022. This is the usual legal notice, which is also available online for you to read. For those of you in the room, I would also like to request that your mobile phones for once switched off and/or set to silence. It has been my first full year as the Chairman of your Board. And during the year, I have been extremely proud of how Vodafone has navigated the COVID-19 pandemic and supported the societies in which we operate. And as society began to recover from COVID-19, I was also heartened by how Vodafone rallied again to provide support for our customers, communities and partners affected by the war in Ukraine. Our response to the war in Ukraine has comprised donations of more than EUR 3 million in contribution and services in kind, including much-needed connectivity for refugees displaced by the crisis. The Vodafone Foundation has coordinated our humanitarian response, including donation of EUR 500,000 to the relief efforts led by the UNHCR. I would like now to show you a video presentation setting out our financial results and our strategic performance during the past year and to outline the next phase of our strategy to become a new generation connectivity and digital services provider. Video, please. [Presentation]

Welcome. I'm pleased to report that through the year, we have continued to demonstrate sustainable growth in both our European and African businesses. There are 4 key areas I'd like to highlight today. First, our financial performance in the year was good, and our results were in line with our expectations for the year and medium-term financial ambition. We grew revenues in both Europe and Africa, grew adjusted EBITDA, grew cash flow and delivered an inflection point in returns with a strong increase in return on capital employed. Second, our good financial performance in the year is a direct result of the systematic execution of our organic growth strategy that we started almost 4 years ago. Alongside our growth strategy, we have clear plans in place to address our shorter-term operational priorities. Third, whilst we're not immune to the macroeconomic challenges in Europe and Africa, we are structured well to manage them. And finally, we're fully committed to improving returns for shareholders through the ongoing and sustainable execution of our organic growth strategy and targeted action to strengthen and simplify our portfolio. Following the strategic progress we've made over the last 3.5 years, I'd like to thank the whole Vodafone team for their dedication in delivering a good financial performance this year in line with our expectations. We've grown service revenue by 2.6%, grown adjusted EBITDA by 5% and grown pretax return on capital by 170 basis points to 7.2%, which is a significant step-up and puts us in a strong position to meet our medium-term ambition to have returns above our cost of capital. This broad-based financial performance begins with sustainable revenue growth. We delivered good growth in Europe with 10 out of 11 markets, improving year-on-year. Our consistent revenue growth was matched with operational leverage and the benefits of ongoing focus on operational efficiency to deliver a 5% increase in adjusted EBITDA and with our highest margin in over a decade at 33.4%. Our full year dividend will be maintained at EUR 0.09. Our strategy is fundamentally focused on delivering sustainable growth in both Europe and Africa, both in revenue, profit, cash flow and returns. We have 6 core elements to our growth plan, which is designed to further deepen the trusted relationships with consumer and business customers through providing the overall best connectivity and digital services with an outstanding digital experience. Our customer-facing strategies are then underpinned by initiatives to drive both operating and capital efficiency. You can see from the snapshot of operational KPIs presented here, that we have built real momentum throughout our business, and we are delivering consistent improvements across the board. I'd particularly like to highlight the growth in revenues from our digital services. Whilst mobile and fixed connectivity remains the core of our business, it is essential to further deepen the relationships we have with our customers by broadening the range of services that they have with us. This both delivers good marginal returns for us on those adjacent services, but importantly, increases the loyalty we have with our valued connectivity customers. Whilst we continue to execute on our long-term organic growth strategy and have delivered another good year of financial performance, I'm not satisfied with the returns we have delivered to our shareholders. Our strategy targets consistent growth of revenues in both Europe and Africa and the growth of adjusted EBITDA by mid-single digits over the midterm. We plan to then convert these profits into predictable free cash flow growth. In addition to our organic growth strategy, we have some important areas of portfolio focus and we have 4 goals: first, have stronger assets in good markets producing predictable cash flow growth; second, simplify our portfolio to assets that leverage our unique regional scale; third, move Vantage Towers to a co-controlling position that has the optimal capital structure; and finally, strengthen our balance sheet further. This is a large agenda. Within a challenging macroeconomic period, but the Board, the management team and I are focused on delivering good outcomes that strengthen the group and create value for our shareholders.

Before we turn on to your questions now, I have 2 brief points. If you are a shareholder or a shareholder's validly appointed proxy, you are eligible to vote to the resolutions and to ask questions at this meeting. If you're not a shareholder or a validly appointed proxy, we are delighted to welcome you to the meeting, but you cannot ask a question nor you are eligible to vote. Secondly, our U.K. customer services representatives are not available at the AGM venue today. We are, of course, happy to take any general questions about Vodafone during the meeting, but would ask that you reserve any individual customer account matters for the U.K. customer services team. They can be contacted using the details on Page 17 of the notice of this AGM. If there are no objections, I propose that the notice convening the meeting be taken as read. And we will now be happy to answer your questions. Please, could you wait for a microphone to reach to you, identify yourself and then ask question. And please note again that you will be recorded. We're now over to the Q&A. You saw all pre-prepared things disappeared. Who can I handle the first question?

Hello. My name is John, and I'm here as an appointed representative on behalf of ShareAction, a shareholder in the company. Firstly, I would like to say congratulations on the crediting a living wage employer -- sorry, credit as a living wage employer. Every work at Vodafone will benefit from being guaranteed a wage that is calculated to ensure a decent standard of living. This is especially vital in the current cost of living crisis. Not only is living wage accreditation 1 of the most important steps an employee can take to alleviate in work poverty. It will also provide huge benefits to the company as a whole. These include reduced staff turnover, increased employee satisfaction and increased prestige amount consumers. I've noticed that you have not publicly announced your accreditation, but just referenced it in your annual report. Do you have plans to publicly celebrate Vodafone's momentous decision to credit as a living wage employer? Doing so could play an important role in getting other companies to a credit as a living wage employers. Please, can you elaborate on any plans you have to influence other companies to follow your leadership on this? And I also look forward to seeing Mattel's Vodafone does to support all those that work for them, building on this first positive step of accreditation as a living wage employee -- employer, sorry.

Thank you, John, for your question. Yes, we have been joining this initiative since April 2022. I'm short of the answer of whether we publicized it otherwise than mentioned it in our annual report, but I will refer to Nick later on to give some -- to shed a light on that. To your question, there are 2 effects. On the one hand, you have the snowball effect. If a company like Vodafone, we will be followed by other companies. I think when big companies like ours take their responsibility and take such an initiative, we also expect that we will be followed because it's anybody's voluntary initiative to do so. But I think we will set an example and we hope to do so. And the other side effect, obviously, is that we work with lots of subcontractors. And of course, contractually, we ask them also to subscribe to what we subscribe to for ourselves. That is my short answer. I don't know, Nick, if you want to add something about

John, I'd just say, look, we're very proud to be accreditated, and you know that, that just happened this April. So let us take away and look at how we lean into this going forward.

Next question, if any, sir? The mic is arriving.

My name is [ Jimmy ] back here. I'm a long-term shareholder in this company. I'd like to congratulate Mr. Read on last year's work. Very good. I have a couple of questions. One of them, I'm quite disappointed why our share price is so much below its intrinsic value. I mean all the people who analyze shares in the papers in America and here, say, Vodafone atleast mispriced by about 50%. What can Mr. Read yourself do to raise our share price? To get the market to be more interested to buy our shares, what are you doing wrong that people like Unilever are not doing? Let's see. That's one. Two, I'm worried about what I hear on the circuit of merchant banks that they are circling Vodafone for making another dead purchase because they make the commissions, we end up with you the money that you're going to get from ,from Vantage Towers, I hope you either use it to reduce debt or give it back to us. Don't go and buy something else. They don't make money. Get stuck for years to be approved. And we -- generally, the shareholders don't look well on your progress. I really think taking over another dead company in a foreign country, not a good idea, but I'm only a small shareholder. Thank you very much.

Thank you,[ Jamie ]. I think your question and comments are very common sensical. Thank you for paying compliments to our Chief Executive. He is with his team doing the right thing to create shareholder value on the long term. It's not his task to move the share price as such, is task and the task of the management team is to move the results up to grow the revenue and to grow the return on our investments. And so pointing out to your point about where to invest money, it's, of course, we have to invest money sensibly in growth opportunities, and we will continue to do so, not in dead horses as you are alluding to. So absolutely, you're absolutely spot on. This board is committed to create shareholder value on the long term. When you refer to the share price a long time ago, I mean its history will tell you, but we have to look for the future. And again, it's the organic performance of this company that we have in our minds in growing Vodafone. I don't know, Nick, if you want to.

Well, maybe I could just build a few points. First of all, we compare ourselves, and that's reflected in our remuneration structure on a total shareholder return basis versus the telecom sector in Europe. On a 1-year and 3-year basis that we have outperformed that sector average. So you are right, the sector itself has been challenged, but we have slightly outperformed our sector but there's a lot more we need to do on the share price front. Two real main actions. One is our organic growth strategy. You saw on the FY '22 results, that level of service revenue growth was the highest level of growth we've achieved since 2008. That EBITDA margin that we achieved was the highest for over a decade. So our organic growth strategy and the actions we're doing is coming through. And to your point around portfolio actions or, let's say, acquisitions, disposals, our focus is always on accretive transactions. We will only ever do a transaction that strengthens the group and is accretive for value and shareholders.

Sorry, the last -- sorry, the German acquisition that you took that really put back Vodafone in a big way on the stock market anyway. I don't think it was a good takeover. And maybe please don't go for these big ones because you suffer. The market now is going to be interest rates going up all the way for maybe the next 2 years. And you're just going to go borrow money and buy something like the German company that you bought, and that could cripple Vodafone. That's my opinion. I'm an old man. I'm not specialists.

Clearly, the Board will obviously take all the environmental macroeconomic circumstances into account. And 1 of the key priorities we have is deleveraging our balance sheet. So being more prudent and bringing our leverage down from 3, we were at 2.7 in down to 2.5%. That's one of the things we have said to shareholders we want to do. And I think in the current macroeconomic environment, that's the right thing to do.

With that second question. Let's move to the third one.

Dennis Bavi, shareholder. Another question on shareholder returns for a longer-term investor, obviously, pay dividend is important. It's been flat for the last 3 years or more. With the improved figures that you've been quoting, can we expect an increase from the $0.09 a year. And perhaps a word about whether you consider you've got a progressive dividend policy or not? The other question on was similar to the last gentleman on debt. Have you actually got a lot of your current loans sort of hedged against higher interest rates for the next few years or not?

And then perhaps, Nick, you can.

Yes. Maybe I'll take the start and then maybe Margherita on the debt side of things. Just in terms of the dividend policy that we currently have, it was part of our midterm guidance. What we said was we have a minimum EUR 0.09 dividend. We want to prioritize and it goes back to the previous gentleman, we want to prioritize deleveraging first. So going down to the 2.5x leverage. Once we're at the 2.5x leverage, we think that's a moment as a Board to reassess what's the best way to either make investments in the business or remunerate our shareholders further. So a move in the dividend would be considered as part of the several options we would consider at that time.

And in terms of our debt management, we are actually in a very good position because we have average maturities of over 11 years. It's a quite unique position across Europe with fixed interest rates. So as we were going through the prior period, our policy was to fix and therefore, we have very limited exposure to any market movement.

With that question being answered, I see further questions to the left.

My name is Henri Lopez. I'm the General Secretary of Independent Workers Union at Great Britain. I'm here with one of your cleaners who work in one of your buildings who would like to ask some questions. We are here as a part of share action. Sorry, he doesn't speak English probably, so I'm going to translate for him.

My name is Walter Cabrera. [Foreign Langauge]

[Interpreted] My name is Walter Cabrera, I clean our Vodafone Headquarters in London Paddington and I'm a member of the IWGB Union, a union that seeks to represent and improve the conditions of workers like myself and my colleagues. I'm here as an appointed representative on the help of ShareAction, a shareholder in the company. ShareAction represents 44 institutional investors with 3.2 trillion assets under management, who are supportive of addressing Precarious work in the U.K.

[Foreign Language]

[Interpreted] I'm here today as a Vodafone worker who is suffering under the poor pay and conditions that come as a result of Vodafone choosing to outsource us. Vodafone has so far failed to address our demands for fair pay and conditions, and this has led to us launching a campaign. I'm here today to offer you the opportunity to address these issues in order to avoid a campaign that could be extremely damaging for the reputation of the company.

[Foreign Language]

[Interpreted] For many years, we have bought a Vodafone headquarters and pay [indiscernible] wages despite working for a prestigious company with scars statutory sick pay, which means we have to work while sick because we cannot afford to lose pay. This was the case of many of my colleagues during the pandemic, who got ill, but had to endure the pain with no financial support available that could have helped them during those difficult and stressful times. In the midst of the cost of living crisis, things are now getting easier.

[Foreign Language]

[Interpreted] We understand that you outsource the services which we provide, but I'm here today to urge you to take responsibility of the outsourcing company, Mitie, who employ us, as we provide essential services to Vodafone, we would like to engage with you before we feel we have to take industrial action as this could impact Vodafone business as well as Mitie's. You have the power to not only give us what we deserve, but also to protect your business.

[Foreign Language]

[Interpreted] Our request is simple. We would like Vodafone to raise our wages to $12.50 per hour to enhance our sick pay and to guarantee the respect and dignity we deserve. In closing, I would like to ask the Board if they are willing to engage with Mitie to review our contracts and implement a reasonable demands. We'll Vodafone agree to meet with the IWGB to discuss how we can work together to find a resolution to this matter?

Thank you for your question. I'm aware we are aware of the situation and I'd like Nick to answer has more to the point where the situation remedy

Yes. So I mean, as you know, we have Mitie as our contractor for cleaning our head office. And we've had a long-term contract with them on a number of our facilities. I understand there's a dispute at the moment. And we have asked Mitie to engage constructively on that dispute, which I understand they are doing. So we're being kept informed of those developments, and I hope that they will be able to find a resolution.

So this is to say we heard you. Any further questions from the audience? One further question from you.

You mentioned briefly Vantage Towers. What is the plan? Are you going to sell more of your part of your ownership further and get more cash? Is that what it is? Or is it when you say joint control of Vantage? I didn't really understand.

Nick?

So Vantage Towers, we IPO-ed. So it went public. We sold 18% Vantage Towers when we did that, and that money went down to paying further down or debt at Vodafone Group. What we're exploring at the moment is a number of opportunities where we will do a further partial sale of our stake and move into a co-control with another party. So we find a partner effectively that we will co-control and run that business together. It will be deconsolidated off our balance sheet. So you won't see it on our balance sheet anymore because a lot of tower companies typically have higher leverage, so higher debt. And the reason they do that is because they're very predictable income coming through from the tower rentals. So they can support, it's a bit more like a pension, if you like, annuity that you're getting over a period of time. So it's a different business model from the rest of Vodafone. So what we're saying is we're going to set it up separately with a different profile and all the money that we raise in our sell-down of our stake will go to paying down debt at Vodafone Group. So it goes back to my point of going down below the 2.5x and making sure that we have a very robust balance sheet to Margherita's point.

There was 1 more further question.

Just quickly. I thought they were going to have -- we're going to have a better response that we already had from Vodafone before, which is basically talk to Mitie with nothing to do with that. And I think Vodafone should be responsible for the people who work in the whole building and responsible for the well-being of everybody who works there. And I think the cleaners play an important role in the business as well because they keep Vodafone functioning. So I would appreciate if we could have a better response than that, and that Vodafone is going to engage through Mitie and through the union in order to solve this problem for these workers.

Yes. Sorry, I want to make it very clear. We value everyone that works for us, whether direct employees or indirect employees through contractors. We care very much in terms of the contracts that we have and the work is within it. What I'm saying Mitie, obviously, we contract with them, so they have to lead the discussion. We, of course, are being made aware of those discussions and we care deeply on the outcome. So I'm saying we're committed to work through Mitie to see whether we can come to a resolution.

[indiscernible] There is the reason we are here today and this is because it hasn't been happening for body. As I'm saying, this has not been the case. These our members have been through a very difficult situation. They've been put in disciplinary for refusing to do all of the work. There is short of staff in the building. We have made Vodafone aware of this situation. But so far, the situation continues. Workers hasn't been given the conditions that they've been asking and that's what they are here today. He's been taking -- he has lose a day of work to come here when he is paid over to wages and you should understand how important is for the life for the family and how difficult has been for them during the pandemic to be paper wages do not have a sick pay. At the moment, they have only statutory sick pay, which is not fair for all these workers, and that's what we are here to and we hope that Vodafone engage with us in order to resolve this problem so that work has working safe and good conditions of employment that everybody else deserves in Vodafone.

We'll engage with Mitie. It's well noted. If there are no further questions from the audience, we still have questions from have been submitted online. And so I propose they're going to be read out, and we are going to answer them in the same format we have been doing it with the questions from the room.

Thank you, Chair. We have 2 questions from Lluis Peralta Zaragoza. He's a fund manager at GVCGaesc. First question. When are you planning to publicly start reporting the gender pay gap and the equal pay gap? Second question, the GHG reduction ambition set out in the CEO LTI metrics, does it include Scope 3 emissions as well. Can you give some color on how you are engaging with your suppliers in order to achieve emission reductions in their operations?

Thank you. I'll ask Rosemary to shed a light on the first question.

Thank you, Chairman. We do, every year, publish the U.K. gender pay gap for Vodafone. We've been doing that since 2017 when the legislation was introduced. In the most recent report, we've disclosed that the U.K. gender pay gap is 9.6%, and that's a decrease from 2020 when it was 12%. And the median U.K. pay gap in 2021 was 12.4%. And again, that's a decrease from the 2020 figure. And the way that the U.K. pay gap is calculated under the statutory methodology means that it will fluctuate from year-to-year as it depends on the business structure and the numbers of men and women in different roles and positions in the company. At Vodafone, we are committed to creating and maintaining an inclusive culture, and we have an extensive program of activities and work to support our women throughout the organization. And this is having good effect and is helping us to reduce the pay gap. On equal pay, I would say that like other companies in the U.K., Vodafone is subject to the Ecology Act. And therefore, we are required and would want to pay men and women similar or the same pay for the similar or same work. And therefore, there's no equal pay gap reporting requirements. And hence, we don't report on that.

And I'll ask Val to shed the light on the second question.

Thank you, Chairman. The question was about Scope 3 emissions, which are indirect greenhouse gas emissions, which we Vodafone cannot control, but may be able to influence our group long-term incentive ESG measures which account for 10% of the GLT 2023 award based on 3 quantitative targets under each of our purpose pillars. Firstly, achieving a net 0 reduction in carbon emissions, then increasing the representation of women in management and increasing financial inclusion customers. These are set out in more detail on Page 111 of our annual report for 2022. Our overall ambition is to reach net zero under Scope 1 and 2 by 2030, and that's an ambition that has been approved independently by the science-based targets initiative. Our broader Planet goals commit Vodafone to halving our Scope 3 carbon emissions by 2030 against the 2020 baseline, including joint ventures including joint ventures, all supply chain purchases, the use of products we have sold and business travel. And by 2040, we intend to fully abate Scope 3 emissions to reach net 0 across our full carbon footprint, but that's a longer-term ambition.

Thank you, all. And as to specific the question about what we do with our suppliers. We have worked with the Carbon Trust on the Scope 3 emission scope. And in 2020, we have been introducing 20% waiting for environmental and social criteria when we evaluate our suppliers. And to be very precise, it's 5% on diversity and inclusion, 5% on the environment and 10% in health and safety, which in the industrial world is of really big importance. The assessments that we make, they award a positive scoring for suppliers that have set or are willing to set science-based targets. And because one has to realize our Scope 3 is the scope 1 and 2 of our suppliers. That's the logic about how you have to think about it. In addition, suppliers, which offer product-specific CO2 data and pathways for reduction over the contract period are, of course, positively scored. And our supplier performance management program also covers environmental factors and suppliers' GHD performance is one of the factors, evaluated in our annual assessment process of our suppliers. And in addition, this year, we introduced a new CO2 analytics dashboard allowing our supply chain teams to view and track progress against our reduction targets because it is a dynamic enterprise. That are the elements for the reply to question 2, and I wait for the next one.

The next 3 questions are from Ian Sharp. Question one. Will the Board members responsible for customer service have the majority or all of their basic salary or bonuses directly linked to customer satisfaction and complaint handling within the organization. And if not, why not, better still, if you're a truly service-focused business, why not all of you? Second question. Will the level and resolution of complaints become an item that is published in annual reports, et cetera, so that shareholders can, A, see the relative level of complaints the company is receiving and B, the level of their satisfactory resolution going forward. Question three, all future official documentation from the company to shareholders demonstrates what actions are being taken to improve services to customers and publish all independently audited levels of customer satisfaction going forward.

Thank you. I'll ask Valerie Gooding to answer specifically on the bonus part of the question and then come back to Nick to give the operational fill in

Thank you, Chairman. The annual bonus, what we call the group short-term incentive plan of everyone who works at Vodafone Group, including all the members of the Executive Committee contains a stretching customer appreciation measure that accounts for 25% of their target. We do Assess that performance on a market-by-market basis against different metrics, including churn, revenue market share and what is called NPS, Net Promoter Score, for both consumer and Vodafone business that measures the extent to which our customers would recommend us.

Maybe just building on Val's point. So delivering an outstanding customer experience is core to our strategy. You saw it as one of the pillars that we have on our strategy. And so we put a lot of time and energy into managing that experience and measuring that experience. We have many operational KPIs, very detailed that management are managing every single day. See that translates into 2 important outcome KPIs, which is churn. We want churn to reduce. And so having a great experience, service experience contributes to churn reduction. And the other one is Net Promoter Score, which we want to increase. So both the elements of the outcome are in the customer appreciation structure. If I look at both of those 2 components, first of all, churn, it was a highly competitive year. There was a lot of regulatory changes. However, broadly, we had a good churn performance and particularly mobile churn fell year-over-year. In terms of Net Promoter Score, we are either a leader or coleader in a heavy number of our markets. and we had a particularly strong performance, I would say, in the U.K. If I go to specifically complaints, there's no intention to publish the number of campaigns or level of resolution in every single market that we operate, we always have a regulator that does some sort of publishing on how we are rated versus the other operators. And so if I pick the U.K. as an example and pick mobile first, typically were average on mobile in terms of number of complaints. We have 2 complaints per 100,000 customers. So that was in the recent Ofcom first quarter analysis. And in fixed, we're slightly above average at the moment, which we're working hard to bring down. So that's 13 complaints in every 100,000.

Thank you. Next question.

The next 3 questions come from John Farmer. First question. Please will Vodafone Group plc improve future annual report legibility by printing in black on white, without pastel contrast such as gray on more gray and a cross page, not in columns to save paper and if red online scrolling. Second question. Please will Vodafone Group Plc reverts to AGMs, not in darkest Newbury but in London, the world's financial capital and at conventional 11 a.m. followed by lunch. Question three, Annual Report 2022, Page 109, remuneration report graph shows Vodafone Group plc, total shareholder return 10-year just 24%, well below comparator group and certainly not justifying the remuneration the Board has lavished on itself. Executive Directors nearly 9 million according to annual report Page 100 and according to annual report Page 105, another GBP 1.9 million on non-Executives. How and when will this abuse stop and total shareholder return be improved?

Thank you for the question. I will try to answer briefly the first 2 ones. The -- on the annual report, one has to realize the overwhelming majority of users now use it online. Hence, colors, little movies, all kinds of animatic inside, very easy. Printed copies are spares and, of course, the accessibility, we will continue to improve the design and the accessibility of our report, but the point is it's essentially an online vehicle. As to having the AGM here in Newbury, I'm saying, first of all, it's our historical and still statutory headquarter of the company. It has a very convenient location to organize both physical and the whole infrastructure to make an efficient online. We have moved to a hybrid model of AGMs as from last year already. a bit forced by the pandemic, but we have seen that has been in the mix offering a lot more opportunity for shareholders outside of the United Kingdom or much further away from the Greater London. And as opposed to hours and launches, one has to realize that we are still in post-pandemic and that we are on the cautious side and not organizing big social events where we would present a risk also for the people attending. As the third question about remuneration, I would ask Val to make an appropriate response.

Thank you. Our remuneration arrangements support our wider business strategy. And they do ensure that there's a strong alignment between executive and shareholder experience. A significant proportion of NIC's overall package and market reaches overall, package opportunity is delivered via the long-term incentive plan. And that's in the form of shares, meaning the value that our executives receive from our arrangements is heavily linked to our share price. The group long-term incentive plan also includes a total shareholder return measure, which means part of the award is determined by share price and dividend performance. Nick's share ownership goal is set at 500% of salary. And as at 31st of March 2022, Nick held shares -- he actually held 4,604,134 shares, and Margherita held 1,814,621 shares, meaning that for both of our executives, they share the same experience as shareholders when the share price moves, whether that goes up or down. And when it goes down, they experience the same as the rest of our shareholder base. The 10-year TSR chart referred to by Mr. Farmer is mandatory reporting requirement, and it's not related to the TSR performance period used for the GLTI awards, which is a 3-year period, and it's not the same comparator group either. And just in terms of our CEO's total single figure for remuneration, which is included in the directors remuneration report, that figure of EUR 4.17 million is well below Vodafone's 10-year average pay for our Chief Executive and it's also below the median for FTSE 30 CEOs. So I mentioned that just to illustrate that it's very much a performance-driven remuneration arrangement. Thank you, John.

Thank you. Over to the next question. .

Chair, The final presubmitted question comes from Naureen Patel. One question. What does the Chief Executive of Vodafone mean by position when referring to opportunities to strengthen its position in the 4 markets in Britain, Italy, Spain and Portugal. Could he spell out if it is customer service or complaints or network coverage or management remigration or something else?

Chief Executive, the question is on you.

Thank you. This builds a little bit on the excellent question the gentleman asked before, which was -- it's related to market structure and our position within that market structure as we've explained before and earlier that European telecoms return on investment has been below the cost of capital within the market. And we need to improve return on capital. And you saw in the FY '22 that we had an inflection of 170 basis points on our return on capital. So we are starting to improve that return on capital, but it needs to be improved further. How do you improve it further? Well, of course, there's growth and various other things that you can do, and we are pulling all of those levers. But an important part of it is the market structure in each of the markets that we participate, whether U.K., whether Germany, whether Italy. And it's important to understand how many players can be in that market. If there is too many players, too fragmented, then you don't have enough scale to earn an adequate return, and that means that you don't invest. We want to invest in network. We want to invest in services and products. So to allow us to do that, we need scale. And what we think is the ideal structure is that there are 2 physical fixed networks in the market and 3 mobile networks in the market at the infrastructure level. Then there's plenty of retail competition with lots of different brands. And so we think there's an opportunity. U.K. would be one of them. where there's an opportunity to gain further scale at the infrastructure level, have fewer mobile networks and go down to 3 players, essentially on infrastructure with lots of retail competition and a healthy market. That will help improve returns, encourage investment and still have healthy competition.

Thank you, Nick. Very clear. We have no further questions that I know. And so I think -- if there are no further questions, I would like now to turn to the resolutions set out in the notice of this meeting. In common with many companies, resolutions are decided upon by means of a poll. This gives all shareholders the opportunity to vote, whether or not they are present at this meeting. If you have already voted on a resolution and do not wish to change your mind, there is no need to vote in this meeting now. Similarly, if you have already voted by proxy, either by post or online, your vote has already been counted and will be included in the figures when the results of the poll is announced. If you have already voted but now wish to change your mind, your vote in this meeting will supersede your previous vote. If you have neither a poll card or nor a pen, please raise your hand now and one of the registers will come over to you. I see no show of hands. For your information, we will display on the screen alongside the resolutions the results of the proxy votes received prior to the meeting. And if you wish to begin voting, please do so now while I summarize the resolutions before you. Your board recommends that you vote for all the resolutions as we have done in respect of our own shareholdings. The first resolution is to receive the company's accounts, strategic report and the reports of the directors and the auditor for the year ended 31st of March 2022, The Resolutions 2 to 14 relate to the elections and reelections of directors: Stephen Carter, Delphine Ernotte Cunci, Deborah Kerr and Simon Segars are standing for election for the first time in accordance with our Articles of Association. The remaining directors are standing up for reelection. Resolution 15 is to declare a final dividend. Your board is recommending the payment of a final dividend of EUR 0.45 per ordinary share, making it a total dividend of EUR 0.09 per share for the year. Resolution 16 is to approve the annual report on remuneration for the year ended 31st of March 2022. Resolution 17 is to reappoint Ernst & Young as the company's statutory auditor to hold office until the next general meeting at which accounts are laid before the company. Resolution 19 authorizes the Audit and Risk Committee to determine the remuneration of the auditor. And Resolutions 19 to 22 relate to the directors' authorizations. The Resolution 19 authorizes directors to issue shares equivalent to 1/3 of the existing ordinary shares and to issue shares equivalent to a further 1/3 of the existing ordinary shares in the company, excluding treasury shares as part of a rights issue. Resolutions 20 and 21 allow directors to allot a limited number of shares without first offering them to the existing shareholders. Such limits being 5% of the company's share capital for any purpose and an additional 5% for the company's share capital in connection with an acquisition or specified capital investment. Resolution 22 authorizes directors to purchase up to 10% of the company's share capital, excluding treasury shares. And each of these authorities will be in place until the earlier of the next AGM of the company in 2023 or at the close of business on 30th of September 2023, whichever occurs first. The Resolution 23 authorizes the company and its subsidiaries to make limited political donations up to an aggregate amount of GBP 100,000. It remains Vodafone's policy not to make political donations or incur political expenditures as those terms are normally understood. This resolution is, therefore, purely precautionary in nature. Resolution 24 authorizes the board to call general meetings of the company other than the AGM with a 14 days notice. That is a summary of all the resolutions being put to the meeting today. Please ensure that you have completed your poll card and signed it before depositing it into the secured voting box as you exit this room. You will have 15 minutes after the end of the meeting to lodge your vote, beyond which point the poll vote will close. The registers will begin to count your votes as soon as the meeting is over and your votes for each resolution will be added to the proxy votes. Representatives of our registered Equiniti are acting as scrutineers for the poll. The final totals will be notified to the London Stock Exchange and posted on our website later today. Now ladies and gentlemen, that concludes business of the meeting. And please do remember to complete, sign and deposit your poll card in the voting box before you leave the room in order your vote to count. And thank you again for joining us today, and I now declare the meeting closed. Thank you very much, and have a good day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]