REG - Vodafone Group Plc - Vodafone Q1 FY26 Trading Update
24/07/2025 07:00
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RNS Number : 3181S Vodafone Group Plc 24 July 2025
Vodafone Group Plc
Q1 FY26 Trading Update
24 July 2025
Encouraging progress in line with expectations
"We have had a good start to the year with strong revenue and EBITDAaL growth.
Germany has started its improvement trajectory and our emerging markets are
delivering strong broad-based growth. In the UK, we have completed the merger
with Three and are moving quickly to combine our networks to benefit
customers.
Today, we reiterate our full year guidance of growth in profit and cash flow.
After two years of transformation and change, Vodafone is now well positioned
for multi-year growth across both Europe and Africa."
Margherita Della Valle
Group Chief Executive
Encouraging progress in line with expectations
"We have had a good start to the year with strong revenue and EBITDAaL growth.
Germany has started its improvement trajectory and our emerging markets are
delivering strong broad-based growth. In the UK, we have completed the merger
with Three and are moving quickly to combine our networks to benefit
customers.
Today, we reiterate our full year guidance of growth in profit and cash flow.
After two years of transformation and change, Vodafone is now well positioned
for multi-year growth across both Europe and Africa."
Margherita Della Valle
Group Chief Executive
UK merger complete Reiterated €2.5 billion 4.9%
VodafoneThree now operational FY26 financial guidance Share buybacks to-date Adjusted EBITDAaL growth
- Group total revenue: Increased by 3.9% to €9.4 billion in Q1 with
strong service revenue growth. Revenue growth was also impacted by the
consolidation of Three UK, offset by foreign exchange movements.
- Group service revenue: Grew by 5.3% in Q1 to €7.9 billion with
higher revenue from the consolidation of Three UK offset by foreign exchange
movements. On an organic basis service revenue increased 5.5% (Q4: 5.4%), with
growth across all segments apart from Germany.
- Germany: Declined by 3.2% in Q1 (Q4: -6.0%), due to the impact of
the TV law change. Excluding this, service revenue was broadly stable at -0.3%
in Q1 (Q4: -2.7%), as mobile market competitive intensity was offset by
Wholesale growth.
- UK: Organic service revenue increased by 0.9% in Q1 (Q4: 3.1%),
with growth in our Consumer and Wholesale segments offset by a decline in
Business due to planned managed services contract terminations.
- Other Europe & Türkiye: Organic service revenue growth in
Other Europe of 0.2% (Q4: 0.8%) with good Business growth across the footprint
offset by a decline in Consumer in Portugal and Romania. Service revenue in
Türkiye increased by 29.6% in euro terms(1).
- Africa: Continued strong organic service revenue growth of 13.8%
in Q1 (Q4: 13.5%), supported by above-inflation growth in Egypt, and Vodacom's
international markets, driven by demand for data and our financial services.
- Business: Organic service revenue grew by 4.0% (Q4: 5.1%),
primarily driven by the strong demand for digital services across Europe and
Africa.
- Group Adjusted EBITDAaL: Increased by 4.9% on an organic basis to
€2.7 billion, as service revenue growth in most markets was partially offset
by the impact of the TV law change in Germany and continued commercial
investments. Adjusted EBITDAaL margin of 29.3% was 0.2 percentage points
higher year-over-year on an organic basis. Operating profit decreased by 34.3%
to €1.0 billion (see basis of preparation on page 7), primarily due to
higher Other income in the prior year arising from the sale of our stake in
Indus Towers.
- Share buybacks: On 20 May 2025 we launched the initial €0.5 billion
tranche of a new €2.0 billion buyback programme following the conclusion of
the first €2.0 billion buyback programme. This tranche is now complete, and
a second €0.5 billion tranche commences today.
- UK merger: VodafoneThree started operating on 1 June 2025 and is now
fully consolidated in our results. We have already started the integration,
with our customers receiving the first benefits.
- Group FY26 guidance reiterated: Following the completion of the
transaction, our guidance now includes the impact of the UK merger(2), with
Group Adjusted EBITDAaL of €11.3-€11.6 billion and Group Adjusted free
cash flow of €2.4-€2.6 billion.
Note:
(1) Excluding the impact of hyperinflationary accounting adjustments.
(2) FY26 UK merger impact on a 10-month basis of €0.3 billion Adjusted
EBITDAaL and -€0.2 billion Adjusted free cash flow.
For more information, please contact:
Investor Relations: investors.vodafone.com (https://investors.vodafone.com/) ir@vodafone.co.uk Media Relations: Vodafone.com/media/contact GroupMedia@vodafone.com
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14
2FN, England. Registered in England No. 1833679
Awebcast Q&A session will be held at 10:00 BST on 24 July 2025. The
webcast and supporting information can be accessed at investors.vodafone.com
(https://investors.vodafone.com/)
Segment performance
Geographic performance summary
Service revenue Other revenue Total revenue
Q1 FY26 Q1 FY25 Q1 FY26 Q1 FY25 Q1 FY26 Q1 FY25
€m €m €m €m €m €m
Germany 2,688 2,778 291 317 2,979 3,095
UK 1,646 1,429 288 260 1,934 1,689
Other Europe 1,184 1,180 191 202 1,375 1,382
Türkiye 629 515 133 149 762 664
Africa 1,555 1,449 377 364 1,932 1,813
Common Functions 192 146 269 295 461 441
Eliminations (36) (32) (22) (16) (58) (48)
Group 7,858 7,465 1,527 1,571 9,385 9,036
Service revenue growth FY25 FY26
Q1 Q2 H1 Q3 Q4 H2 Total Q1
% % % % % % % %
Germany (1.5) (6.2) (3.9) (6.4) (6.0) (6.2) (5.0) (3.2)
UK 2.0 2.9 2.4 7.6 5.7 6.7 4.5 15.2
Other Europe 1.6 2.1 1.9 2.2 1.1 1.7 1.8 0.3
Türkiye 54.7 18.8 33.2 97.5 15.2 50.4 42.3 22.1
Africa 1.6 0.3 0.9 4.1 8.8 6.4 3.7 7.3
Group 3.2 0.2 1.7 5.6 2.3 4.0 2.8 5.3
Organic service revenue growth(1) FY25 FY26
Q1 Q2 H1 Q3 Q4 H2 Total Q1
% % % % % % % %
Germany (1.5) (6.2) (3.9) (6.4) (6.0) (6.2) (5.0) (3.2)
UK - 1.2 0.6 3.3 3.1 3.2 1.9 0.9
Other Europe 2.3 2.6 2.5 2.6 0.8 1.7 2.1 0.2
Türkiye 91.9 89.1 90.3 83.4 73.2 78.1 83.4 63.8
Africa 10.0 9.7 9.9 11.6 13.5 12.6 11.3 13.8
Group 5.4 4.2 4.8 5.2 5.4 5.3 5.1 5.5
Group profitability FY25 FY26
Q1 Q2 H1 Q3 Q4 H2 Total Q1
Operating profit/(loss) (€m) 1,545 837 2,382 1,022 (3,815) (2,793) (411) 1,015
Adjusted EBITDAaL (€m)(1) 2,681 2,730 5,411 2,828 2,693 5,521 10,932 2,748
Adjusted EBITDAaL margin %(1) 29.7 29.5 29.6 28.8 28.8 28.8 29.2 29.3
Organic Adjusted EBITDAaL growth %(1) 5.1 2.5 3.8 2.2 0.3 1.3 2.5 4.9
Note:
1. Non-GAAP measure. See page 8 for more information.
Germany ⫶ Delivering expected service revenue improvements
34% of Group service revenue Q1 FY26 Q1 FY25 Reported Organic
€m €m change % change %(1)
Total revenue 2,979 3,095 (3.7)
- Service revenue 2,688 2,778 (3.2) (3.2)
- Other revenue 291 317
Note:
1. Non-GAAP measure. See page 8 for more information.
Growth
Total revenue decreased by 3.7% to €3.0 billion as a result of lower service
and equipment revenue.
Service revenue improved quarter-on-quarter primarily driven by higher
wholesale revenue and Business project phasing. Service revenue declined 3.2%
(Q4: -6.0%) in Q1 due to a -2.9 percentage point impact (Q4: -3.3 percentage
points) from the end to bulk TV contracting in Multi Dwelling Units ('MDUs').
Fixed service revenue decreased by 8.0% in Q1 (Q4: -9.7%) primarily due to the
cumulative impact of fewer TV and broadband customers. The MDU transition had
a -5.3 percentage point impact (Q4: -5.9 percentage points) on fixed service
revenue growth in Q1. Our performance in the quarter was also impacted by
lower consumer ARPU, partially offset by the demand for Business digital
services.
Mobile service revenue grew by 2.7% in Q1 (Q4: -1.2%) driven by higher
wholesale revenue following the continued migration of 1&1 customers onto
our network. We continue to expect the migration to reach a full run-rate
during H2 FY26. Growth was also supported by the phasing of digital services
projects in Business. This was partially offset by ARPU pressure due to higher
competitive intensity in the market.
Vodafone Business service revenue declined by 0.9% in Q1 (Q4: -2.8%), as
pressure in core connectivity services was partially offset by strong digital
services demand and the phasing of project work, which also contributed to the
quarterly improvement.
Customers
Our broadband customer base declined by 23,000 during the quarter (Q4:
-7,000), including -15,000 (Q4: -3,000) customers on our gigabit capable
network. The greater decline was primarily due to our focus on driving
front-book ARPU improvement through a reduction in promotional activity. We
continue to be the largest provider of fixed line gigabit connectivity in
Germany, as we market gigabit speeds to almost 75% of German homes with 5
million fibre households beyond our own cable footprint of 25 million
households. Our OXG joint venture buildout is gaining momentum with c.100,000
additional homes passed in the quarter.
Our TV customer base increased by 28,000 (Q4: -81,000) reflecting our strategy
to bundle basic TV services with broadband. This was partially offset by the
ongoing decline in demand for standalone linear TV services.
Our mobile contract customer base declined by 36,000 (Q4: 12,000) in the
quarter, due to the continued reduction of customers through resellers'
channels and low ARPU Business disconnections. The overall competitive
intensity in the mobile market impacted the number of new customer additions.
However, thanks to the improvements we have made to our customer experience,
our branded Consumer contract churn has continued to improve, supporting our
overall base value. We connected a further 2.9 million IoT devices, driven by
good demand from the automotive sector.
Operational actions
We continue to invest in customer experience, our brand and Business. As a
result, we continue to see year-on-year improvements in customer satisfaction
and a continued reduction in detractors. In May 2025 we announced that
Vodafone will be the new main sponsor of eight-time German football champions
Borussia Dortmund for the next five years, further enhancing our brand
awareness in Germany. In July 2025, we enhanced our FamilyCard proposition by
updating our unlimited data tariffs.
We remain on track with the simplification of our German operations. We are
now more than halfway through the implementation of our 3,200 role reduction
programme and have simplified our organisational structure.
UK ⫶ Merger complete forming VodafoneThree, the UK's leading mobile operator
21% of Group service revenue Q1 FY26 Q1 FY25 Reported Organic
€m €m change % change %(1)
Total revenue 1,934 1,689 14.5
- Service revenue 1,646 1,429 15.2 0.9
- Other revenue 288 260
Note:
1. Non-GAAP measure. See page 8 for more information.
Growth
Total revenue increased by 14.5% to €1.9 billion due to the consolidation of
Three UK's financial results following the completion of the merger on 31 May
2025. Service revenue increased by 15.2% (Q4: 5.7%), with organic growth in
service revenue of 0.9% (Q4: 3.1%) as growth in Consumer and Wholesale was
partially offset by a decline in Business.
Mobile service revenue grew by 19.6% (Q4: 4.4%), and organic growth in mobile
service revenue was 0.4% (Q4: 1.8%) as growth in Wholesale was largely offset
by lower price increases compared to the prior year. The slowdown in quarterly
trends was driven by the delivery of Business project milestones in Q4. Mobile
growth was also impacted by ARPU dilution as a result of a change in mix in
the Three UK customer base, a trend which was expected and will be addressed
through the benefits of the integration plan.
Fixed service revenue grew by 3.1% (Q4: 8.8%) and organic growth in fixed
service revenue was 2.7% (Q4: 6.4%) with strong growth in Consumer, supported
by higher ARPU and a larger customer base. This was partially offset by a
decline in Business due to planned managed services contract terminations.
Vodafone Business service revenue declined by 0.8% (Q4: 3.7%). On an organic
basis, Vodafone Business service revenue decreased by 3.0% (Q4: 1.3%) due to
managed services contract terminations and continued mobile ARPU pressure.
This was partially offset by good demand for fixed connectivity and digital
services.
Customers
In mobile, our contract customer base declined by 46,000 in the quarter driven
by the timing of large contract disconnections in Business and Three UK
Consumer customer losses.
In fixed, we continue to be one of the fastest growing broadband providers in
the UK and our customer base increased by 44,000 in Q1, supported by increased
customer loyalty. We now cover 20.3 million households with gigabit speeds.
VodafoneThree Integration
On 31 May 2025, we successfully completed the merger of Vodafone UK and Three
UK. The combined business, named VodafoneThree, is 51% owned by Vodafone and
49% by CK Hutchinson. As of 1 June 2025, we are now fully consolidating
VodafoneThree in our financial results. VodafoneThree will invest £11
billion over the next 10 years creating one of Europe's most advanced 5G
networks, giving millions of customers and businesses up and down the country
a vastly superior mobile experience, and generate cost and capex synergies
of £700 million per annum by the fifth year after completion. The
completion announcement can be found here: Completion of Vodafone and Three
merger in the UK
(https://otp.tools.investis.com/clients/uk/vodafone5/rns/regulatory-story.aspx?cid=221&newsid=1949784)
.
VodafoneThree is now the biggest mobile network operator in the UK with 28.8
million customers, offering a multi-brand mobile strategy in consumer through
the Vodafone, Three, VOXI, SMARTY and Talkmobile brands. We have made a fast
start integrating the two businesses and delivering the best-in-class network
and experience we promised our customers.
We are making immediate improvements to our network. Within just two weeks,
through sharing of combined spectrum, 7 million Three and SMARTY customers
have benefitted from improving 4G speeds by up to 40%. Within a few months,
28.8 million Vodafone and Three customers will start to benefit from
seamlessly using both networks. By the end of the year this will remove a
total of 16,500 km(2) of 'not spot' areas.
We now expect to leverage our market leading customer experience with a focus
on driving improved customer loyalty across the Three UK customer base. On top
of the critical network improvements, we have also launched our 'Just Ask
Once' promise which will set a new standard in customer service.
Other Europe(1) ⫶ Stable growth despite market conditions in Portugal
15% of Group service revenue Q1 FY26 Q1 FY25 Reported Organic
€m €m change % change %(2)
Total revenue 1,375 1,382 (0.5)
- Service revenue 1,184 1,180 0.3 0.2
- Other revenue 191 202
Notes:
1. Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
2. Non-GAAP measure. See page 8 for more information.
Growth
Total revenue declined 0.5% to €1.4 billion due to lower non-service
revenue. Service revenue grew by 0.3% (Q4: 1.1%) and organic growth in service
revenue was 0.2% (Q4: 0.8%) as growth in the Business segment supported by
demand for digital services was offset by a decline in Consumer. The
quarter-on-quarter slowdown was driven by continued ARPU pressure in Portugal.
In Portugal, as anticipated following the launch of a fourth player, service
revenue was impacted by lower mobile ARPU, more than offsetting fixed-line
growth. Despite increased competitive intensity in the market, our Contract
customer base continues to grow. In Ireland, service revenue growth was
supported by higher broadband and mobile Contract customer bases. This was
partially offset by lower mobile contract ARPU. In Greece, service revenue was
broadly stable as growth in mobile, supported by a higher Contract customer
base, was partially offset by a decline in fixed.
Vodafone Business service revenue increased by 1.6% (Q4: 1.5%) in Q1, with
organic growth in Vodafone Business service revenue of 1.5% (Q4: 1.2%) mainly
driven by strong growth across most of our markets, supported by the demand
for digital services.
Customers
We added 28,000 mobile contract customers and 3,000 broadband customers across
our six markets in Q1.
Portfolio
In November 2024, we announced that, along with Digi Romania, we have signed a
memorandum of understanding with Hellenic Telecommunications in relation to a
potential acquisition of separate parts of its subsidiary Telekom Romania. The
discussions are at an advanced stage with the regulatory approval process also
underway.
Türkiye ⫶ Strong euro growth momentum sustained
8% of Group service revenue Q1 FY26 Q1 FY25 Reported Organic
€m €m change % change %(1,2)
Total revenue 762 664 14.8
- Service revenue 629 515 22.1 63.8
- Other revenue 133 149
Notes:
1. Non-GAAP measure. See page 8 for more information.
2. Türkiye was designated as a hyperinflationary economy on 1 April 2022 in
line with IAS 29 'Financial Reporting in Hyperinflationary Economies'. Organic
growth metrics exclude the impacts of the hyperinflation adjustment and
foreign exchange translation.
Growth
Total revenue increased by 14.8% to €0.8 billion, with service revenue
growth partly offset by depreciation of the local currency versus the euro.
Service revenue increased by 63.8% (Q4: 73.2%) on an organic basis. As
reported under IAS 29, service revenue growth in euro terms was 22.1% (Q4:
15.2%). Excluding the impact of hyperinflationary accounting adjustments,
service revenue increased by 29.6% in euro terms (Q4: 52.3%). Growth in
Türkiye was primarily driven by ongoing price actions, value accretive base
management and strong growth in Business.
Vodafone Business service revenue increased by 72.7% (Q4: 105.1%) on an
organic basis, supported by growth in mobile connectivity, increased data
centre usage and demand for digital services. In euro terms, Business service
revenue increased by 28.6% (Q4: 38.0%) as reported under IAS 29.
Customers
We added 200,000 mobile contract customers during the quarter, including
migrations of prepaid customers.
Africa ⫶ Growth across South Africa, Egypt & International markets
20% of Group service revenue Q1 FY26 Q1 FY25 Reported Organic
€m €m change % change %(1)
Total revenue 1,932 1,813 6.6
- Service revenue 1,555 1,449 7.3 13.8
- Other revenue 377 364
Note:
1. Non-GAAP measure. See page 8 for more information.
Growth
Total revenue increased by 6.6% to €1.9 billion as higher service revenue
was partly offset by the depreciation of local currencies versus the euro.
Service revenue increased by 7.3% (Q4: 8.8%) and organic growth in service
revenue was 13.8% (Q4: 13.5%), with growth in South Africa, Egypt and all of
Vodacom's international markets, apart from Mozambique.
In South Africa, service revenue increased due to growth in the mobile
contract segment, supported by price increases, and good demand for fixed
connectivity. This was partially offset by a strong prior year comparative in
the prepaid segment. Financial services revenue continued to perform well with
organic growth of 5.8% (Q4: 3.0%), supported by demand for insurance products.
Service revenue growth in Egypt remained above inflation during the quarter
due to sustained customer base growth and data demand. Price actions in prior
quarters continued to contribute to service revenue growth. Our financial
services product, 'Vodafone Cash' continued to grow with revenue increasing by
55.1% on an organic basis to €31 million in Q1, and now represents 7.6% of
Egypt's service revenue.
In Vodacom's international markets, service revenue growth was supported by
strong demand for data, an acceleration in M-Pesa revenue and an improvement
in trends in Mozambique. M-Pesa revenue grew by 20.8% on an organic basis to
€112 million and now represents 28.7% of service revenue.
Vodacom Business service revenue grew by 5.7% (Q4: 9.6%) and organic growth in
Vodacom Business service revenue was 11.2% (Q4: 11.5%), driven by growth in
mobile connectivity and strong demand for our digital services.
Customers
In South Africa, we lost 3,000 mobile contract customers in the quarter and
now have a mobile contract base of 7.0 million. Across our active customer
base, 77.5% of our mobile customers now use data services.
In Egypt, we launched 5G services during the quarter and added 78,000 contract
customers and 636,000 prepaid mobile customers, and we now have 52.2 million
mobile customers. 'Vodafone Cash' reached 12.0 million active users with 0.6
million users added during the quarter.
In Vodacom's international markets, we added 1.0 million mobile customers in
Q1, and our mobile customer base is now 61.0 million, with 66.5% of active
customers using our data services. Our M-Pesa customer base now totals 26.1
million active users with 0.9 million users added during the quarter.
Notes to the Q1 FY26 Trading update
Basis of preparation
Adjusted EBITDAaL and Operating profit has been extracted from the Group's
unaudited consolidated financial statements for the three months ended 30 June
2025.
These financial statements, insofar as they are applicable to the calculation
of Adjusted EBITDAaL and Operating profit, include all adjustments necessary
for a fair statement of Adjusted EBITDAaL and Operating profit for the periods
presented and apply the same accounting policies, presentation and methods of
calculation as those followed in the preparation of the Group's consolidated
financial statements for the year ended 31 March 2025, which were prepared in
accordance with UK-adopted International Accounting Standards ('IAS'), with
International Financial Reporting Standards ('IFRS') as issued by the IASB and
with the requirements of the UK Companies Act 2006, except no goodwill
impairment assessment in accordance with IAS 36 "Impairment of Assets" has
been conducted at 30 June 2025.
The preparation of the unaudited consolidated financial statements requires
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the end of the reporting period, and the reported amounts of
revenue and expenses during the period. Actual results could vary from these
estimates. These estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revisions affect only that period or
in the period of the revision and future periods if the revision affects both
current and future periods.
Critical accounting judgements and estimates
The Group's critical accounting judgements and estimates are disclosed in the
Group's Annual Report for the year ended 31 March 2025.
Merger of Vodafone UK and Three UK
On 31 May 2025, the Group and CK Hutchison Group Telecom Holdings Limited
('CKHGT'), a wholly owned subsidiary of CK Hutchison Holdings Limited
('Hutchison'), transferred their UK telecommunication businesses, respectively
Vodafone UK and Three UK, into VodafoneThree Holdings Limited ('VTHL').
Following completion, VTHL is a subsidiary of the Group, in which the Group
owns 51% of the issued share capital and CKHGT indirectly owns 49%. The Group
is consolidating VodafoneThree into its financial results from 1 June 2025.
The Group has provisionally determined the fair value of the individual assets
acquired and liabilities assumed at the date of merger. Consequently,
depreciation and amortisation charges included in Operating profit for the
month of June reflect the provisional fair values assigned to these individual
assets.
Non-GAAP measures
In the discussion of the Group's reported operating results, non-GAAP measures
are presented to provide readers with additional financial information that is
regularly reviewed by management. This additional information presented is not
uniformly defined by all companies including those in the Group's industry.
Accordingly, it may not be comparable with similarly titled measures and
disclosures by other companies. Additionally, certain information presented is
derived from amounts calculated in accordance with IFRS but is not itself a
measure defined under GAAP. Such measures should not be viewed in isolation or
as an alternative to the equivalent GAAP measure. The non-GAAP measures
discussed in this document are listed below.
Non-GAAP measure Defined on page Closest equivalent GAAP measure Reconciled on page
Performance metrics
Organic revenue growth Page 8 Revenue Pages 9 and 10
Organic service revenue growth Page 8 Service revenue Pages 9 and 10
Organic mobile service revenue growth Page 8 Service revenue Pages 9 and 10
Organic fixed service revenue growth Page 8 Service revenue Pages 9 and 10
Organic Vodafone Business service revenue growth Page 8 Service revenue Pages 9 and 10
South Africa - Financial services revenue Page 8 Service revenue Pages 9 and 10
Vodacom International M-Pesa revenue Page 8 Service revenue Pages 9 and 10
Egypt - Financial services 'Vodafone Cash' revenue Page 8 Service revenue Pages 9 and 10
Service revenue growth in Türkiye excluding the impact of the Page 8 Service revenue Pages 9 and 10
hyperinflationary adjustments
Group Adjusted EBITDAaL Page 11 Operating profit Page 11
Organic Group Adjusted EBITDAaL growth Pages 8 and 11 Operating profit Page 11
Organic percentage point change in Group Adjusted EBITDAaL margin Pages 8 and 11 Operating profit Page 11
Performance metrics
Organic growth
Organic growth presents performance on a comparable basis, excluding the
impact of foreign exchange rates, mergers and acquisitions, the hyperinflation
adjustments in Türkiye and other adjustments to improve the comparability of
results between periods. The following organic growth metrics are provided:
- Revenue;
- Service revenue;
- Mobile service revenue;
- Fixed service revenue;
- Vodafone Business service revenue;
- South Africa - Financial services revenue;
- Vodacom International M-Pesa revenue;
- Egypt - Financial services 'Vodafone Cash' revenue;
- Group Adjusted EBITDAaL; and
- Group Adjusted EBITDAaL margin
Whilst organic growth is not intended to be a substitute for reported growth,
nor is it superior to reported growth, we believe that the measure provides
useful and necessary information to investors and other interested parties for
the following reasons: (i) It provides additional information on underlying
growth of the business without the effect of certain factors unrelated to its
operating performance; (ii) It is used for internal performance analysis; and
(iii) It facilitates comparability of underlying growth with other companies
(although the term 'organic' is not a defined term under GAAP and may not,
therefore, be comparable with similarly-titled measures reported by other
companies). We have not provided a comparative in respect of organic growth
rates as the current rates describe the change between the beginning and end
of the current period, with such changes being explained by the commentary in
this document. If comparatives were provided, significant sections of the
commentary for prior periods would also need to be included, reducing the
usefulness and transparency of this document.
Service revenue growth in Türkiye excluding the impact of the
hyperinflationary adjustment
This growth metric presents performance in Türkiye excluding
hyperinflationary adjustment recorded in the Group's consolidated financial
statements in accordance with IAS 29 'Financial Reporting in Hyperinflationary
Economies'.
Non-GAAP measures
Quarter ended 30 June 2025
Reported growth M&A and Other Foreign exchange Organic growth
Q1 FY26 Q1 FY25
€m €m % pps pps %
Service revenue
Germany 2,688 2,778 (3.2) - - (3.2)
Mobile service revenue 1,264 1,231 2.7 - - 2.7
Fixed service revenue 1,424 1,547 (8.0) - - (8.0)
UK 1,646 1,429 15.2 (13.8) (0.5) 0.9
Mobile service revenue 1,250 1,045 19.6 (18.7) (0.5) 0.4
Fixed service revenue 396 384 3.1 - (0.4) 2.7
Other Europe 1,184 1,180 0.3 - (0.1) 0.2
Türkiye(1) 629 515 22.1 1.2 40.5 63.8
Africa 1,555 1,449 7.3 - 6.5 13.8
Common Functions 192 146
Eliminations (36) (32)
Total service revenue 7,858 7,465 5.3 (2.7) 2.9 5.5
Other revenue 1,527 1,571
Revenue 9,385 9,036 3.9 (2.8) 3.0 4.1
Other growth metrics
Vodafone Business - Service revenue 1,964 1,911 2.8 (0.4) 1.6 4.0
Germany - Vodafone Business service revenue 581 586 (0.9) - - (0.9)
UK - Vodafone Business service revenue 518 522 (0.8) (1.8) (0.4) (3.0)
Other Europe - Vodafone Business service revenue 378 372 1.6 - (0.1) 1.5
Türkiye - Vodafone Business service revenue 99 77 28.6 1.2 42.9 72.7
Africa - Vodacom Business service revenue 280 265 5.7 - 5.5 11.2
South Africa - Financial services revenue 43 42 2.4 - 3.4 5.8
Vodacom International M-Pesa revenue 112 99 13.1 - 7.7 20.8
Egypt - Financial services 'Vodafone Cash' revenue 31 22 40.9 - 14.2 55.1
Note:
1. Reported service revenue growth in Türkiye of 22.1% includes -7.5pps in
relation to the application of IAS 29 'Financial Reporting in
Hyperinflationary Economies'. Growth in Türkiye excluding the impact of
these hyperinflationary adjustment was 29.6%.
Non-GAAP measures
Quarter ended 31 March 2025
Reported growth M&A and Other Foreign exchange Organic growth
Q4 FY25 Q4 FY24
€m €m % pps pps %
Service revenue
Germany 2,670 2,839 (6.0) - - (6.0)
Mobile service revenue 1,242 1,257 (1.2) - - (1.2)
Fixed service revenue 1,428 1,582 (9.7) - - (9.7)
UK 1,489 1,409 5.7 - (2.6) 3.1
Mobile service revenue 1,057 1,012 4.4 - (2.6) 1.8
Fixed service revenue 432 397 8.8 - (2.4) 6.4
Other Europe 1,194 1,181 1.1 - (0.3) 0.8
Türkiye(1) 605 525 15.2 22.1 35.9 73.2
Africa 1,614 1,484 8.8 - 4.7 13.5
Common Functions 176 140
Eliminations (28) (32)
Total service revenue 7,720 7,546 2.3 1.0 2.1 5.4
Other revenue 1,641 1,842
Revenue 9,361 9,388 (0.3) 1.0 2.1 2.8
Other growth metrics
Vodafone Business - Service revenue 2,062 1,979 4.2 0.6 0.3 5.1
Germany - Vodafone Business service revenue 588 605 (2.8) - - (2.8)
UK - Vodafone Business service revenue 565 545 3.7 - (2.4) 1.3
Other Europe - Vodafone Business service revenue 405 399 1.5 - (0.3) 1.2
Türkiye - Vodafone Business service revenue 98 71 38.0 23.8 43.3 105.1
Africa - Vodacom Business service revenue 296 270 9.6 - 1.9 11.5
South Africa - Financial services revenue 44 40 10.0 - (7.0) 3.0
Vodacom International M-Pesa revenue 114 98 16.3 - (2.0) 14.3
Note:
1. Reported service revenue growth in Türkiye of 15.2% includes -37.1pps in
relation to the application of IAS 29 'Financial Reporting in
Hyperinflationary Economies'. Growth in Türkiye excluding the impact of
these hyperinflationary adjustments was 52.3%.
Non-GAAP measures
Non-GAAP measure Purpose Definition
Group Adjusted EBITDAaL Adjusted EBITDAaL is used in conjunction with financial measures such as Adjusted EBITDAaL is operating profit after depreciation on lease-related
operating profit to assess our operating performance and profitability. right of use assets and interest on lease liabilities but excluding
depreciation, amortisation and gains/losses on disposal of owned assets and
It is a key external metric used by the investor community to assess excluding share of results of equity accounted associates and joint ventures,
performance of our operations. impairment losses/reversals, restructuring costs arising from discrete
restructuring plans, other income and expense and significant items that are
It is our segment performance measure in accordance with IFRS 8 (Operating not considered by management to be reflective of the underlying performance of
Segments). the Group.
Group Adjusted EBITDAaL margin Group Adjusted EBITDAaL margin is Group Adjusted EBITDAaL divided by Revenue.
The tables below provide the reconciliations of: (i) Group Adjusted EBITDAaL
to Group Operating profit which is the closest equivalent GAAP measure; (ii)
Reported growth in Group Adjusted EBITDAaL to organic growth in Group Adjusted
EBITDAaL; and (iii) Reported growth in the Group Adjusted EBITDAaL margin and
the organic growth in the Group Adjusted EBITDAaL margin.
Reported growth M&A and Other Foreign exchange Organic growth
Q1 FY26 Q1 FY25
€m €m % pps pps %
Group Adjusted EBITDAaL 2,748 2,681 2.5 (0.5) 2.9 4.9
Restructuring costs (24) (38)
Interest on lease liabilities 137 109
Profit on disposal of property, plant and equipment and intangible assets 1 2
Depreciation and amortisation of owned assets (1,955) (1,847)
Share of results of equity accounted associates and joint ventures (7) 48
Other income 115 590
Group Operating profit(1) 1,015 1,545
Percentage point change in Adjusted EBITDAaL margin 29.3 29.7 (0.4) 0.6 - 0.2
Note:
1. See page 7 for more information on the basis of preparation.
Definitions
Key terms are defined below. See page 8 for the location of definitions for
non-GAAP measures.
Term Definition
Africa Comprises the Vodacom Group.
ARPU Average revenue per user, defined as customer revenue and incoming revenue
divided by average customers.
Common Functions Comprises central teams and business functions.
Depreciation and amortisation The accounting charge that allocates the cost of tangible or intangible
assets, whether owned or leased, to the income statement over its useful life.
The measure includes the profit or loss on disposal of property, plant and
equipment, software and leased assets.
Eliminations Refers to the removal of intercompany transactions to derive the consolidated
financial statements.
Europe Comprises the Group's European businesses and the UK.
Fixed service revenue Service revenue (see below) relating to the provision of fixed line and
carrier services.
GAAP Generally Accepted Accounting Principles.
IFRS International Financial Reporting Standards.
Incoming revenue Comprises revenue from termination rates for voice and messaging to Vodafone
customers.
Internet of Things ('IoT') The network of physical objects embedded with electronics, software, sensors,
and network connectivity, including built-in mobile SIM cards, that enable
these objects to collect data and exchange communications with one another or
a database.
MDU Multi Dwelling Units.
Mobile service revenue Service revenue (see below) relating to the provision of mobile services.
NPS Net Promoter Score.
Other Europe Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
Other revenue Other revenue principally includes equipment revenue, interest income, income
from partner market arrangements and lease revenue, including in respect of
the lease out of passive tower infrastructure.
Reported growth Reported growth is based on amounts reported in euros and determined under
IFRS.
Revenue The total of Service revenue (see below) and Other revenue (see above).
Roaming Roaming allows customers to make calls, send and receive texts and data on our
and other operators' mobile networks, usually while travelling abroad.
Service revenue Service revenue is all revenue related to the provision of ongoing services to
the Group's consumer and enterprise customers, together with roaming revenue,
revenue from incoming and outgoing network usage by non-Vodafone customers and
interconnect charges for incoming calls.
Vodafone Business Vodafone Business supports organisations in a digital world. With Vodafone's
expertise in connectivity, our leading IoT platform and our global scale, we
deliver the results that organisations need to progress and thrive. We support
businesses of all sizes and sectors.
Notes
1. References to Vodafone are to Vodafone Group Plc and references to
Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise
stated. Vodafone, the Vodafone Speech Mark Devices, Vodacom and
everyone.connected are trademarks owned by Vodafone. Other product and company
names mentioned herein may be the trademarks of their respective owners.
2. All growth rates reflect a comparison to the quarter ended 30 June 2024
unless otherwise stated.
3. References to "Q1", "Q2", "Q3" and "Q4" are to the three months ended 30
June, 30 September, 31 December and 31 March. References to the "year",
"financial year" or "FY26" are to the financial year ending 31 March 2026.
References to "last year", "last financial year" or "FY25" are to the
financial year ended 31 March 2025.
4. Vodacom refers to the Group's interest in Vodacom Group Limited
('Vodacom') as well as its operations, including subsidiaries in South Africa,
Egypt, DRC, Tanzania, Mozambique and Lesotho.
5. This document contains references to our and our affiliates' websites.
Information on any website is not incorporated into this update and should not
be considered part of this update.
Forward-looking statements and other matters
This document contains 'forward-looking statements' within the meaning of the
US Private Securities Litigation Reform Act of 1995 with respect to the
Group's financial condition, results of operations and businesses and certain
of the Group's plans and objectives. In particular, such forward-looking
statements include, but are not limited to, statements with respect to: the
Group's portfolio transformation plan; expectations regarding the Group's
financial condition or results of operations and the guidance for Adjusted
EBITDAaL and Adjusted free cash flow for the financial year ending 31 March
2026; the announced potential acquisition of Telekom Romania; changes to
German TV laws and the migration of users to individual TV customer contracts;
expectations for the Group's future performance generally; the Group's share
buyback programme; expectations regarding the operating environment and market
conditions and trends, including customer usage, competitive position and
macroeconomic pressures, price trends and opportunities in specific geographic
markets; intentions and expectations regarding the development, launch and
expansion of products, services and technologies, either introduced by
Vodafone or by Vodafone in conjunction with third parties or by third parties
independently; expectations regarding the integration or performance of
current and future investments, associates, joint ventures, non-controlled
interests and newly acquired businesses; the impact of regulatory and legal
proceedings involving the Group and of scheduled or potential regulatory
changes; certain of the Group's plans and objectives, including the Group's
strategy.
Forward-looking statements are sometimes but not always identified by their
use of a date in the future or such words as 'will', 'may', 'expects',
'believes', 'continue', 'plans', 'further', 'ongoing', 'progress', 'targets'
or 'could'. By their nature, forward-looking statements are inherently
predictive, speculative and involve risk and uncertainty because they relate
to events and depend on circumstances that will occur in the future. There are
a number of factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to the following:
general economic and political conditions in the jurisdictions in which the
Group operates and changes to the associated legal, regulatory and tax
environments; increased competition; levels of investment in network capacity
and the Group's ability to deploy new technologies, products and services,
including artificial intelligence; the Group's ability to optimise its
portfolio in line with its business transformation plan; evolving cyber
threats to the Group's services and confidential data; rapid changes to
existing products and services and the inability of new products and services
to perform in accordance with expectations; the ability of the Group to
integrate new technologies, products and services with existing networks,
technologies, products and services; the Group's ability to generate and grow
revenue; slower than expected impact of new or existing products, services or
technologies on the Group's future revenue, cost structure and capital
expenditure outlays; slower than expected customer growth, reduced customer
retention, reductions or changes in customer spending and increased pricing
pressure; the Group's ability to extend and expand its spectrum resources, to
support ongoing growth in customer demand for mobile data services; the
Group's ability to secure the timely delivery of high-quality products from
suppliers; loss of suppliers, disruption of supply chains, shortages and
greater than anticipated prices of new mobile handsets; changes in the costs
to the Group of, or the rates the Group may charge for, terminations and
roaming minutes; the impact of a failure or significant interruption to the
Group's telecommunications, data centres, networks, IT systems or data
protection systems; the Group's ability to realise expected benefits from
acquisitions, partnerships, joint ventures, associates, franchises, brand
licences, platform sharing or other arrangements with third parties, including
the combination of Vodafone's UK business with Three UK, the mobile network
sharing agreement with Virgin Media O2 and the Group's strategic partnerships
with Microsoft and Google; acquisitions and divestments of Group businesses
and assets and the pursuit of new, unexpected strategic opportunities; the
Group's ability to integrate acquired business or assets; the extent of any
future write-downs or impairment charges on the Group's assets, or
restructuring charges incurred as a result of an acquisition or disposal;
developments in the Group's financial condition, earnings and distributable
funds and other factors that the Board takes into account in determining the
level of dividends; the Group's ability to satisfy working capital
requirements; changes in foreign exchange rates; changes in the regulatory
framework in which the Group operates; the impact of legal or other
proceedings against the Group or other companies in the communications
industry; and changes in statutory tax rates and profit mix.
A review of the reasons why actual results and developments may differ
materially from the expectations disclosed or implied within forward-looking
statements can be found in the summary of our principal risks in the Group's
Annual Report for the year ended 31 March 2025. The Annual Report can be found
on the Vodafone Group's website (investors.vodafone.com/results
(http://investors.vodafone.com/results) ). All subsequent written or oral
forward-looking statements attributable to Vodafone or any member of the
Vodafone Group or any persons acting on their behalf are expressly qualified
in their entirety by the factors referred to above. No assurances can be given
that the forward-looking statements in this document will be realised. Subject
to compliance with applicable law and regulations, Vodafone does not intend to
update these forward-looking statements and does not undertake any obligation
to do so.
Copyright © Vodafone Group 2025
-End-
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