Vodafone Group Plc (LON:VOD) has announced its Q1 FY26 Trading Update.
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 VodafoneThree now operational | Reiterated FY26 financial guidance | €2.5 billion Share buybacks to-date | 4.9% 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 terms1.
– 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 merger2, 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.
