Vodafone Group Plc (LON:VOD) has announced its H1 FY26 Results.
Good H1 performance, expect to deliver upper end of FY26 guidance
“Following the progress of our transformation, Vodafone has built broad-based momentum. In the second quarter we saw service revenue accelerating, with good performances in the UK, Türkiye and Africa, and a return to top-line growth in Germany. Whilst we have more to do, we delivered good strategic progress in the half year, driving further operational improvements across the business, expanding our customer satisfaction initiatives, and making a fast start in integrating the Vodafone and Three networks in the UK.Based on our stronger performance, we are now expecting to deliver at the upper end of our guidance range for both profit and cash flow, and as our anticipated multi-year growth trajectory is now under way, we are introducing a new progressive dividend policy, with an expected increase of 2.5% for this financial year.” Margherita Della Valle, Group Chief Executive
Financial highlights
| 6.8% | 2.25 eurocents | Expecting to deliver upper end | |||
| Adjusted EBITDAaL organic growth | Interim dividend per share | of FY26 financial guidance | |||
– Total revenue: Increased by 7.3% to €19.6 billion in H1 (H1 FY25: €18.3 billion) due to strong service revenue growth and the consolidation of Three UK, partially offset by adverse foreign exchange movements.
– Service revenue: On a reported basis grew by 8.1% to €16.3 billion in H1 (H1 FY25: €15.1 billion) and increased by 5.7% on an organic basis.
– Germany: Returned to growth in Q2 (+0.5%), supported by the end of the TV law change impact and higher wholesale revenue.
– UK: +1.2% organic growth in Q2, strong commercial momentum and fast start on VodafoneThree integration.
– Africa: Maintaining double-digit organic service revenue growth (Q2: 13.5%), supported by above-inflation growth in Egypt and Vodacom’s international markets, with strong demand for data and financial services.
– Business: +2.9% organic growth in Q2, with strong demand for digital services.
– Adjusted EBITDAaL: On a reported basis increased by 5.9% to €5.7 billion (H1 FY25: €5.4 billion), and by 6.8% on an organic basis, as service revenue growth in most markets was partially offset by the final impact of the TV law change in Germany and continued commercial investment.
– Operating profit: On a reported basis decreased by 9.2% to €2.2 billion in H1 (H1 FY25: €2.4 billion), with Adjusted EBITDAaL growth offset by higher depreciation and amortisation following the consolidation of Three UK, and lower other income.
– Shareholder returns: €3.0 billion of share buybacks now complete (since May 2024), further €1.0 billion remaining. Next €500 million tranche commences today.
– FY26 guidance1: We now expect to deliver the upper end of our guidance ranges: Adjusted EBITDAaL of €11.3-11.6 billion and Adjusted free cash flow of €2.4-2.6 billion.
– New progressive dividend policy: Reflecting our medium-term outlook for Adjusted free cash flow growth. We expect to grow the FY26 dividend per share by 2.5%.
Operational highlights
– Customers: A fast start to VodafoneThree integration, with immediate improvements to the network. Our new customer service initiative ‘Ask Once’ has been implemented in three markets, and we have leading NPS positions in 11 markets.
– Simplicity: AI virtual assistant, SuperTobi, live in all European markets reaching 70% end-to-end resolution rate.
– Growth: Strong digital services revenue growth in Business (Q2: 12.2%), Financial services revenue growth in Africa (Q2: 21.8%).
Note:
1FY26 UK merger impact on a 10-month basis of €0.3 billion Adjusted EBITDAaL and -€0.2 billion Adjusted free cash flow.
