VOD

Business Context and Reporting Period

Company: Vodafone Group Public Limited Company
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Half (H1) of Financial Year 2026 (ended 30 September 2025)
Announcement Date: 11 November 2025

Vodafone reported good H1 performance driven by service revenue acceleration and strategic progress, including the consolidation of Three UK and the integration of Vodafone and Three networks. The Group expects to deliver at the upper end of its FY26 guidance and has introduced a new progressive dividend policy.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 7.3% due to strong service revenue growth and the consolidation of Three UK, partially offset by adverse foreign exchange movements.
• Operating Profit Decline: Despite Adjusted EBITDAaL growth, operating profit fell 9.2% primarily due to higher depreciation and amortisation following the Three UK consolidation and lower other income.
• Segment Performance:
  • Germany: Returned to service revenue growth in Q2 (+0.5%) as the impact of TV law changes ended.
  • UK: Organic service revenue grew 1.2% in Q2, supported by the fast start of the VodafoneThree integration.
  • Africa: Maintained double-digit organic service revenue growth (13.5% in Q2), driven by Egypt and Vodacom's international markets.
  • Türkiye: Reported strong growth, though impacted by hyperinflationary accounting adjustments.
• Shareholder Returns: €3.0 billion of share buybacks completed since May 2024, with €1.0 billion remaining. A new €500 million buyback tranche commenced in November 2025.

Guidance, Outlook, and Risks

Guidance and Outlook

Based on H1 performance, Vodafone expects to deliver at the upper end of its FY26 guidance ranges:

• Adjusted EBITDAaL: €11.3 - €11.6 billion.
• Adjusted Free Cash Flow: €2.4 - €2.6 billion.

Dividend Policy: The Group introduced a new progressive dividend policy, expecting a 2.5% increase in the FY26 dividend per share. The interim dividend is set at 2.25 eurocents per share.

Operational Highlights

• UK Integration: Fast start to VodafoneThree integration with immediate network improvements and 5,000 sites upgraded.
• AI & Digital: AI virtual assistant "SuperTobi" is live in all European markets with a 70% end-to-end resolution rate.
• Acquisitions: Completed acquisition of Telekom Romania Mobile Communications S.A. (€30 million) and announced binding agreement to acquire Skaylink (€175 million).

Risks and Contingencies

• Legal Proceedings:
  • India: Tax amnesty scheme concluded with a €185 million charge; all related court proceedings closed.
  • Germany: Competition authority investigation regarding 1&1 tower site provision; Vodafone believes it has strong defenses.
  • South Africa: Settlement reached in the Kenneth Makate v Vodacom case for an immaterial amount.
  • UK: Phones 4U appeal rejected by Court of Appeal; Mr. Gutmann class action regarding "loyalty penalty" pending certification decision.
• Principal Risks: Adverse macroeconomic conditions, market competition, regulatory changes, cyber threats, and supply chain disruptions.

Investor Verification Checklist

• UK Merger Impact: Verify the realization of cost synergies and revenue growth from the VodafoneThree integration against the €0.3 billion Adjusted EBITDAaL impact noted in guidance.
• Germany TV Law Transition: Monitor the full run-rate impact of the end of bulk TV contracting in Multi Dwelling Units (MDUs) on fixed service revenue.
• Net Debt Trajectory: Assess the impact of the €3.5 billion increase in net debt (driven by the UK merger and buybacks) on future leverage ratios and credit ratings.
• Hyperinflation Accounting: Review the specific impact of IAS 29 adjustments on Türkiye's reported revenue and profit figures to understand underlying organic performance.
• Dividend Sustainability: Confirm the ability to fund the new progressive dividend policy and ongoing share buybacks given the current Adjusted Free Cash Flow outflow.