Vodafone Group Plc FY26 Preliminary Results Summary
Business Context and Reporting Period
This Form 6-K reports the FY26 Preliminary Results for Vodafone Group Plc for the financial year ended 31 March 2026, announced on 12 May 2026. The period marks the conclusion of a three-year transformation strategy, positioning the company as "simpler, stronger, and growing." Key strategic milestones include the consolidation of the VodafoneThree UK merger (completed May 2025) and the announcement of full ownership acquisition of VodafoneThree (May 2026). The Group operates through four divisions: Europe, Africa, Business, and Investments.
Key Financial Metrics
- Total Revenue: €40.5 billion (FY25: €37.4 billion), an increase of 8.0%.
- Service Revenue: €33.5 billion (FY25: €30.8 billion), up 8.8% reported and 5.4% organic.
- Adjusted EBITDAaL: €11.4 billion (FY25: €10.9 billion), up 3.8% reported and 4.5% organic.
- Operating Profit: €2.8 billion (FY25: Loss of €0.4 billion), driven by EBITDA growth and the absence of prior-year impairment charges.
- Adjusted Free Cash Flow (FCF): €2.6 billion (FY25: €2.5 billion).
- Net Debt: €25.4 billion (FY25: €22.4 billion), increasing due to VodafoneThree consolidation and share buybacks.
- Dividends: Total dividend per share of 4.6125 eurocents (FY25: 4.5 eurocents), a 2.5% increase.
- Shareholder Returns: €3.1 billion returned in FY26, including the completion of a €2 billion buyback programme.
Material Changes vs. Prior Period
- Profitability Turnaround: Operating profit swung from a €0.4 billion loss in FY25 to a €2.8 billion profit in FY26. This is primarily due to Adjusted EBITDAaL growth and the non-recurring €4.5 billion impairment charge recorded in FY25.
- UK Consolidation: The consolidation of Three UK significantly boosted reported revenue and service revenue, though organic growth in the UK was modest at 0.3% due to Business segment declines.
- Germany Performance: Organic service revenue declined 0.2% for the full year but returned to growth in Q4 (1.3%), signaling a turnaround despite competitive intensity and TV law impacts.
- Africa Growth: Maintained double-digit organic service revenue growth of 12.9%, driven by Egypt and Vodacom's international markets.
- Türkiye: Reported service revenue grew 13.8% in euro terms, with organic growth of 45.2% (excluding hyperinflation adjustments).
Guidance, Outlook, and Risks
- FY27 Guidance:
- Adjusted EBITDAaL: €11.9 billion – €12.2 billion.
- Adjusted Free Cash Flow: €2.6 billion – €2.9 billion.
- Europe Adjusted EBITDAaL: €7.6 billion – €7.9 billion.
- Strategic Outlook: Management expects mid-term double-digit Adjusted FCF growth. The Group aims to maintain capital intensity broadly stable and target the lower half of the 2.25x–2.75x Net Debt to Adjusted EBITDAaL leverage range.
- Key Transactions:
- VodafoneThree: Agreed to buy out CK Hutchison's 49% stake for €4.9 billion, achieving full ownership.
- Safaricom: Agreed to acquire an additional 20% stake (total 55%) for €1.81 billion, subject to regulatory approval and a pending court ruling in Kenya.
- VodafoneZiggo: Agreed to sell interest for €1.0 billion cash plus a 10% stake in the new Ziggo Group.
- Risks and Contingencies:
- Legal Proceedings: Ongoing class action in Germany regarding price increases (approx. 115,100 customers registered); UK "loyalty penalty" collective proceedings (value reduced to €638 million); and competition authority investigation in Germany regarding 1&1.
- Regulatory: Safaricom acquisition pending High Court of Kenya ruling expected 18 May 2026.
- Macro: Uncertainties regarding trade, energy costs, and foreign exchange rates.
Investor Verification Checklist
- Verify the final ruling on the Safaricom acquisition by the High Court of Kenya (expected 18 May 2026) and its impact on consolidation.
- Monitor the progress of the VodafoneThree full ownership transaction and the realization of the projected €700 million annual synergies by FY30.
- Assess the sustainability of the Germany turnaround, specifically the Q4 organic growth of 1.3% amidst competitive pressure.
- Review the status of the VodafoneZiggo disposal to Liberty Global, expected to complete in H2 2026.
- Track the outcome of the UK "loyalty penalty" collective proceedings and the German price increase class action.
- Confirm the execution of the progressive dividend policy and the timing of the final dividend payment (30 July 2026).