Business Context and Reporting Period
This Form 6-K filing contains Vodafone Group Plc's Q3 FY26 Trading Update for the quarter ended December 31, 2025, dated February 5, 2026. The report covers the Group's performance across Europe, Africa, and Turkey, highlighting the integration of the UK merger with Three UK (completed May 31, 2025) and the consolidation of Telekom Romania assets (completed October 1, 2025).
Key Financial Metrics
- Total Revenue: €10.5 billion (Q3 FY26), an increase of 6.5% year-over-year.
- Service Revenue: €8.5 billion, up 7.3% year-over-year. Organic service revenue growth was 5.4%.
- Adjusted EBITDAaL: €2.8 billion, representing a 2.3% organic increase. Year-to-date (YTD) Adjusted EBITDAaL is €8.5 billion (5.3% organic growth).
- Operating Profit: €0.5 billion, a decrease of 52.7% year-over-year due to M&A impacts and non-cash accounting adjustments related to Indian simplification activities.
- Shareholder Returns: €3.5 billion in share buybacks completed since May 2024. A new €500 million tranche commenced on the filing date.
- Dividend Policy: FY26 dividend per share expected to grow by 2.5%.
Material Changes vs. Prior Period
- Revenue Growth Drivers: Growth was primarily driven by strong performance in Africa (13.5% organic service revenue growth) and Turkey (38.5% organic service revenue growth, though reported revenue declined 13.5% due to hyperinflationary accounting adjustments). The consolidation of Three UK and Telekom Romania contributed significantly to reported revenue increases.
- Regional Performance:
- Germany: Service revenue grew 0.7% organically, supported by wholesale revenue.
- UK: Organic service revenue declined 0.5% due to a strong prior-year comparative in Business, though the merger integration is on track.
- Other Europe: Organic service revenue grew 1.2%, offset by competitive intensity in Portugal and Romania.
- Profitability Impact: The significant drop in Operating Profit is attributed to M&A activities and temporary non-cash accounting impacts, rather than operational underperformance.
Guidance, Outlook, and Risks
- Guidance Reiteration: Management expects to deliver at the upper end of FY26 guidance ranges: Adjusted EBITDAaL of €11.3–11.6 billion and Adjusted Free Cash Flow of €2.4–2.6 billion.
- Strategic Initiatives:
- UK Merger: VodafoneThree integration is progressing well, with network sharing ahead of plan.
- Acquisitions: Completed acquisition of Skaylink (Germany) and Telekom Romania assets. Announced agreement to acquire a 20% stake in Safaricom (Kenya) for €1.81 billion, expected to close in Q1 2026.
- 5G Expansion: Vodafone Turkey acquired 100 MHz of 5G spectrum for €539 million; services expected to launch in 2026.
- Risks and Contingencies:
- Impairment Testing: A significant decline in the share price of Inwit (Italian infrastructure JV) may impact impairment testing results to be reported in FY26 final results.
- Regulatory Approvals: The Safaricom acquisition is subject to regulatory approvals in Kenya, South Africa, and Ethiopia.
- Market Conditions: Competitive intensity in Portugal, Romania, and the UK mobile market; foreign exchange volatility; and hyperinflationary accounting in Turkey.
Investor Verification Checklist
- Verify the impact of the Safaricom acquisition on future cash flows and consolidation once regulatory approvals are secured.
- Monitor the outcome of the impairment testing for the Inwit joint venture, given the recent share price decline.
- Assess the sustainability of organic growth in Africa and Turkey amidst currency fluctuations and inflationary pressures.
- Review the progress of the VodafoneThree integration to ensure expected synergies and cost savings are realized.
- Confirm the execution of the €500 million share buyback tranche and the timing of the FY26 dividend payment.