Vodafone Group Public Limited Company Q2 FY2026 earnings call

Transformation Progress

• Completed merger of Vodafone and Three in the U.K. and acquisition of Telekom Romania's assets.
• Capital structure reset with over EUR 5B returned to shareholders via buybacks and dividends over 18 months, with EUR 1B buybacks to come in next 6 months.

Financial Results

• Group service revenue growth accelerated to 5.8% in Q2; group EBITDAaL grew by 6.8% in the first half.

Germany

• Turnaround ongoing; 5G stand-alone covers over 90% of population, fixed broadband reaches 3 out of 4 German households; customer satisfaction improving, B2B growth opportunities with Skaylink acquisition.

U.K.

• Integration of Vodafone and Three underway, GBP 11B network investment, cross-selling opportunities, customer experience leadership.

African Markets

• Strong results in line with double-digit EBITDAaL growth guidance; structural opportunities across services.

Dividend

• Moving to progressive dividend policy.

Group service revenue growth accelerated to 5.8% in Q2, supported by growth across Europe and Africa. Group EBITDAaL grew by 6.8% in the first half. Germany: Operates at scale in mobile (5G stand-alone covers over 90% of population, 40M mobile customers, ~60M IoT SIMs) and fixed broadband (gigabit connectivity to 3 out of 4 German households). U.K.: Largest mobile operator, fastest-growing broadband provider, with GBP 11B network investment. African markets had strong results, in line with medium-term double-digit EBITDAaL growth guidance. Revenue contributions: Group service revenue growth driven by Europe and Africa, EBITDAaL growth nearly across all markets.

Full-Year Outlook

• Confirmed to close the year at upper end of growth guidance set in May.

Second Half Factors

• Emerging markets growth to trend down as inflation moderates; U.K. topline growth to slow, especially in B2B with tough comps; marketing expenses in U.K. back-end loaded.

FY '27 Outlook

• U.K. to be positive contributor with synergies from merger; Germany to face puts and takes; emerging markets growth challenge; mix shift back to Europe favorable for EBITDA contribution.

• Emerging markets growth moderation.
• U.K. topline growth slowdown, particularly in B2B.
• Phasing of marketing expenses in the U.K.
• Uncertainty around German fiber building legislation impact on OXG JV.

Q: If I could ask a little bit about the EBITDA run rate for the second half and also next year...

A: Sure. Luka Mucic discussed factors like emerging markets slowdown, U.K. phasing, and Germany's MDU and 1&1 impacts.

Q: If we look at the moment and we strip out the MDU effect and the 1&1 impact, the German revenue trends are still declining 2% to 3%. I'd love to understand what you think it takes in the timeline to see the underlying momentum starting to improve...

A: Margherita Della Valle and Luka Mucic discussed customer experience improvements, churn reduction, ARPU support, and B2B growth as drivers of underlying momentum.

Q: I wanted to ask about the U.K. You touched in the presentation on making a fast start on integration. Can you provide a bit more color on your early actions and synergy delivery?...

A: Margherita Della Valle and Luka Mucic talked about early integration actions, network quality improvements, cross-selling, and positive commercial performance in the U.K.

Q: My question, yet again this quarter, is on Vodafone Turkey. On my numbers, it represents, I think, almost half of the organic EBITDA growth that we've seen since last year...

A: Luka Mucic discussed Türkiye's strong performance, digital capabilities, cost management, and export of successful models to other countries.

Q: I wanted to come back to the U.K. market and focus on your FWA proposition in particular...

A: Margherita Della Valle and Luka Mucic talked about FWA net adds, leveraging asset superiority, and balancing FWA with fixed broadband growth.

Q: I just had a question around the Skaylink acquisition...

A: Margherita Della Valle discussed digital services growth, B2B opportunities, and potential for more bolt-on M&A in digital capabilities.

Q: So we haven't yet had a question on the dividend...

A: Margherita Della Valle discussed progressive dividend policy, buybacks, and capital allocation based on market environment and balance sheet.