VOD

• Business Transformation Update

• Vodafone has completed 3 years of deep transformation across portfolio, capital structure, and operating model, emerging as a simpler, stronger business focused on scale markets with strong competitive positions.
• The operating environment has become more supportive, with embedded sustainable pricing models in more markets, increasingly pro-investment spectrum regulatory decisions, and broader industry recognition of the benefits of in-market scale.

• Germany Operational Progress

• Consistently improved NPS quarter-over-quarter across all segments, reaching all-time highs for mobile and cable, supported by new customer care initiatives like the Ask Once commitment.
• Strategic priorities for the coming year include becoming the market leader in customer experience, a one-stop provider for fixed, mobile, and TV services, and a top trusted B2B partner.

• UK VodafoneThree Integration Progress

• Less than one year into integration, the business has delivered significant measurable mobile network quality improvements, which have driven step changes in customer satisfaction and loyalty.
• Recently announced expansion of fixed-wireless access (FWA) coverage to an additional 3.7 million UK homes. The business is on track to deliver the first meaningful cost and CapEx synergies in FY '27, with a total target of GBP 700 million in cost and CapEx synergies by 2030.

• Africa Fintech and Connectivity Expansion

• Continued to expand beyond connectivity into fintech, growing the largest fintech platform on the continent to over 100 million users and millions of merchants, creating new long-term growth opportunities.

• FY '27 Group Guidance: Expects continued good growth in both adjusted EBITDAaL and adjusted free cash flow. Europe adjusted EBITDAaL is expected to be broadly stable at the guidance midpoint, with a decline in Germany offset by strong growth in the UK from the VodafoneThree synergy delivery. The UK is expected to return to positive organic service revenue growth in FY '27, after lapping temporary B2B contract termination impacts.
• Germany FY '27: Expects adjusted EBITDAaL to decline, as continued competitive pressure in mobile persists and the business laps the prior year wholesale migration contribution from 1&1. Underlying business health is expected to continue improving, with B2B and consumer broadband growth continuing.
• Midterm Ambition: Expects to deliver double-digit organic adjusted free cash flow growth, reinstating this long-term target after completing the 3-year transformation. This confidence is rooted in the new simplified, scaled portfolio and a more supportive operating environment for telecom investment.
• Leverage Guidance: The target leverage corridor remains unchanged, with management targeting the lower half of the range. The full VodafoneThree buyout will temporarily push leverage slightly above target, but leverage is expected to return to the lower half of the target range by the end of FY '27, supported by proceeds from the Netherlands sale and projected cash growth.
• Capital Intensity: Expects broadly stable capital intensity across all markets after FY '27. UK CapEx will peak in FY '27 and decline thereafter, while investment in high-growth African markets will continue to expand in line with demand growth.

Overall Group Performance: Group service revenue grew 5.1% in Q4 FY '26, with adjusted EBITDAaL organic growth of 4.5% (hitting the upper end of prior guidance). Adjusted free cash flow reached EUR 2.6 billion, extending the cash growth trend starting in FY '24. The full year FY '26 dividend was increased by 2.5% under the new progressive dividend policy.

1. Germany: The mobile market remains highly competitive, and the TV segment continues to face pressure. However, operational performance improved, with B2B digital services (cloud, security, AI) returning to growth and consumer broadband also growing. Net Promoter Score (NPS) hit all-time record highs for mobile and cable, supported by customer experience initiatives. Gross adds have declined after recent front book price increases, but churn remains stable and ARPU for consumer broadband inflow grew 30% year-on-year.

2. UK: VodafoneThree integration is progressing well less than one year in, with meaningful mobile network quality improvements driving higher customer satisfaction and loyalty. Home broadband achieved its fastest ever annual customer growth, and VodafoneThree holds the largest gigabit broadband footprint among UK operators. Q4 FY '26 service revenue declined due to temporary B2B large contract termination impacts, but consumer performance improved quarter-on-quarter with ARPU growth across mobile and fixed, and churn reduction across all brands.

3. Africa (Vodafone's second largest division): Delivered its highest service revenue growth in almost 20 years, with strong performance across all markets. It operates Africa's largest fintech platform, which now has over 100 million users and millions of merchants. The segment benefits from structural long-term growth drivers including population growth, rising smartphone penetration, and increasing data usage.

4. Other Emerging European Markets: Delivered full year service revenue growth in FY '26.

• The German mobile market remains structurally competitive, with persistent pricing pressure that will continue to weigh on retail service revenue and EBITDA performance through FY '27.
• New low-cost entrants (such as Revolut and Digi) in the UK mobile market are continuing to disrupt pricing dynamics, requiring continued competitive response that may pressure margins.
• AI development introduces new cyber and fraud risks, including AI-generated fraudulent activity like deepfakes that require ongoing network defense investment.
• Proposed EU merger rules are still in draft form, and while the initial draft is encouraging, unresolved details around assessment timelines and reliance on blunt structural remedies still create uncertainty for future industry consolidation and investment.
• German market consolidation scenarios (such as a potential acquisition of 1&1 by Telefonica) create midterm uncertainty for Vodafone's market position and wholesale revenue contribution.

Q: Why reinstate the midterm double-digit free cash flow growth target now, and what drives management's higher confidence?

A: Management stated this is the right time because the 3-year transformation is complete, leaving a simplified portfolio of only strong, scaled positions in every operating market. The broader operating environment for connectivity has also become more supportive, with strong sustained demand, more pro-investment regulation, and clearer recognition of scale benefits. The diversified, balanced portfolio of growth opportunities across Europe and Africa supports confidence in both near-term FY '27 and midterm growth.

Q: What is Vodafone's appetite for large M&A after the UK VodafoneThree buyout, and what is the planned leverage path?

A: The full UK buyout was always planned and opportunistically completed early, and it will only temporarily push leverage slightly above the target range. Management expects to return to the lower half of the target leverage corridor by the end of FY '27, driven by proceeds from the Netherlands sale and projected organic cash growth. Management is satisfied with the current portfolio shape, and the primary strategic focus remains organic execution and delivering the midterm double-digit free cash flow growth target, with only bolt-on deal appetite going forward.

Q: Does the midterm guidance still assume German EBITDA stabilizes within 2-3 years, even with the projected FY '27 decline, and how should we interpret subscriber trends after price increases?

A: Management confirmed that beyond FY '27, Germany (Europe's largest telecom market) remains well positioned for EBITDA stabilization and eventual growth. Germany has a powerful brand, strong scale across fixed and mobile, and the structural TV headwind will not be permanent. While higher front book prices have reduced gross adds, churn remains stable and inflow ARPU for consumer broadband is up 30% year-on-year. Management prioritizes revenue growth over subscriber count, and the improved value equation is delivering for the long-term health of the business.

Q: How does AI create value for Vodafone, and what are the key risks and opportunities from AI development?

A: Management noted AI creates value across three core areas: first, AI improves network efficiency and fault prevention; second, AI is a major driver of operational cost productivity, with embedded AI in customer care (AI-powered voice agents like SuperTOBi) and procurement already delivering measurable savings; third, growing AI demand increases the need for high-performance, low-latency edge networks, which positions Vodafone to capture new connectivity demand growth. AI does introduce new fraud and cyber threats, but AI also enables stronger, faster defensive capabilities to address these risks. Vodafone maintains a flexible multi-LLM architecture to adapt to ongoing AI evolution.