Vodafone Group reported mixed earnings for FY25, which showed the company’s recent highlights and ongoing challenges. The company’s successful transformation and restructuring have resulted in strong performance in the UK as well as growth markets in Turkey and Africa. Its operations in Germany and the B2B sector, however, face difficulties that could affect its outlook as a whole.
Financial Performance and Buyback Program
Vodafone reported €37.45 billion in revenue, up from last year’s €36.72 billion, due to strong service revenue growth of 2.8%. The company reported a decline in adjusted earnings to €10.93 billion for fiscal 2025 from €11.02 billion the year prior, caused by competitive pricing in Germany. Pretax loss came in at €1.48 billion, compared to a €1.62 billion profit the prior year, largely due to €4.5 billion in noncash impairment charges for Germany and Romania. ⁽¹⁾
Vodafone said it is launching a new €2 billion ($2.25 billion) buyback, starting with an initial phase of €500 million, having just completed another €2 billion program, signaling its commitment to enhancing shareholder value. Dividend returns reached €1.8 billion as the company declared a new dividend of €0.045 per share. ⁽²⁾
Company Highlights
Strong UK Performance and Merger with Three
Vodafone has performed well in the UK, with an 8% EBITDA growth in FY25. The company also achieved a record low for customer complaints and is leading in Net Promoter Scores in both mobile and fixed broadband services, which indicates improvements in customer experience and operational efficiency. ⁽³⁾
Vodafone sold its operations in Spain and Italy and is in the process of a merger with rival Three as part of its restructuring strategy, which resulted in the €2 billion return to shareholders through buybacks and dividends.
However, the merger is expected to result in a €200 million adjusted free cash flow drag due to front-loaded investments and integration costs. The merger is expected to contribute €400 million for FY26 EBITDAL. ⁽⁴⁾
Africa and Turkey Operations
Vodafone’s operations in Africa and Turkey are positioned strongly, with growth opportunities contributing to a notable increase in free cash flow in Euros. These regions are important to Vodafone’s overall growth strategy. ⁽⁵⁾
Challenges in Germany, B2B and Delay in Fiber Upgrades
Vodafone faces a very competitive market in Germany, where the company is facing a decline in broadband services, pressure from competition in mobile, and price pressures.
Vodafone has been assessing the impact from a regulatory change in Germany preventing landlords from bundling TV services with rental agreements, as well as lower broadband customer base. Vodafone said its German pressure continues, but that it had stabilized its customer base. ⁽⁶⁾
The OXG joint venture for fiber upgrades in Germany is behind schedule, affecting Vodafone’s plans to reach 7 million MDU homes. This delay poses a challenge to the company’s infrastructure development goals. ⁽⁷⁾
The B2B market in the UK is facing challenges, particularly with managed services and ARPU pressures, which are impacting growth expectations for the fiscal year 2026. ⁽⁸⁾
Guidance For FY26
Vodafone has forecasted its guidance for FY26, where the company’s adjusted EBITDAL is expected to reach €11 billion, with adjusted free cash flow growth reaching between €2.6 billion and €2.8 billion.
Vodafone’s merger with Three is expected to support EBITDAL, although it might impact free cash flow due to front-loaded investments. Vodafone remains committed to shareholder returns, which was shown by a new €2 billion buyback program. ⁽⁹⁾
Vodafone’s earnings call shows a company in transition, with highlights in transformation and growth in key markets like the UK, Africa, and Turkey. The company’s growth in FY26, however, may be impacted by looming challenges in Germany and the B2B market.
