EXTRA: Vodafone looks to "new chapter" as transformation bears fruit
Idag, 12:51
(Alliance News) - Vodafone PLC on Tuesday talked up the success of its transformation and improving prospects in Germany as it delivered annual earnings growth.
"After the transformation of the last three years, we are now a simpler company with a stronger growth outlook," said Vodafone Chief Executive Margherita Della Valle.
The Berkshire, England-based telecommunications provider has taken steps to streamline its portfolio in recent years with asset sales in the Netherlands, Spain and Italy amongst others, along with a reduction of its stake in Vantage Towers.
Meanwhile in the UK, the FTSE 100 listing has beefed up its operation, taking full control of VodafoneThree, creating the UK's largest mobile operator.
Speaking to reporters, CEO Della Valle said Vodafone has "reshaped our markets in Europe, strengthened our balance sheet and simplified our operations", adding the "significant" transformation is now "behind us".
"We are entering a new chapter as a simpler and stronger business," the CEO said.
Vodafone swung to a pretax profit of EUR1.86 billion in the financial year to March from a EUR1.48 billion loss the year prior.
Revenue grew 8.0% to EUR40.46 billion from EUR37.45 billion, due to strong service revenue growth and the consolidation of Three UK, partially offset by foreign exchange movements.
Service revenue was up 8.8% to EUR33.48 billion from EUR30.76 billion, or by 5.4% on an organic basis, with growth in all segments except Germany.
In Germany, organic service revenue decreased 0.2% for the financial year, with gradual improvement throughout the year to 1.3% growth in the fourth quarter.
CEO Della Valle told reporters the mobile market remains "very competitive" in Germany but the firm is taking the "right actions" supporting the turnaround.
Vodafone said its broadband customer base in Germany declined by 202,000 in the financial year, with 90,000 losses in the fourth quarter, picking up speed from 63,000 in the prior quarter.
But Della Valle said of importance to Vodafone is its "branded base" in consumer mobile which she said was "stable", despite the competitive pressures.
"Step-by-step, Germany is moving in the right direction," she added.
Della Valle said the German market is stable but only following a "significant" step-down experienced.
She also flagged improvements in the business segment in Germany and said Vodafone is exiting Germany with "more momentum operationally than we had before."
In the UK, organic service revenue increased 0.3% with growth in Consumer and Wholesale segments, partially offset by Business decline due to planned managed services contract terminations.
Della Valle said Vodafone is "incredibly excited" about opportunities in the UK, noting Vodafone is the largest mobile network in the UK and one of the fastest growing broadband providers.
This confidence saw Vodafone push forward the deal to take full ownership of VodafoneThree faster-than-expected, the CEO explained.
Della Valle said Vodafone is happy to manage a "multi-brand" estate, noting it is keen to look after its 28 million mobile customers and maintain customer choice.
Organic service revenue grew 0.5% in Other Europe with good performance across markets offset by competitive pressure in Portugal. Service revenue in Turkey increased 10.8%.
Africa maintained double-digit organic service revenue growth of 12.9%, supported by growth above inflation in Egypt and Vodacom's international markets.
Here, the CEO pointed to a growing customer base and expanded next generation connectivity, helping to drive the highest service revenue growth in almost two decades.
Business organic service revenue grew 3.2%, with double digit growth in digital services.
Adjusted earnings before interest, tax, depreciation and amortisation and after leases grew to EUR11.35 billion from EUR10.93 billion but missed company compiled consensus of EUR11.48 billion.
Adjusted basic earnings per share totalled 10.72 euro cents, up from 7.87 cents a year ago, and above 9.23 cents consensus.
Operating profit was EUR2.84 billion compared to a loss of EUR411 million the year before.
Adjusted free cash flow edged up 2.9% to EUR2.62 billion from EUR2.55 billion, above the top-end of guidance.
Net debt increased to EUR25.41 billion from EUR22.40 billion, reflecting the VodafoneThree deal.
The total dividend was increased 2.5% to 4.6125 euro cents from 4.5 cents, the first increase to Vodafone's dividend since 2018.
Vodafone said the final EUR0.5 billion tranche of the second EUR2 billion buyback programme was completed on Monday and CEO Della Valle said buybacks remain an "element of our toolkit" in terms of returns to shareholders.
Shares in Vodafone were down 5.4% at 113.85 pence each in London on Tuesday with the wider FTSE 100 down 0.4%. Shares have risen 65% in the last 12 months.
"In the stock market it's often said that it's better to travel than arrive, hence why shares in Vodafone dipped on robust-looking full-year results after a strong rally in the past 12 months," said Dan Coatsworth, head of markets at AJ Bell.
While Citi analyst Carl Murdock-Smith said results contains something for the bulls and the bears.
"Vodafone's Q426 results are solid at a group level, with revenue and adjusted free cash flow ahead of consensus, albeit with EbitdaaL below," he commented.
He believes German net adds deterioration "may raise some questions".
Vodafone forecast financial 2027 EbitdaaL of EUR11.9 billion to EUR12.2 billion and adjusted free cash flow of EUR2.6 billion to EUR2.9 billion.
"Looking ahead, we will continue to drive continuous improvements across our business, with customer experience as our number one priority. We are now well set for mid-term growth," said CEO Della Valle.
"Our growth portfolio gives us the confidence in our medium-term ambition to deliver double-digit adjusted free cash flow growth, driving continued adjusted free cash flow growth in euro terms," Vodafone added in a statement.
Deutsche Bank said the mid-term ambitions are not "especially onerous", but "are pleasing to see".
"We see Vodafone increasingly on track for a much less 'Lemony' and increasingly self-directed future and we reiterate our buy-rating," Deutsche said.
Vodafone said it has taken steps to reduce volatility in energy prices and is mostly hedged for financial 2027.
Richard Hunter, head of markets at interactive investor, said overall the direction of travel should "provide some relief," with "increasing signs that the transformation is beginning to reap rewards."
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2026 Alliance News Ltd. All Rights Reserved.
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EXTRA: Vodafone looks to "new chapter" as transformation bears fruit
Idag, 12:51
(Alliance News) - Vodafone PLC on Tuesday talked up the success of its transformation and improving prospects in Germany as it delivered annual earnings growth.
"After the transformation of the last three years, we are now a simpler company with a stronger growth outlook," said Vodafone Chief Executive Margherita Della Valle.
The Berkshire, England-based telecommunications provider has taken steps to streamline its portfolio in recent years with asset sales in the Netherlands, Spain and Italy amongst others, along with a reduction of its stake in Vantage Towers.
Meanwhile in the UK, the FTSE 100 listing has beefed up its operation, taking full control of VodafoneThree, creating the UK's largest mobile operator.
Speaking to reporters, CEO Della Valle said Vodafone has "reshaped our markets in Europe, strengthened our balance sheet and simplified our operations", adding the "significant" transformation is now "behind us".
"We are entering a new chapter as a simpler and stronger business," the CEO said.
Vodafone swung to a pretax profit of EUR1.86 billion in the financial year to March from a EUR1.48 billion loss the year prior.
Revenue grew 8.0% to EUR40.46 billion from EUR37.45 billion, due to strong service revenue growth and the consolidation of Three UK, partially offset by foreign exchange movements.
Service revenue was up 8.8% to EUR33.48 billion from EUR30.76 billion, or by 5.4% on an organic basis, with growth in all segments except Germany.
In Germany, organic service revenue decreased 0.2% for the financial year, with gradual improvement throughout the year to 1.3% growth in the fourth quarter.
CEO Della Valle told reporters the mobile market remains "very competitive" in Germany but the firm is taking the "right actions" supporting the turnaround.
Vodafone said its broadband customer base in Germany declined by 202,000 in the financial year, with 90,000 losses in the fourth quarter, picking up speed from 63,000 in the prior quarter.
But Della Valle said of importance to Vodafone is its "branded base" in consumer mobile which she said was "stable", despite the competitive pressures.
"Step-by-step, Germany is moving in the right direction," she added.
Della Valle said the German market is stable but only following a "significant" step-down experienced.
She also flagged improvements in the business segment in Germany and said Vodafone is exiting Germany with "more momentum operationally than we had before."
In the UK, organic service revenue increased 0.3% with growth in Consumer and Wholesale segments, partially offset by Business decline due to planned managed services contract terminations.
Della Valle said Vodafone is "incredibly excited" about opportunities in the UK, noting Vodafone is the largest mobile network in the UK and one of the fastest growing broadband providers.
This confidence saw Vodafone push forward the deal to take full ownership of VodafoneThree faster-than-expected, the CEO explained.
Della Valle said Vodafone is happy to manage a "multi-brand" estate, noting it is keen to look after its 28 million mobile customers and maintain customer choice.
Organic service revenue grew 0.5% in Other Europe with good performance across markets offset by competitive pressure in Portugal. Service revenue in Turkey increased 10.8%.
Africa maintained double-digit organic service revenue growth of 12.9%, supported by growth above inflation in Egypt and Vodacom's international markets.
Here, the CEO pointed to a growing customer base and expanded next generation connectivity, helping to drive the highest service revenue growth in almost two decades.
Business organic service revenue grew 3.2%, with double digit growth in digital services.
Adjusted earnings before interest, tax, depreciation and amortisation and after leases grew to EUR11.35 billion from EUR10.93 billion but missed company compiled consensus of EUR11.48 billion.
Adjusted basic earnings per share totalled 10.72 euro cents, up from 7.87 cents a year ago, and above 9.23 cents consensus.
Operating profit was EUR2.84 billion compared to a loss of EUR411 million the year before.
Adjusted free cash flow edged up 2.9% to EUR2.62 billion from EUR2.55 billion, above the top-end of guidance.
Net debt increased to EUR25.41 billion from EUR22.40 billion, reflecting the VodafoneThree deal.
The total dividend was increased 2.5% to 4.6125 euro cents from 4.5 cents, the first increase to Vodafone's dividend since 2018.
Vodafone said the final EUR0.5 billion tranche of the second EUR2 billion buyback programme was completed on Monday and CEO Della Valle said buybacks remain an "element of our toolkit" in terms of returns to shareholders.
Shares in Vodafone were down 5.4% at 113.85 pence each in London on Tuesday with the wider FTSE 100 down 0.4%. Shares have risen 65% in the last 12 months.
"In the stock market it's often said that it's better to travel than arrive, hence why shares in Vodafone dipped on robust-looking full-year results after a strong rally in the past 12 months," said Dan Coatsworth, head of markets at AJ Bell.
While Citi analyst Carl Murdock-Smith said results contains something for the bulls and the bears.
"Vodafone's Q426 results are solid at a group level, with revenue and adjusted free cash flow ahead of consensus, albeit with EbitdaaL below," he commented.
He believes German net adds deterioration "may raise some questions".
Vodafone forecast financial 2027 EbitdaaL of EUR11.9 billion to EUR12.2 billion and adjusted free cash flow of EUR2.6 billion to EUR2.9 billion.
"Looking ahead, we will continue to drive continuous improvements across our business, with customer experience as our number one priority. We are now well set for mid-term growth," said CEO Della Valle.
"Our growth portfolio gives us the confidence in our medium-term ambition to deliver double-digit adjusted free cash flow growth, driving continued adjusted free cash flow growth in euro terms," Vodafone added in a statement.
Deutsche Bank said the mid-term ambitions are not "especially onerous", but "are pleasing to see".
"We see Vodafone increasingly on track for a much less 'Lemony' and increasingly self-directed future and we reiterate our buy-rating," Deutsche said.
Vodafone said it has taken steps to reduce volatility in energy prices and is mostly hedged for financial 2027.
Richard Hunter, head of markets at interactive investor, said overall the direction of travel should "provide some relief," with "increasing signs that the transformation is beginning to reap rewards."
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2026 Alliance News Ltd. All Rights Reserved.
