Vodafone reiterates guidance after first-half revenue growth

The FTSE 100 telecoms giant said organic service revenue increased 4.8%, largely due to gains in European, African, and Turkish markets, despite a decline in Germany linked to the recent MDU TV law change.

Vodafone said it had actively retained four million German households affected by the change, though service revenue in Germany still dropped 6.2% in the second quarter.

In its business division, Vodafone said it saw organic service revenue accelerate to 4% in the second quarter, driven by digital service demand.

In Africa, growth remained robust at 9.7%, supported by price adjustments in South Africa and strong demand for data and financial services in Egypt.

Vodafone said its operating profit rose significantly, up 28.3% to €2.4bn, helped by a €0.7bn gain from the partial sale of its stake in Indus Towers.

Adjusted EBITDAaL increased organically by 3.8% to €5.4bn, benefiting from revenue growth and reduced energy costs across Europe.

Vodafone said it had nearly completed its second share buyback tranche, repurchasing €1bn in shares.

The firm reiterated its 2025 financial year guidance, targeting adjusted EBITDAaL of around €11bn and a minimum adjusted free cash flow of €2.4bn.

Strategically, Vodafone said it had been advancing its customer experience transformation, reporting reduced detractor numbers across all segments and maintaining leading net promoter scores in nine of its 15 markets.

Operational simplification efforts were progressing, with Accenture investing in Vodafone’s commercial shared operations business as part of a €150m commitment and with 3,100 role reductions underway in Germany.

Vodafone’s pre-tax return on capital employed rose to 7.2%, reflecting improved returns following the reshaping of the group, partially offset by the effects of the Vantage deconsolidation and regulatory changes in Germany.

“We continue to make good progress on our strategy to change Vodafone,” said group chief executive Margherita Della Valle.

“The approval processes for our transactions in the UK and Italy are nearing conclusion - these will complete our programme to reshape the group for growth.

“We are also investing in Germany to strengthen our market position and taking steps to expand our B2B capabilities.”

Della Valle said that the company moved through the “year of transition”, its results in the first half had been consistent with expectations, adding that Vodafone was reiterating its full-year guidance.

“We grew service revenue by 4.8% and adjusted EBITDAaL by 3.8%.

“We delivered good performances across our markets, with the exception of Germany, where we have been impacted as expected by the TV law change.

“I am confident that the actions we are taking will deliver growth for Vodafone this year and a further acceleration into the 2026 financial year.”

Reporting by Josh White for Sharecast.com.