Vodafone posted a 5.5% rise in service income in Q1 (to June 30), beating expectations, regardless of a reversal at its huge German op-co, albeit a slowing one, and softening progress in its dwelling market within the UK, the place the Three merger is enjoying out. Its outlook stays unchanged.
Optimistic outlook – good outcomes, significantly in the remainder of Europe and Africa; respectable enterprise gross sales.
Germany steady – improved wholesale and enterprise gross sales partly offset a success from bulk TV offers.
UK, slower – good mounted gross sales, however enterprise and shopper contract churn, and Three integration.
Vodafone reported a 5.5 % soar in group service income to €7.86 billion within the quarter ending June 30, exceeding expectations of 4.9 %. The corporate’s first-quarter (2025/26) figures revealed an extra decline in Germany, its largest market, however a slower one – with a 3.2 % reversal, down from a six % decline within the earlier quarter. At dwelling within the UK, its different huge market, natural service income was 0.9 % larger, down from 3.4 % final quarter – partly on account of merger-related disruption following its tie-up with UK operator Three.
Collectively, these markets contributed 55 % of the group’s whole service income (€2.688 billion and €1.646 billion, respectively), throughout all segments. Its outlook is unchanged with full-year revenue steerage set between €11.3 and €11.6 billion – up from €10.9 billion anticipated in 2025. Shares rose 4 % on the outcomes, and are up over 20 % within the year-to-date. The group’s whole income elevated by 3.9 % to €9.4 billion within the first quarter. Adjusted EBITDA rose 4.9 % to €2.7 billion, supported by a 0.2 % margin enchancment to 29.3 %.
Wholesale and enterprise gross sales drove its enchancment in Germany, versus final quarter – respectively with larger income from the migration of 1&1 roaming clients (driving cell service income up 2.7 %), and the “phasing of digital providers tasks” (offset by ARPU strain within the enterprise sector; which means enterprise service income declined by 0.9 %). The decline, total, was right down to the influence from the top of bulk TV contracting in ‘multi-dwelling models’ (MDUs) – residences, condominiums, duplexes, and such – on its fixed-line enterprise.
Its broadband, tv, and cell bases in Germany all declined within the interval. Vodafone Germany is within the midst of slashing 3,200 employees within the nation.
Within the UK, cell service income grew by 0.4 % with larger wholesale and decrease subscriber returns. It additionally cited “enterprise venture milestones” from the fourth quarter, and a modified shopper combine with the Three merger. Mounted service income was up by 2.7 %, with 44,000 new clients; enterprise income declined by three % on account of “deliberate managed providers contract terminations” and decrease ARPU – “partially offset by good demand for mounted connectivity and digital providers”.
Its cell base declined by 46,000 within the quarter due to the “timing of huge contract disconnections in Enterprise and Three UK Client buyer losses”. The brand new VodafoneThree firm within the UK will make investments £11 billion over 10 years in 5G infrastructure, and generate value and capex synergies of £700 million each year – by the fifth 12 months after its completion. VodafoneThree is now the largest cell community operator within the UK with 28.8 million clients.
In the remainder of the group’s footprint, Türkiye was the standout, with service income up by 29.6 %. In Europe – excluding Germany and the UK, however together with Türkiye – natural service income progress was 0.2 % larger, with good gross sales to enterprises throughout the area, and declining gross sales to shoppers in Portugal and Romania. Africa additionally carried out nicely, with progress of 13.8 % within the quarter, notably in Egypt and throughout its Vodacom operations, together with from monetary providers.
A web page in its report displaying adjusted non-GAAP outcomes (as above), together with for Vodafone Enterprise, says enterprise gross sales (by way of Vodafone Enterprise) climbed 4 % throughout all territories to €1.964 billion. There is no such thing as a point out wherever of the efficiency of Vodafone IoT, spun off from the remainder of the group in April 2024, however nonetheless owned by it.
Margherita Della Valle, chief govt at Vodafone Group, commented: “Germany has began its enchancment trajectory and our rising markets are delivering sturdy broad – based mostly progress. Within the UK, we’ve got accomplished the merger with Three and are transferring rapidly to mix our networks to learn clients. Immediately, we reiterate our full 12 months steerage of progress in revenue and money circulation. After two years of transformation and alter, Vodafone is now nicely positioned for multi – 12 months progress throughout each Europe and Africa.”
