Vodafone reports €40.5bn revenue with 5.4% organic growth and 29.2% EBITDA margin

Strategic Transformation Accelerates UK and African Expansion

Vodafone Group Plc’s 2026 Annual Report paints a picture of a company entering a new chapter, simpler, stronger, and primed for growth. The full consolidation of VodafoneThree UK, following the merger completed in May 2025, has positioned Vodafone as the UK’s largest mobile operator, now with full ownership anticipated after a £4.3 billion buyout of CK Hutchison’s 49% stake.

Meanwhile, the acquisition of Telekom Romania and the cloud specialist Skaylink, alongside a pending controlling stake in Safaricom, Kenya’s telecom and FinTech powerhouse, underscore Vodafone’s commitment to expanding its European and African footprints. Completion of the Safaricom deal remains subject to court approval, with resolution expected within 2026.

Robust Financial Performance and Shareholder Returns

Financially, Vodafone delivered an 8.0% increase in total revenue to €40.5 billion, with organic service revenue up 5.4%. Adjusted EBITDAaL climbed to €11.4 billion, achieving a 29.2% margin, at the upper end of guidance. Operating profit swung to a €2.8 billion gain from a prior year loss, driven by EBITDA growth and one-off prior impairments.

Shareholders saw a 2.5% dividend increase to 4.6125 eurocents per share, complemented by €4 billion in share buybacks since May 2024. This disciplined capital allocation reflects confidence in the Group’s medium-term cash flow growth, aiming for double-digit adjusted free cash flow expansion.

Network Expansion and Digital Services Drive Customer Growth

Vodafone’s network strategy focuses on expanding 5G coverage in Europe, now reaching 78% of the population, and boosting 4G presence in Africa, where smartphone penetration has risen to 65%. The Group’s digital services, including IoT and financial inclusion platforms like M-Pesa and Vodafone Cash, continue to grow strongly, with 92 million financial inclusion customers across Africa.

Customer experience improvements are evident in rising Net Promoter Scores across markets and stabilising churn rates, despite competitive pressures. The UK merger integration has delivered early synergies, including network sharing across 28.6 million customers and removal of coverage ‘not-spots’.

ESG Commitments and Governance Strengthened

Vodafone’s ESG framework remains integral to its mission of connecting everyone. The Group maintains net zero targets for operational emissions by 2028 in Europe and 2035 in Africa, with a broader 2040 value chain goal. Renewable electricity use has reached 100%, and initiatives in device and network equipment circularity have scaled, including the collection of one million used mobile devices for reuse or recycling.

Governance enhancements include Board refreshment with new appointments bringing financial and tech expertise, and increased gender and ethnic diversity. The Group continues to navigate regulatory complexities across its markets, including EU digital and cybersecurity laws, UK merger commitments, and evolving African telecom regulations.

Key Risks and Outlook

Principal risks flagged include regulatory changes, intensified market competition, cyber threats, and supply chain disruptions. The Board’s viability assessment confirms sufficient liquidity and resilience over a three-year horizon, supported by €13.3 billion in cash and investments and €7.6 billion in undrawn credit facilities.

Looking ahead, Vodafone’s strategy centres on operational excellence, customer experience, and growth in digital and financial services, with a keen eye on technology trends such as AI and satellite connectivity. The successful UK merger integration and African expansion will be critical to watch as catalysts for value creation.