Vodafone posted a 5.5% rise in service income in Q1 (to June 30), beating expectations, regardless of a reversal at its massive German op-co, albeit a slowing one, and softening progress in its dwelling market within the UK, the place the Three merger is taking part in out. Its outlook stays unchanged.
Constructive outlook – good outcomes, notably in the remainder of Europe and Africa; respectable enterprise gross sales.
Germany steady – improved wholesale and enterprise gross sales partly offset successful from bulk TV offers.
UK, slower – good mounted gross sales, however enterprise and shopper contract churn, and Three integration.
Vodafone reported a 5.5 p.c leap in group service income to €7.86 billion within the quarter ending June 30, exceeding expectations of 4.9 p.c. 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 p.c reversal, down from a six p.c decline within the earlier quarter. At dwelling within the UK, its different massive market, natural service income was 0.9 p.c greater, down from 3.4 p.c final quarter – partly on account of merger-related disruption following its tie-up with UK operator Three.
Collectively, these markets contributed 55 p.c 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 steering set between €11.3 and €11.6 billion – up from €10.9 billion anticipated in 2025. Shares rose 4 p.c on the outcomes, and are up over 20 p.c within the year-to-date. The group’s whole income elevated by 3.9 p.c to €9.4 billion within the first quarter. Adjusted EBITDA rose 4.9 p.c to €2.7 billion, supported by a 0.2 p.c margin enchancment to 29.3 p.c.
Wholesale and enterprise gross sales drove its enchancment in Germany, versus final quarter – respectively with greater income from the migration of 1&1 roaming prospects (driving cell service income up 2.7 p.c), and the “phasing of digital providers initiatives” (offset by ARPU stress within the enterprise sector; that means enterprise service income declined by 0.9 p.c). The decline, general, was right down to the affect 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 p.c with greater 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 p.c, with 44,000 new prospects; enterprise income declined by three p.c 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 enormous contract disconnections in Enterprise and Three UK Shopper buyer losses”. The brand new VodafoneThree firm within the UK will make investments £11 billion over 10 years in 5G infrastructure, and generate price and capex synergies of £700 million every year – by the fifth 12 months after its completion. VodafoneThree is now the largest cell community operator within the UK with 28.8 million prospects.
In the remainder of the group’s footprint, Türkiye was the standout, with service income up by 29.6 p.c. In Europe – excluding Germany and the UK, however together with Türkiye – natural service income progress was 0.2 p.c greater, with good gross sales to enterprises throughout the area, and declining gross sales to customers in Portugal and Romania. Africa additionally carried out properly, with progress of 13.8 p.c within the quarter, notably in Egypt and throughout its Vodacom operations, together with from monetary providers.
A web page in its report exhibiting adjusted non-GAAP outcomes (as above), together with for Vodafone Enterprise, says enterprise gross sales (through Vodafone Enterprise) climbed 4 p.c throughout all territories to €1.964 billion. There isn’t any 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 government 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 now have accomplished the merger with Three and are shifting rapidly to mix our networks to profit prospects. As we speak, we reiterate our full 12 months steering of progress in revenue and money move. After two years of transformation and alter, Vodafone is now properly positioned for multi – 12 months progress throughout each Europe and Africa.”