Vodafone (VOD) Q1 2025 earnings summary

Executive summary

• Q1 FY25 results met expectations, with 5.4% service revenue growth and adjusted EBITDAaL up 5.1% to €2.7bn, driven by strong performance in Africa and Turkey and lower inflation in Europe.

• Germany's performance was impacted by TV law changes, B2B project phasing, and prior year price increases, resulting in a 1.5% decline in service revenue.

• Major transformation actions included the sale of Spain, a €2 billion share buyback program, and a further 10% sell-down in Vantage Towers, reducing the stake to 50%.

• Strategic priorities focus on customer satisfaction, operational simplicity, and growth, with 7,000 role reductions and a new ExCo structure implemented.

Financial highlights

• Group Q1 service revenue up 5.4% year-over-year, with adjusted EBITDAaL up 5.1% to €2.7bn and margin at 29.7%.

• Total revenue increased by 2.8% year-over-year to €9.0 billion, with operating profit up 42.9% to €1.5 billion due to a one-time gain from Indus Towers.

• Germany's Q1 service revenue declined 1.5% year-over-year, mainly due to MDU TV law changes; UK service revenue was flat, while Turkey grew 91.9% (25% in euro terms), and Africa saw strong growth.

• Q1 saw a €240 million year-on-year revenue increase and €55 million EBITDA increase.

Outlook and guidance

• FY25 guidance reiterated: Adjusted EBITDAaL of approximately €11 billion and adjusted free cash flow of at least €2.4 billion.

• Sequential improvement expected in Vodafone Business and Germany, with stronger exit growth rate versus FY24.

• Germany expected to return to positive contribution in FY26 as MDU headwinds dissipate and B2B/digital services demand strengthens.

• Revenue from the 1&1 national roaming agreement in Germany to become material in Q3, ramping to full run rate by H2 FY26.