Vodafone Group (VOD) Q2 2026 earnings summary

Executive summary

• Group reshaping completed, including Vodafone-Three UK merger and Telekom Romania asset acquisition, positioning all operations at scale with sustainable structures.

• Strong H1 FY26 performance with service revenue up 5.8% and adjusted EBITDAaL up 6.8% year-over-year, driven by growth in Europe, Africa, and Türkiye.

• Operational transformation advanced, boosting customer satisfaction, simplifying operations, and expanding digital and financial services.

• UK merger integration is ahead of schedule, Germany is improving, and a progressive dividend policy has been introduced.

• Interim dividend per share held at 2.25 eurocents, with a new progressive dividend policy targeting a 2.5% increase for FY26.

Financial highlights

• Group Q2 service revenue grew 5.8% year-over-year; H1 FY26 total revenue rose 7.3% to €19.6bn, with strong growth in Europe, Africa, and Türkiye.

• Adjusted EBITDAaL reached €5.7bn in H1 FY26, up 6.8% organically; margin at 29.2%.

• Over €5 billion returned to shareholders via buybacks and dividends in the last 18 months; €3bn in buybacks since May 2024, with €1bn more planned.

• Statutory profit for H1 FY26 was €1,052m; basic EPS from continuing operations at 3.38c.

• Net debt increased to €25.9bn, mainly due to the Three UK merger, share buybacks, and dividend payments.

Outlook and guidance

• Expecting to close the year at the upper end of previously set growth guidance; FY26 adjusted EBITDAaL guidance raised to €11.3–11.6bn and adjusted FCF €2.4–2.6bn.

• Progressive dividend policy introduced, targeting annual growth starting with 2.5% for FY26.

• Leverage ratio expected in the lower half of the 2.25–2.75x range.

• Germany anticipated to continue improving in H2 as MDU impact dissipates and wholesale migration completes.

• Emerging markets' growth contribution expected to moderate as inflation slows.