VOD — Vodafone Group Public Limited Company

Summary of Vodafone (VOD) Q2 2026 Earnings Call

1. Key Financial Results and Metrics:

• Group service revenue growth accelerated to 5.8% in Q2, driven by performance in Europe and Africa.
• Group EBITDAaL grew by 6.8% in the first half, with nearly all markets posting growth.
• Vodafone returned over EUR 5 billion to shareholders in buybacks and dividends over the past 18 months, with an additional EUR 1 billion in buybacks planned for the next six months.
• The company expects to close the year at the upper end of its growth guidance set in May 2023.

2. Strategic Updates and Business Highlights:

• The merger of Vodafone and Three in the U.K. has been completed, along with the acquisition of Telekom Romania's assets, positioning Vodafone strongly in its markets.
• In Germany, Vodafone's 5G network now covers over 90% of the population, serving over 40 million customers, and gigabit broadband is available to 75% of households.
• Vodafone U.K. is the largest mobile operator and fastest-growing broadband provider, with significant investments to enhance network quality.
• The company is focusing on expanding digital and financial services, with a recent acquisition of a cloud service specialist, Skaylink.

3. Forward Guidance and Outlook:

• Vodafone expects a slowdown in EBITDA growth in the second half of the fiscal year due to tougher comparisons, particularly in the U.K. B2B segment and emerging markets.
• The company anticipates that Germany will continue to improve in H2, with the full run rate of wholesale migration from 1&1 expected to contribute positively.
• Long-term, Vodafone aims for sustainable cash flow growth and has initiated a progressive dividend policy, starting with a 2.5% increase.

4. Bad News, Challenges, or Points of Concern:

• Despite positive overall growth, Germany's revenue trends are still declining by 2-3% when excluding the MDU effect and the impact of 1&1.
• The U.K. is expected to see a slowdown in EBITDA growth due to tough comparisons and increased marketing expenses in H2.
• Emerging markets growth is projected to trend down as inflation moderates, impacting overall revenue contributions.
• Competitive pressures in Germany, particularly from Deutsche Telekom, may affect market dynamics.

5. Notable Q&A Insights:

• Management acknowledged that while Germany's turnaround is progressing, underlying revenue performance remains stable without significant quarter-on-quarter improvements expected.
• The integration of Vodafone and Three in the U.K. is progressing rapidly, with early wins in network quality and customer experience.
• The equity contribution for the OXG fiber joint venture is minimal, indicating a low financial burden on Vodafone.
• Turkey's strong performance continues to be a significant contributor to overall EBITDA growth, although growth rates may decrease as inflation recedes.
• Future M&A activity is expected to focus on small bolt-on acquisitions to enhance digital capabilities rather than large-scale mergers.

Overall, Vodafone is navigating a transformative phase with solid financial performance, strategic initiatives in key markets, and a cautious outlook on growth due to competitive and economic pressures.