Vodafone Group Plc

Vodafone reported 5.1% group service revenue growth in Q4 and 4.5% organic growth in adjusted EBITDAaL for FY '26, both described as at the upper end of expectations/guidance. Adjusted free cash flow was EUR 2.6 billion, and the FY '26 dividend was increased by 2.5%. For FY '27, management guided to continued good growth in adjusted EBITDAaL and adjusted free cash flow, with Europe expected to be broadly stable overall, the U.K. expected to grow, and Germany expected to remain under pressure and see EBITDA decline; Africa and Turkey were expected to continue growing well. Guidance and outlook were stated in organic terms, with management emphasizing that the midterm cash flow outlook is fully organic and that capital intensity should remain broadly stable, with U.K. CapEx peaking in FY '27 before easing.

Margherita Della Valle framed FY '26 as the start of a “new chapter” for Vodafone after a deep 3-year transformation in portfolio, capital structure, and operating model. Her message was that the company is now simpler, stronger, and operating from scaled positions in its markets, which gives her confidence in FY '27 and beyond. She highlighted improving customer experience, stronger positions in Germany and the U.K., and Africa’s structural growth as the basis for the longer-term double-digit free cash flow ambition. Her tone was confident and explicit about medium-term optimism, but she repeatedly tied that confidence to execution and to the company’s new market structure.

Maria López Álvarez said FY '27 group guidance reflects a balanced view across markets: Germany is expected to decline, the U.K. should see strong growth from the first meaningful delivery of synergies, and Europe overall should be broadly stable, while Africa and Turkey continue to grow well. She said FY '27 adjusted free cash flow growth is driven by good adjusted EBITDA growth and broadly stable capital intensity by market, noting that U.K. CapEx peaks this year and then falls. On the midterm cash flow target, she confirmed it is fully organic and not pro forma for portfolio changes, and that the company expects the cash contribution from 1&1 to reduce as 1&1 expands coverage. She also pointed to AI as a contributor to OpEx gross and net savings, capital discipline, customer care, and procurement efficiency.

Analysts focused heavily on the new medium-term double-digit free cash flow target, asking why Vodafone felt confident enough to reintroduce a longer-term outlook and what underpins it. Management answered that the company has transformed its portfolio and capital structure, now operates from strong scaled positions, and sees a more supportive connectivity environment and a better growth mix across Europe, Africa, and B2B. Questions on Germany centered on whether subscriber losses and investment would keep pressuring EBITDA; management said broadband gross adds are being hurt by price increases, mobile remains fundamentally unchanged, but the business is making operational progress and should eventually stabilize and grow. There were also questions on M&A/leverage and the U.K. JV buyout, with management saying the buyout was always planned, leverage should return to the lower half of the range by end-FY '27, and the focus remains on organic execution.