Vodafone swings to profits as Germany returns to top-line growth Proactive uses images sourced from Shutterstock
Vodafone Group PLC (LSE:VOD) reported improved revenue and profits rose for the past financial year as the telecoms group returned to growth in Germany and benefited from the inclusion of Three UK in its results.
Total revenue increased 8.0% to €40.5 billion, while service revenue rose 8.8% to €33.5 billion.
On an organic basis, service revenue growth was 5.4%, with all segments except Germany recording growth. In the fourth quarter, organic service revenue grew 5.1%, beating the average analyst forecast of 4.9%.
Germany, Vodafone’s largest market, saw organic service revenue decline 0.2% for the year, though fourth-quarter growth improved to 1.3%. The company said competitive pressure and the impact of TV law changes were offset by stronger wholesale revenue and broadband pricing.
Adjusted EBITDAaL rose 3.8% to €11.4 billion, slightly shy of the €11.48 billion consensus estimate, while operating profits swung to €2.8 billion from a loss of €0.4 billion a year earlier, after no repeat of the large impairment charges a year earlier.
The group reported adjusted free cash flow of €2.6 billion, inching up from €2.5 billion to the top end of its guidance range.
Vodafone increased its full-year dividend by 2.5% to 4.6125 eurocents per share and completed the final €0.5 billion tranche of its €2 billion share buyback programme on 11 May.
For the 2027 financial year, Vodafone expects adjusted EBITDAaL of €11.9-€12.2 billion and adjusted free cash flow of €2.6-€2.9 billion.
Chief executive Margherita Della Valle said: “After the transformation of the last three years, we are now a simpler company with a stronger growth outlook.”
She added: “Our early successes from the UK merger integration “reinforce our confidence in its potential and I am delighted that we are now gaining full ownership.”