It now expects fiscal 2027 adjusted EBITDAaL, a measure of operating profit after lease costs, of €13.2 billion to €13.4 billion, up from €13.0 billion to €13.3 billion. Adjusted free cash flow is now seen at €2.8 billion to €3.0 billion, up from €2.6 billion to €2.9 billion. At the midpoints, the new ranges imply organic growth of about seven percent in adjusted EBITDAaL and 21 percent in adjusted free cash flow. Vodafone said that was the first year of a plan for double-digit organic cash flow growth. First-half revenue rose 11.4 percent to €21.9 billion, helped by consolidating Safaricom, VodafoneThree and Telekom Romania, partly offset by currency moves.
Service revenue rose 12.8 percent to €18.4 billion, or 5.8 percent on an organic basis, with growth in all segments. Adjusted EBITDAaL rose 12.6 percent to €6.5 billion, or 6.4 percent organically, with the margin up 0.5 percentage point to 29.5 percent. The reported loss compares with a €1.1 billion profit a year earlier. It reflects an impairment in Germany tied to higher interest rates and a write-down of deferred tax assets in the UK after Vodafone bought out CK Hutchison’s stake in VodafoneThree, partly offset by a non-cash gain on the Safaricom deal.
The interim dividend rose 2.5 percent to 2.306 euro cents a share. Africa led growth, with organic service revenue up 13.4 percent. Vodafone Business grew 5.8 percent, with a best-ever 6.6 percent in the second quarter. Germany, the biggest drag, grew just 0.4 percent, and the U.K. 0.9 percent. “Germany is not yet where it needs to be,” Chief Executive Margherita Della Valle said, adding that an action plan is under way.
Vodafone has delivered more than €200 million of gross cost savings and about 3,000 role reductions across Europe and shared operations in the half. It has separately announced 2,300 more job cuts in Germany. It also raised its VodafoneThree synergy target to £0.8 billion a year by fiscal 2030 and £1 billion by 2032.
