Organic service revenue growth
5.8%
▲ Q2 6.4%, Q1 5.2%
FY27 Adjusted FCF guidance
€2.8–3.0bn
▲ raised from €2.6–2.9bn in July
H1 Adjusted free cash flow
€(440)m
▲ against €(583)m in H1 FY26
Net debt
€33.5bn
▲ up from €25.4bn at 31 March 2026
Vodafone's first-half results today raised full-year guidance for the second time in four months. FY27 Adjusted EBITDAaL (earnings before interest, tax, depreciation and amortisation, after leases) is now expected at €13.2–13.4 billion and Adjusted free cash flow at €2.8–3.0 billion, up from €13.0–13.3 billion and €2.6–2.9 billion in July. Organic service revenue grew 5.8% in the half and 6.4% in Q2. Africa grew 13.4% and Vodafone Business had its best quarter yet at 6.6%. Germany slipped back to a 0.5% decline in Q2, and a €4.85 billion goodwill impairment there pushed the group to a statutory loss of €3.6 billion.
The upgrade is not yet showing up in cash. Adjusted free cash flow was an outflow of €440 million in the half. Buying out CK Hutchison's 49% of VodafoneThree and adding 15% of Safaricom lifted net debt by €8.1 billion to €33.5 billion. To reach the new range, the second half has to produce €3.24–3.44 billion of adjusted free cash flow. That is a demanding but plausible figure against about €3.18 billion in the same half last year. Several deadlines fall within the next few months. A Düsseldorf court is due to give its decision on German price rises on 26 November. A date for the Kenyan appeal over Safaricom is expected before the end of December, and a German competition hearing is set for January 2027.
“Today, we are upgrading our guidance for both profit and cash flow for the year, and we now expect to deliver over 20% organic Adjusted Free Cash Flow growth in year one of our multi-year double-digit cash flow growth trajectory.”
— Margherita Della Valle, Group Chief Executive · Vodafone Group H1 FY27 Results, 10 November 2026
Organic service revenue rose 5.8% in the six months to 30 September, and every segment grew. Organic figures strip out currency moves, acquisitions and Turkish hyperinflation accounting. Total revenue rose 11.4% to €21.9 billion on a reported basis, but much of that came from consolidating Safaricom, VodafoneThree and Telekom Romania.
Africa did most of the work. Organic service revenue grew 13.4% and organic Adjusted EBITDAaL 18.0%, with growth in every Vodacom market. Safaricom's M-Pesa revenue rose 13.7%, Egypt's Vodafone Cash revenue rose 74.3% to €113 million, and M-Pesa in Vodacom's international markets rose 23.4% to €285 million. Vodafone Business grew 5.8% for the half and 6.6% in Q2, its best quarter yet, led by double-digit growth in digital services in Europe. Türkiye's 32.8% organic growth mostly reflects inflation. Its euro service revenue, excluding hyperinflation adjustments, rose 12.7%.
Germany, which supplies 30% of group service revenue and 33% of Adjusted EBITDAaL, is weaker. Organic service revenue grew 0.4% for the half but fell 0.5% in Q2, and organic Adjusted EBITDAaL fell 3.2%. About 2.0 percentage points of that fall came from a legal provision on historical broadband price rises. After a court ruling, Vodafone has stopped recognising revenue from the €5 a month increase still charged to 2.5 million legacy broadband customers. The broadband base shrank by 198,000 and the mobile contract base by 75,000. The company puts the broadband losses down to its focus on raising average revenue per user. Separately, 2,300 more German role reductions were announced on 9 November.
The UK is now wholly owned after the £4.3 billion (€5.0 billion) buyout of CK Hutchison's 49% stake in VodafoneThree, completed in July. Organic service revenue grew 0.9% and organic Adjusted EBITDAaL 5.9%, with more than €50 million of cost synergies already delivered. In October the synergy target rose to £0.8 billion a year by FY30 and £1 billion by FY32. Other Europe's organic Adjusted EBITDAaL fell 4.6%, which the company attributes to a legal one-off in Portugal in the prior period.
| Figure | Value | Change | |
|---|---|---|---|
| Total revenueH1 FY27 | €21.9bn | +11% on €19.6bn | |
| Africa organic service revenue growthH1 FY27 | 13.4% | +13% | |
| Africa organic Adjusted EBITDAaL growthH1 FY27 | 18.0% | +18% | |
| Vodafone Business organic service revenue growthQ2 FY27 | 6.6% | ||
Steps follow the company's net debt reconciliation, with increases in debt shown as positive; dividends (€544m) and buybacks (€92m) are combined.
Adjusted EBITDAaL rose 6.4% organically and 12.6% on a reported basis to €6.5 billion. The organic margin improved 0.5 percentage points to 29.5%. Operating leverage held up: Vodafone delivered €0.2 billion of gross savings and about 3,000 role reductions across Europe and shared operations in the half.
The statutory result went the other way. The €3.6 billion loss, against a €1.1 billion profit a year earlier, comes from three non-cash items. The first is a €4.85 billion impairment of German goodwill. Vodafone attributes it to higher German bond yields, which lifted the pre-tax discount rate to 8.0% from 7.5%, and to an updated, lower operating plan for Germany. The second is a €2,247 million write-down of UK deferred tax assets after the VodafoneThree buyout. These were partly offset by a €3,022 million gain from revaluing the previously held Safaricom stake. The impairment is non-cash, but it also records that the German plan has been cut.
Net debt rose to €33.5 billion at 30 September from €25.4 billion at the end of March. Acquisitions and disposals account for €6,957 million of the rise. The main items are the €5,019 million VodafoneThree buyout, €1,379 million for the extra 15% of Safaricom and €537 million of net debt that came with Safaricom. The rest comes from the €845 million free cash outflow and €636 million of dividends and buybacks. On the company's €13.2–13.4 billion EBITDAaL guidance, that is about 2.5 times, inside its 2.25–2.75 times range but above the lower half it targets.
Cash generation is improving at the operating level. Operating cash inflow rose 24.8% to €6,354 million. The improvement was largely spent before it reached free cash flow. Capital additions rose to €3,320 million from €2,800 million, dividends paid to minority shareholders rose to €398 million from €141 million, and restructuring cash rose to €320 million. Adjusted free cash flow improved by €143 million to an outflow of €440 million, while free cash flow after restructuring, integration and spectrum worsened slightly to an outflow of €845 million.
Liquidity is ample. Cash and short-term investments total €8.4 billion and undrawn revolving facilities €7.6 billion, against €6.8 billion of current borrowings, and the pension schemes show a €184 million surplus. Two arrangements sit outside headline net debt. The first is €12.8 billion of lease liabilities. The second is the new OXG fibre joint venture in Germany: Itaparica, a Société Générale subsidiary, will provide up to €2,250 million of equity funding with a guaranteed minimum return, and Vodafone must buy its shares if they are not sold within five and a half years. That obligation is currently carried as a €58 million derivative liability.
The upgraded guidance implies organic growth of about 6–8% in Adjusted EBITDAaL and 17–25% in Adjusted free cash flow, or 7% and 21% at the mid-points. Two parts of the bridge matter. The €1.1 billion of EBITDAaL from nine months of Safaricom was already added in July, and it carries no adjusted free cash flow uplift. Today's €0.2 billion rise in both ranges is organic. The European EBITDAaL outlook of €7.6–7.9 billion is unchanged.
The cash range is the harder test. After a €440 million outflow in the first half, the second half needs €3.24–3.44 billion of adjusted free cash flow. On FY26's €2.6 billion total and the €583 million first-half outflow, the comparable figure last year works out at €3.18 billion. Vodafone's cash is usually heavier in the second half, and FY26 finished at the top of its guidance range, so the target looks achievable. Restructuring and integration costs are expected to peak at about €0.7 billion this year, including about €0.4 billion for VodafoneThree, and sit below the adjusted line.
The guidance assumes no material change to the group's structure. That makes the Safaricom appeal relevant. The Kenyan High Court declared the purchase of the government's 15% null and void on 15 September. On 13 October the Court of Appeal ordered the status quo kept until it rules, so Vodacom remains the registered holder and Kenya holds the purchase money. Vodafone expects an appeal date to be set before the end of December 2026.
The interim dividend rises 2.5% to 2.306 eurocents. The shares go ex-dividend on 19 November and the dividend is paid on 3 February 2027. At the unchanged progressive policy the full-year ordinary dividend costs about €1.07 billion, which the guided cash range would cover even after restructuring cash.
At 116.95p, the 9 November close before the results, Vodafone was valued at £27.10 billion. Against that sits net debt of €33.5 billion and a full-year adjusted free cash flow range of €2.8–3.0 billion. A sizeable part of that cash belongs in practice to minority shareholders in Vodacom and Safaricom, and to the coming restructuring bill.
The income argument is modest. Converting the FY26 dividend of 4.6125 eurocents at the guidance exchange rate of €1: GBP 0.87 gives roughly 4.0p a share, a yield of about 3.4% at 116.95p. The ten-year gilt yielded 5.45% on 4 November and Bank Rate was 4.00%. Any case for the shares therefore rests on cash flow growth and the long-dated targets. These include double-digit organic growth in adjusted free cash flow over the medium term and UK operating free cash flow more than tripling by FY32 against FY25.
Ownership points to differing views among large holders. Vega SAS holds 19.87%, and Société Générale, now OXG's partner, has hovered around 9% through October. Ten disclosed short positions together total 15.58% of the shares. Insider dealing has been mixed. The Chief Executive sold 2,658,846 shares on 28 July, and other executives sold after that, while several directors made small purchases on 4 August.
| Figure | Value | Change |
|---|
Going into the results the shares were 11.4% below the 132.07p high of 17 September and up about 32% over a year. They had corrected, but they were not at a low. At the 9 November close of 116.95p they sat below their 20-day and 50-day averages but above the 200-day average of about 115.4p. There was no trend in force, with the ADX measure of trend strength at 18.4.
Volume through the pullback showed selling. Turnover was heavy on the way down in early October, and on-balance volume made a lower low alongside price at the 12 October low. Good news has been sold since. The shares fell from 127.45p to 124.4p on the day of the 8 October VodafoneThree briefing that raised the synergy target, and fell to 118.35p the next day. A push to 122.65p on 5 November reversed to 116.5p by the following session.
Volatility had compressed sharply. Bollinger bandwidth, a measure of how far prices are spread around their average, was narrower than on 95% of the previous 126 sessions. Tight compression of this kind usually comes before a larger move, without saying which way. The levels that matter are support at 113.86p, tested nine times since October, and resistance at 121.47p. A close below support on heavy volume would leave little support before 104.66p and the July gap between 97.98p and 107.45p. A close above 121.47p on volume larger than the 5 November spike would be the first sign in six weeks of buyers willing to pay up.
The case for starts with delivery. FY26 finished at the top of its guidance, July's range was steered to its upper end, and today's upgrade is organic, adding €0.2 billion to both profit and cash ranges. Growth is spread more widely than in earlier years. Africa grows in the teens, Business digital services grow at double digits in Europe, and the UK is now wholly owned with a £1 billion synergy target by FY32. Liquidity of €8.4 billion plus €7.6 billion of facilities leaves room to absorb setbacks. The financing swing that hit adjusted earnings per share is mostly the absence of a €782 million one-off gain. The second-half cash requirement of €3.24–3.44 billion is only modestly above the €3.18 billion produced in the same half last year. If the shares break out of their narrow range, it will happen just as these figures start to come through.
The case against is that none of this has yet reached shareholders as cash. Free cash flow was negative €845 million in the half. Net debt rose €8.1 billion, and adjusted earnings attributable to Vodafone shareholders were just €342 million while minorities took €1,192 million. Germany is a third of group EBITDAaL, and its service revenue turned negative in Q2. Its impairment rests on a reduced plan, and the company warns that higher bond yields would, in isolation, mean a further charge: a 0.5-point rise in the discount rate takes the shortfall to €6.8 billion from €4.9 billion. Legal risks cluster in the same market: the price-rise injunction, a class action with about 118,500 registrants, a €239 million teleshopping claim and a competition investigation that could include disgorgement of the alleged economic advantage. Return on capital of 4.5% after tax and a yield below gilts leave the shares reliant on targets that run to FY32.
The next few months bring a run of tests. On 26 November the Düsseldorf court gives its decision on the German price-rise injunction. A Kenyan appeal date should be set before the end of December. The Bundeskartellamt challenge is heard in January 2027, and Q3 trading is expected around 8 February 2027. Three measures will show which case holds. The first is second-half adjusted free cash flow against €3.24 billion, together with how much of it survives restructuring, interest and minority dividends. The second is whether German quarterly service revenue returns to growth. The third is whether net debt stops rising. In the market, the 113.86p and 121.47p levels will show which way the share price breaks.
| 5.8% for H1 |
| Germany organic service revenue growthQ2 FY27 | (0.5)% | Q1 1.2%, H1 0.4% |
| Germany organic Adjusted EBITDAaL growthH1 FY27 | (3.2)% |
| Germany broadband customer base changeH1 FY27 | -198,000 |
| UK organic Adjusted EBITDAaL growthH1 FY27 | 5.9% | +5.9% |
Sources: H1 FY27 Results RNS, 10 Nov 2026
Adjusted basic earnings per share fell to 1.48 eurocents from 6.92 eurocents. Most of the fall comes from financing. Adjusted net financing moved from €27 million of income to an €869 million cost, but the prior half included a €782 million gain on bonds bought back early, and none recurred this time. Minority shareholders also take a larger share now that Safaricom is consolidated: €1,192 million of H1 profit was attributable to non-controlling interests, against €223 million a year ago. Adjusted profit attributable to Vodafone shareholders was €342 million.
Post-tax return on capital employed fell to 4.5% from 4.8%. More tax charges may follow. If Luxembourg enacts a planned one-point cut in its corporate tax rate in H2, the company says the recognised deferred tax asset would fall by about €630 million.
| Figure | Value | Change | |
|---|---|---|---|
| Adjusted EBITDAaLH1 FY27 | €6.5bn | +13% 6.4% organic | |
| Loss for the financial periodH1 FY27 | €(3,597)m | against profit of €1,052m | |
| Adjusted basic EPSH1 FY27 | 1.48c | −79% from 6.92c | |
| Post-tax ROCE12 months to 30 Sep 2026 | 4.5% | from 4.8% | |
Sources: H1 FY27 Results RNS, 10 Nov 2026
| Figure | Value | Change | |
|---|---|---|---|
| Net debt30 Sep 2026 | €33.47bn | +32% up €8,062m from €25,411m at 31 Mar 2026 | |
| Inflow from operating activitiesH1 FY27 | €6.35bn | +25% | |
| Capital additionsH1 FY27 | €3.32bn | +19% from €2,800m | |
| Cash and short-term investments30 Sep 2026 | €8.4bn | −32% from €12.4bn at 31 Mar 2026 | |
| Undrawn revolving credit facilities30 Sep 2026 | €7.6bn | ||
| Lease liabilities30 Sep 2026 | €12.78bn | ||
| Dividends paid to non-controlling shareholdersH1 FY27 | €398m | +182% from €141m | |
Sources: H1 FY27 Results RNS, 10 Nov 2026
“I am very happy about our overall Group performance, but Germany is not yet where it needs to be. We have a clear action plan in progress, which is structurally simplifying our German operations and improving customer satisfaction across all of our services.”
— Margherita Della Valle, Group Chief Executive · Vodafone Group H1 FY27 Results, 10 November 2026
| Figure | Value | Change |
|---|---|---|
| FY27 Adjusted FCF guidanceFY27 | €2.8–3.0bn | from €2.6–2.9bn in July |
| Safaricom consolidation impact on EBITDAaL guidance9 months FY27 | €1.1bn | no Adjusted FCF impact |
| Restructuring and integration costsFY27 | c.€700m | |
| Interim dividend per shareH1 FY27 | 2.306 eurocents | +2.5% on 2.25 eurocents |
| FY26 Adjusted free cash flowFY26 | €2.6bn |
Sources: H1 FY27 Results RNS, 10 Nov 2026; FY26 Preliminary Results, 12 May 2026
| Share priceClose, 9 Nov 2026 | 116.95p |
| Market capitalisationClose, 9 Nov 2026 | £27.1bn |
| 10-year gilt yield4 Nov 2026 | 5.45% |
| Largest shareholder, Vega SASDisclosed 16 Jul 2026 | 19.87% |
| Disclosed short positionsLatest 23 Oct 2026 | 15.58% |
Sources: Ticker market data; UK economy and markets data; Major shareholder disclosures; Disclosed short positions
| Figure | Value | Change |
|---|---|---|
| Germany recoverable amount less carrying value, +0.5pp discount rate30 Sep 2026 | €(6.8)bn | against €(4.9)bn base case |
| Customers registered in German price-increase class action30 Sep 2026 | c.118,500 | |
| Teleshopping channels damages claimFiled Aug 2026 | c.€239m | |
| Profit attributable to non-controlling interestsH1 FY27 | €1.19bn | +435% from €223m |
Sources: H1 FY27 Results RNS, 10 Nov 2026
A more sceptical reading holds that the upgrade measures the wrong thing. Group EBITDAaL is rising, but what reaches Vodafone shareholders per share is shrinking. Adjusted profit attributable to them was €342 million in the half, while minorities took €1,192 million. Post-tax return on capital fell to 4.5% even before the cost of the new debt is fully felt. Net debt grew €8.1 billion to fund two minority buyouts whose returns are promised for FY32 and FY34. The German impairment is not a clean reset either. It removes the benefit of uncommitted restructuring and leans on an EBITDAaL growth rate of 1.7% a year in Germany, and a two-point shortfall in that growth widens the gap to €7.5 billion. On this view, the guidance raise is real but marginal, worth €0.2 billion, against a balance sheet that has become materially more stretched. The burden of proof sits with the second-half cash figure, and an in-line result would not lighten it.