AUS
NZ
UK
CA
USA
IND
Highlights
- Revenue Growth: Group total revenue increased by 5.0% to €9.8 billion in Q3, with organic service revenue up by 5.6%.
- UK Merger & Italy Disposal: Vodafone's merger with Three UK received regulatory approval, with completion expected in the coming months. The €8 billion sale of Vodafone Italy to Swisscom AG was finalized in December 2024.
- Share Buybacks & Financial Outlook: Vodafone has repurchased €1.5 billion worth of shares since May 2024, with an additional €0.5 billion tranche beginning. The company reiterated its FY25 financial guidance.
Vodafone Group Plc (LSE:VOD) has reported a strong financial performance in its Q3 FY25 trading update, underpinned by robust organic service revenue growth and strategic portfolio adjustments. The telecommunications giant posted a 5.0% increase in total revenue to €9.8 billion, with group service revenue rising by 5.6% to €7.9 billion, driven by accelerated growth in the UK and Africa.
Despite broad-based growth across key markets, Vodafone Germany faced a 6.4% decline in service revenue, largely due to regulatory changes impacting TV services. Excluding this factor, the decline stood at 2.6%, primarily attributed to lower broadband revenues. In contrast, the UK segment saw a significant improvement, with organic service revenue growth accelerating to 3.3% from 1.2% in the previous quarter.
Vodafone’s performance in Africa remained a key highlight, with service revenue growth improving to 11.6% in Q3, supported by a surge in demand for data services and price adjustments in Egypt and South Africa. Other European markets and Türkiye also contributed to overall growth, with Türkiye recording a remarkable 53.1% increase in service revenue, excluding hyperinflationary adjustments.
In the business segment, Vodafone continued to build momentum, achieving 4.3% organic service revenue growth, driven by double-digit expansion in digital services such as cloud and cybersecurity.
Financial & Strategic Updates
The company’s Group Adjusted EBITDAaL (Earnings Before Interest, Taxes, Depreciation, and Amortization after Leases) increased by 2.2% on an organic basis to €2.8 billion in Q3, reflecting strong service revenue growth and lower energy costs in Europe. However, the overall operating profit declined by 18.4% to €1.0 billion. Vodafone reiterated its full-year FY25 guidance, expecting Group Adjusted EBITDAaL of approximately €11 billion and a minimum of €2.4 billion in adjusted free cash flow.
A major highlight of the quarter was Vodafone’s successful regulatory approval for its UK merger with Three, a move expected to bolster its market position and improve network capabilities. The merger is set to be completed in the coming months. Meanwhile, the €8 billion sale of Vodafone Italy to Swisscom AG was finalized on December 31, 2024, with proceeds used to reduce net debt. The Board also announced plans to return up to €2.0 billion to shareholders via buybacks once the current €2 billion repurchase program is completed.
