Vodafone Group(VOD) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Group service revenue growth accelerated to 5.8% in Q2, supported by growth across both Europe and Africa [5][6] - Europe's service revenue returned to growth at 0.5%, driven by stabilization in Germany and growth in The UK [5][6] - Adjusted EBITDA saw an organic growth of 6.8% in the first half [7] Business Line Data and Key Metrics Changes - In Germany, service revenue grew by 0.5% despite intense competition, aided by the end of the MDU TV law change and acceleration in wholesale revenue [6][9] - The B2B business grew at 2.9% in Q2, with strong demand for digital services growing in double digits [6][10] Market Data and Key Metrics Changes - The UK market showed strong performance in the first full quarter post-merger with Three, with measurable improvements in network and customer experience [5][12] - Emerging markets, particularly Turkey and Vodacom, continued to deliver strong growth in euro terms [6] Company Strategy and Development Direction - The company is focused on operational turnaround in Germany and executing integration plans in The UK, aiming to improve customer experience and simplify operations [20] - A progressive dividend policy has been announced, with a planned 2.5% increase in the final FY26 dividend [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering at the upper end of FY 2026 guidance due to solid performance and positive outlook [7][20] - The company is positioned in markets with sustainable structures and good local scale, with a focus on high growth opportunities such as IoT and digital services [19][20] Other Important Information - The company has returned over €3 billion of capital to shareholders via buybacks and dividends since the capital allocation framework was refreshed [14][15] - The incoming CFO, Pilar Lopets, emphasized the importance of operational excellence and sustainable cash flow growth [18] Q&A Session Summary Question: What are the expectations for future growth? - Management confirmed that Vodafone is now growing service revenue in Europe and Africa, with a focus on operational turnaround and integration plans [19][20] Question: How is the integration with Three progressing? - The integration is off to a fast start, with improvements in customer loyalty and measurable network enhancements already noted [12]