Vodafone raises profit and cash guidance despite EUR 4.85bn Germany writedown
The telecoms group grew organic service revenue by 5.8% in the first half, helped by its business unit and Africa, and lifted its outlook for the year. Germany, its largest market, barely grew and triggered a goodwill impairment that pushed the group into a loss.
Vodafone raised its guidance for adjusted EBITDAaL and adjusted free cash flow for the year to March 2027 on Tuesday 10 November 2026, after organic service revenue rose 5.8% in the first half, according to its H1 FY27 results.
At the same time, the group reported a loss for the period of EUR 3.6bn, compared with a profit of EUR 1.1bn a year earlier, mainly because of a EUR 4.85bn impairment in Germany. Reuters said Germany stalled even as business customers and Africa drove growth.
The new guidance
Vodafone now expects adjusted EBITDAaL of EUR 13.2bn to 13.4bn for the 2027 fiscal year, up from EUR 13.0bn to 13.3bn, and adjusted free cash flow of EUR 2.8bn to 3.0bn, up from EUR 2.6bn to 2.9bn. The company says the midpoints imply organic growth of 7% in adjusted EBITDAaL and 21% in adjusted free cash flow. Reuters noted that the new EBITDAaL range was in line with the latest analyst forecasts.
In the six months to 30 September, total revenue rose 11.4% to EUR 21.9bn. Growth was boosted by the consolidation of Safaricom, VodafoneThree and Telekom Romania. Adjusted EBITDAaL rose 12.6% to EUR 6.5bn, or 6.4% on an organic basis, and the margin improved to 29.5%. The interim dividend rises 2.5% to 2.306 eurocents per share.
"We have made a strong start to Vodafone's new growth chapter, with organic service revenue increasing by 5.8%," said chief executive Margherita Della Valle. She pointed to the best-ever growth in Vodafone Business, where organic service revenue rose 5.8% and 6.6% in the second quarter.
Germany is the weak spot
"I am very happy about our overall Group performance, but Germany is not yet where it needs to be," Della Valle said. Organic service revenue in Germany, Vodafone's largest market, grew only 0.4% in the half, and it fell 0.5% in the second quarter after a 1.2% rise in the first. Adjusted EBITDAaL in Germany fell 3.2% on an organic basis, including the impact of a legal provision related to historical broadband price increases.
The group lost 75,000 mobile contract customers and 198,000 broadband customers in Germany during the half, which it attributes to intense competition in mobile and its focus on value in broadband. According to telecoms.com, Germany's mobile customer base fell to 28.7 million from 29 million a year earlier.
Why the group made a loss
Vodafone booked an impairment of EUR 4.85bn on its German business, relating solely to goodwill. It says the charge mainly reflects higher German government bond yields, which raise the discount rate used to value the business, as well as an updated business plan. It also wrote down EUR 2.2bn of deferred tax assets in the UK after buying out CK Hutchison's stake in VodafoneThree. A non-cash gain of EUR 3.0bn from the Safaricom transaction partly offset these items.
The result was a loss of EUR 3.6bn for the period; the loss attributable to shareholders of the parent was EUR 4.79bn, the figure Euronews highlighted. Net debt rose to EUR 33.5bn from EUR 25.4bn at the end of March, driven by the VodafoneThree buyout and the Safaricom deal.
Cost cuts
Vodafone targets more than EUR 2bn in annual gross savings in Europe and shared operations by fiscal 2030. In the first half, it delivered more than EUR 200m of gross savings, including about 3,000 role reductions across Europe and shared operations, and it has announced a further 2,300 role reductions in Germany.
What it means for European founders and investors
Vodafone's half shows the two sides of Europe's telecoms market. The growth is coming from business customers buying digital services such as cloud, security and software, and from emerging markets in Africa. Classic consumer connectivity in large European markets is flat at best, and Germany, the biggest of them, is shrinking in mobile.
For B2B software founders, that is a relevant signal. Large operators are positioning themselves as resellers of "smart, secure and sovereign" digital services to companies and the public sector, and Vodafone says it is the exclusive telecom partner for AWS's sovereign cloud in Germany. Startups selling cybersecurity, connectivity management or AI tools to small and mid-sized businesses can treat operators as distribution partners.
The impairment is also a reminder of how interest rates feed into valuations. Higher German bond yields alone were enough to cut the value of Vodafone Germany by billions. Investors comparing telecoms, infrastructure and late-stage tech valuations should keep that sensitivity in mind. For comparison, Deutsche Telekom raised its 2026 guidance earlier this month, with third-quarter revenue in Germany up 3.9%.
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