Vodafone achieves €18.3bn revenue in H1 FY25 despite challenges in Germany

Vodafone Group Plc’s H1 FY25 financial results showcase its steady revenue growth, improved operational efficiencies, and progress on strategic initiatives. With significant investments in key markets and a reinforced focus on customer satisfaction, Vodafone is positioning itself for long-term success despite challenges in its largest market, Germany.

Revenue growth highlights Vodafone’s strategic focus

In the first half of FY25, Vodafone Group’s total revenue increased by 1.6%, reaching €18.3 billion compared to €18.0 billion in the same period last year. Service revenue grew by 1.7% to €15.1 billion, driven by organic growth of 4.8%. The company noted that growth was partially offset by adverse foreign exchange impacts, underscoring the resilience of its diversified portfolio. Operating profit surged by 28.3% to €2.4 billion, buoyed by a €0.7 billion gain from the sale of an 18% stake in Indus Towers.

Chief Executive Margherita Della Valle reiterated confidence in Vodafone’s trajectory, stating that the company’s results reflect the effectiveness of its strategic roadmap. She highlighted the strong performance outside Germany and reiterated Vodafone’s full-year financial guidance, targeting an adjusted EBITDAaL of €11 billion and at least €2.4 billion in free cash flow.

Operational progress in key markets

Germany faces challenges but sees strategic advancements

Vodafone Germany, the company’s largest market, faced expected headwinds due to changes in the MDU TV law, leading to a 6.2% decline in Q2 service revenue. Adjusted for these impacts, Germany’s revenue drop was limited to 2.4%. The company reported significant progress in retaining 4.0 million households, aligning with expectations. Investments in network infrastructure and operational simplification, including a 3,100-role reduction plan, aim to strengthen its competitive position in this critical market.

Africa sustains robust growth

In contrast, Vodafone Africa achieved consistent organic growth of 9.7% in Q2, driven by increased demand for data and financial services. Markets like South Africa and Egypt saw above-inflation growth supported by strategic price adjustments and strong consumer demand.

Business services expand globally

Vodafone Business continued to outperform, with organic service revenue accelerating to 4.0% growth in Q2. Partnerships with global technology leaders like Microsoft and Google are driving the development of SME-focused solutions, enhancing Vodafone’s capabilities in managed services and digital sales.

Strategic milestones and portfolio actions

Vodafone emphasized its commitment to its strategic priorities of customers, simplicity, and growth. Progress includes improved customer satisfaction scores across major markets and operational efficiencies achieved through partnerships and AI-driven tools. The company’s collaboration with Accenture brought €150 million in investments as part of a shared operations initiative.

The sale of a 10% stake in Vantage Towers for €1.3 billion in July further demonstrates Vodafone’s ability to reshape its portfolio for growth. Regulatory approvals for transactions in the UK and Italy are nearing completion, with final decisions expected by December 2024.

Outlook and confidence in FY25

Vodafone’s strong H1 results reflect its disciplined execution of strategic goals. Despite the challenges in Germany, the company’s performance in other regions and its focus on digital transformation underline its capacity for growth. Della Valle expressed optimism, stating that these actions are expected to accelerate growth into FY26, reinforcing the company’s market leadership.