182 Vodafone Group Plc Annual Report 2026
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− Finance leases where the Group is sub-lessor of handsets or similar items in back-to-back arrangements or where surplus assets or certain retained mobile base stations sites are sublet out for all or substantially all of the remaining head lease term. The Group’s income as a lessor in the year is as follows: 2026 2025 2024 €m €m €m Operating leases Lease revenue (note 2 ‘Revenue disaggregation and segmental analysis’) 415 423 463 Income from leases not recognised as revenue 42 36 38 Substantially all of the Group’s income as a lessor is operating lease income. The committed amounts to be received from the Group’s operating leases are as follows: Maturity Within one In one to In two to In three to In four to In more than year two years three years four years five years five years Total €m €m €m €m €m €m €m Committed operating lease payments due to the Group as a lessor 31 March 2026 258 110 34 21 9 11 443 31 March 2025 261 98 31 18 11 14 433 31 March 2024 296 121 29 16 9 20 491 The Group recognises a net investment in leases (receivables) as a result of providing finance leases as a lessor, which are disclosed in note 14 ‘Trade and other receivables’. The maturity profile of the Group’s net investment in leases is as follows: 2026 2025 €m €m Within one year 109 106 In more than one year but less than two years 86 82 In more than two years but less than three years 61 59 In more than three years but less than four years 52 51 In more than four years but less than five years 50 42 In more than five years 182 238 540 578 Unearned finance income (99) (118) Net investment in leases - as disclosed in note 14 ‘Trade and other receivables’ 441 460 The Group has no material lease income arising from variable lease payments.
20. Leases (continued) Lease liabilities The Group’s lease liabilities are disclosed in note 21 ‘Borrowings’. The maturity profile of the Group’s lease liabilities is as follows: 2026 2025 €m €m Within one year 3,241 2,765 In more than one year but less than two years 2,546 2,081 In more than two years but less than three years 1,972 1,756 In more than three years but less than four years 1,441 1,434 In more than four years but less than five years 1,269 965 In more than five years 4,265 3,868 14,734 12,869 Effect of discounting (2,346) (2,043) Lease liability - as disclosed in note 21 ‘Borrowings’ 12,388 10,826 At 31 March 2026 the Group has committed to enter into future lease contracts with future undiscounted lease payments of €2,349 million (31 March 2025: €1,464 million) which includes €1,386 million (31 March 2025: €1,102 million) of commitments to Vantage Towers A.G., a subsidiary of the Group’s joint arrangement Oak Holdings 1 GmbH, for tower leases which predominantly have terms of eight years from the date on which the towers are made available for use. The towers are expected to become available for use over the four years ending 31 March 2030. Interest expense on lease liabilities for the year is disclosed in note 5 ‘Investment income and financing costs’. The Group has no material liabilities under residual value guarantees and makes no material variable payments not included in the lease liability. The Group does not apply either the short term or low value expedient options in IFRS 16 ‘Leases’. The Group’s leasing activities as a lessor The Group has a wide range of lessor activities with consumer and enterprise customers, other telecommunication companies and other companies. With consumer and enterprise customers, the Group generates lease income from the provision of handsets, routers and other communications equipment. The Group provides wholesale access to the Group’s fibre and cable networks, leases out space on the Group’s owned mobile base stations to other telecommunication companies and subleases certain retained mobile base station sites to telecommunication tower companies. In addition, the Group subleases retail stores to franchise partners in certain markets and leases out surplus assets (e.g. vacant offices and retail stores) to other companies. Lessor transactions are classified as operating or finance leases based on whether the lease transfers substantially all of the risks and rewards incidental to ownership of the asset. Leases are individually assessed, but generally, the Group’s lessor transactions in the year are classified as: − Operating leases where the Group provides wholesale access to its fibre and cable networks, provides routers or similar equipment to fixed customers or is lessor of space on owned mobile base stations; and
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