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Vodafone Group Plc Annual Report 2026
Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Our financial performance continued
Net financing costs
Taxation
€160 million in dividends from Safaricom. TPG Telecom Limited Associate (Australia) – 23.7% ownership TPG Telecom Limited is a fully integrated telecommunications operator in Australia and is listed on the Australian stock exchange. The Group owns an equivalent economic interest of 23.7%, via an 11% direct stake in TPG and a 13% indirect stake, held through a 50:50 joint venture with CK Hutchison. In July 2025, TPG completed the sale of Vocus, its fixed line business, and in November 2025 returned A$3 billion cash to shareholders, with Vodafone receiving A$748 million for its share via a capital return and special dividend. Vodafone and CK Hutchison agreed to reinvest the funds to its 50:50 joint venture for the purpose of repaying A $1.4 billion of its multicurrency loan facility. Subsequently, the Group provides guarantees amounting to US$0.5 billion and €0.6 billion (FY25: US$1.0 billion and €0.6 billion) in relation to its 50% share in the loan facility. During FY26, Vodafone received €22 million in dividends from its direct stake in TPG. Vodafone Idea Limited Joint Venture (India) – 16.1% ownership In March 2025, Vodafone Idea announced that the government had agreed to convert US$4.3 billion of its outstanding spectrum dues to equity. The Group’s shareholding in Vodafone Idea Limited was subsequently diluted to 16.1% in April 2025. As part of the agreement to merge Vodafone India and Idea Cellular in 2017, the parties agreed a mechanism for payments (the ‘CLAM indemnity’) between the Group and Vodafone Idea Limited (‘VIL’) under which the Group would reimburse VIL in the event of the crystallisation and payment of certain identified contingent liabilities. On 31 December 2025 the Group reached an agreement with VIL to settle the Group’s obligations under the CLAM. See note 29 ‘Contingent liabilities and legal proceedings’ in the consolidated financial statements for more information.
VodafoneZiggo Joint Venture (Netherlands) – 50.0% ownership In February 2026, we announced that we agreed to sell our interests in VodafoneZiggo to Liberty Global for €1.0 billion in cash and a 10% equity stake in a soon-to-be-formed Benelux entity (Ziggo Group), which will own 100% of both VodafoneZiggo and Liberty Global’s Belgian subsidiary, Telenet Group Holding 2 . Consequently, the Group’s investment in VodafoneZiggo was classified as held for sale from this date. The transaction is subject to the receipt of customary approvals and regulatory clearances and is expected to complete in the second half of 2026. Vodafone’s share of net loss in the period was €95 million, driven by lower operating income. During the year, Vodafone received €62 million in dividends and €51 million in interest payments from the joint venture. Safaricom Associate (Kenya) – 27.8% ownership In December 2025, we announced that Vodacom Group Limited had agreed to acquire a further effective 20% of the issued share capital in Safaricom PLC, Kenya’s leading telecoms operator. Vodacom will acquire 15% from the Government of Kenya for a cash consideration of €1.36 billion and 5% from Vodafone for a cash consideration of €0.45 billion. Following completion of the acquisition, Safaricom will be owned by Vodacom (55%), the Government of Kenya (20%) and public investors (25%). Once the transaction completes, Safaricom will be consolidated by both Vodacom and the Vodafone Group. Completion of the acquisition is subject to certain conditions and is currently prevented by a court order. Safaricom service revenue grew 3.2% to €2.8 billion, with organic growth of 11.1% partially offset by foreign exchange movements of the Kenyan shilling versus the euro. Vodafone’s higher share of results was due to a strong result in Kenya and lapping a prior year currency devaluation in Ethiopia. During the year, Vodafone received
Reported change %
Reported change pps
FY26 €m
FY25 €m 864
FY26 %
FY25 %
Investment and other income Financing costs Net financing costs Adjustments for: Mark-to-market losses/(gains) Foreign exchange (gains)/losses Fair value gains on Other Investments through profit and loss Adjusted net financing costs 1
Effective tax rate Adjusted effective tax rate 1
96.8% (152.0)% 248.8
1,395
(2,375) (1,931) (980) (1,067) 8.2
28.1% 25.3%
2.8
Note: 1. Adjusted effective tax rate is a non-GAAP measure. See page 226 for more information. The Group’s Effective tax rate (‘ETR’) for the year ended 31 March 2026 was 96.8% (FY25: -152.0%). The ETR includes a €358 million derecognition of the net deferred tax assets (‘DTAs’) in the Group UK tax group, and a €305 million write-down of the German DTAs as a result of enacted reductions to future tax rates. In addition, the group has significant non-deductible costs related to M&A activity. The Group’s Adjusted ETR (‘AETR’) for the year ended 31 March 2026 was 28.1% (FY25: 25.3%). The AETR excludes certain items, including the €358 million derecognition of the net DTAs in the Group UK tax group, the €305 million German DTA write-down, the utilisation of the Luxembourg loss DTA, and the impact of hyperinflation adjustments in Türkiye. The BEPS Pillar Two Minimum Tax legislation was enacted in July 2023 in the UK with effect from 2024. The Group has applied the temporary exception under IAS 12 in relation to the accounting for deferred taxes arising from the implementation of the Pillar Two rules. The tax charge for the year ended 31 March 2026 includes a current tax charge of €9 million (2025: €7 million) relating to Pillar Two income taxes.
217
(2)
(56)
1
–
(247)
(819) (1,315) 37.7
Note: 1. Adjusted net financing costs is a non-GAAP measure. See page 226 for more information. Adjusted net financing costs decreased by €496 million, mainly as a result of the gain of €771 million (2025: €253 million) from the redemption of certain bonds that were bought back in advance of their maturity dates. Net financing costs decreased by €87 million as the impact of the gain on bond buyback was partially offset by the mark-to-market losses on derivatives of €217 million (2025: €2 million net gains) and fair value gains on other investments (nil in 2026, €247 million gain in 2025).
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