Our financial performance continued 20 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Borrowings and cash position FY26 €m Non-current borrowings (45,506) (46,096) Current borrowings (7,130) (7,047) Borrowings (52,636) (53,143) Cash and cash equivalents 8,982 11,001 Borrowings less cash and cash equivalents (43,654) (42,142) FY25 €m
Funding position
Net debt increased by €3,014 million to €25,411 million. This was driven by free cash flow of €1,795 million, together with an inflow from other movements (€1,212 million), which was principally due to the settlement of redeemable preference shares provided by Zegona
Adjusted free cash flow was an inflow of €2,621 million in the period, representing an improvement of €73 million compared to the prior year. This primarily reflects higher adjusted EBITDAaL and higher dividends received which outweighed higher capital additions and taxation outflows. Acquisitions and disposals include net debt acquired on the merger of Vodafone and Three into VodafoneThree Holdings Limited (‘VTHL’) in the UK of €2,042 million and €410 million in relation to the acquisition of a 30% interest in Maziv Proprietary Limited, offset by €348 million of equity funding injected into VTHL by Hutchison.
Reported change %
Reported change %
FY26 €m
FY25 €m
Bonds
(33,828) (36,402) (1,383) (1,213)
Bank loans
Other borrowings including spectrum (3,393) (2,345) Gross debt 1 (38,604) (39,960)
Communications Plc as part of the disposal of Vodafone Spain, offset by outflows in relation to acquisitions and disposals (€2,715 million), mostly related to the merger with Three UK, equity dividends (€1,093 million) and share buybacks (€2,041 million). Other funding considerations include: FY26 €m
3.4
Cash and cash equivalents
8,982 11,001
(3.6) Borrowings include bonds of €33,828 million (31 March 2025: €36,402 million), lease liabilities of €12,388 million (31 March 2025: €10,826 million), cash collateral liabilities of €1,644 million (31 March 2025: €2,357 million) and loans and other borrowings of €4,776 million (31 March 2025: €3,558 million). The decrease in borrowings of €507 million was primarily driven by a reduction in bonds (€2,574 million) as a result of the repayment of certain bonds and foreign exchange rate movements, together with a reduction in collateral liabilities (€713 million), which outweighed an increase in lease liabilities (€1,562 million) arising primarily from the VodafoneThree merger in the UK and an increase on other borrowings (€1,218 million) following a preference share issuance in Vodacom (€404 million) and higher licence and spectrum borrowings (€602 million), principally from 5G spectrum acquired in Türkiye.
Non-current investments in sovereign securities Derivative and other financial instruments 3 Net collateral liabilities 4
915 913 Short-term investments 2 3,431 5,280
FY25 €m
340 1,716 (475) (1,347)
Lease liabilities Pension fund liabilities Guarantees over loan issued by Australia joint venture Equity characteristic of 50% attributed by credit rating agencies to ‘Hybrid bonds’ included in net debt, EUR swapped
(12,388) (10,826) (206) (187) (1,031) (1,479)
(25,411)(22,397) (13.5)
Net debt 1
Notes: 1. Gross debt and Net debt are non-GAAP measures. See page 226 for more information. 2. Short-term investments include €217 million (31 March 2025: €2,139 million) of highly liquid government and government- backed securities and managed investment funds of €3,214 million (31 March 2025: €3,141 million) that are in highly rated and liquid money market investments with liquidity of up to 90 days. 3. Derivative and other financial instruments exclude derivative movements in cash flow hedging reserves of €823 million gain (31 March 2025: €575 million gain). 4. Collateral arrangements on derivative financial instruments result in cash being held as security. This is repayable when derivatives are settled and is therefore deducted from liquidity.
value of €7,594 million (€8,162 million as at 31 March 2025) 3,797 4,081 The Group’s gross and net debt includes certain bonds which have been designated in hedge relationships, which are carried at €839 million higher value (€899 million higher as at 31 March 2025) than their euro equivalent redemption value. In addition, where bonds are issued in currencies other than the euro, the Group has entered into foreign currency swaps to fix the euro cash outflows on redemption. The impact of these swaps is not reflected in gross debt and if it were included, the euro equivalent value of the bonds would increase by €173 million (€1,132 million decrease as at 31 March 2025).
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