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Strategic report
Governance
Financials
Other information
Vodafone Group Plc Annual Report 2025
Chair’s message Reshaping Vodafone for growth
Two years ago, Margherita outlined her transformation roadmap for the Group, highlighting that Vodafone must change. We have since made considerable progress. We have successfully reshaped our footprint, reset our capital allocation framework and fundamentally redesigned our operating model. Vodafone is now well placed for sustainable growth. Jean-François van Boxmeer Chair This year we have made further progress against our strategic priorities. Our portfolio transformation is now complete, customer satisfaction is improving, and our balance sheet position is stronger. The Board and I have been pleased with both the pace of delivery and the progress made by Margherita and her team in transforming the business. As we move to the next phase in our strategy, we must now focus our efforts on driving growth across the Group. This will be underpinned by our continued focus on operational excellence across our three key strategic priorities of Customers, Simplicity and Growth. Portfolio transformation complete Over the last two years we have taken significant steps to reshape our European footprint to focus on growth markets, where we have strong positions and good local scale. In May 2024, we completed the sale of Vodafone Spain for €4.1 billion in cash and €0.9 billion in redeemable
Digital connectivity is core to the development of societies Our digital services help to improve lives, transform industrial productivity, drive growth and secure infrastructure. At Vodafone, we remain firmly committed to supporting Europe and Africa’s digital ambitions for the benefit of their citizens and businesses. In this context, policymakers are also shifting their priorities. With structurally low returns on capital in European markets and its wider importance to competitiveness, connectivity investment must be a priority to reverse the continent’s declining productivity and share of global output. If Europe is to achieve a globally competitive digital infrastructure, the ‘connectivity’ chasm with North America and Asia must be reversed. While some progress has been achieved by European policymakers, the urgency of the situation must be appreciated. I believe Europe can draw on the lessons of the Competition and Mergers Authority (‘CMA’) decision in the UK. The CMA has demonstrated that in-market consolidation can be pro-competitive as well as supportive of investment, without the need for structural remedies. If a similar approach were adopted by the EU, it would enable operators to deliver Europe’s digital decade targets and support the competitiveness of the European economy. The year ahead On behalf of the Board, I would like to thank all our colleagues across the Group who have continued to work tirelessly to support our transformation as we focus on our customers, become a simpler business, and accelerate growth. For FY26, I am confident that Margherita and her management team will continue to take the actions needed to drive further change, growth and operational excellence across the Group. Jean-François van Boxmeer, Chair
preference shares, and in December we finalised the sale of Vodafone Italy for €7.9 billion in cash. Proceeds from these disposals as well as €1.3 billion from the stake reduction in Vantage have been used to lower our net debt and to support a €4.0 billion share buyback programme, which we are now halfway though. The completion of our merger with Three UK will enable us to become a scaled operator in the UK, with a clear pathway to driving good returns and a firm commitment to build a leading 5G standalone network. This will benefit the country, our customers and our shareholders. In Africa, Vodacom has continued to build on its market leading position. In February, the local management team upgraded their medium-term growth expectations for the business to 2030, highlighting the clear growth opportunities that exist across these markets. Board composition In January 2025, I was pleased to announce that Simon Dingemans had been appointed as a Non-Executive Director to the Board. Simon brings with him a wealth of financial, operational and strategic experience and has also delivered extensive transformation and restructuring programmes. Simon has been appointed as Chair of the Audit and Risk Committee, taking over from David Nish, who after nine years on the Board will not be seeking re-election at our next AGM. I would like to thank David for his outstanding service and commitment to the Company. In April, we also announced that Anne-Françoise Nesmes will be appointed as a Non-Executive Director and join the Audit and Risk and ESG Committees from the conclusion of our AGM. Anne-Françoise is highly experienced and brings a strong focus on strategy, IT, regulation and shared services.
We announced on 7 May 2025 that Luka Mucic would step down as Chief Financial Officer and as a Director of the Company, no later than early 2026 to pursue an external opportunity in Germany. I would like to thank Luka for his commitment to Vodafone as we progressed our transformation programme. A rigorous search is being conducted to find a suitable successor. FY25 financial performance Our financial results for FY25 were in line with our expectations and we achieved our financial guidance for the year. Total revenue grew 2.0% to €37.4 billion, with Group organic service revenue growing by 5.1% this year. Our reported financials were also impacted by adverse currency movements. Adjusted EBITDAaL increased by 2.5% on an organic basis, as solid growth across the majority of our footprint was offset by a decline in Germany, which was largely driven by a change in TV regulation. Adjusted free cash flow was €2.5 billion. We reported a Group operating loss of €0.4 billion in FY25, primarily impacted by goodwill impairments in Germany and Romania, totalling €4.5 billion. The disposals of Vodafone Italy and Spain, as well as an incremental sell down of our Vantage Towers stake, drove an improvement in reported leverage. We ended the year with net debt of €22.4 billion and Group leverage of 2.0x. The Board has declared a total dividend per share of 4.5 eurocents for the year, including a final dividend per share of 2.25 eurocents, which will be paid in August following shareholder approval at our AGM. Our returns to shareholders are complemented by our share buyback program. We successfully completed the first €2.0 billion programme, while the second €2.0 billion programme commenced in May 2025.
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