London, May 12, 2026, 09:19 BST
Vodafone shares fell in London on Tuesday even after the telecoms group forecast stronger earnings for the year ahead and said its three-year overhaul had left it a simpler business. The stock was down 3.0% at 116.80 pence in morning trade, after touching its highest level since August 2022 on Monday.
The move matters because investors are testing whether Vodafone’s sharp share-price rally can survive the next stage of Chief Executive Margherita Della Valle’s turnaround: full control of VodafoneThree in Britain, a recovery in Germany and continued cash returns. Vodafone has sold or exited weaker assets in Spain, Italy and the Netherlands, and is now leaning harder on Germany, the UK and Africa.
Vodafone reported total revenue of €40.5 billion for the year to March 31, up 8.0%, helped by service revenue growth and the consolidation of Three UK. Service revenue rose 8.8% to €33.5 billion, while adjusted EBITDAaL — earnings before interest, tax, depreciation and amortisation after leases, a measure of operating profit after lease costs — increased 3.8% to €11.4 billion.
Della Valle said Vodafone was “now a simpler company with a stronger growth outlook” after the transformation of the past three years. “We are now well set for mid-term growth,” she said in the company’s results statement. Vodafone
The market still found reasons to sell. Adjusted EBITDAaL came in at €11.35 billion, below company-compiled consensus of €11.48 billion, while net debt rose to €25.41 billion from €22.40 billion. That made the earnings beat look less clean than the headline guidance suggested.
Germany remains the central test. Vodafone said organic service revenue in its largest market fell 0.2% for the full year, though it improved through the year and grew 1.3% in the fourth quarter. The company blamed mobile competition and the final impact of a TV law change, partly offset by higher wholesale revenue, better broadband average revenue per user and demand for business digital services.
In Britain, Vodafone is moving to buy CK Hutchison’s 49% stake in VodafoneThree for £4.3 billion, giving it full ownership of the UK’s largest mobile operator. The deal, announced last week, is expected to close in the second half of 2026 and needs approval under the UK National Security and Investment Act.
That deal is the big swing. Vodafone said the combined UK business is already sharing networks across 10,000 radio sites ahead of plan and expects £700 million of annual cost and capital-expenditure synergies by fiscal 2030. Della Valle said the team had made “remarkable progress” since the merger and that full ownership would help Vodafone roll out one of Europe’s most advanced 5G networks. Investegate
The competitive context is narrow but important. VodafoneThree gives Vodafone more scale against BT-owned EE and Virgin Media O2 in a UK mobile market that has already consolidated from four network operators to three. Reuters reported last week that the venture had overtaken EE and O2 in size after the UK merger.
Analysts are not lined up on one side. UBS reiterated a “sell” rating on Vodafone on Monday with a 95 pence target, MarketBeat reported, implying about 21.5% downside from the cited share price. The same report listed a mixed spread of recent views, with Citigroup at “neutral”, JPMorgan at “underweight” and Berenberg and Deutsche Bank at “buy”. MarketBeat
Technical traders had been watching the rally before the results. TradingView, citing Invezz, said Vodafone’s London shares had climbed to about 118 pence, up around 90% from their December low, and had formed a “golden cross”, where a shorter-term moving average moves above a longer-term average. That pattern is often read by chart traders as a bullish signal, but Tuesday’s fall showed the earnings bar had moved higher too. TradingView
The risk is that the turnaround remains more fragile than the recent share-price move implies. Germany has only just returned to quarterly growth, Portugal remains under pressure, UK business revenue was held back by planned contract exits, and the VodafoneThree buyout adds leverage even if it simplifies control.
Vodafone raised its total dividend for FY26 by 2.5% to 4.6125 euro cents a share and said the final €500 million tranche of its second €2 billion buyback programme was completed on May 11. For FY27, it guided to adjusted EBITDAaL of €11.9 billion to €12.2 billion and adjusted free cash flow — cash left after operating costs and investment needs — of €2.6 billion to €2.9 billion.
