Vodafone Group Plc (LSE: VOD; NASDAQ: VOD) set out a markedly more shareholder‑friendly playbook today, guiding to the top end of its FY26 outlook, signalling its first full‑year dividend increase since 2018 (up 2.5%), and starting a new €500 million share buyback. The stock jumped ~5% toward 94p, helping push the FTSE 100 to a fresh record intraday high. 1
What changed today
- Guidance tightened to the top end. Vodafone now expects FY26 adjusted EBITDAaL of €11.3–€11.6bn and adjusted free cash flow of €2.4–€2.6bn, citing stronger operating momentum. 2
- Dividend policy turns progressive. Management introduced a progressive dividend policy and said it expects to grow the FY26 dividend per share by 2.5%—the first raise since 2018. The interim dividend stays at 2.25 eurocents (ex‑div 20 Nov; pay 5 Feb 2026). 2
- €500m buyback begins today. A non‑discretionary repurchase programme with Merrill Lynch International runs from 11 Nov 2025 to no later than 4 Feb 2026, solely to reduce share capital. 3
- H1 FY26 delivered growth where it mattered. Group revenue rose 7.3% to €19.6bn; service revenue +8.1% (organic +5.7%); adjusted EBITDAaL +5.9% to €5.7bn (organic +6.8%). 2
Why it happened: Germany turned, UK integration accelerated, Africa remained strong
- Germany returned to growth in Q2. After five quarters of drag from a TV‑law change, German service revenue grew +0.5% in Q2. Vodafone has migrated 10.5m 1&1 customers onto its network and expects full run‑rate revenues in Q4 FY26. 2
- UK merger momentum. Following completion of the Vodafone–Three UK merger on 31 May 2025, integration is yielding immediate benefits: >5,000 radio sites already upgraded and 16,500 km² of “not‑spot” areas due to be removed by year‑end. UK organic service revenue grew +1.1% in H1 (Q2 +1.2%). 2
- Africa stayed a growth engine. Vodacom delivered double‑digit organic service‑revenue growth (Q2 +13.5%), with M‑Pesa up 21.7% organically in H1. 2
Capital returns: dividend details & buyback mechanics
- Dividend track. Vodafone will lift the FY26 full‑year DPS by 2.5% (first increase in eight years on a full‑year basis), while keeping the interim at 2.25 eurocents and setting interims at 50% of the prior full‑year DPS going forward. Key dates: ex‑div 20 Nov 2025 (ordinary), record 21 Nov, pay 5 Feb 2026. 1
- Buyback. The €500m programme begins today and may run until 4 Feb 2026; purchases will occur on the London Stock Exchange and eligible venues, with the sole purpose of reducing share capital. Vodafone has completed €3.0bn of buybacks since May 2024, with €1.0bn remaining after today’s tranche. 3
Market reaction
Shares rose around 5% to ~94p after the release, and the FTSE 100 notched a record high in Tuesday trading—telecoms were standout gainers on the day. 1
Strategy backdrop: simplification pays off
Under CEO Margherita Della Valle, Vodafone has exited Spain and Italy and combined UK operations with Three, moves aimed at streamlining the portfolio, focusing capital, and improving cash generation. Today’s progressive dividend policy underscores that pivot to sustainable shareholder returns. 4
“We are introducing a new progressive dividend policy, with an expected increase of 2.5% for this financial year,” Della Valle said, adding that Vodafone is on track for the upper end of its FY26 guidance. 2
Key numbers at a glance (H1 FY26)
- Revenue: €19.6bn (+7.3%)
- Service revenue: €16.3bn (+8.1%, organic +5.7%)
- Adjusted EBITDAaL: €5.7bn (+5.9%, organic +6.8%)
- Germany: Q2 service revenue +0.5%, 10.5m 1&1 customers migrated
- UK: Organic service revenue +1.1%; >5,000 radio sites upgraded post‑merger
- Africa: Q2 organic service revenue +13.5%; M‑Pesa +21.7% in H1
- FY26 outlook: Adjusted EBITDAaL €11.3–€11.6bn; adjusted FCF €2.4–€2.6bn
- Capital returns: Interim DPS 2.25c (ex‑div 20 Nov, pay 5 Feb 2026); €500m buyback started today; €3.0bn buybacks completed since May 2024, €1.0bn remaining. 2
What to watch next
- Germany’s run‑rate: Whether the Q2 inflection sustains as 1&1 wholesale migration completes and ARPU pressure eases. 2
- UK integration milestones: Pace of site upgrades and coverage improvements as the Vodafone–Three network integration scales. 2
- Cash discipline: Delivery of upper‑end guidance alongside progressive DPS and the buyback cadence. 2
- Leadership hand‑offs: Newly appointed CFO Pilar López (effective 1 Dec 2025) steps into the role as capital allocation tightens. 5
FAQ
When will I receive the interim dividend?
Vodafone’s interim 2.25 eurocent dividend goes ex‑dividend on 20 Nov 2025 (ordinary shares), with record date 21 Nov and payment on 5 Feb 2026. 6
How big is the buyback and how long does it run?
Up to €500 million, running from 11 Nov 2025 to no later than 4 Feb 2026; conducted by Merrill Lynch International, solely to reduce share capital. 3
Why did shares pop today?
Investors welcomed the first full‑year dividend increase since 2018, tightened guidance, and the new buyback; the stock rose ~5% and contributed to a FTSE 100 record. 1
Disclosure: This article is for information only and is not investment advice. Always do your own research.
