Vodafone raised its fiscal 2027 targets after organic adjusted EBITDAaL grew 6.4% in the first half, lifting expected earnings and cash generation as it pursues a broad cost-reduction program.
The company now expects adjusted EBITDAaL of €13.2 billion to €13.4 billion, compared with its previous €13 billion to €13.3 billion range. Its adjusted free cash flow target moved to €2.8 billion to €3 billion from €2.6 billion to €2.9 billion. At the center of the new ranges, Vodafone's forecast implies 7% organic growth in adjusted EBITDAaL and 21% in adjusted free cash flow.
Revenue increased 11.4% to €21.9 billion in the six months, and service revenue rose 5.8% on an organic basis. Vodafone reported a €3.6 billion loss, with noncash items including a €4.85 billion impairment in Germany and a €2.2 billion write-down of U.K. deferred tax assets. A €3 billion noncash gain from its Safaricom transaction, included in other income, partly offset the charges. Adjusted free cash flow was a €440 million outflow, narrower than the €583 million outflow in the year-earlier period.
Vodafone said it generated more than €200 million in gross savings and reduced about 3,000 roles across Europe and shared operations during the first half. It has also announced plans to eliminate 2,300 roles in Germany, covered in EconoTimes' report on planned job cuts in Germany. EconoTimes previously reported on Vodafone's first-half cost reductions and higher guidance.
The savings program aims to lift margins, with Vodafone targeting more than €2 billion in annual gross savings across Europe and shared operations by fiscal 2030. The company reported €1.5 billion in annual net savings from fiscal 2019 through fiscal 2022, followed by €700 million in annual gross savings and 11,000 role reductions from fiscal 2023 through fiscal 2026.
Vodafone expects restructuring and integration costs to total about €700 million in fiscal 2027, including roughly €400 million associated with VodafoneThree. The company's next scheduled financial update is its Q3 FY27 trading update on Feb. 3, 2027.