VODAFONE GROUP : The Price of Happiness

Research evidence excerpt

VODAFONE GROUP : The Price of Happiness

EQUITIES

TELECOM OPERATORS

UNDERPERFORM TARGET PRICE EPS 03/27e EPS 03/28eVODAFONE GROUP PRICE* 112p  TARGET PRICE 95p (DOWNSIDE 15%) unchanged  -7%  -6%

UNDERPERFORM TARGET PRICE EPS 03/27e EPS 03/28eVODAFONE GROUP ADR PRICE* USD15.1  TARGET PRICE USD12.8 (DOWNSIDE 16%)  2%  -7%  -6%

The Price of Happiness

In our recent deep-dive report we argued that whilst Vodafone Germany had made improvements13 MAY 2026

Securities Research Report in key metrics like NPS and churn, these improvements were coming at the cost of increased

Production time: 18:47* (London time)

customer investment. FY26 results broadly confirmed this thesis, with German EBITDAaL

Research Analysts & Publishing Entities

expected to decline again next year (and, we believe, in the medium term) as increased sub losses

Joshua Mills, CFA highlight continued competition. We see recent results/ guidance from Vodacom, and the earlier-BNP Paribas London Branch

(+44) 203 430 8670 than-expected buyout of CK Hutchison from VOD UK as positives. But with downside risk to VOD

Joshua.Mills@uk.bnpparibas.com Group numbers (particularly in the event of German consolidation and 1&1 wholesale losses), ‘real’

FCF yield expensive vs. peers, and buyback support ended we reiterate Underperform.

What do we know that we didn’t know before?

Germany was the main focus for the call. Vodafone confirmed that they expect German EBITDAaL

to decline in FY27 (vs. cons expectations of +1% growth) and would not commit to a specific

timeline on when this should stabilise. Given that FY27 will still see some tailwinds from 1&1

wholesale revenues (BNPP estimate +1ppt boost to EBITDA) this is disappointing in our view –

and we forecast -3% reported/ -4.5% underlying German EBITDAaL growth in FY27.