Vodafone books €4.9bn Germany impairment but lifts guidance

Vodafone booked a €3.6 billion net loss for its fiscal first half, driven by a €4.9 billion impairment on its German business, yet raised full-year guidance for profit and cashflow and reported more than €200 million of early savings from its €2 billion cost-cutting programme.

The loss, announced on 9 November, compares with a €1.1 billion profit in the same period a year earlier. It stemmed from what the operator called "non-cash accounting charges": the German impairment, which it attributed primarily to adverse changes in interest rates, plus a €2.2 billion write-down of UK deferred tax assets connected to the buyout of its partner in the VodafoneThree joint venture.

Those charges were partially offset by a €3.0 billion accounting gain from the Safaricom transaction, in which Vodacom struck a $2 billion-plus deal to boost its stake in the Kenyan operator.

Where is the money actually coming from?

Group revenue rose 11.4% year-on-year to €21.9 billion, helped by the consolidation of Safaricom, VodafoneThree and Telekom Romania, though foreign exchange movements clawed back part of the gain.

The underlying picture was more mixed. Service revenue in the Business division grew 5.8%, and Africa delivered 13.4% growth. CEO Margherita Della Valle pointed to what she described as the "best-ever growth in Vodafone Business, with a record performance in digital services as we focus on smart, secure and sovereign solutions for our B2B and public sector customers".

Germany told a different story. Service revenue in the market was broadly flat, with the TV business still shrinking and mobile under pressure. Consumer broadband and digital service sales to enterprise customers grew, but not enough to lift the whole operation.

What is Vodafone doing about Germany?

On 9 November, alongside the results, Vodafone announced plans to cut 2,300 jobs in Germany as part of a wider restructuring of the operation. Della Valle was blunt about the state of the market, saying she was "very happy" with company performance overall but acknowledging "Germany is not yet where it needs to be".

"We have a clear action plan in progress, which is structurally simplifying our German operations and improving customer satisfaction across all of our services," she said.

How fast is the cost programme moving?

Vodafone unveiled the €2 billion savings drive in May, targeting annual gross cost reductions across Europe and shared operations by fiscal 2030. In the first half of FY27 it delivered more than €200 million of the total.

The savings included €50 million in synergies from its UK business and from cutting 3,000 roles across Europe and its shared operations. The new German job cuts sit outside that count and suggest the headcount reduction will deepen before the programme matures.

Della Valle framed the half-year as a "strong start to Vodafone's new growth chapter", and the raised guidance for profit and cashflow gives that claim some substance beyond the marketing language.

The tension in the story remains Germany: the largest market in the group is still dragging on results, and the €4.9 billion impairment signals how far expectations for that business have fallen. With 2,300 German jobs now going and a restructuring plan in motion, the next set of results will show whether the flat service revenue in the market finally turns.