The British telecom giant reported adjusted core earnings of €10.9 billion for the past year, just shy of its €11 billion target. The miss owed much to hyperinflation in Turkey, a perennial headache, and a pesky 5% revenue drop in Germany, Vodafone’s biggest market. This is due to surprise change to cable TV contracts in apartment buildings that cut into service revenues. A nuisance, yes, but one that CEO Margherita Della Valle believes is behind them. She’s “very pleased” with early signs of recovery in Germany and expects the country to return to revenue growth this year - with a “much better” second half for earnings.

The broader picture is mixed but not grim. Vodafone’s service revenue nudged up by 2.8%, helped by better performance in the rest of Europe and Africa. Free cash flow edged above expectations at €2.55 billion, giving the company some breathing room to invest or reward shareholders. And reward them it will, launching a hefty €2 billion buyback, starting with €500 million - a clear signal Vodafone’s management is confident the shares are cheap.

Vodafone’s adjusted EBITDAaL rose 2.5% on an organic basis to €10.9 billion, thanks largely to a solid showing across Africa, Türkiye and the rest of Europe - enough to offset Germany’s regulatory-induced hangover. Service revenue grew 5.1% organically, with standout performances in high-growth markets like Egypt and South Africa, while the UK managed to post respectable gains on the back of improved customer service. Meanwhile, Vodafone reported an operating loss of €411 million - the result of €4.5 billion in impairments tied to Germany and Romania - but investors seem unfazed, perhaps reassured by the €2 billion share buyback programme and an optimistic whisper of medium-term growth.

The buyback also aims to reduce share capital, a neat way to tidy up the balance sheet as the group looks to shake off years of debt and restructuring pains. The UK merger, which will crown Vodafone as the country’s mobile leader, is another key piece of the puzzle - expected to add €400 million to earnings by fiscal 2026.

A changed company

Yet the mood music remains cautious. Vodafone’s shares have slid 6% in the past year, trading near levels not seen since 1997. Investors remain unconvinced the group can fully overcome its challenges, from German regulatory hiccups to stiff competition in saturated European markets.

Still, Della Valle’s track record of pruning non-core assets and focusing on operational efficiency has earned her plaudits. The company’s guidance for the coming year - adjusted EBITDA of €11-11.3 billion and free cash flow of €2.6-2.8 billion - points to modest growth, a steady hand rather than fireworks.

Vodafone’s journey is emblematic of the broader European telecom saga: slow, steady, and often frustrating. The company’s renewed focus on core markets, paired with a tangible commitment to shareholder returns, may not make for headline-grabbing excitement, but it could be just what’s needed to turn the page.

For all the modest figures and cautious forecasts, Vodafone insists this is not merely a company surviving - it is one that has changed. Two years into a sweeping transformation plan, Chief Executive Margherita Della Valle is keen to emphasise that the Vodafone of today is not the bloated, bewildered telco of yesteryear. The group has shed its Iberian baggage, slimmed down its corporate HQ, and redirected its gaze toward markets with actual growth potential. Germany may still be licking its wounds from regulatory reform, but Vodafone sees green shoots - and, crucially, a stabilised customer base. Africa and Türkiye continue to deliver double-digit growth, and the UK is enjoying a commercial renaissance, thanks to a newfound obsession with customer satisfaction. Vodafone even boasts a digital services segment that now accounts for a tenth of group revenue. The message from management is clear: the transition is over, and sustainable cash flow growth is finally within reach. Investors, however, will want more than just new buzzwords and buybacks before they believe the reinvention is complete.

For now, Vodafone is betting on Germany’s rebound, its UK merger, and the patient confidence of investors who may have seen it all before. Whether that gamble pays off remains to be seen - but after years of upheaval, even steady progress will feel like a victory.