Vodafone has reported a 7.3% rise in half-year revenue to €19.6 billion, as growth in service revenue and the consolidation of Three UK in Britain lifted the top line, and its troubled German business returned to growth in the second quarter.

The telecoms group said service revenue rose 8.1% to €16.3 billion in the six months, up 5.7% on an organic basis. Vodafone Business grew by 2.6%, or 3.4% organically, supported by strong demand for digital services.

Germany returns to growth

Germany, Vodafone's largest market and a drag on results in recent years, returned to top-line growth in the second quarter. Growth there was modest, at 0.5%, driven by the end of the impact of a German TV law change and higher wholesale revenue.

Chief executive Margherita Della Valle said: “In the second quarter, we saw service revenue accelerating, with good performances in the UK, Türkiye, and Africa, and a return to top-line growth in Germany.”

The group added that it delivered good operational progress against its strategic priorities during the first half, giving it further confidence in generating sustainable adjusted free cash flow growth over the medium term.

Profit falls as costs rise

Despite the stronger revenue, operating profit fell 9.2% to €2.2 billion, down from €2.4 billion a year earlier. Vodafone said adjusted earnings growth was offset by higher depreciation and amortisation following the consolidation of Three UK, and lower other income.

Adjusted EBITDAaL, the group's preferred measure of underlying earnings, increased 5.9% to €5.7 billion, from €5.4 billion in the same period last year, and by 6.8% on an organic basis.

Profit for the financial period fell to €1,052 million from €1,221 million a year earlier. Basic earnings per share from continuing operations were 3.38 eurocents, compared with 3.92 eurocents in the first half of last year.

The enlarged UK business reflects the combination with Three UK, which brought the rival mobile network onto Vodafone's balance sheet. That deal lifted reported revenue and service revenue, but also raised depreciation and amortisation charges, which weighed on operating profit in the half.

What to watch next

Investors will now watch whether the recovery in Germany can build through the second half, and how the enlarged UK business performs after the Three UK deal. Vodafone also highlighted growth in the UK, Africa and Türkiye in the second quarter, alongside the return to growth in Germany.

The results come on a busy day for London-listed companies, with several FTSE 100 and FTSE 250 groups reporting half-year figures and trading updates on Tuesday.