Vodafone Group (LSE:VOD) has increased its annual cost savings target for its UK subsidiary VodafoneThree to £1 billion by the financial year ending March 2032, compared with its previous objective of £700 million by fiscal 2030.
The telecommunications group outlined the revised target on Thursday as part of its medium-term financial objectives, identifying VodafoneThree as a contributor to its plans for group-wide cash flow growth.
Vodafone expects adjusted earnings before interest, tax, depreciation and amortisation after leases (EBITDAaL) at VodafoneThree to increase at a mid-to-high single-digit annual rate between fiscal 2025 and fiscal 2032.
The company is also targeting more than a threefold increase in operating free cash flow at the UK business by fiscal 2032, measured against its fiscal 2025 baseline.
The revised financial objectives follow Vodafone’s acquisition of the remaining 49% interest in VodafoneThree from former joint venture partner CK Hutchison Group Telecom Holding for £4.3 billion in July 2026.
VodafoneThree was established in 2025 through the merger of Vodafone UK and Three UK, combining the two operators into a single telecommunications business. The July transaction gave Vodafone full ownership of the merged entity.
According to Vodafone, the UK operation has maintained commercial momentum since the merger. The group expects further cost savings and earnings growth at VodafoneThree to contribute to its broader medium-term financial targets.
At group level, Vodafone is aiming to achieve double-digit organic growth in adjusted free cash flow over the medium term, with the UK subsidiary expected to play a role in meeting that objective.
The updated targets establish VodafoneThree’s planned cost savings, profitability growth and cash generation through fiscal 2032, following the integration of the former Vodafone UK and Three UK operations.
Leave a Reply