Vodafone Group (LON: VOD) has upgraded the cost target for VodafoneThree, its UK business, to £1 billion a year by FY32. The telecoms group announced the change in a stock exchange statement at 7am today, alongside new growth targets for the unit.
VodafoneThree was created by the merger of Vodafone UK and Three UK, which completed in June 2025. Group Chief Executive Margherita Della Valle said the company was now setting out its UK strategy in detail, with new, bolder financial targets.
After a strong start, we now have even greater confidence in the opportunity ahead. That’s why we are upgrading our cost target to £1 billion, with VodafoneThree set to become an increasingly important contributor to Vodafone’s growth ambitions.
Margherita Della Valle, Group Chief Executive
Two further targets run to FY32. Vodafone is aiming for mid-to-high single digit growth a year in Adjusted EBITDAaL, its core earnings measure, as a compound annual rate over FY25 to FY32.
It also wants operating free cash flow, defined as Adjusted EBITDAaL less capital additions, to more than triple by FY32 against FY25.
The company attributes the savings to further cuts as the network build completes and from network rationalisation, with full Group ownership enabling a faster pace. It also sees significant potential for additional revenue synergies, meaning extra income from combining the two businesses.
Vodafone describes VodafoneThree as a key driver of the Group’s mid-term ambition for double-digit organic growth in Adjusted Free Cash Flow. It also targets pre-tax return on capital employed, including goodwill, exceeding the cost of capital by FY32 and materially above it by FY34.
The statement refers to a 10-year, £11 billion investment plan for a next-generation 5G standalone, AI-ready network. Vodafone stresses that the targets are not a profit forecast or estimate, and that savings may not be achieved or may arrive later or sooner than planned.
The briefing is hosted by Ahmed Essam, CEO of European Markets, and Max Taylor, CEO of VodafoneThree. Presentation materials go on vodafone.com from noon today, and the webcast starts at 1pm.
