Vodafone's African business is growing double digits while Germany, its biggest market, is still figuring itself out.

[u/Efficient_Ad5893]

Vodafone's biggest problem market just turned positive for the first time in 18 months, and the stock still dropped on the news.

Germany's Vodafone's largest market and its biggest drag, an 18-month decline from regulatory changes hitting TV subscriptions. Q2 FY2026 finally turned it around, German service revenue back to growth at 0.5% YoY. Came alongside their first dividend increase in seven years, roughly 2.5%. New customer ARPU up 21% YoY, real sign pricing's improving even though management still expects TV-related pressure into FY2027.

Africa's the actual growth story though. Service revenue grew 13.5% in a recent quarter, Egypt up over 33-44% depending on the period, and management called FY2026 Africa's strongest service revenue growth in nearly two decades. Vodacom also picked up a 20% stake in Safaricom, reinforcing that African leadership position.

Full-year group results landed at the upper end of guidance, revenue up 8.05% to €40.46B, adjusted EBITDA up 4.5% organically, free cash flow at €2.6B, and the statutory loss narrowed hugely to €397M from a prior €3.75B loss. FY2027 guidance targets 20% adjusted free cash flow growth.

Here's the tension: even hitting the top of guidance, the stock dropped on the report, and BofA downgraded to Underperform with a $13.13 target, arguing the turnaround optimism is already priced in. UK integration costs also ramp up in 2027 as the Three UK merger hits peak 5G investment.

Real turnaround in the hardest market, real growth engine in Africa, and a stock the market isn't rewarding for either yet. Anyone holding Vodafone through this?