Vodacom Group Limited

Analyst thesis

Our recommendation is based on:

• Safaricom consolidation as a structural catalyst: Vodacom completed the acquisition of an additional effective 20% stake in Safaricom on 30 June 2026, increasing its holding from approximately 35% to a controlling share of 55%. The R35 billion transaction comprised of a 15% stake acquired from the Government of Kenya and an effective further 5% acquired from Vodafone Group. On a full-year consolidated basis, Safaricom is expected to make a significant contribution to reported group results, with group EBITDA projected to increase by 47%.

• Fintech becoming a key growth engine: Vodacom is leveraging its large mobile customer base and trusted M-Pesa, Vodafone Cash and VodaPay platforms to deepen its role in everyday financial services across Africa. Strong financial-services growth in Egypt and the International M-Pesa markets, combined with the consolidation of Safaricom, expands Vodacom’s fintech scale and strengthens the group’s position in Africa’s mobile financial-services market.

• Egypt and the International portfolio: These businesses provide attractive growth opportunities outside the mature South African market, with revenue growth translating into operating leverage and supporting group earnings diversification. They benefit from rising smartphone penetration, strong data consumption, underpenetrated digital financial services, and expanding merchant ecosystems.

• Key risks: Key risks include the negative impact of translating local currency earnings into earnings reported in ZAR, currency depreciation, inflation, stricter regulation, spectrum costs, and political or economic disruption. There is also integration risk associated with incorporating Safaricom into broader group operations and managing its position as a strategic public asset.