Zegona Holdco Limited TLB reporting as at 31/12/25
Zegona Communications plc has reported robust Q3 results for Vodafone Spain, with total revenues reaching €923 million and EBITDAaL of €313 million for the three months ending December 31, 2025. This performance marks a continuation of the company's transformation strategy, which has been in effect since Zegona's acquisition of Vodafone Spain in 2024. The results indicate a strong operational trajectory, with EBITDAaL less capital expenditure at €176 million, and a reduction in net debt from €3.6 billion in September 2025 to €3.3 billion at year-end. The completion of the FiberCo transactions, which generated €1.8 billion in upfront proceeds, is a significant milestone that will enable Zegona to return €1.6 billion to shareholders through a special dividend and share buyback, while allocating €0.2 billion for further debt reduction.
Zegona's operational history has been marked by a clear focus on enhancing the performance of its telecommunications assets. The company has consistently communicated its strategy of transforming Vodafone Spain into a more competitive player in the market. The recent Q3 results underscore the effectiveness of this strategy, as evidenced by positive customer additions and a stabilisation of revenue. The company has also highlighted its commitment to improving cash flow margins, which are projected to exceed 21% for FY26, up from 17% in the previous year and more than double the 10% margin prior to Zegona's acquisition. This operational improvement is critical as Zegona positions itself for sustainable growth in the competitive telecommunications landscape.
From a financial perspective, Zegona's balance sheet reflects a proactive approach to managing debt and capital allocation. The reported net debt of €3.3 billion is expected to decrease to €3.2 billion by year-end, aligning with the company's leverage target of 1.5x to 2x. The recent refinancing at a cost of debt of only 4.3% further strengthens Zegona's financial position, reducing total annual interest costs and enhancing cash flow generation capabilities. The substantial capital return to shareholders, including a €1.4 billion special dividend and an ongoing €0.2 billion share buyback programme, signals confidence in the company's future cash flows and operational stability.
In terms of peer comparison, Zegona operates in a distinct segment of the telecommunications market, making direct comparisons somewhat challenging. However, companies such as TalkTalk Telecom Group plc (LON: TALK), which operates in a similar market and development stage, can be considered. TalkTalk reported revenues of £1.5 billion for the year ending March 2025, with a focus on enhancing its broadband offerings. Another comparable entity is Altice Europe N.V. (AMS: ATC), which has a diversified telecommunications portfolio and reported revenues of €3.2 billion for the first half of 2025. While these companies differ in scale and specific operational focus, they share a commitment to improving profitability and cash flow within the telecommunications sector.
The significance of Zegona's recent results lies in their potential to enhance shareholder value and de-risk the company's assets. The successful execution of the FiberCo transactions and the resulting capital return strategy not only reflect Zegona's operational achievements but also position the company favorably against its peers. The ongoing transformation of Vodafone Spain, coupled with a disciplined approach to debt management, suggests a pathway for continued growth and value creation. As Zegona moves forward, its ability to maintain operational momentum and effectively manage its financial resources will be crucial in navigating the competitive telecommunications landscape and delivering on its strategic objectives.