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Press Release -- February 6th, 2020
Source: Vodafone Group

Trading update for the quarter ended 31 December 2019


  • Continued organic service revenue growth in Q3, up 0.8%* (Q2: 0.7%*).
  • Similar performance in Europe (Q3: -1.4%*, Q2: -1.4%*), with ongoing recovery in Spain and acceleration in the UK offset by a tougher prior year comparison in Italy. Retail revenues grew in Germany, supported by strong cable broadband net adds.
  • Good growth in Rest of the World (Q3: 9.1%*, Q2: 8.9%*) as continued recovery in South Africa was partially offset by lower growth in Turkey.
  • Good progress on strategic priorities during the quarter:
    –  Deepening customer engagement: Europe mobile contract churn declined year-on-year for a fifth successive quarter, supporting 0.51 million mobile contract net additions. Over 0.4 million NGN broadband net additions in Europe. First in Europe to make Amazon Web Services ultra-low latency mobile edge computing available over our 5G networks.
    – Radical simplification and digital transformation: 3.0 million Consumer customers on simplified speed-tiered unlimited data plans. On track to achieve the €0.4 billion net opex reduction target in Europe for FY20.
    – Improving asset utilisation: Further progress on mobile network sharing. Detailed talks with Deutsche Telekom in Germany to address ‘grey spots’, exclusive talks with NOS in Portugal.
    – Towers monetisation: On track to operationalise our European TowerCo by May 2020 with senior management now appointed. INWIT merger in Italy notified to the EC, decision due by end of February.
    – Portfolio management: MoU in relation to the sale of our 55% shareholding in Vodafone Egypt for €2.2 billion, implying a September FY20 LTM multiple of 7.0x adjusted EBITDA. Agreement to sell Vodafone Malta for €250 million.
  • Full year guidance reiterated: adjusted EBITDA of €14.8-15.0 billion, free cash flow (pre-spectrum) of around €5.4 billion.

Nick Read, Group Chief Executive, commented:

“I am pleased with the pace at which we have executed our commercial and strategic priorities, which has allowed us to maintain our momentum in the quarter. Competition in Europe remains challenging, primarily in the value segment, however we continued to improve customer loyalty and to grow in broadband, and we achieved good growth in Africa. We expect a further gradual improvement in service revenue growth in Q4, led by Europe.

We have recently announced the proposed sale of our stake in Vodafone Egypt, which simplifies the Group into two scaled regional platforms – Europe and sub-Saharan Africa – and reduces our net debt. We have also appointed the senior management team for our European TowerCo, and we are preparing for a potential IPO in early 2021.”

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