Maintaining commercial momentum during lockdown, service revenue in line with our expectations
- Q1 organic service revenue relatively resilient with a decline of 1.3%*, mainly due to COVID-19 impacts
- Resilient performance in Germany with stable organic service revenue growth
- Mobile contract customer loyalty improved year-on-year for a seventh successive quarter and record 429,000 NGN broadband customer additions in Europe
- Europe’s leading tower infrastructure company, ‘Vantage Towers’, on track for IPO in early 2021
- COVID-19 impacted sequential organic service revenue growth due to lower revenue from roaming and visitors, project delays and lower automotive activity in Business, and lower prepaid revenue in some smaller markets
- On track to deliver at least €0.4 billion net opex reduction in Europe in FY21. Adjusted EBITDA outlook unchanged - remains 'flat to slightly down'
- FY21 guidance for ‘at least’ €5.0 billion of free cash flow (pre-spectrum) reiterated
Nick Read, Group Chief Executive, commented:
“Our trading performance in the first quarter demonstrates the relative resilience of our operating model and focused delivery of our strategic priorities. Whilst we have seen the direct impact on our revenue from travel restrictions and business project delays, we have also seen increased usage in voice and data, alongside record NGN broadband customer net additions in Europe.
I am also delighted to introduce Vantage Towers as Europe’s leading tower infrastructure company. A year ago, I set out a three-phase plan for our towers to deliver industrial synergies from network infrastructure sharing, generate operational efficiencies by establishing a dedicated towers management team, and unlock value for our shareholders through the IPO of Vantage Towers, which is firmly on track for early 2021.
The role Vodafone plays in society has never been more important, particularly as the markets in which we operate continue to face challenging conditions. We have executed well in delivering on our social contract to provide fast and reliable connectivity for our customers. We will continue to work collaboratively with governments and policy makers to create the right environment for investment in essential services and ensure our customers receive the best overall experience.”
Notes to Editors
- Service revenue and organic growth are alternative performance measures. See page 7 for further details.
All amounts in the commentary below marked with an “*” represent organic growth, which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. Organic growth is an alternative performance measure. See “Alternative performance measures” on page 7 for further details and the reconciliation to the respective closest equivalent GAAP measure.
|Q1 performance summary|
|Service revenue1||Q1 FY21
|Reported Growth||Organic Growth1|
|- of which Germany||2,840||2,265||25.4%||0.0%|
|Other / Eliminations||93||98|
|Total service revenue||9,110||8,994||1.3%||(1.3)%|