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Vodafone: Ticking one box, others await

17 November 2023
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Metrics in Vodafone's Q3 results pointed in various directions with the main positive being revenue growth in Germany, but there were also concerning data points including continued subscriber decline there, and EBITDA across all of Europe.

The company reiterated its guidance for EBITDA and FCF for the year which looks achievable but a stretch. More importantly, these numbers exist only in theory with the Euro-based results looking set to be lower—with implications for the outlook and dividend cover.

Ridding the Group of its Spanish business, and possibly the Italian one too, will be helpful in delivering on the promise of growth, but whether it creates value for shareholders is another matter.

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  • Adiós España: Vodafone Spain sold

    31 October 2023

    Vodafone has struck a deal to sell its ailing Spanish business in a deal worth €5bn, equivalent to 5.3x EBITDAaL.

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    Service revenue growth almost doubled this quarter to 2.4% aided by price rises in the UK, Spain, and France, but remains well below inflation-levels.

    The revenue boost from in-contract price rises will ultimately disappear as customers recontract, dampening the EBITDA outlook as costs continue to rise.

    Operators are looking to other strategies to strengthen their positions, including edging up new-customer pricing, M&A, and attracting wholesale MVNO business.

     

    Access report

  • Vodafone: Pushing (too?) hard

    26 July 2023

    Vodafone's headline revenue growth of +3.7% is actually a small decline once Rest of World exchange depreciation is accounted for. Europe, however, delivered an improving revenue trend to +0.4%, as signalled at Vodafone's FY results announcement.

    The mix and operating trends are less positive, with growth driven by low-margin B2B, and subscriber losses accelerating in German fixed. Investors will be weighing up whether these results are green shoots of a recovery or another false dawn.

    Although the company may reach its guided EBITDA on assumed exchange rates, it looks set to fall short in euro terms, which has implications for FCF and dividend cover.

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