Following a Q1 that was marred by difficult markets in Spain and Italy, the company has seen stabilisation in the mediterranian along with a positive initial impact of the recently acquired Liberty Global assets in Germany, Hungary, Romania and the Czech Republic.
Overall, the operator recorded organic service revenue growth of 0.3% for the half year. It also adjusted its earnings forecast for the year to €14.8-€15.0 billion, up from its previous forecast of €13.8-14.2 billion.
Germany in particular proved to be a bright spot, with the fast integration of Unitymedia. September alone saw 41,000 net cable additions, though this was offset by DSL customers falling by 20,000 due to price increases.
CEO Nick Reed noted that Germany now accounts for 30% of Vodafone’s business, making it the company’s largest market. Reed however did note that “there are still significant opportunities to further lower our cost base, particularly in Germany.”
Reed also noted positive performance in the UK, saying that the company achieved “record net adds across fixed and mobile during the quarter”. The UK, which amounts to 13% of Vodafone’s business, saw service revenue growth increase to 0.5% and EBITDA up by 4%.
The CEO said: “I am confident that the UK will return to reported growth in H2, becoming a contributor to our overall group growth story.”
Commenting on the results, Amit Pau – former managing director of Vodafone and current chief operating officer of Accloud – suggested that the results show Vodafone’s lack of innovation: “The top-line results disguise the fact that there has been little innovation, which would drive Vodafone’s long-term growth and expansion. Given the phenomenal levels of innovation in the mobile world, it is strange that it is in decline at the business.”
He concluded that it “has been a year of two halves for Vodafone and their new CEO” and that “Vodafone now seems to be operationally stable and gives the impression it’s turned the corner of organic growth.”
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