Vodafone Group maintains outlook after return to organic service revenue growth in Q3

News General Europe 3 FEB 2021
Vodafone Group maintains outlook after return to organic service revenue growth in Q3

Vodafone Group reported a return to positive organic service revenue growth in its fiscal third quarter to December, with growth of 0.4 percent. While roaming revenues remained depressed, the company reported strong growth in the fixed broadband market and improved results in its largest market Germany. The outlook for full-year operating profit and cash flow was maintained, and Vodafone said it's on track for the IPO of its towers business in early 2021. 

On a reported basis, revenues fell 4.7 percent year-on-year to EUR 11.2 billion, and service revenue dropped 3.9 percent to EUR 9.4 billion, according to the quarterly trading update.

In Europe, service revenues dropped 2.4 percent to EUR 7.4 billion and were down 1.1 percent on an organic basis, excluding currency effects and changes in scope. Germany was the one positive area, with growth of 1.0 percent to EUR 2.9 billion in service revenue, while Italy fell 7.8 percent, the UK was down 0.4 percent, and Spain dropped 1.1 percent. The drop in Europe was offset by 3.3 percent organic growth at Vodacom and a 12.3 percent increase in other markets. 

Vodafone said underlying trends, excluding the impact from lower roaming and visitors, were broadly similar quarter-on-quarter. As a result, it's reiterating the full-year outlook for adjusted EBITDA of EUR 14.4-14.6 billion and free cash flow of at least EUR 5 billion, excluding spectrum and restructuring costs. 

The introduction of speed-based mobile data plans across its mature markets has helped supported ARPU gains, while second brands cover the value segment. Vodafone said it already had 10 million active customers on unlimited data, across 10 markets. The other main growth driver in the consumer market is NGN broadband, which added over 1.1 million customers in Europe in the year to date, including 330,000 in Q3, for a total of 22.6 million at the end of December. 

The mobile customer base totaled 268.45 million at the end of the period, up by nearly 3.2 million from September. The growth was led by Vodacom and Vodafone Turkey, and the operator also added customers in Germany, Romania, Czechia and Ghana. Vodafone said postpaid customers in Europe increased to 65.4 million from 64.2 million a year ago. 

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Vodafone,  Vodafone Group,  Vodacom

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