Vodafone Group CEO Nick Read has conceded the company is not immune to macroeconomic challenges, but it is on track to meet full year performance targets after a broadly positive fiscal first quarter.
In comments accompanying Vodafone’s numbers for the three months to end-June, Read highlighted growth in Europe and Africa along with a stabilisation of its business in Germany, which had struggled in the year to end-March.
Revenue in the market was flat at €2.9 billion, with Vodafone’s units in Italy and Spain recording declines.
Vodafone’s UK unit recorded organic service revenue growth of 6.5 per cent, with South Africa-based Vodacom Group recording a 2.9 per cent increase in overall sales.
Overall, group service revenue grew 1.3 per cent in reported terms to €9.5 billion and total revenue 1.6 per cent to €11.3 billion.
M&A progress
Vodafone published its fiscal Q1 results shortly after Orange and MasMovil struck a deal to combine operations in Spain, posing a fresh challenge to its business there.
The operator stated it continues to “actively pursue opportunities with Vantage Towers and to strengthen our market positions in Europe”.
During an earnings call, Read said he wanted to keep any discussions around M&A “on a fairly high level because a lot is going on behind the scenes, and we’re making good progress”.
“We have had and continue to have extensive conversations with a number of players around towers”, Read said noting Vodafone’s objective remains partly generating revenue from its infrastructure assets and deconsolidate while retaining control: “We believe we can achieve that”.
A deal by Vodacom Group to acquire 55 per cent of Vodafone Egypt has been “slightly protracted” due to a need to get clearance from national and financial regulators, “but we are confident that we can close that out in the near term”.
Read added there was “very strong appetite” to create a fibre JV in Germany, explaining Vodafone will trim the list of potential partners in the coming weeks, “to advance those conversations”.
