Proactive Investors - Vodafone Group PLC’s chief executive Margherita Della Valle inherited a bloated, underperforming business when she secured the top role 15 months ago.
A trading update from the FTSE 100-listed communications giant shows that her turnaround plan, though progressing as expected, is still facing many of the same challenges that preceded her.
Vodafone’s biggest market Germany continues to be a drag. Total revenues in the country fell 1.6%, offsetting incremental gains in other European markets.
Fixed service revenue fell by 2.0%, with broadband customer numbers declining by 55,000, including the loss of 32,000 customers on gigabit-capable networks.
Mobile service revenue dropped by 0.8%, with a Consumer mobile contract customer base decline of 9,000 and the loss of 30,000 corporate accounts in Business.
The total TV customer base lost a bruising 700,000, which Vodafone attributed to changes in German TV laws.
Things were slightly more optimistic in the UK, where the mobile Consumer contract customer base grew by 22,000, while the digital prepaid sub-brand 'VOXI' added 17,000 customers.
However, the total contract customer base declined due to low-value contract disconnections in Business.
Part of Della Valle’s turnaround strategy is the disposal of underperforming assets.
To that end, Vodafone pared down its stake in Vantage Towers to 50% for €1.3 billion in the period.
Combined with funds from its Spanish exit, Vodafone managed to continue with its liberal shareholder returns strategy by commencing a €2 billion share buyback programme
“We continue to progress our transactions in Italy and the UK as well as the broader transformation of Vodafone, focused on customer experience, Business growth and operational execution in Germany. The actions we are taking now will deliver improved performance and underpin the turnaround of Vodafone," said Della Valle.