20th May 2025 08:52
(Alliance News) - Vodafone Group PLC on Tuesday announced a new share buyback after reporting mixed annual results with a soft performance in Germany offset by growth elsewhere in Europe.
The Newbury, England-based telecommunications provider swung to a pretax loss of EUR1.48 billion for the financial year that ended March 31 from a profit of EUR1.62 billion the year prior.
Hurting Vodafone's bottom-line were non-cash impairments totalling around EUR4.5 billion for Germany and Russia.
Adjusted earnings before interest, tax, depreciation, and amortisation after leases slipped 0.8% to EUR10.93 billion from EUR11.02 billion a year ago, landing just shy of company-compiled consensus of EUR10.99 billion.
Vodafone said adjusted EbitdaaL in Germany declined 13%, including a 7.5 percentage point impact related to the MDU TV law change, offset by good performance across the rest of Europe, Africa and Turkey.
Revenue increased 2.0% to EUR37.45 billion from EUR36.72 billion but was behind market consensus of EUR37.71 billion.
Vodafone said strong service revenue growth was partly offset by by adverse foreign exchange movements.
Service revenue, which makes up the bulk of its top-line, advanced 2.8% to EUR30.76 billion from EUR29.91 billion.
Vodafone said an anticipated slowdown in Germany was more than offset by growth across the rest of Europe, Africa and Turkey. Vodafone Business grew by 4.0% during the year, supported by strong demand for digital services.
Service revenue declined by 5.0% in Germany, grew by 1.9% in the UK, and rose by 2.1% in Other Europe & Turkey. In Africa, service revenue leapt 11%, supported by growth in South Africa and a very strong performance in Egypt, Vodafone said.
In the Business division, organic service revenue grew by 4.0% during the year, with an accelerating trend.
Shares in Vodafone were up 1.1% to 73.22 pence in London on Tuesday morning. The wider FTSE 100 index was up just 0.2%.
Adjusted free cash flow declined to EUR2.5 billion from EUR2.6 billion, while net debt decreased to EUR22.4 billion from EUR33.2 billion a year ago, primarily driven by the proceeds from the sale of Vodafone Spain for EUR4.1 billion and Vodafone Italy for EUR7.9 billion, as well as the 10% stake in Oak Holdings for EUR1.3 billion.
"The current macroeconomic climate presents significant uncertainties, particularly on trade and foreign exchange rates, which may impact our financial performance in the year ahead," Vodafone said
Chief Executive Officer Margherita Della Valle said: "A year ago I set out my plans to transform Vodafone, including the need to right-size Europe for growth. Since then, we have announced a series of transactions and we are now delivering growth in all of our markets across Europe and Africa.
"Much more still needs to be done in the year ahead. We will step-up investment in our customer experience, improve our underlying performance in Germany and accelerate our momentum in Business, whilst also continuing to simplify our operations throughout the group.
"We are fundamentally transforming Vodafone for growth."
Della Valle said Vodafone expects to see "broad-based momentum across Europe and Africa, and for Germany to return to top-line growth during this year."
For the current financial year, Vodafone expects adjusted EbitdaL of between EUR11.0 billion to EUR11.3 billion, before the impact of the UK merger with Three UK, compared to company-compiled consensus of EUR11.11 billion.
Vodafone forecast adjusted free cash flow to be between EUR2.6 billion to EUR2.8 billion
Vodafone's dividend, which has been rebased, totalled 4.5 cents per share for the financial year. This is down from 9.0 cents a year prior. Its final dividend amounted to 2.25 cents, down from 4.5 cents a year ago.
The company announced a new EUR2.0 billion share buyback, using the proceeds from the sale of Vodafone Italy, which will begin Tuesday with an initial tranche of EUR500 million.
In addition, Vodafone said outgoing Chief Financial Officer Luka Mucic bought 356,000 shares at 71.97 pence each, worth GBP256,213, on Tuesday.
Earlier this month, Vodafone said Mucic will leave in early 2026 to join Bochum, Germany-based residential real estate firm Vonovia SE as chief executive officer.
By Jeremy Cutler, Alliance News reporter
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