Vodafone Group back to service revenue growth in Europe, as well as Africa

Vodafone Group

Vodafone Group Plc (LON:VOD) has announced its Q1 FY22 trading update.

Growth in Europe and Africa

·   Group service revenue growth of 3.3%* (Q4: 0.8%*), with growth across both Consumer and Business segments

·   Strong service revenue trend, including one-off growth of around 1.0 percentage point following COVID-19 disruption last year

·   Good service revenue growth in Germany of 1.4%* (Q4: 1.2%*) 

Q1 performance summary1Q1 FY22
Q1 FY21
Service revenue9,390 9,110 3.1%3.3%
 – of which Germany2,872 2,840 1.1%1.4%
Other revenue1,711 1,396 22.6%20.2%
Total revenue11,101 10,506 5.7%5.6%

1.  Our segmental reporting has been updated to include Vantage Towers A.G. as a separate reporting segment for the year ending 31 March 2022. See page 4.

2.  Organic growth is a Non-GAAP measure. All amounts marked with an “*” in the commentary represent organic growth. See page 8.

·   Europe mobile contract churn 1.6 percentage points lower than Q1 FY20 (pre-pandemic), but commercial activity yet to return to normal conditions

·   Roaming and visitor revenue grew 56% year-on-year, but still 54% lower than Q1 FY20 (pre-pandemic)

·   Vodafone Business service revenue growth of 2.7%*, driven by strong growth in IoT and digital services

·   Strong growth in Africa, with M-Pesa transaction volumes increasing 45% year-on-year

·   On track to deliver FY22 guidance with Adjusted EBITDAaL expected to be between €15.0 – €15.4 billion and Adjusted FCF of at least €5.2 billion

Nick Read, Vodafone Group Chief Executive, commented:

“I am pleased to report that we are back to service revenue growth in Europe, as well as Africa. This growth was broad-based within both Consumer and Business segments, with the vast majority of our markets contributing. This is a result of our commercial and operating momentum built over the past 3 years as part of our strategic transformation.

In Europe, the operating and retail environment has not yet returned to normal conditions, but we are delivering a good service revenue performance. In our Business segment, we are seeing stronger growth with our public sector and corporate customers, whilst further building a pipeline of demand for our digital services, such as IoT, security and cloud.

In May we announced, for the first time, our medium-term growth ambition. We have entered the year in line with this ambition, on track to deliver our guidance for the year, and with a continued focus to optimise our portfolio, to accelerate the delivery of shareholder value.”

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