Vodafone expands in Germany as group revenues lag

A Lady walks by a Vodafone shop with the company logo on display
A Lady walks by a Vodafone shop with the company logo on display Copyright ADRIAN DENNIS/AFP
By Indrabati Lahiri
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Vodafone first half (H1) results reveal increased growth in Germany whilst the group’s overall revenues fall behind due to more divestments.


The FTSE 100 company released its H1 results on Monday and reported robust growth in Germany despite overall lower revenues.

It said group revenue came in at €21,937 million, which was 4.3% lower than the first half results reported in 2023 (H1 FY23), which was at €22,930 million.

Operating profit also came down from €2.9 billion in H1 FY23, to €1.7 billion in this half, a drop of about 44%. 

The UK-based company also re-emphasised its full year 2024 (FY24) guidance, keeping adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) mostly flat at about €13.3 billion. Interim dividends were 4.5 eurocents.

Revenue growth in Germany

On the other hand, Vodafone Germany reported service revenue growth of about 1.1%, in the second quarter. Vodafone Business also showed strengthened growth of about 4.4% across the board in the first half of the financial year, apart from in Spain.

The lower group revenues are mostly due to the significant divestments Vodafone has carried out recently. These include cutting out Vodafone Hungary, Vantage Towers as well as Vodafone Ghana. The company has also pulled out of Spain, by selling Vodafone Spain.

These moves have come as it attempts to declutter its African portfolio, as well as decrease leverage. The Spanish market was also proving tricky, especially following Vodafone’s failed deal with MasMovil, another major Spanish operator.

Furthermore, more foreign currency fluctuations as well as higher energy costs have also impacted revenues. Soaring inflation in many parts of Europe still, along with lower-than-expected profits on some derivatives instruments, rounded this off.

Growth initiatives announced

The company also announced some growth initiatives, including the merging of Vodafone UK with Three UK. Customer service is another priority area, receiving an additional €150 million investment and reporting early encouraging results regarding pain points.

In an increased simplicity drive, Vodafone has also recently announced that it will axe 11,000 jobs in the next three years, out of which 2,700 are already gone.

The company is also seeing its TV and broadband consumer base slowly reducing, especially in the face of changing German TV regulations. Mobile service revenues were also hit by one-off disconnections, as several disgruntled consumers left for rival networks.

However, this was somewhat offset by fixed service revenues growing due to Vodafone’s increased partnerships with fibre networks such as OpenReach and CityFibre. The company has also pledged to supply hybrid 5G mobile networks to European natural gas transportation company SNAM.

New players in the European telecom market have also complicated things for Vodafone, which itself has been forced to hike costs to beat inflation.

However, group CEO, Margherita Della Valle, remains optimistic, noting: “Vodafone’s transformation is progressing. Our focus on customers and simplifying our business is beginning to bear fruit, although much more needs to be done.”

Vodafone's share price was down 2.67% on Tuesday afternoon following the financial update.

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