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Vodafone Germany results decline for the second quarter in a row

Vodafone HQ sign

UK operator group Vodafone published its Q2 2022 results with its largest market, Germany, seeing service revenues decline for a second quarter in a row.

Vodafone says overall it grew at group level in the second quarter of this year. This is in line with its expectations and supported by both Europe and Africa as revenues growing by 1.6% YoY, reaching €11,278 million.

However, its largest market is still on recovery course as Germany’s organic service revenue growth declined by 0.5%, entering a second quarter of declining results. The quarterly results point to the new German Telecommunications Act which kicked in December 2021 as the main reason and contributing broadband and TV customer losses. The new act saw the end of automatic renewals, according to Reuters.

Other markets in Europe that also experienced service revenue growth declining were Spain (-3.0%) and Italy (-2.3%). The operator was quick to point out that the negative growth in those markets is offset by an acceleration in its UK business (+6.5%) driven by contractual price increases and customer base growth.

There was also uplift from the Turkish operations (+35.8%) but it is worth noting that it the group has now applied hyperinflationary accounting for that country, given the high inflation rates. Nonetheless, Vodafone believes it remains on track to deliver its FY23 guidance with an expected adjusted EBITDAal of €15.0 – €15.5 billion.

“We have executed in line with our expectations, delivered another quarter of growth in both Europe and Africa, and seen an acceleration in business growth.” said Vodafone Group CEO Nick Read. “Whilst we are not immune to the current macroeconomic challenges, we’re on track to deliver financial results for the year in line with our guidance.

“Our near term focus on our operational and portfolio priorities remains unchanged. We’ve made good progress towards stabilising our commercial performance in Germany, and we continue to actively pursue opportunities with Vantage Towers and to strengthen our market positions in Europe.”

Given the macroeconomic conditions in many of Vodafone’s markets and the cost of living crisis in much of Europe, perhaps it is wise to expect more of the same in the upcoming quarterly results. For those interested in more details, here is the full view of the Vodafone quarterly results:

 

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