Vodafone cites German performance as drag on 2022 results

UK operator group Vodafone pointed to an ‘unsatisfactory’ commercial performance in Germany as well as inflation as main pain points in its FY2022 financial results.

Vodafone says overall it made good financial performance in FY2022 which were in line with expectations, citing improving YoY service revenue trends in ten out of 11 European markets. Overall the group clocked a 4% revenue increase to €45.6 billion for the period ending March 31st. However Group CEO Nick Read pointed to flagged up Germany as a drag to the overall group’s results, as well as wider economic trends such as rising inflation.

There’s not too much detail on what exactly went wrong there, but it seems to have something to do with customer service and retail stores in the region. It being a corporate financial statement once whatever bad news they have to announce has been thrown out there, you are then bombarded with positive spins on however many data points will allow it. You can’t blame them for trying to direct your attention elsewhere, of course.

What it does lay out is the measures it is taking to address the ‘unsatisfactory’ performance. With regards to customer ops it says it is ‘addressing specific issues related to new legislation’ and making ‘further enhancements to customer journeys.’ It also says it is accelerating a shift from traditional retail stores to ‘digital first sales and customer care channels’, and looking for new distribution partnerships.

“We delivered a good financial performance in the year with growth in revenues, profits and cash flows, in line with our medium term financial ambitions,” said Nick Read, Group Chief Executive of Vodafone. “Our organic growth underpinned a step change in our return on capital, which improved by 170bps to 7.2%. Whilst we are not immune to the macroeconomic challenges in Europe and Africa, we are positioned well to manage them and we expect to deliver a resilient financial performance in the year ahead.

“Our near term operational and portfolio priorities remain unchanged from those communicated 6 months ago. We are focused on improving the commercial performance in Germany, actively pursuing opportunities with Vantage Towers and strengthening our market positions in Europe. These actions, together with the simplification of our portfolio and the ongoing delivery of our organic growth strategy, will create further value for our shareholders.”

For those interested in the details of Vodafone’s FY2022 results, feast your eyes on the below:

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