- Publisher Enders Analysis.
- Publish Date May 26, 2020
- Sector Telecom.
- Company

Vodafone’s financial metrics appear to be slowly ticking up and it is making some progress in narrowing its performance gap to peers. Signs that it may be moving away from a discount-led convergence strategy in Germany are very positive
Organic EBITDA growth is highly flattered by one-off items and, as is frequently the case, even this headline EBITDA growth for FY20 is wiped out by currency depreciation in ‘Rest of World’ countries
This lack of real progress on EBITDA and FCF and the muted outlook for both exacerbates Vodafone’s tight leverage position. There seems very little prospect of it unsettling the O2/Virgin Media JV in the UK
Contents
Interpret results with caution
Some strategic and operational positives
Leverage remains very tight
UK— pulling back?
Shifting sands in pricing dynamics
Germany—where is the growth?
Italy—recovery remains elusive
Spain —recovery gains some (patchy) momentum
List of charts/tables
Figure 1: Organic EBITDA and service revenue growth
Figure 2: Vodafone mobile service revenue growth in the 'top 4' markets
Figure 3: Vodafone fixed service revenue growth in the 'top 4' markets
Figure 4: Organic EBITDA growth
Figure 5: RoW organic EBITDA growth and growth in Euro terms
Figure 6: Vodafone business mobile market shares
Figure 7: Mobile service revenue growth versus peers
Figure 8: German converged customer net adds (000)
Figure 9: UK operational and financial metrics
Figure 10: Vodafone mobile revenue and service revenue growth under IFRS 15
Figure 11: UK service revenue growth by operator
Figure 12: UK contract net additions (000)
Figure 13: Contract ARPU growth
Figure 14: ‘Sweet spot’ bundle with iPhone 6s/7/8/XR/11
Figure 15: SIM-only pricing by data allowance (GB)—direct distribution (£/month)
Figure 16: SIM-only unlimited data bundle pricing (£/month)
Figure 17: UK fixed performance
Figure 18: Discounts to out-of-contract customers offered by operators
Figure 19: Potential drag from out-of-contract bundle customers spinning down
Figure 20: Germany operational and financial metrics
Figure 21: Germany contract net additions (000)
Figure 22: Germany mobile service revenue growth by operator
Figure 23: German operator contract ARPU growth
Figure 24: Germany fixed performance
Figure 25: Italy operational and financial metrics
Figure 26: Italy service revenue growth by operator
Figure 27: Italy total subscriber net additions (000)
Figure 28: Italy fixed performance
Figure 29: Spain operational and financial metrics
Figure 30: Spain service revenue growth by operator
Figure 31: Spain contract net additions (000)
Figure 32: Spain fixed performance