Vodafone managed to post a profit last year despite the persistent challenges caused by the coronavirus in its main European markets.
Lockdown restrictions and reduced international travel affected purchases of new smartphones and roaming revenues and contributed to a 2.6% drop in Group revenue to € 43.8 billion.
However, Vodafone said it was satisfied with the stable service revenues and the contribution of German and Central European companies acquired from Liberty Global. The operator’s digital and efficiency efforts have also saved 500 million euros across the company.
The company now has 65.4 million mobile customers and 25.6 million broadband customers across the continent, while increasing engagement, reducing churn rate, increasing ARPU (average revenue per user) and seeing the average data consumption drop from 5.7 GB to 7.2 GB.
At the same time, the € 2.3 billion proceeds from the IPO of was used to reduce debt.
The profit of 536 million euros compares favorably with the loss of 455 million euros reported last year (largely due to a depreciation of the Indian joint venture of Vodafone), and the company is satisfied with that. ‘it sees a broader economic climate as a “resilient performance”.
Group CEO Nick Read said his aim is to deliver the next phase of its strategy to become a next-generation digital connectivity and services provider in Europe and Africa with a medium-term ambition to generate revenue. returns through faster growth.
“We have completed the first phase of our strategy to reshape Vodafone as a stronger connectivity provider – including the simplification of the group in Europe and Africa, the successful IPO of Vantage Towers, the rapid deployment of our new generation mobile and fixed networks. , the gain in broadband subscriptions and the continued reduction in customer churn, ”he said.
“Our digital transformation initiatives generated savings of € 0.5 billion over the year and the integration of the assets acquired from Liberty Global is well ahead of expectations. The world has changed. The pandemic has shown how essential connectivity and digital services are to society. Vodafone is well positioned and with increased investments we are acting now to ensure we play a leadership role and seize the opportunities these changes create.
“The increased demand for our services supports our ambition to grow revenues and cash flow over the medium term. We remain fully focused on generating returns for shareholders through deleveraging, improving our return on capital and a strong commitment to our dividend. “
In the UK, revenue fell 5.1% to € 6.2 billion due to the same factors affecting other markets. However, the churn rate fell from 14.1% to 13%, and the company added 219,000 subscribers to the mobile contract and achieved 192,000 net additions to its broadband service, contributing to a 5.6% increase. of his income.