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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Vodafone Group Plc | VOD | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| -1.48 | -2.08% | 69.76 | 08:24:11 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 69.40 | 69.34 | 70.06 | 71.24 |
| Industry Sector |
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| MOBILE TELECOMMUNICATIONS |
| Top Posts |
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Posted at 13/11/2024 00:40 by philanderer Investors ChronicleVodafone needs Three merger to be successful The telecoms company can't generate profitable growth and its German business is dragging down the rest. HOLD |
Posted at 12/11/2024 12:47 by dplewis1 Incoming CEOs don't get a handbook for reviving a struggling company. But if they did, it would probably say something like: sell off or merge subscale businesses to focus on core markets, while being honest with investors about the scale of the task at hand. This has roughly been Margherita Della Valle's approach since she took over Vodafone on a permanent basis 18 months ago, yet the group's shares have trailed those of rivals. It all comes down to Germany.Della Valle, a former finance chief at the 22-billion-euro telecom group, went on an overdue M&A spree after taking the top job early last year. She struck a long-awaited merger with CK Hutchison's UK unit Three, agreed to sell the company's Spanish division, and this year offloaded Italy. The effect has been to focus on the key German market, which makes sense in theory, but has backfired in the short term given a deterioration in that business. Vodafone has been warning that a Teutonic law preventing landlords from bundling TV bills with rental costs, which went into effect in July, would prove problematic.And so it has. Revenue in the German unit fell 6% year-on-year in the most recent quarter. After a 6% share-price fall on Tuesday, the company's stock is down by a quarter since Della Valle's permanent appointment in April 2023, compared with a 6% rise for the STOXX Europe 600 Telecom Index. Vodafone trades at 10 times forecast earnings over the next 12 months, according to Visible Alpha, compared with European rivals' average multiple of 12.6.The question is how quickly Vodafone can start growing again in Germany. Della Valle is hoping to do so at some point in the next financial year, which ends in March 2026. She'll get a lift from an influx of new mobile customers thanks to a deal with smaller peer 1&1, which will eventually see 11 million customers move to Vodafone's 5G mobile network. Sustaining the momentum may be tough. Rival Deutsche Telekom is ramping up its rollout of full-fibre broadband across Germany, which could boost competition in the market for superfast internet.Shedding the Germany discount could be worth a lot to Della Valle. Closing the price-earnings gap with rivals would boost the shares by roughly a third, based on Breakingviews calculations. The benefits of future cost savings from the UK merger could add a further boost over time. Della Valle has played a bad hand well at Vodafone, but the payoff will take a while to show up. |
Posted at 12/11/2024 09:53 by jubberjim More smoke and mirrorsWhat is it with these companies and us investors that we are so easily taken in Will look if it should go to 60 level Be good |
Posted at 17/10/2024 13:14 by dplewis1 Vodafone's upcoming 2Q results are likely to be mixed given the concerns weighing on its German segment, Citi analyst Siyi He writes in a note. The company has been transparent on the impact from regulation changes in Germany--which prevent landlords from bundling TV services with rental agreements--, as well as the removal of broadband pricing support, but the high-margin nature of those revenues could hit profitability, the analyst says. However, the ample cash generated from asset disposals coupled with improving outlook and simplified group structure, should gradually gain investors' confidence, she adds. |
Posted at 13/9/2024 07:04 by netcurtains Still early morning market has taken it in its stride.Generally speaking investors do not like mergers... So perhaps if the merger is "off" that might boost the share price. Who knows.. |
Posted at 13/9/2024 06:53 by simon8 Nope, poor result, but hope they can turn it around - usual rubbish findings of a quango with no business acumen, jobsworths with no idea of the real world.Really not what the company needed when it is trying to build the business and infrastructure, months more of uncertainty that will undermine the business, confidence in the sector and the share price for investors. Three cheers for the idiots at the CMA! What is there role, do they have a mission statement? If they do it appears to be undermine the sector and set back investment and connectivity years! |
Posted at 16/8/2024 14:45 by davius ii view: is reshaped Vodafone all about German growth?Shares in this popular FTSE 100 company have halved over the last five years. Now undertaking a major share buyback programme, we assess prospects. 16th August 2024 11:16 by Keith Bowman from interactive investor First-quarter trading update to 30 June Adjusted or organic service revenues up 5.4% (Q4: +7.1%) Total revenues up 2.8% to €9.04 billion German organic service revenue fell 1.5% (Q4: +0.6%) Adjusted profit (EBITDA) up 2.1% to €2.68 billion Guidance: Continues to expects 2025 adjusted profit (EBITDA) unchanged on 2024 at €11 billion Plans to halve the dividend for the year ahead to 4.5 eurocents per share, but with ambition to grow over time Pursuing €4 billion of share buybacks following business sales Chief executive Margherita Della Valle said: "Our performance in the first quarter is consistent with our full year guidance, which we reiterate today. We continue to deliver strong revenue growth in Africa and Turkey, whilst lower inflation is slowing revenue growth in Europe and accelerating Group EBITDAaL growth. "During the last few months, we have announced the final step in reducing our stake in Vantage Towers to 50% for €1.3 billion and commenced our €2 billion share buyback programme following the sale of Spain. "We continue to progress our transactions in Italy and the UK as well as the broader transformation of Vodafone, focused on customer experience, Business growth and operational execution in Germany. The actions we are taking now will deliver improved performance and underpin the turnaround of Vodafone." Vodafone Group operates both mobile phone and fixed broadband networks. Operating in Europe and Africa and following business sales in Spain and Italy, key countries of operation now include Germany, the UK, Turkey, and South Africa. ii view: Conducting the first mobile phone call ever in the UK in 1985, Vodafone today provides mobile and fixed line broadband services to over 300 million customers in 15 different countries. 5G mobile provision is available in over 230 European cities, with its fast broadband network passing 52 million European homes. Fast data broadband provision also makes it Europe’s second largest TV platform with around 17 million such customers. Germany continues to generate its biggest chunk of adjusted profit at 46% during its last fiscal year, with the UK at 13%, other European countries combined and including Portugal and Ireland at 14%, Africa 22%, and Turkey 5%. For investors, previous German law changes to end bulk TV contracts to multi-dwelling units (MDU) continues to pressure service revenue at its core German market. The proposed merger of Vodafone’s UK phone operations with those of CK Hutchison’s Three UK operations is subject to an in-depth competition probe. The sale of Italian and Spanish businesses leaves it less geographically diverse. The dividend payment is again being reduced given business sales, while group net debt of €33.2 billion (£28 billion) as of late March compares to a stock market value of £19.6 billion. To the upside, a major transformation of the business has been undertaken, including asset sales in Italy and Spain and the proposed strengthening of its UK mobile business. Management focus now includes increased investment in customer experience and growing business-related sales. A €4 billion share buyback out to 2026 has seen around 10 million shares bought daily, while UAE telecommunications company e& continues to hold a sizeable shareholding in Vodafone, potentially applying further pressure on management for change and improvement. For now, declining revenue in its key German market along with the ongoing UK investigation into its UK phone merger may leave many investors sidelined. That said, a rejigged business focused on growth opportunities and strong cashflows which underpin a forecast dividend yield of over 5% does at least reward shareholders for their patience. Positives Business and geographical diversity Ongoing management transformation programme Negatives Intense competition Pending cut to the dividend payment The average rating of stock market analysts: Strong hold |
Posted at 31/7/2024 23:57 by blackhorse23 Vodafone dividend among £3bn of cash for investors in August |
Posted at 06/12/2022 18:49 by vodman1 CEO Turmoil Leaves FTSE a Target for Opportunistic PredatorsSabah Meddings and Dinesh Nair, Bloomberg News Nick Read, chief executive officer of Vodafone Group Plc, during an interview at their offices in London, UK, on Friday, May 20, 2022. Three-and-a-half years into his tenure as CEO, with activist investors and hedge funds on alert, 57-year-old Read deflects media reports of “pressure̶ Nick Read, chief executive officer of Vodafone Group Plc, during an interview at their offices in London, UK, on Friday, May 20, 2022. Three-and-a-half years into his tenure as CEO, with activist investors and hedge funds on alert, 57-year-old Read deflects media reports of “pressure̶ (Bloomberg) -- Turmoil at the top of UK Plc -- with Vodafone Group, Unilever, Reckitt Benckiser Group and others simultaneously hunting for new chief executive officers -- has prompted fears that Britain’s largest companies may become vulnerable to activist investors and opportunistic takeovers. On Monday, Vodafone’s Nick Read became the 23rd CEO of a company in the FTSE 100 stock index to announce their departure this year, following executive changes at companies including Shell Plc, Rolls-Royce Plc and M&G Plc. The high level of boardroom churn has led some investors in the City of London to predict that changes at the top could cripple the ability of companies to press the button on transformational acquisitions, or make them a target. Uncertainty around leadership raises questions about companies’ strategic direction and is “always going to make them more vulnerable,” said Ben Ritchie, head of UK and European equities at fund manager Abrdn Plc. “It’s inevitable.” AJ Bell, which has been tracking the changes, noted that Read had served only 4.25 years at Vodafone, compared with the FTSE 100 average of 5.8 years. Even before 2023 has begun, Read is the 10th CEO to have announced a departure set for next year, after 12 exits in 2022. The post-2000 average is 12.5 a year, according to AJ Bell. Activist Investors Some exits have been driven by the company, or by activist investors. Read’s departure from Vodafone followed a turbulent year in which the company’s share price fell sharply and management faced criticism from shareholders. A vehicle backed by French billionaire Xavier Niel bought 2.5% of Vodafone, raising the prospect that he would shake up the under-performing telecommunications group. Unilever CEO Alan Jope announced his departure shortly after the arrival of Nelson Peltz, the owner of New York hedge fund Trian, on its board. Peltz, 80, disclosed a 1.5% stake in the company in May. For others, the chief executive has chosen to jump ship, with the company falling victim to the global war for talent. The lure of a US job, with more lucrative pay, has tempted some executives to leave the UK. Laxman Narasimhan announced his departure from Nurofen maker Reckitt Benckiser in September, jumping ship to US-based coffee-shop chain Starbucks Corp. after just three years in the role. Narasimhan, who was paid £6 million ($7.3 million) including bonuses and share options in 2021, will receive total compensation of as much as $17.5 million at Starbucks. Others have been tempted away from the public markets by private equity. Earlier this year Rob Hattrell, the former head of EBay Inc.’s European arm, turned down the chief executive role at fashion retailer Asos in favor of a job at private equity firm TDR, the part-owner of Asda. UK Valuations The CEO churn comes at a time when UK company valuations are depressed compared with their peers. Though shares have slumped worldwide since Russia’s invasion of Ukraine, UK boards are increasingly complaining of a conservative investor base that favors stable yield-paying stocks over innovative, faster-growing technology firms. One FTSE 100 chairman, quoted in a recent report on stewardship by the public relations agency Tulchan, said the UK market “struggles to understand what a tech stock does.” “The bias of the UK investor base means it would probably be better for a tech company to be listed somewhere else,” they said. Another chair, quoted in the report, said it was becoming “difficult and more so to recruit CEOs and chairs to London-listed boards.” “It’s not just the pay but also the scrutiny and second-guessing,R Focusing on dividends and shareholder returns may be the safe option, but eschewing transformational deals and other riskier strategies can open CEOs up to criticism from activist investors who swoop in, seeking faster change. Sharon Sands, a partner at executive search firm Heidrick & Struggles’ London office, said that market volatility and economic uncertainty may be a factor in the level of chief executive churn. She said it was important to acknowledge that the “weight of the role is heavy.” “Expectations of CEOs have broadened and deepened,” Sands said. Depressed valuations and the threat of activist pressure have also left boards fighting to prove to shareholders that they are taking action. Fran Minogue, managing partner of Clarity Search, said there was likely to be more change into the New Year for those companies whose shareholders are looking for growth and “want to be seen by their shareholders to be doing something.” She said that post-Covid, boards were asking whether employees are “stepping up, is change being driven fast enough, are transformation programs going well?” --With assistance from Swetha Gopinath and Loukia Gyftopoulou. ©2022 Bloomberg L.P. |
Posted at 21/11/2022 18:43 by vodman1 Vodafone: Empire Building Gone WrongNov. 20, 2022 9:19 PM ETVodafone Group Public Limited Company (VOD), VODPF4 Comments Summary Vodafone is one of the largest Pan-European telecommunications giants, whose empire spans 22 countries and three continents. The British-based company has had another difficult year in the markets and lost a quarter of its market cap since the offset of the year. This has led to an interesting valuation, with VOD currently being sold for an NTM EV/EBITDA of 6.44x, NTM P/E of 10.44x, and an NTM P/FCF of 6.44x. We attempt to dissect if we are dealing with an enticing value trap or a truly attractive and immersive investment opportunity. Vodafone headquarters, in Bucharest, Romania. lcva2 At face value, defensive-oriented stocks such as telecommunication companies that were in a position to offer immediate access to shareholder returns in the form of lucrative dividends should have been able to perform well this year during the market downturn. However, the oligopoly-like market conditions combined with the potent cash flows the companies were generating allowed them to become significantly more levered up than what would usually be considered acceptable. The rising interest rate environment, accompanied by increased capital expenditures dedicated to building up the 5G infrastructure, as well as the fact that the risk-free rates started slowly creeping up to the dividend yields the telecoms were offering started draining equity out of telecoms this year at an alarming pace. This process hit telecommunication companies across the globe, and Vodafone (NASDAQ:VOD) was no exception, with the British-based telecommunication giant losing more than a quarter of its market capitalization since the offset of the year, once more leading to disappointing results for investors. This has led to an interesting valuation, with the company currently being sold for an NTM EV/EBITDA of 6.44x, NTM P/E of 10.44x, and an NTM P/FCF of 6.44x, while offering an attractive dividend yield of 7.97%. Today, we attempt to analyze the situation and attempt to dissect if we are dealing with a classic value trap or a possibly truly attractive and immersive investment opportunity. Vodafone vs S&P500 YTD Returns as per SA Vodafone vs S&P500 YTD Returns (Seeking Alpha) Overview of the company Vodafone Group represents one of the leading telecommunications services providers in Europe, as well as one of the largest communications providers in the world, as measured by both customer base and generated revenues. The group offers its fixed-line and mobile communication services to more than 650 million customers in 21 countries across three continents. Being founded all the way back in 1984 in the United Kingdom, the company has since evolved to become a true Pan-European telecommunications giant. Vodafone ended last year with €45.58 billion in revenues while generating Adj. EBITDA of €15.20 billion, as well as €5.43 in Adj. Free Cash Flow. Wall Street Breakfast Wake up with Wall Street Breakfast Get your daily take on the financial markets with Seeking Alpha's flagship newsletter. The U.K.-based company provides a broad range of traditional services offered through mobile communications, including call, text, and data access, as well as fixed-line services, including broadband, television, and voice. Beyond its traditional portfolio offering, Vodafone also engages in products such as the Internet of Things, comprising managed IoT connectivity, automotive, and insurance services; cloud and security portfolio comprising public and private cloud services, as well as cloud-based applications and products for securing networks and devices; and international voice, IP transit, and messaging services to support business customers that include small home offices and large multi-national companies. Vodafone Group Holding Structure as per Vodafone Group Holding Structure Vodafone Group Holding Structure (Investor Relations Presentation) The telecom empire Vodafone has managed to build throughout the decades expanded way beyond only premium and high-end markets such as Germany and the United Kingdom, through distressed markets such as Turkey, to major growth markets such as Africa. Regional Footprint of Vodafone as per Investor Presentation FY '22 Regional Footprint (Investor Presentation FY '22) When analyzing telecommunication companies around the world, there usually comes a point where we would have to discuss the debt levels of the company, which are usually quite high, and that remains the case with Vodafone as well. The company struggled with leverage for a long time. As of the half-year results, the company was carrying a significant amount of debt totaling €53.78 billion in gross debt, and €45.52 billion in net debt. The net debt position increased by €3.94 million to €45.52 million when compared to the FY 2022 results. Using its definition of Adjusted EBITDAaL, Vodafone has a net leverage ratio of 3.53x and a gross leverage ratio of 2.99x. Financial Results as perH1 FY '23 as per Financial Results (H1 FY '23 Release) The company holds a borderline respectable credit rating. Currently, it received an investment-grade rating from all three major credit rating agencies. It carries a Baa2, BBB, and BBB credit rating from Standard & Poor's, Fitch, and Moody's, respectively. Credit Ratings as per Vodafone Investor Relations Credit Ratings (Vodafone Investor Relations) The main form of generating shareholder value for Vodafone was its lucrative dividend program. All things considered, Vodafone Group is operating a very lucrative dividend policy within the current market environment. Between the London-traded shares selling at around £0.99 and the ADR shares selling at around $11.69, the current dividend yield is roughly 7.97%. Dividend growth has definitely not been a strong point when it comes to Vodafone, as the company was forced to cut its dividends twice over the past decade in order to ensure the stability of its balance sheet. The currently committed dividend distribution is about half of what the distribution was almost a decade ago. Currently, the company is paying out €0.09 on a semi-annual basis, through its equal €0.045 interim and final dividends. That leads us to the question of dividend safety. The company should not in theory be struggling to keep up with its current dividend policy, which costs slightly more than €2.3 billion each year. As a reminder, Vodafone generated €5.43 in Adj. Free Cash Flow last year. Latest developments indicate it's likely that FCF is going to come under pressure, which led to some analysts even raising the question of a possible dividend cut, but that seems rather unlikely from our point of view. Dividend Distribution History as per Vodafone Dividend Distribution History (Author Spreadsheet - VOD Data) Management has reaffirmed its commitment to the €0.09/year dividend policy, but their stance on the issue sends a clear message dividend growth is likely out of the question for the short-mid term. Yes. So maybe just to frame how the Board would think about the dividend, we have a minimum commitment of EUR 0.09. That was part of our midterm ambition. We have been prioritizing deleveraging. We have gone past the peak of 5G spectrum and Liberty integration, so that will support free cash flow. We are doing a number of portfolio actions that will materialize synergy benefits, et cetera, if we complete everything that we want to complete. Clearly, in the near term, we have an energy hit, but we have to look through that. And when we look through it and, let's say, the exceptional inflation, and we have the balance sheet effectively to absorb that, if we look through it, management still remains on the ambition of the midterm growth. So we see the dividend intrinsically linked to that profile. Nicholas Read, CEO - Q2 2023 Earnings Call Even though the company has engaged in some significant buy-back programs in the past, the results were mostly aimed at offsetting the share dilution originating from convertible bonds. As a result, the somewhat depressing valuation wasn't capitalized on by management, whose almost sole focus is still placed on the efforts to deleverage the balance sheet. Diluted Shares Outstanding as per IQ capital data Shares Outstanding (TIKR Terminal - IQ Capital Data) When asked about it during the latest earnings call, management avoided providing a direct answer. Last year alone, the company dedicated €2 billion toward share buy-backs and more than €10 billion over the past decade, but the overall results in this aspect lacked. On capital allocation, as you mentioned, we have always indicated that our near-term priority would be deleveraging. And I think this is proving the right approach in the current macroeconomic conditions, so you should expect us initially to allocate the proceedings towards further strengthening our balance sheet. But we will form a full view on this once the transaction will have completed, and the final proceedings will be set. Margherita Della Valle, CFO - Q2 2023 Earnings Call Valuing the telecom While it does remain true that Vodafone is trading at relatively attractive multiples that do signal a possible value opportunity, the depressed multiples also serve to embody the level of investor disappointment Vodafone has garnered throughout the years. In this context, the sheer amount of equity erosion that has taken place is being actively priced into the company stock by investors. Over the past decade, Vodafone generated a negative 32.55% return. For the same time period, the average passive index investor managed to almost triple his principal, even after the stark market (SPY) decline this year. This obviously does not take into account the dividends that were distributed over the period, such as the £1.02 major dividend after the company sold its Verizon (VZ) stake, but does speak toward the sentiment surrounding the company. Vodafone and S&P500 10-year returns as per SA Vodafone and S&P500 10-year returns (Seeking Alpha) With that being said, we are not attempting to value Vodafone back in 2012, but the company that it represents today. As of today, British-based telecom does seem to be positioning itself well to be able to deliver above-market returns over the upcoming period. Currently, the market is valuing the company for an NTM EV/EBITDA of 6.44x, NTM P/E of 10.44x, and an NTM P/FCF of 6.44x, as it offers an attractive dividend yield of 7.97%. Vodafone and Industry Peers Vodafone and Industry Peers (TIKR Terminal - IQ Capital Data) Closing thoughts and arguments Strictly, fundamentally speaking, it is somewhat hard not to conclude that Vodafone represents an attractive investment opportunity from a value investor's perspective. We can certainly recognize value hidden behind depressed multiples that could unlock along the way, indicating a material upside potential, but in our view, catalysts for such an upside action are too far between. The main issue we encounter with Vodafone's current valuation is that the company is trading relatively in line with its US-based counterparts such as AT&T (T) and Verizon, which possibly remains somewhat unwarranted in our view. Ultimately, Vodafone does offer a higher dividend yield accompanied by some strong upside potential if one is willing to accept the inherent risks associated with the investment, but we remain unconvinced if the European telecom is a place in which, given the market conditions, one would be willing to take on such risks. The bottom line is that we fail to recognize why the average income investor would opt to invest in the British-based telecom instead of the already discounted American counterparts. However, for some international income investors, Vodafone could make a lot of sense given the right circumstances. The slightly higher yield combined with the more lenient approach to the question of dividend withholding taxes from His Majesty's Treasury would make for a compelling argument. Further to the point, we also fail to see a likely scenario where Vodafone's valuation gets further depressed and opens the floodgates to an even more accelerated erosion of equity, or a noticeable decrease in distributed dividends compared to its foreseeable cash generation potency, making the company far from the worst investment opportunity for international income-oriented investors. |
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