Share Name Share Symbol Market Type Share ISIN Share Description
Vodafone Group Plc LSE:VOD London Ordinary Share GB00BH4HKS39 ORD USD0.20 20/21
  Price Change % Change Share Price Shares Traded Last Trade
  -1.61 -1.8% 87.66 159,961,902 16:35:17
Bid Price Offer Price High Price Low Price Open Price
88.04 88.06 92.33 86.36 88.64
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mobile Telecommunications 38,392.86 3,330.53 6.06 14.1 23,523
Last Trade Time Trade Type Trade Size Trade Price Currency
17:15:41 O 48,592 90.765 GBX

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Posted at 07/12/2022 08:20 by Vodafone Daily Update
Vodafone Group Plc is listed in the Mobile Telecommunications sector of the London Stock Exchange with ticker VOD. The last closing price for Vodafone was 89.27p.
Vodafone Group Plc has a 4 week average price of 86.36p and a 12 week average price of 86.36p.
The 1 year high share price is 141.60p while the 1 year low share price is currently 86.36p.
There are currently 26,834,312,187 shares in issue and the average daily traded volume is 88,085,083 shares. The market capitalisation of Vodafone Group Plc is £23,522,958,063.12.
Posted at 06/12/2022 18:49 by vodman1
CEO Turmoil Leaves FTSE a Target for Opportunistic Predators
Sabah 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 “pressure̶1; and doesn’t actually admit to making any big mistakes himself: David Levenson/Bloomberg
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 “pressure̶1; and doesn’t actually admit to making any big mistakes himself: David Levenson/Bloomberg , Bloomberg

(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,R21; they said. “Most CEOs after being CEO to a public company look to go into private roles where there is more freedom to implement and deliberate strategy over a long period of time and where the frustrations are fewer.”

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 06/12/2022 17:27 by waldron
Vodafone readies its Open RAN ‘golden cluster’
Ray Le Maistre
By Ray Le Maistre

Dec 6, 2022
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Vodafone UK is deploying 16 Open RAN towers in south-west England
They will provide mobile services to the towns of Exmouth and Torquay
Samsung, Intel, Dell and Wind River once again are the main vendors
Initial rollout does include 5G but not massive MIMO… yet

Vodafone UK is to roll out Open RAN technology across 16 masts covering two mid-sized towns in south-west England over the next three months in a deployment the operator has long referred to as its “golden cluster,” as it comprises multiple interconnected Open RAN sites in urban areas. 

It’s the latest Open RAN development in the UK for Vodafone, which is one of the most vocal supporters of, and advocates for, disaggregated multivendor radio access networks in the industry. It has previously announced plans to deploy at least 2,500 Open RAN sites in rural areas across the UK by 2027 and earlier this year switched on its first 5G Open RAN site just outside the city of Bath – see Vodafone fires up its first commercial Open RAN site.

Even at that time, Yago Tenorio, Vodafone fellow and director of network architecture at the operator, was excited about the “cluster”; as it would be in “a more populated area... where we can stress the system with some capacity requirements but also where we can deploy more bands and systems, including massive MIMO... that’s the biggest next milestone.” 

But massive MIMO is clearly proving to be something of a challenge still when it comes to Open RAN deployments. 

The sites in Torquay and Exmouth will be delivering 4G and 5G services, but the 5G services are being offered using dynamic spectrum sharing (DSS) technology that enables 4G and 5G to be offered across the same spectrum, in this case the low and mid-band (2.6 GHz) frequencies used for LTE, providing 5G services in the area for the first time, according to a Vodafone spokesperson. 

Later in 2023, massive MIMO antennas, which can offer very high-bandwidth connectivity to 5G devices, will be added to the sites to offer 5G services across the operator’s licensed mid-band spectrum (3.5 GHz) “once the massive MIMO radio units have completed testing in the lab.”   

While Vodafone says the timetable for the golden cluster rollout hasn’t changed, it does seem to be just a few months behind the original schedule, and it seems clear that integrating new technologies from additional providers, particularly the massive MIMO antennas, is proving a bit more challenging than initially envisaged: Multivendor integration has certainly emerged as the most cited challenge facing operators testing, trialling and deploying Open RAN in recent months.

And it’s notable (and understandable) that Vodafone is deploying the same combination of vendors and technology in Exmouth and Torquay as it has done at the site near Bath: Samsung for virtual RAN software and radios; Intel for its processors, accelerator cards and FlexRAN software that are housed in Dell servers; and Wind River for cloud-native function management and orchestration platform.

And currently, as Tenorio noted in a recent conversation with TelecomTV about Vodafone’s Open RAN trials in Germany, where the same combination of vendors is being used, it’s easier to use the same combination of suppliers and partners so that a whole new integration process doesn’t need to be initiated – see Samsung lands more Open RAN business with Vodafone.

Adding massive MIMO to the mix, though, does involve adding a new vendor into the mix too as when the lab testing is complete, “a number of sites will be brought live with massive MIMO units from NEC,” according to the spokesperson. 

The operator remains bullish about Open RAN’s potential to broaden its technology options and deliver efficiencies. “The potential of Open RAN is huge and clear to see,” stated Andrea Dona, chief network officer at Vodafone UK. “But to realise this potential, we need to deploy the technology out in the live network and take it from rural to urban locations. This is what we have now done – taking lab innovations into the real world.”

Once the “golden cluster” deployment is fully up and running, Vodafone plans to deploy Open RAN sites in “more complex urban environments” and to push ahead with the rural rollout that, the operator stresses, will encompass “a minimum” of 2,500 sites. 

But there is clearly a degree of caution in Vodafone UK’s plans, as the spokesperson adds that “as the ecosystem matures” the operator will consider “increasing the volume” of urban Open RAN deployments “should it make sense.”

Deployments such as the “golden cluster” will help it decide just how useful Open RAN architectures can be as part of the operator’s mobile networking strategy.

In the meantime, across all its territories, Vodafone Group is sticking with its plan to deploy Open RAN at 30% of all of its sites across Europe by 2030, and continues to push the telecom sector to embrace Open RAN more broadly and develop new deployment models that enable best-of-breed deployments that don’t rely on the R&D cadence and strategies of a handful of major suppliers – for related articles, see: 

Qualcomm and Vodafone partnering to develop and test next-generation 5G Open RAN infrastructure

Vodafone and Samsung cooperate with Marvell to accelerate Open RAN performance and adoption

Why Vodafone and NTT Docomo are connecting their Open RAN labs

Vodafone and NTT DOCOMO sign MoU to cooperate to drive greater system integration and service efficiency in Open RAN

- Ray Le Maistre, Editorial Director, TelecomTV

Posted at 22/11/2022 13:21 by spud
Vodafone Is an MBA Case Study of Messed-Up M&A

Here are key takeaways if you treat miscalculations as object lessons on what to avoid in the future.

ByChris Hughes

22 November 2022, 05:00 GMT

There’s hidden value in Vodafone Group Plc, the sprawling telecoms company whose market capitalization has shed more than $50 billion in nearly five years. It offers business students a lesson in the good, the bad and ugly of mergers and acquisitions. The only thing missing is the ultimate deal: a break-up bid.

Things aren’t going well. The shares recently slid beneath the psychological 100 pence level. The competition has been whipping Vodafone in Germany, its main market. Management is struggling to convince investors that high debt from dealmaking will come under control. Activist Cevian Capital AB gave up on the stock earlier this year, but telecoms billionaire Xavier Niel has taken its place as a potential agitator.

Rewind to 2013 and it’s hard to believe Vodafone could have got into such a pickle. Then-Chief Executive Officer Vittorio Colao agreed to an exit from its joint venture with Verizon Communications Inc. for $130 billion. Most of the payment received — mainly a mix of cash and Verizon shares — was funneled to shareholders. That was a great deal, making a hiatus in years of empire building. Sadly, the sequels in this M&A saga have been a letdown.

Vodafone added cable infrastructure to its portfolio pursuing a so-called convergence strategy to sell phone, internet and pay-television services. Having offered $11 billion to take control of Kabel Deutschland Holding AG in Germany, it then gobbled up Spain’s Grupo Corporativo ONO SA for $10 billion. The Spanish market later became viciously competitive.

In 2018 came the $22 billion acquisition of assets from rival Liberty Global Plc. This filled gaps in Vodafone’s German coverage. Less than a week after the announcement, Nick Read, then chief financial officer, was announced as Colao’s successor and given the mammoth integration job. True, Colao had been boss nearly 10 years, but the succession was hardly ideal. Vodafone shares have badly trailed European peers ever since.

The Line's Dropped
Vodafone has lagged since announcing a $22 billion acquisition in 2018

To be fair, the idea of becoming a bundled telecoms provider made sense, and it would have taken years to build this from scratch instead of doing acquisitions. The snag is that Vodafone has not run the assets well. Having initially reaped synergies, poor customer service has seen it lose German market share. If you do expensive M&A, you have to be a flawless manager of what you buy.

Vodafone also took on a lot of debt. It’s a fine judgement, but it would have been wiser to retain more of the roughly $80 billion returned to shareholders after the Verizon deal and keep more headroom.

Then there are the deals Vodafone didn’t do, or took its time over. Its assets span Europe and emerging markets. Yet what matters most in telecoms is scale within not across borders, while a multinational footprint adds complexity for investors. Vodafone could have done more to focus on select markets in Europe while finding better owners for everything else. That would have accelerated debt reduction and made the company a more manageable beast.

Earlier this year Vodafone passed on a deal with Masmovil Ibercom SA, letting Orange SA steal a march on Spanish consolidation. And while this month’s agreement on a partial sale of its mobile towers will cut leverage, it’s a governance fudge with a consortium of private equity and Saudi Arabian money. It would have been better to do a straight disposal years ago.

relates to Vodafone Is an MBA Case Study of Messed-Up M&A
This is what Vodafone calls its “simplified” holding structure for investors.
There is no rabbit that CEO Read can now pull from the hat. Regulators are likely to be more wary of permitting consolidation within Vodafone’s markets when consumers are stretched. A mooted combination with Three UK, owned by CK Hutchison Holdings Ltd., has yet to materialize.

Read’s best bet is to run the operations better, cut costs and grasp any M&A opportunities that fortune presents hereon. He could also be clearer that shareholders will benefit as debt comes down. Analysts at New Street Research see potential for a 4.9 billion-euro ($5.1 billion) cash return if things go well.

A smaller company with this record would be a takeover target itself. Vodafone’s enterprise value, exceeding $90 billion, offers protection from that threat. The fantasy deal would be a well organized consortium of buyers looking to carve up the firm between them. If that loomed, defending the status quo would be a huge challenge.

It’s up to Chairman Jean-François van Boxmeer to decide whether Read is successfully leading Vodafone out of the mire. But any CEO here would have the same limited options for turning this monster around.


Posted at 21/11/2022 18:43 by vodman1
Vodafone: Empire Building Gone Wrong
Nov. 20, 2022 9:19 PM ETVodafone Group Public Limited Company (VOD), VODPF4 Comments

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.


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.
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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.

Posted at 19/11/2022 00:08 by stoopid
From Stockopedia

Many investors don’t like the EBITDA figure because it hides what is actually going on at a company. Vodafone (LON: VOD) uses ‘adjusted EDITDAal’ as its headline metric - a figure which includes depreciation on leased assets, but excludes that on owned assets and joint ventures. It is very hard to unpick. But no amount of accounting wizardry can hide the problems at Vodafone. The business is haemorrhaging cash, leaving the dividend (currently yielding just over 8%) on shaky ground.

In the six months to September, Vodafone spent €2.2bn on mobile network licenses leading to a free cash outflow of €3.2bn. True, big mobile spectrum auctions don’t happen every quarter, but to compete Vodafone is having to cough up cash it doesn’t have. Operating cash inflows were €6.3bn in the period, a 2.7% decline on the previous year owing to an unexpected increase in receivables. Being a big beast doesn’t protect Vodafone from the symptoms of recession - customers are taking longer to pay their bills, making it harder for the company to manage its working capital.

With €7bn of cash and €75bn of debt, Vodafone’s net gearing has now exceeded 100% - the figure most analysts deem a cause for concern. Net borrowing is now 4.5x the company’s forecast forecast for ‘EBITDAal̵7; in FY2023 (or 12x actual operating profits reported last year). And that borrowing doesn’t come cheap. Finance costs were €1.4bn in the period and management expects this to rise as interest payments on its borrowings increase.

Meanwhile, new legislation in Germany (Vodafone’s biggest market by revenue and profits) has made it easier for customers to switch, leading to a net loss of 83,000 customers. It’s the same problem which has pervaded the UK business for years - higher rates of switching undercut margins massively, leading to lower profits.

But chief executive Nick Read isn’t sitting on his hands and waiting for the damage to be done. He has plans to shake up the business, starting with the sale of its stake in the mobile towers business, Vantage, worth €14.8bn. That sale will free up some capital for the company to pursue acquisitions, giving it a stronger foothold in the European mobile networks business. It’s a good plan, but an expensive one and right now, Vodafone just doesn’t look like it has the cash.

Posted at 17/11/2022 11:31 by spud

Vodafone is still not moving the dial for its unhappy investors

However much the telecoms company talks itself up it isn’t doing enough to rescue the share price

Nick Read, Vodafone’s chief executive, was paid £4.2m last year despite a share price near to a 20-year low.

Tue 15 Nov 2022 19.13 GMT
Nick Read, chief executive of Vodafone, was pushing his luck in describing the group’s first-half performance as “resilient”, a word nobody would apply to the share price on his watch. He inherited 150p when he was promoted from finance director in 2018 and the poor old shareholders are now looking at 96p, down a thumping 8% on Tuesday.

Since 100p is virtually the lowest the shares had been in the past 20 years, a sense of brewing crisis is unmistakable. Once upon a time – albeit well before Read’s time in charge – Vodafone was the UK’s largest quoted company. Now it is 19th in the FTSE 100 pecking order.

The usual plea in mitigation is that the telecoms market is horrible for every operator everywhere. And, in the round, that’s true. Price increases in a “more for less” industry are always hard to achieve, thus shocks on the revenue or cost line are felt immediately. Covid and accompanying lockdowns whacked roaming charges. Now higher energy costs have added €300m (£262m) to Vodafone’s bill this year, so Tuesday’s downwards nudge in full-year forecasts was hardly a bolt from the blue.

But investors’ frustration with Vodafone runs deeper. The company seems perpetually to fail to meet its potential, while simultaneously claiming a breakthrough lies just around the next corner. Read’s contribution to the overpromising agenda was a bullish presentation a year ago that declared that Vodafone was “structured for value creation” and that “portfolio actions” – dealmaking, in other words – would “improve returns at pace”.

One can’t quite say nothing has happened since then. The Hungarian operation has been sold, a bolt-on acquisition has been made in Portugal and last week Vodafone unveiled a sell-down of its majority stake in Vantage Towers, its German-listed mast business, that may yield the thick end of €6bn. It’s just that none of those actions has been enough to shift the dial at a group carrying net debt of a remarkable €45bn.

The Vantage transaction, which will create a joint venture with private equity, is immensely complicated and the glaring omissions from the deal-doing have been transactions in Spain and Italy, seen as the priorities given their sub-par competitive positions. In Spain, Vodafone was outflanked in the last round of market consolidation; in Italy, it looked at a deal and rejected it. Hopes are now pinned on the UK, where combination talks are happening with Three; UK competition regulators, though, represent a hard-to-read obstacle.

Meanwhile, the one thing investors thought they knew about Vodafone was that its German operation, 30% of the group’s revenues and home of an €18bn cable acquisition in 2018, could be relied upon in all weathers. The company, after all, enjoys the biggest market share in Europe’s biggest telecoms market.

The half-year numbers, though, showed German profits down 7% with “operational challenges” taking the blame. It seems that Vodafone didn’t have IT systems in place to adapt quickly to new consumer legislation. Local management has been changed, and a rebound promised, but the episode will fuel the other big criticism of Vodafone: that it is a telecoms conglomerate that moves slowly.

Read is now offering a fresh €1bn-plus group-wide target for cost savings but, as the share price indicates, it’s needed. Round numbers shouldn’t matter, but they are noticed. Aside from soggy market conditions, sub-100p feels like a case of shareholders hanging up on Vodafone’s pledges to reinvent itself as a slimmer company with a smaller debt pile. Read was paid £4.2m last year and £3.5m the one before. When you’re paid the big bucks, you have to deliver. He is running very short on time.


Posted at 09/11/2022 18:39 by waldron
Jeremy Cutler

14:24 Wed 09 Nov 2022

Vodafone to net minimum €3.2bn from sale of stake in Vantage Towers

A consortium led by KKR and GIP will buy up to half of Vodafone's 81.7% stake in Vantage and the joint venture will offer to buy out the minority shareholders at a price of €32 per share.

Vodafone PLC has sold a major stake in its wireless infrastructure company Vantage Towers to private equity firms KKR and Global Infrastructure Partners (GIP) that will net the UK telco a minimum of €3.2bn.

A consortium led by KKR and GIP will buy up to half of Vodafone's 81.7% stake in Vantage, with the three-way joint venture offering to buy out the minority shareholders at a price of €32 per share.

Vodafone boss Nick Read said the €16bn deal achieved his objectives of retaining co-control of the infrastructure needed to roll out the 5G network, while extracting value and removing it from Vodafone's balance sheet.

Placing the stake in a joint venture with long-term investors KKR and GIP would enable it to achieve the higher debt multiples typical for infrastructure investments, he said.

Depending on how many minority investors agree to sell their shares, and how much of Vodafone's stake GIP and KKR agree to buy, the FTSE 100 listed group will receive cash proceeds of up to €7.1bn, Read said, which will be used to reduce net debt, which stood at €41.6bn at the end of March.

Shares in Vantage jumped 11% to €32.7 while Vodafone fell 1.4% to 105p.

Vodafone spun off its towers infrastructure into a separately listed company last year.


Posted at 19/10/2022 07:55 by diku
All the joint ventures and down goes VOD share price...miss the plot...
Posted at 19/10/2022 05:59 by ariane
Vodafone Turkey, Cisco and Qwilt to bring the Future of Content Delivery to 25 million subscribers nationwide

19 October, 2022 at 6:03 AM

Posted by: Janmesh Chintankar

Vodafone Turkey, Cisco and Qwilt to bring the Future of Content Delivery to 25 million subscribers nationwide

Redwood City, United States – Vodafone Turkey signed a commercial agreement with Cisco and Qwilt to substantially enhance the quality and delivery capacity of its live streaming, video-on-demand, and media applications to approximately 25 million subscribers in Turkey.

Vodafone Turkey is the digital service provider in Turkey with a presence in 81 provinces. This relationship is the latest example of Cisco and Qwilt’s drive towards a federated content delivery network for the mutual benefit of content publishers and communication service providers, globally.

Qwilt’s Open Edge Cloud for Content Delivery solution features Qwilt Edge Nodes software, Qwilt Cloud services, and Qwilt Open APIs. It enhances Vodafone Turkey’s services with quality content delivery by pushing content caching and delivery to the very edge of its network, delivering content closer to its subscribers than any commercial or private CDN. This architecture minimises the cost of building network capacity and substantially improves delivery quality to ensure service providers scale for less and serve media and applications at better quality than previously possible. This new streaming model is compliant with Open Caching guidelines from the streaming video technology alliance and includes Cisco’s edge compute and networking infrastructure to deliver the solution-as-a-service to service providers worldwide.

Levent Gemici, chief Strategy, wholesale & customer operations officer, Vodafone Turkey, says: “Quality of experience is our top priority, and we are proud of the high level of service we provide our customers. As the demand for our live streaming, VoD, and application services grows, we want to continuously collaborate with Content Publishers serving Turkey to build the necessary infrastructure to deliver top-quality experiences. Partnering with Cisco and Qwilt provides us with a new way to enable content delivery from within service provider networks. It gives us access to a more scalable content delivery infrastructure while ensuring our customers receive the best streaming quality.”

By joining Cisco and Qwilt’s global alliance of service providers and employing Qwilt’s Open Edge Cloud for Content Delivery solution, Vodafone Turkey establishes a highly distributed layer of content caching resources that delivers media and applications from the closest possible source to subscribers. The partnership allows Vodafone Turkey to rapidly scale while accommodating exciting digital services and experiences, including media and website delivery.

Alon Maor, CEO, Qwilt, says: “As one of Turkey’s leading service providers, Vodafone Turkey is a fantastic addition to our global partnership and enables us to power a unique content delivery service offering across the region. Through our edge caching model, Vodafone Turkey can further improve its central role in the end-to-end media value chain while embracing new monetisation opportunities for content delivery. We’re delighted to see such rapid momentum among our global partners as we continue to build the world’s highest-performing edge delivery network.”

Comment on this article below or via Twitter: @VanillaPlus OR @jcvplus”

Posted at 17/10/2022 17:28 by vodman1
Europe’s largest activist investor Cevian Capital has slashed its stake in Vodafone as scepticism grows that the UK-based telecoms group will be able to reverse its sluggish performance amid a challenging economic backdrop.

Cevian built a significant but undisclosed position in the FTSE 100 group last year through shares and derivatives, becoming one of the 10 largest shareholders according to people familiar with the matter. It was pushing for management to simplify the group’s sprawling international portfolio and sell poorly performing divisions.

However the activist investor sold the vast majority of its stake by the end of June, the people said, due to changes in the economic environment including indications that interest rates would rise, reducing the chances Vodafone would be able to secure favourable deals.

Vodafone has shed nearly 25 per cent of its value since then.

The group is looking at a series of deals across Europe but other investors have expressed impatience over the pace of change and prospects of its flagging share price being revived.

“Would management change be taken well? I think it would,” said one top 15 investor adding that chief executive Nick Read, who joined Vodafone in 2001 and took the top job in 2018, has “been there for a long time . . . and he has not transformed the business”.

Peter Schoenfeld, another shareholder and founder of New York-based hedge fund PSAM, said investors are “frustrated and fed up with Vodafone’s poor stock performance” and that “it’s very much a show me kind of situation now”.

“Read has committed to a strategy that he has so far failed to fulfil,” he added.

Short positions in the company — used by investors to bet that the share price will go down — peaked in May, with 10 per cent of the stock out on loan, according to S&P Global Market Intelligence. This has since dropped below 2 per cent.

But others are still betting the stock will rise. French telecoms billionaire Xavier Niel has built a 2.5 per cent stake in the group and is angling for a shake up.

Recent activity suggests Read is making good on his ambition to pursue deals. In August, Vodafone agreed to sell its Hungarian business for $1.8bn and earlier this month confirmed it was in advanced talks with CK Hutchison, owner of Three, to combine their UK businesses and create the biggest mobile operator in Britain. It also announced a deal to buy MasMovil’s telecoms assets in Portugal, and hired bankers to help look at selling its broadband business in Spain.

However Vodafone’s share price has fallen around 10 per cent over the past month, and 50 per cent over the past five years, to 100p.

Several investors have misgivings about whether the UK joint venture being proposed — with Vodafone as 51 per cent shareholder — would be given the green light by regulators, and if it is liable to create an even more convoluted business.

“We started off the year thinking regulators are more open to [deals], but that’s yet to be seen,” said the top 15 investor.

Some investors and analysts also expressed concern about the level of net debt on the UK group’s balance sheet — at £42bn — given rising interest rates.

“Vodafone tells us it’s all hedged and termed out but . . . hedges don’t always work as we think they will,” said the top 15 investor, who has also reduced their holding in recent months. “They’re trying to do some of the right things with consolidation but with that amount of debt . . . they can’t afford an [earnings] squeeze.”

Another source of frustration is a long-awaited decision over Vodafone’s 80 per cent stake in its Vantage Towers masts business, which would help reduce debt.

Read explored a merger with either Deutsche Telekom or Orange but is now reverting to the idea of selling a stake to private equity. The delay has angered some.

“It’s a statement of fact that they would have got a much better price for these assets a year or 18 months ago,” said the top 15 investor.

Vodafone said in a statement that “the macroeconomic backdrop is challenging for everyone. We continue to progress opportunities with Vantage Towers, strengthen our market positions in Europe, and prioritise the deleveraging of our balance sheet.” It declined to comment on Cevian reducing its stake.

Vodafone share price data is direct from the London Stock Exchange
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