Vodafone beats estimates. In the third quarter, the group reported revenues totals of 11,37 billion euros, of which 9,38 billion came from services (+4,7%), underlining a solid performance. A quarter which exceeded Bloomberg estimates excluding exchange rate effects, merger activities and adjustments linked to hyperinflation in Turkey, and confirmed the guidance for the 2024.
However, the title of the British giant initially opened lower, reaching almost -2%, and then stabilized at around -0,99% at 67,93 euros per share around 11 am.
Vodafone: not growing in Italy, slowing down in Germany
The Italy, Together with Spain (-1,1%), is the market in which Vodafone is not recording growth. Instead the market of UK remained solid with organic service revenue growth of 5,2%, nearly the same as the prior year's 5,3% and higher than the expected 4,69%. However, in its third quarter the group also has to deal with a slowdown of growth in Germany, its main market, with revenues from services improving by 0,3% unlike the +1,1% in the previous quarter which had represented the return to growth.
Vodafone Italia: declining revenues, many good things for Vodafone Business
In Italy, Vodafone highlighted a decline in revenues from services by 1,3% in the third quarter, compared to -1% in the previous quarter, but an improvement from the 3,3% decline recorded year-over-year and the 1,46% expected. Robust demand for fixed connectivity and digital services for businesses partially offset this decline. In particular, Vodafone Business recorded an increase in revenues from services of 7,5%, while mobile revenues fell to 714 million (-4,8%) and fixed revenues rose to 343 million (+6,9%).
Attention is also paid to the possible consolidation in the Italian market, with the company exploring merger options after the two no's to Iliad and the rumors about Fastweb. However, there is no certainty regarding any future transactions, as confirmed by CEO Margherita Della Valle: "Our transactions announced in the United Kingdom and Spain are progressing well and we are in active negotiations in Italy", who immediately afterwards specifies: “There can be no certainty that a transaction will ultimately be agreed.”
Guidance confirmed
Regarding future prospects, the company confirms an estimate of adjusted ebitda of €13,3 billion for the full fiscal year, higher than the consensus forecast of €13,12 billion. The expected adjusted free cash flow is approximately 3,3 billion euros.
