By James Davey
LONDON (Reuters) -Vodafone said it is close to returning to growth in Germany, its biggest market, as the mobile operator reported a tick up in first-quarter group organic service revenue growth.
Vodafone has struggled in Germany since it was tripped up by a change in the rules on selling cable television to apartments.
Its performance there is, however, on an improving trajectory. While first-quarter organic service revenue growth in Germany fell 3.2%, this was an improvement on the previous quarter’s 6.0% decline.
“We are close to returning to growth (in Germany), it will happen in the next few quarters,” Chief Executive Margherita Della Valle told reporters on Thursday.
“We can’t give you the precise month, but it’s coming,” she said.
The group as a whole reported a 5.5% rise in group organic service revenue in the first quarter, a slight increase on the previous quarter that reflected positive outcomes in Britain, the rest of Europe, Turkey and Africa.
Vodafone also reiterated its full-year guidance of growth in profit and cash flow.
Della Valle has reshaped the British group in the last two years, by selling operations in Spain and Italy and merging its British operations with those of CK Hutchison to create “VodafoneThree”.
Analysts have applauded Della Valle’s actions, which have reduced debt and sharpened Vodafone’s operational performance.
Vodafone shares were up 2%, extending 2025 gains to 24%.
“After two years of transformation and change, Vodafone is now well positioned for multi-year growth across both Europe and Africa,” Della Valle said.
VodafoneThree started operating on June 1 and is now fully consolidated in the group’s results.
Vodafone’s full-year guidance includes the impact of the merger.
It said it expected to report core earnings of between 11.3 billion and 11.6 billion euros ($13.3 billion and $13.6 billion) and adjusted free cashflow of 2.4 billion to 2.6 billion euros.
First-quarter core earnings rose 4.9% on an organic basis to 2.7 billion euros.
($1=0.8506 euros)
(Reporting by James Davey; Editing by David Holmes and Clarence Fernandez)
