沃达丰——在困境中前行

RatingUnderperformPrice TargetVOD.LNAdjusted EPSF23AVOD.LN (EUR)0.07Source: Bloomberg, Bernstein estimates and analysis.The magnitude of the deterioration in German EBITDA deserves scrutiny.This morningVOD reported 4Q/2H results and announced guidance for FY25-26. 4Q results came inline with the company-compiled consensus (but they were relatively light when comparedto VA consensus, for full details please see Exhibit 1-3). The main highlight from 2H resultswas the significant fall in German EBITDA (-15.9% yoy, which compares to the -9.3%recorded as of 1H). A deterioration (albeit not the magnitude) was likely to be expectedfollowing the management’s warning during last quarterly results, as they cautioned onthe 1) slow ramp-up in the migration of 1&1 customers (as the migration was proving“technically challenging”); 2) the ongoing pressure in the corporate segment; 3) the increasedcompetition in the mobile segment. As Germany represented c.44.5% of group EBITDA, the€396m fall in Germany contributed to a c. 7% fall in group EBITDA, which was partly negatedby €192m yoy growth in Turkey, €81m growth in the African segment and €83m growth inthe UK. As a result, group EBITDA was down yoy by 1.3%. We note that management removethe forex impact from their adjusted EBITDA definition. During 2H, the removal of the foreximpact flatters yoy growth by c.260bps, leading to yoy “organic” growth of +1.3%.Why forex removal distorts VOD’s “organic” growth.For companies exposed tocountries with high levels of inflation (the case of Egypt and Turkey for VOD ), the foreximpact is consistently negative because exchange rates adjust to reflect the large inflationdifferential. Accordingly, removing forex from the ‘organic’ definition flatters growth, as itretains the positive impact fuelled by high levels of inflation, but excludes the adjusting factorprovided by forex. The 20% YTD fall recorded by the Turkey Lira vs the EUR (in addition to thec. 7% fall in the Egyptian Pound and 4.4% fall in the South African Rand) is a reminder of whyVOD’s definition of “organic” growth is flawed.Guidance in line with a (weakening) consensus.Mid-point of management guidancefor EBITDAaL of c.€11.15m compares to VA consensus of €11.2bn. However, we notethat following the warning on trends for German EBITDA (announced with 3Q results), VAconsensus for FY26 EBITDAaL fell by c.2%. On a positive note, mid-point of guidance for Adj.FCF of €2.7bn (pre-Hutch UK consolidation) compares favorably to VA consensus of €2.6bn.However, we also note that management guided for c.€200m negative pro-forma impactfrom the first-time consolidation of Hutch UK, as they guided for Hutch UK’s EBITDAaL ofonly €400m (vs c. €650m reported by Hutch last year). We expect management to providesome colour (during the post-results call) on the lower contribution from Hutch UK, whencompared to the figures originally disclosed when the merger was first announced.See the Disclosure Appendix of this report for required disclosures, analyst certifications and otherimportant information. Alternatively, visit our Global Research Disclosure Website.First Published: 20 May 2025 08:34 UTC Completion Date: 20 May 2025 08:34 UTC 65.00 GBpF25E0.09FinancialsReported EPS CAGR--Close DateEDMFYEDiv YieldEV (GBp) (M)PerformanceAbsolute (%)EDM (%)Relative (%)85p80p75p70p65p05/24 F24E0.08F23AF24EF25E0.070.080.09 INVESTMENT IMPLICATIONSWe reiterate our PT of GBp 65 and Underperform recommendation.BERNSTEIN TICKER TABLETickerRatingVOD.LNUGBpEDMO - Outperform, M - Market-Perform, U - Underperform, NR - Not Rated, CS - Coverage SuspendedSource: Bloomberg, Bernstein estimates and analysis.EUROPEAN TELECOM SERVICES 19 May2025TTMClosingPriceRel.PriceTargetPerf.72.4665.00(13.4)%1,416.22 I. REQUIRED DISCLOSURESReferences to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,C. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited andSanford C. Bernstein Japan KKOn April 1, 2024, Société Générale (SG) and AllianceBernstein, L.P. (AB) completed a transaction that created a new joint venturein which their respective cash equities and research businesses operate in a new business combination. Although their respectiveownership percentages in the joint venture differ between North America and the rest of the world, the creation, production andpublication of research is handled collaboratively on a global basis across the two research brands, “Bernstein” and “Autonomous”.Unless specifically noted otherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG andAB and their respective affiliates.VALUATION METHODOLOGYVodafone Group PLCOur 65p TP i