Vodafone Group PLC (LSE:VOD) announced a new €2 billiion share buyback as it posted results for the past year, saying the turnaround of its business in Germany is bearing fruit and a return to growth is expected this year.
The FTSE 100-listed telecoms group reported a 2.0% increase in total revenue to €37.4 billion, as service revenue rose by 2.8% to €30.8 billion, or 5.0% on an organic basis. This was better than the 4.2% average analyst forecast.
Germany's service revenue declined 5.0% over the year, impacted by a regulatory change, or 2.0% if excluding this factor amid competitive pressures in the mobile sector.
UK organic service revenue growth was up 1.9%, supported by improvements in customer experience. The merger with Three UK is expected to complete in the first half of this year.
Türkiye posted the highest growth, with organic service revenue soaring by 83.4%, while Africa delivered organic growth of 11.3%. The Business segment saw organic service revenue growth of 4.0%.
Underlying profits (EBITDAaL) grew 2.5% to €10.9 billion, marginally short of forecasts and guidance for a straight €11 billion. On a reported basis, an operating loss of €0.4 billion was recorded, primarily due to €4.5 billion in impairment charges for Germany and Romania.
The new buyback, of which the first €500 million tranche begins today, is to be accompanied by a dividend of 4.5 eurocents per share, down from 9.0 eurocents in the previous year.
Chief executive Margherita Della Valle said: "Since I set out my plans to transform Vodafone two years ago, Vodafone has changed."
With the disposals of businesses in Spain and Italy, along with the Vantage towers spin-off, she said the reshaped business is "seeing the positive impact of our drive for customer satisfaction in all our markets".
In the coming year, Voda is expected to see "broad-based momentum across Europe and Africa, and for Germany to return to top-line growth".
Guidance for the 12 months was given for adjusted EBITDAaL of €11.0-11.3 billion and adjusted free cash flow of €2.6-2.8 billion.