Vodafone Shares Fall as Germany Weakness Offsets Sales Beat

Vodafone Group PLC (LON: VOD) shares fell on Thursday despite reporting a sales beat for the first quarter of its fiscal year 2025. The company's share price dropped by 4.1% in London trading, as investors focused on the weakness in its German market rather than the strong performance in other regions. Vodafone's revenue for the quarter rose by 1.7% to €18.28 billion, while adjusted earnings before interest, tax, depreciation, amortisation, and adjusted loss (EBITaL) remained similar to the year before at €5.4 billion.



The company's performance in Germany, its largest market, continues to be a concern. Total revenue in Germany decreased by 4.4% to €6.1 billion, primarily due to lower service and equipment revenue. The decline in service revenue was driven by the impact of the Multi Dwelling Units (MDU) TV transition, broadband price increases in the prior year, and lower broadband customer base. Vodafone's share price fell in line with the broader market, which was down by 1.2% on Thursday.



Vodafone's CEO, Margherita Della Valle, stated that the company's first-half earnings were driven by strong growth in Europe and Africa, as well as a significant improvement in Turkey. However, the company's performance in Germany was impacted by the TV law change and the lapping of broadband price increases in the prior year. Vodafone's share price has fallen by around 10% since the beginning of the year, as investors have been concerned about the company's performance in its home market.



The company's share price has also been affected by the broader market conditions, as the telecom sector has been under pressure due to regulatory changes and increased competition. Vodafone's share price is down by around 20% compared to its peak in 2018, as the company has struggled to maintain its market share in the face of intense competition from rivals such as Deutsche Telekom and Orange.

Vodafone's share price may continue to be volatile in the near term, as investors focus on the company's performance in Germany and the broader market conditions. However, the company's strong performance in other regions, particularly Africa and Turkey, suggests that there may be opportunities for the company to improve its valuation. Vodafone's management has stated that it is confident that the actions it is taking will deliver growth for the company this year and a further acceleration into FY26.



In conclusion, Vodafone's shares fell despite reporting a sales beat for the first quarter of its fiscal year 2025, as investors focused on the weakness in its German market. The company's performance in Germany continues to be a concern, as total revenue in the country decreased by 4.4% to €6.1 billion. Vodafone's share price has fallen by around 10% since the beginning of the year, as investors have been concerned about the company's performance in its home market. However, the company's strong performance in other regions, particularly Africa and Turkey, suggests that there may be opportunities for the company to improve its valuation.