The Vodafone boss has announced his retirement at the end of the year.
(Photo: NurPhoto/Getty Images)
London The British telecom group Vodafone is getting a new boss. Nick Read is stepping down at the end of December after more than four years at the helm of the company. This was announced by Vodafone on Monday morning in London. Until a successor is found, CFO Margherita Della Valle will also take over the management of the group.
“I have agreed with the Board that now is the time to hand over the reins to a new leader who can build on Vodafone’s strengths and capitalize on the significant opportunities that lie ahead,” Read said of the leadership transition. He will remain available to the Executive Board as an advisor until the end of March. The 58-year-old has worked for Vodafone for more than 20 years.
The CEO had led the group through the economically difficult years of the pandemic, but had not managed to steer the company back on a successful course. However, since taking office in 2018, Vodafone has lost more than 40 percent of its market value on the stock exchange. Vodafone recently surprised with a profit warning and announced savings of more than one billion euros by 2026.
According to the management, the main reason for the economic problems is the weak business development in Germany. The German market contributes about 30 percent to the group’s revenues. The net profit (Ebitda) from the German business fell by more than seven percent to almost 2.7 billion euros in the first half of the year. The reasons for this were a decline in broadband customers and higher marketing costs.
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In addition, there were cost increases due to the current energy crisis and higher interest charges for a mountain of debt that, at around 45 billion euros, is higher than the current market value of almost 29 billion euros. Large shareholders such as the financial investor Cevian had put Read under massive pressure because of the unrecognizable trend reversal. According to media reports, Cevian had therefore significantly reduced its stake in Vodafone.
The chief financial officer is to lead Vodafone on an interim basis.
(Photo: Vodafone)
Read had tried, largely unsuccessfully, to improve Vodafone’s competitive position in Spain, Portugal, Italy and the UK through mergers or acquisitions. In the United Kingdom, the group is in talks with competitor CK Hutchison, which is represented on the British market with the “Three” brand.
A merger of the two mobile divisions would result in the largest provider in Great Britain. In addition, Vodafone recently sold a large stake in its Frankfurt-listed radio tower subsidiary Vantage Towers to a private equity group.
“Vodafone is facing persistent headwinds as its German business is underperforming, the cost of living crisis is hampering a market recovery and the most viable transaction has already been announced,” said Jefferies analyst Jerry Dellis. In addition, the level of debt is “uncomfortably high” even after the Vantage deal.
It is still unclear who will follow Read in the long term. Vodafone has never appointed an external CEO, stressed Carl Murdock-Smith, an analyst at Berenberg Bank in London.
He brought in the boss of the scientific publisher Informa, Stephen Carter. He is already on the Vodafone board of directors and was previously the head of the British telecoms regulator Ofcom. Nick Jeffery, who ran Vodafone’s UK business before leaving last year, is also a possibility.
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