Vodafone Group Plc (NASDAQ: VOD) announced yesterday that Nick Read has agreed with the Board to step down as Group Chief Executive and as a Director of Vodafone on December 31, 2022. He will stay on as an adviser to the Board until March 31, 2023. Margherita Della Valle, currently Vodafone’s Group Chief Financial Officer, has been appointed interim Group Chief Executive. The company says that her mandate is to accelerate the execution of its strategy to improve operational performance and deliver shareholder value. Even in her new role as interim Group Chief Executive, Della Valle will continue as Group CFO. The Board has begun a search for a new Group CEO.
Read has come under growing pressure from investors to show better results, according to TelecomTV. Vodafone has been working to revamp its assets for several years. The company identified markets in which it currently operates, such as Italy, Portugal, Spain, and the U.K., as candidates to either exit altogether or grow through M&A deals. At the same time, Vodafone was raising capital by carving out and selling assets such its towers with the formation of Vantage Towers, Inside Towers reported.
But the M&A plans have faltered, leading some investors to press for quicker results. In Spain, Vodafone lost out to Orange, which struck a merger deal with MásMóvil. In Italy, Vodafone walked away from a takeover offer from Iliad and Apax Partners.
In the U.K., Vodafone and the country’s fourth mobile network operator, ThreeUK, reached an agreement to merge in October, but that deal will take time to clear regulatory hurdles. In Portugal, Vodafone is acquiring Nowo, a cable operator and MVNO, to bolster its market presence there. In August, it announced a deal to sell its operations in Hungary.
All this effort apparently has not been enough to satisfy investors. In its fiscal 2023 half-year results ending September 30, Vodafone reported that its Group service revenues from operations in Europe and Africa grew 2.5 percent on a year-over-year basis, but profits declined 2.7 percent in the same period. The company subsequently announced a substantial cost-cutting measure that Inside Towers reported.
Vodafone’s market capitalization has declined by $35 billion, more than half of what it was at the beginning of Read’s eight years presiding over the company, first as CFO, then CEO, according to the Financial Times. It seems that at the behest of activist investors, Vodafone’s Board has decided to go in a different direction.
By John Celentano, Inside Towers Business Editor
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