Vodafone: First Quarter in Line With Guidance; Customer Losses Continue in Germany
Vodafone recorded a stable quarter, with organic service revenue growth of 5.4%. EBITDAaL of EUR 2.68 billion grew by 5.1% organically, supported by lower cost inflation and seasonality in operating expenses, which should moderate as the year passes. Germany was once again the main laggard, with Vodafone losing 655,000 TV customers (653,000 losses last quarter) because of changes in German housing regulation. German broadband losses also continued, albeit at a much smaller pace, with 55,000 fewer subscribers. Deutsche Telekom is being the main beneficiary of Vodafone customer losses. We are maintaining our GBX 125 fair value estimate.