Vodacom Group (VOD) Q1 2025 TU earnings summary

Executive summary

• Group revenue rose 1.5% to ZAR 36.2 billion, with normalized group service revenue up 10% year-over-year, exceeding medium-term targets despite currency headwinds.

• Financial services processed $400.2 billion in transactions over the last 12 months and remain a key growth driver.

• Customer base expanded across all regions, with Egypt and International segments showing strong growth in data and financial services customers.

• Beyond Mobile services contributed 20.8% of group service revenue, with a medium-term target of 25%-30%.

Financial highlights

• Group service revenue increased 10% on a normalized basis, exceeding medium-term targets.

• South Africa service revenue rose 1.8% to ZAR 15.3 billion, with prepaid revenue up 3.5% and contract revenue up 3.6%.

• Egypt's local currency service revenue surged 43.7%, with Vodafone Cash revenue up 87%.

• International business service revenue grew 2.3% to ZAR 7.4 billion, with strong local currency growth in Tanzania and DRC.

• Group financial services revenue grew 8.7% (16.8% normalized), now 11.3% of group service revenue.

Outlook and guidance

• Medium-term targets unchanged: high single-digit group service revenue and EBITDA growth, and capex at 13.0%-14.5% of group revenue.

• Measures are being implemented to drive operational leverage and support rand-based earnings growth in FY 2025.

• Safaricom's FY 2025 EBIT guidance implies 12% growth, with Ethiopia expected to reach peak losses.

• Prepaid and postpaid pricing adjustments, along with Beyond Mobile growth, are expected to offset wholesale revenue pressure.