- Cash flow guidance downgraded last month
- CFO to take over until successor is found
Vodafone (VOD) chief executive Nick Read has resigned after four years in the job, after the telecoms giant downgraded its full-year profit and cash flow guidance last month. CFO Margherita Della Valle will take over as interim boss once Read leaves at the end of December.
In its interim results last month, the company blamed its poor showing on the underperformance of Germany, its largest and highest-margin market. Meanwhile, inflation pushed up free cash outflow to €3.2bn (£2.8bn) from €1bn a year earlier. The telecommunications company is struggling with increased costs and investors have not responded with confidence - in the past six months its share price has fallen a quarter.
To tackle the cash flow issue, Read launched a new €1bn package of cost saving measures. In part, this would be achieved through corporate restructuring. Vodafone already sold off its Hungary business earlier this year and launched a joint venture with Altice in Germany to deliver broadband to 7mn homes.
However, investors and the board have both seemingly lost faith in Read’s ability to see it through. Activist investors Cevian already slashed the position it took earlier in the year.
The share price was up 2 per cent after the announcement but dropped back in morning trading. Given the long-term decline of both Vodafone and BT (BT), the market doesn’t seem confident there is anyone out there that can turn this around.
