Vodafone said it would accelerate investment in its network again this year after spending more to meet the demands of COVID-19.
The British company said free cash flow would increase to at least 5.2 billion euros this year, after it just met its target of at least 5 billion euros in the year to end-March.
“We see a compelling opportunity for high growth given the step change we’ve seen towards a digital society over the past year. Importantly, this growth opportunity exists in both Europe and Africa,” Vodafone Group CEO Nick Read told reporters on Tuesday.
He said COVID-19 had advanced digitalisation by about five years, and higher network usage would be permanent.
Analysts at Citi, who rate Vodafone a “buy”, said capex levels and other outflows were hindering growth in free cash flow.
Vodafone has reported a 1.2 percent drop in adjusted earnings to 14.4 billion euros for the year to end-March, on 2.6 percent lower revenue of 43.8 billion euros after COVID-19 hit roaming and handset sales.
Read said Vodafone exited the year with accelerating service revenue growth across its business, with a particularly good performance in its largest market, Germany.
“The increased demand for our services supports our ambition to grow revenues and cash flow over the medium-term,” he said.
He has focused Vodafone on Europe and Africa and spun off its mobile towers infrastructure into a separate business that it listed in Frankfurt in March.
Vodafone said it expected EBITDA for the current year to rise to 15.0 – 15.4 billion euros.
