Vodafone Group has achieved significant cost savings after the launch of its Fit for Growth program in September 2014.
The key objective of Fit for Growth cost efficiency program is to enhance operational leverage and drive margin expansion across all markets.
Vodafone centrally monitors the initiatives to share best practice between operating companies.
Vodafone achieved significant cost saving in areas including procurement, improved sales channel efficiency and standardised network design during the first half of this financial year.
Improved margin performance across both Europe and AMAP was reflected in the recently revealed financial results of Vodafone Group.
Vodafone Group said its 19 telecom markets out of 26 achieved better EBITDA growth than revenue, driving 0.7 percentage point improvement in organic Group EBITDA margin.
As per the Fit for Growth program, Vodafone has set a new internal 3-year margin targets across the Group.
Vodafone is now targeting organic EBITDA growth of 3-6 percent, equivalent to €15.7 billion – €16.1 billion of EBITDA against the target of €15.7 billion – €16.2 billion.
Vodafone Group EBITDA declined 1.7 percent to €7.9 billion primarily due to foreign exchange rate movements, with organic EBITDA growing at 4.3 percent, a faster pace than revenue.
Vodafone’s organic growth in EBITDA was supported by cost control despite incremental drags from roaming, increased content costs and a higher operating cost base post-Project Spring. EBITDA margin improved by 0.6 percentage points to 29.2 percent, and grew 0.7 percentage points on an organic basis. Europe and AMAP supported with margin improvements — by better top line trends and cost control.
Vodafone revenue for the first half of the year fell 3.9 percent to €27.1 billion primarily due to foreign exchange movements. Organic service revenue grew 2.3 percent to €24.8 billion.
