Vittorio Colao will step down in October © Reuters
Vittorio Colao, who helped build into one of the world’s largest telecommunications groups, will step down as its chief executive in October after a decade at the helm.
Chief financial officer Nick Read, 53, has been promoted to the top job, having been groomed as the preferred internal candidate. He joined Vodafone in 2001 and, before becoming CFO in 2014, headed the UK business and was responsible for Africa, Asia and the Middle East.
Vodafone shares opened down nearly 4 per cent after the announcement on Tuesday morning, at just under 200p.
Mr Colao’s decision to stand down comes only days after the company sealed an of Liberty Global’s German and eastern European cable companies, Vodafone’s biggest takeover of his tenure. It also comes ahead of the merger of its struggling Indian business with Idea Cellular, a deal that is expected to close in June.
The 56-year-old Italian said that the time was right to move on with most of the , now complete following the recent spate of deals. “The chapter Vodafone is starting to write is completely different,” he said. “After India, after Liberty, this is a new story that will take five years to be written.”
New chief executive Nick Read joined Vodafone in 2001
Mr Read, who has spent 12 years working alongside Mr Colao, said that his job will be to get the most out of the “embedded champions” within Vodafone and to deliver “efficiencies and greater returns” by integrating the Liberty and Idea.
Gerard Kleisterlee, chairman of Vodafone, said Mr Colao’s tenure had been “outstanding”.
“He has been an exemplary leader and strategic visionary who has overseen a dramatic transformation of Vodafone into a global pacesetter in converged communications, ready for the Gigabit future,” Mr Kleisterlee said.
Dhananjay Mirchandani, an analyst with Bernstein, said that while Mr Colao’s exit was not expected, it was not a surprise. “We always thought he had one major deal in him, before he moved on to his next corporate adventure. With the Liberty deal announced and India set to close, he leaves behind a strategically well-positioned portfolio for his successor Nick Read who we think is a safe pair of hands,” he said.
The announcement accompanied full-year results from Vodafone that showed revenue dipping 2.2 per cent to €46.6bn. Service revenue rose 1.6 per cent driven by broadband growth. Earnings before interest taxation, depreciation and amortisation grew 12 per cent to €15bn, beating its forecast, while free cash flow was €5.6bn hitting its promise to exceed €5bn.
Mr Colao said that his departure should not overshadow what he called a “strong financial performance” when Vodafone beat expectations that it upgraded during the year.
Vodafone grew in 20 out of its 25 markets, according to Mr Colao. Performance in the UK has started to improve but India, another under-performing unit, continued to struggle.
Vodafone India’s ebitda dropped by more than a third and service revenue down by almost 20 per cent ahead of the merger with Idea. Vodafone’s foray into India, under Mr Colao’s predecessor Arun Sarin, has proved challenging over the past decade with its local unit beset by a tax dispute with local authorities and, more recently, the launch of aggressive new market entrant .
Vodafone’s outlook for ebitda growth of between 1 per cent and 5 per cent for the year to March 2019 was cautious and signalled a slight slowdown. That anticipates a tougher performance in Italy where low-cost new entrant Iliad is due to launch and a softer outlook in Spain.