Vodafone Group Plc Shares Fall as CEO Prepares to Step Down

Eileen GuzmanMay 16, 2018

News of the changeover at the top came as Vodafone's full year results revealed it swung out of the red with bottom line profits of €2.8 billion (£2.5 billion) against losses of €6.1 billion (£5.4 billion) the previous year, when it was knocked by a mammoth hit on its Indian arm.

Vodafone Group has announced CEO Vittorio Colao is stepping down from October and will be succeeded by CFO Nick Read. If the deal survives scrutiny from European regulators, Vodafone will be a big step closer to Colao's vision of a European cross-border champion that can offer mobile and broadband services in numerous markets.

Prior to this, at the company's annual general meeting on July 27, Read will become group chief executive-designate and deputy CFO Margherita Della Valle will take over as group chief financial officer and will join the board.

"The overall improvement in Vodafone's fortunes over the last 10 years is less evident in the United Kingdom, the company's worst major European market, albeit that some of this reflects an inherently more competitive mobile market with four strong players", he added.

"With positive results across the board, one would expect markets to react by buying the shares, and yet investors are clearly taking a dimmer view about the company's prospects with the CEO of 10 years on his way out", said Accendo Markets analyst Artjom Hatsaturjants.

The combined company will be jointly controlled by Vodafone and the Aditya Birla Group.

Vodafone Group Plc says that Read was chosen as the successor to Colao following an extensive search for a replacement CEO. An accountant by training, Read joined Vodafone in 2001 following senior finance roles at UBM Plc and FedEx Corp. He's now the chief financial officer so is well known in City and investment circles. She was previously Group Chief Financial Controller, Chief Financial Officer for the Europe region, and Chief Financial Officer for Vodafone Italy.

Gerard Kleisterlee, chairman of Vodafone, said Colao's tenure had been "outstanding".

"Nick has been the co-architect of the Group's strategy together with Vittorio, combining extensive worldwide operational and commercial leadership with world-class financial acumen", commented Gerard Kleisterlee, the Group's Chairman. In addition, we agreed the merger of Indus Towers and Bharti Infratel, allowing Vodafone to own a significant co-controlling stake in India's largest listed tower company.

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