Chief Financial Officer Margherita Della Valle will do the job on an interim basis while the board, led by Chairman Jean-Francois van Boxmeer, searches for a replacement.
Read, who had been in the role for four years and at Vodafone for more than two decades, will remain as an adviser until the end of March, the company said in a statement on Monday.
“I agreed with the board that now is the right time to pass the helm to a new leader who can build on Vodafone’s strengths and capture the important opportunities that lie ahead.”Read, 58, said in the statement.
Vodafone’s share price has plunged about 44% since Read took over in October 2018. In that time, the Newbury, England-based mobile and broadband giant has downsized and cut the debt.
According to Bloomberg, Read’s biggest move may have been to spin off and list the company’s tens of thousands of mobile antennas, selling a stake in Frankfurt-listed Vantage Towers AG to a private equity consortium in a deal that valued the business at 16.2 billion euros ($17.1 billion) last month.
He added that Read still struggled to finalize deals that would have reduced the number of players in some of Vodafone’s biggest markets, such as the UK, Italy and Spain.
It said an approach for the Italian business was turned down, a key merger opportunity in Spain was missed and talks with British rival Three, owned by CK Hutchison Holdings Ltd., are public but not yet concluded.
Vodafone shares
Vodafone shares were barely changed at 12:39 p.m. in London trading: they were holding near 25-year lows.
Vodafone’s share price has underperformed the rest of the industry this year, even as the sector lost value as a whole, falling more than the Stoxx Europe 600 telecoms price index.
The agency noted that challenges deepened in 2022 after Russia’s invasion of Ukraine sent energy costs skyrocketing, while interest rates also rose. Read faced pressure from investors, including Europe’s largest activist fund, Cevian Capital AB, which sold much of its stake earlier this year.
More recently, a vehicle backed by French billionaire Xavier Niel bought 2.5% of Vodafone saying it saw opportunities to speed up deals and improve profits.
Although major issues like energy prices and the coronavirus were out of Read’s control, analysts pointed to how he had handled others.
In 2019, it cut the dividend six months after the company said it was affordable. Earlier this year, he missed the company’s biggest opportunity yet to merge its shrinking and embattled Spanish division. And he has acknowledged underperformance in Vodafone’s biggest business, Germany, following an 18.4-billion-euro deal early in Read’s tenure.
The acquisition, which included some Eastern European companies, was originally carried out by his predecessor, Vittorio Colao.
Challenge of the new CEO
A new CEO will have to address business woes in Germany and cost-of-living concerns across Vodafone’s footprint, which could undermine support for “market repair,” which could include price hikes or mergers, he said. Jefferies analyst Jerry Dellis.
Dellis added that leverage remains “uncomfortably high” after the Vantage deal and that dividend policy should be treated as if it were under review.
Vodafone’s operations are complex and a complete stranger has never been appointed to the top job, so Read’s successor may already have some ties to the company, Berenberg analyst Carl Murdock-Smith said in a post-war note. ad.
He pointed to Informa Plc CEO Stephen Carter, who sits on Vodafone’s board and was previously a director of UK telecoms regulator Ofcom, and Nick Jeffery, who was previously a UK director of Vodafone and left the company on last year to lead US-based Frontier Communications.
Other contenders mentioned by analysts include new interim chief Della Valle, who has implemented major cost cuts as chief financial officer. There is no clear internal successor, Bernstein analysts said.
Source: Gestion
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