Vodafone Share Price Rallied 5.21% on €8Bn Vodafone Italy Sale

Vodafone Group plc (LON: VOD) ‘s share price rallied 5.21% after the company announced that it had completed the final phase of its strategic portfolio optimisation, initiated in May 2023, with the sale of its 100% stake in Vodacom Italy to Swisscom AG for €8 billion in immediate cash proceeds.

The telecommunications company also announced that it would return €4 billion to shareholders via share buybacks and a dividend rebase to 4.5 cents a share in the 2025 fiscal year. Investors reacted positively to the news, as evidenced by today's rally in Vodafone shares. 

Following the disposals of Vodafone Italy and Vodafone Spain and the merger of Vodafone UK and Three UK, Vodafone is now recalibrating its focus on burgeoning European markets, which have exhibited consistent growth over the past three years. 

With these strategic adjustments, including the divestitures mentioned, Vodafone anticipates an increase in the Group's Return on Capital Employed (ROCE) by over one percentage point. Vodafone is also shifting its strategic emphasis towards the B2B sector, identifying it as a significant growth area.

With robust demand for digital services, Vodafone is positioning itself as a critical partner for SMEs and public sector entities transitioning to cloud and generative AI technologies. This focus is supported by a 5% growth in B2B service revenue in Q3 FY24 and competitive market share gains. Investments and partnerships, such as with Microsoft, are planned to enhance Vodafone's platform capabilities.

A new focus will also be placed on IoT, aiming to expand Vodafone's leadership through market entry and platform-as-a-service models starting 1 April 2024. In Africa, Vodafone plans to sustain its growth through mobile and fixed connectivity and financial services, leveraging its market leadership and fintech platforms, serving over 75 million customers.

Vodafone is committed to operational excellence, emphasising customer satisfaction, simplification, and growth. The company plans to adopt a fully commercial model for its central operations to enhance flexibility and efficiency starting 1 April 2024. 

Organisational changes are also on the horizon, with a restructuring into five business divisions to better align with strategic priorities. This restructuring will lead to the departure of Philippe Rogge, CEO of Vodafone Germany.

Vodafone share price.

The Vodafone share price rallied 5.21% to trade at 69.760p from Thursday’s closing price of 66.305p.