Vodafone CEO to stand down

Chief Executive Officer of Vodafone Arun Sarin (Library image – AFP)

Vodafone Group Chief Executive Arun Sarin is to stand down in July after five years in charge, the company said on Tuesday, as it hit forecasts for annual revenues and earnings and issued a solid outlook for 2009.

Sarin will be replaced at the world's largest mobile phone company by revenue by his deputy chief executive and head of the European business, Vittorio Colao.

Under Sarin, the mobile group acquired a controlling stake in one of India's biggest mobile phone companies, Hutchison Essar, to expand into faster-growing emerging markets and counter tougher conditions in Europe.

On Tuesday, British-based Vodafone said its annual group earnings before interest, tax, depreciation and amortisation (EBITDA) rose over 10 per cent to 13.2 billion pounds ($26.11 billion) on revenues of 35.5 billion pounds.

The group posted organic revenue growth of 4.2 per cent.

Analysts were expecting EBITDA of 13.1 billion pounds and revenues of 35.3 billion pounds, according to Reuters Estimates.

"Arun has done a tremendous job as chief executive," Chairman John Bond said in a statement.

"He has led the company with distinction and navigated Vodafone through a period of rapid change. He has developed a new strategy for the business and significantly expanded our footprint in emerging markets."

Publishing its forecasts for the year ahead, the company said it expected group revenue of between 39.8 billion pounds to 40.7 billion pounds, with adjusted operating profit of 11 billion pounds to 11.5 billion pounds.

The results for the year to March 31 were boosted by booming growth from the EMAPA unit of businesses in Eastern Europe, Middle East and Africa, Asia, Pacific and Affiliates which saw 14.5 per cent organic revenue growth.

The European unit had revenue growth of 2 per cent while the overall group posted a 40.6 per cent organic rise from data revenues for services such as downloading music.

Sarin said he expected operating conditions to continue to be challenging in Europe given the current economic environment and ongoing pricing and regulatory pressures but noted he expected positive trends in messaging and data revenue to continue.

He also said he expected significant benefits from recent changes in foreign exchange rates compared to 2008, particularly in respect of the euro.

Free cash flow for the past year was 5.5 billion pounds and is expected to be in the range of 5.1 billion to 5.6 billion pounds for the following year, excluding spectrum and licence payments.

The group declared a final dividend of 5.02 pence per share, raising the total payout by 11.1 per cent to 7.51 pence.