Vodafone raises guidance despite German business slipping into decline

LONDON, Nov 10 (Reuters) - Vodafone raised its full-year guidance on Tuesday as strong growth in its business-to-business operations and Africa helped offset a decline in service revenue in Germany in the second quarter.

• Vodafone upgraded its guidance for adjusted core earnings for the year to end-March 2027 to between €13.2 billion and €13.4 billion, in line with latest analyst forecasts, and adjusted free cash flow to €2.8 billion to €3.0 billion

• At the mid-point, the free cash flow forecast would represent growth of more than 20% on an organic basis

• First-half adjusted core earnings were €6.5 billion ($7.3 billion), up 6.4% on an organic basis

• Chief Executive Margherita Della Valle said organic service revenue growth accelerated to 6.4% in the second quarter, one of the company's "highest ever growth rates"

• However she also said: "Germany is not yet where it needs to be," as organic service revenue in the market turned negative in the second quarter — down 0.5% — from growth of 1.2% in the first, reflecting continued mobile pressure

• Vodafone has announced a further 2,300 job cuts in Germany. "We need to be simpler, hence the job reductions, and we need in parallel to continue to invest in our customer experience," she said

• Vodafone delivered €200 million in gross savings in the first half, including 3,000 role reductions

• Organic service revenue grew 0.9% in Britain, driven by strong fixed-line growth and higher mobile wholesale revenue

• In Africa, organic service revenue growth accelerated to 13.4%, with growth in all of Vodacom's markets across both connectivity and financial services

• Shares in Vodafone, which have risen 21% in the last two months, traded down 1.8% in early deals($1 = 0.8908 euros)

(Reporting by Paul Sandle; editing by James Davey and Tomasz Janowski)