Vodafone chief announces departure
Vodafone chief executive Arun Sarin today said he was leaving the business "in capable hands" after announcing his departure and naming deputy Vittorio Colao as his successor to the top job.
Mr Colao, 46, will take over the reins at the end of July when Mr Sarin steps down after five years at the helm.
Vodafone's outgoing boss admitted he was retiring from the role as the group faced a challenging market amid global economic uncertainty, but said he was handing over a "resilient" business.
Vodafone posted a 10.2% rise in annual underlying earnings today, while revenues increase 4.2% on an organic basis to £35.49bn (€44.6bn) in the year to March 31, and adjusted operating profits rose 5.7% to £10.1bn (€12.7bn).
Underlying pre-tax profits lifted 2% to £8.93bn (€11.21bn), according to the group.
Vodafone said it was expecting another robust year despite the tough trading conditions, pencilling in group revenues of between £39.8bn (€50bn) to £40.7bn (€51.1bn) and adjusted operating profits of between £11bn (€13.8bn) to £11.5bn (€14.43bn).
Analysts at Citi said in a note that Mr Colao had been the consensus choice of successor and added that he was held in "high regard".
Tributes also flowed in for Mr Sarin, with Vodafone chairman John Bond praising the "tremendous" job he has done during his tenure.
He said: "He has led the company with distinction and navigated Vodafone through a period of rapid change."
Indian-born Mr Sarin, 53, joined Vodafone's board in 1999 and became chief executive in July 2003.
He went through a rocky patch two years ago, when nearly 15% of Vodafone shareholders failed to support his re-election as chief executive.
The company has since outperformed City profit forecasts however and enjoyed big revenue growth in fast-growing markets such as India and Turkey.
In January, Vodafone revealed that the majority of its customers are now outside western Europe.
Mr Sarin also helped steer the group through the aftermath of the dotcom crash and has over the past five years boosted the firm's customer base from 120 million to 260 million globally.
Mr Sarin said: "It has been a privilege to lead Vodafone for the last five years and to have been involved in the company for such a long time.
"I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy. I am very proud of what Vodafone and its 71,000 people have achieved and the good momentum we have in the marketplace.
"I know that the business is in capable hands with Vittorio Colao. Having worked with him for many years I know that he has the experience and vision to take Vodafone on to future success."
Mr Sarin said he was "looking forward" to taking a sabbatical and travelling after retiring from the post following the group's annual general meeting.
He also confirmed that he would be returning to the US, but denied reports that he was planning to join a private equity firm, saying only that he had "no specific plans".
Vodafone declined to provide details of any leaving package that Mr Sarin may receive.
He was paid £3.2m (€4m) in salary and bonuses in the year to March 31 2007 and was also awarded 8.1 million share options and a further potential £2.9m (€3.6m) in shares under various incentive schemes.
The group has caused controversy in recent years with its performance-related bonus schemes after lowering the targets for senior executives in the past two years.
Details of Mr Sarin's leaving pay award and bonuses due after this year's performance are set to be revealed in Vodafone's annual report next month.
Mr Sarin today said he felt the "timing was right" to leave and said he saw the business as being resilient in the face of economic troubles.
The firm's developed markets are already feeling the heat from global economic woes however, with prices falling by 10-15% in those areas, according to Vodafone.
"Operating conditions are expected to continue to be challenging in Europe given the current economic environment and ongoing pricing and regulatory pressures, but with continued positive trends in messaging and data revenue and voice usage growth," said the group.
It added: "The group considers that its geographically diverse portfolio should provide some resilience in the current economic environment."
Shares in Vodafone rose 2% in early trading as the market reacted well to the firm's results and Mr Sarin's succession plans, although the stock later slipped into the red.
Mark James, analyst at Collins Stewart, said the group's full-year results and outlook were strong.
He added that Mr Sarin's departure was "a little earlier than many had anticipated" and said his successor now faced the challenge of pursuing growth in emerging markets and cutting costs in developed markets.
