Strategic Review
⫶ Transformation gaining
momentum
|
|
In May 2023, we set out a new
roadmap to transform Vodafone along three strategic priorities:
Customers; Simplicity; and Growth. We measure our operational progress in these areas through a
consistent scorecard summarised below. During FY24, we have
reshaped our European footprint to focus on growing markets, with
strong positions and good local scale. Alongside the progress to
right-size our portfolio for growth, we have made good early
progress with our operational transformation, which aims to improve
the experience provided to our customers, remove complexity from
our operations and accelerate growth in revenue, profit, cash flow
and return on capital.
Customers
-
Wide-reaching customer experience transformation
underway, supported by reallocated investment of €140 million in
FY24, as well as new incentives and talent development
plans
-
Customer insights processed through real-time AI
models, feeding into detailed action plans on a weekly basis in all
markets
-
Frontline tools and processes enhancements
benefitting 70,000 team members
-
Significant improvement in Germany fixed network
reliability, recognised in four independent network quality
tests
-
Despite material price inflation, customer
detractors have reduced across all segments, and we now have
leading or co-leading net promotor scores in 5 out of 9 European
markets
Simplicity
-
New organisational structure and executive
management team in place
-
Completed first phase of commercialising shared
operations, enabling greater transparency, productivity and
flexibility
-
Actioned c.5,000 role reductions and announced a
further 2,000 in first year of 3-year 11,000 plan and continued to
deliver opex efficiencies
Growth
-
Reshaped European footprint focused on growing
telco markets, with strong positions and good local
scale
-
Vodafone now growing in all segments and
accelerating throughout the year
-
Accelerated organic service revenue growth of
Vodafone Business to 5.4% in Q4; B2B focus step-up with new
organisation, sales transformation plan, investment in products and
capabilities and strategic partnership with Microsoft
|
Customers
|
|
|
|
Simplicity
|
|
|
|
|
FY24
|
|
|
FY24
|
|
Consumer NPS
|
|
|
|
|
|
|
|
Germany
|
YoY
|
Stable
|
|
Europe opex savings
(FY23-FY24)
|
€ billion
|
0.4
|
|
UK
|
YoY
|
Increased
|
|
Productivity (role
reductions)
|
'000
|
c.5
|
|
Other Europe
|
YoY
|
Stable
|
|
Shared operations NPS
(May'24)
|
%
|
85
|
|
South Africa
|
YoY
|
Stable
|
|
Employee engagement index
(Oct'23)
|
%
|
77
|
|
Detractors
|
|
|
|
|
|
|
|
Germany
|
YoY
|
Improved
|
|
|
|
|
|
UK
|
YoY
|
Improved
|
|
|
|
|
Other Europe
|
YoY
|
Improved
|
|
|
|
|
|
South Africa
|
YoY
|
Improved
|
|
Growth1
|
|
|
|
Revenue market share
|
|
|
|
|
FY24
|
|
Germany
|
YoY
|
Stable
|
|
Organic Service revenue
growth
|
%
|
6.3
|
|
UK
|
YoY
|
Increased
|
|
B2B organic service revenue
growth
|
%
|
5.0
|
|
Other Europe
|
YoY
|
Increased
|
|
Organic Adjusted EBITDAaL
growth
|
%
|
2.2
|
|
South Africa
|
YoY
|
Stable
|
|
Adjusted free cash flow
|
€ billion
|
2.6
|
|
Network quality
|
Very good reliability in
all European markets
|
|
Pre-tax return on capital
employed
|
%
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP measure. See page
36.
More remains to be done across all
these areas in FY25. Our priorities for the year ahead include:
stepping-up our operational performance in Germany; further
strengthening our capabilities in Vodafone Business; completing the
commercialisation of our shared operations; and completing our
in-flight portfolio transformation. A more detailed summary of our
transformation progress and focus areas for FY25 is contained
within an accompanying presentation and video Q&A available
here:
investors.vodafone.com/results.
Financial
Review ⫶ Improved
service revenue trends
|
|
|
Financial results
-
Total
revenue: Declined by 2.5% to €36.7
billion due to the disposals of Vantage Towers, Vodafone Hungary
and Vodafone Ghana in the prior financial year and adverse exchange
rate movements.
-
Service
revenue: Decreased by 1.3%, however
on an organic basis, increased by 6.3%, with Europe, Africa and
Business all growing. Excluding Turkey, the Group had good service
revenue growth of +3.7% on an organic basis.
-
Operating
profit: Decreased by 74.6% to €3.7
billion primarily reflects business disposals in the prior
financial year, in particular the €8.6 billion gain on disposal of
Vantage Towers.
-
Adjusted
EBITDAaL: Increased by 2.2% on an organic basis as good service revenue
progress was partially offset by higher energy costs and other
inflationary impacts. Excluding Turkey,
adjusted EBITDAaL declined by 0.6%
on an organic basis.
-
Earnings per
share: Basic earnings per share
from continuing operations was 4.45 eurocents, compared to basic
earnings per share of 43.66 eurocents in the prior year, primarily
due to lower operating profit. Adjusted basic earnings per share
was 7.47 eurocents, compared to 11.28 eurocents in the prior year,
primarily due to lower adjusted EBITDAaL.
-
Discontinued
operations: Following the
announcement that we entered into binding sale agreements with
respect to the sales of Vodafone Spain and Vodafone Italy, both
businesses are now reported separately as discontinued operations
in the consolidated financial statements. See Note 3 'Discontinued
operations and assets held for sale' in the condensed consolidated
financial statements for more information.
|
|
|
Re-presented2
|
|
|
|
FY241
|
FY23
|
Reported
|
|
€m
|
€m
|
change %
|
Revenue
|
36,717
|
37,672
|
(2.5)
|
- Service revenue
|
29,912
|
30,318
|
(1.3)
|
- Other revenue
|
6,805
|
7,354
|
|
Adjusted EBITDAaL3,4
|
11,019
|
12,424
|
(11.3)
|
Restructuring costs
|
(703)
|
(538)
|
|
Interest on lease
liabilities5
|
440
|
355
|
|
Loss on disposal of property, plant
and equipment and intangible assets
|
(34)
|
(41)
|
|
Depreciation and amortisation of
owned assets
|
(7,397)
|
(7,520)
|
|
Share of results of equity accounted
associates and joint ventures
|
(96)
|
433
|
|
Impairment
reversal/(loss)
|
64
|
(64)
|
|
Other income
|
372
|
9,402
|
|
Operating profit
|
3,665
|
14,451
|
(74.6)
|
Investment income
|
581
|
232
|
|
Financing costs
|
(2,626)
|
(1,609)
|
|
Profit before taxation
|
1,620
|
13,074
|
|
Income tax expense
|
(50)
|
(492)
|
|
Profit for the financial year - Continuing
operations
|
1,570
|
12,582
|
|
Loss for the financial year - Discontinued
operations
|
(65)
|
(247)
|
|
Profit for the financial year
|
1,505
|
12,335
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
- Owners of the
parent
|
1,140
|
11,838
|
|
- Non-controlling
interests
|
365
|
497
|
|
Profit for the financial year
|
1,505
|
12,335
|
|
|
|
|
|
|
Basic earnings per share -
Continuing operations
|
4.45c
|
43.66c
|
|
Basic earnings per share - Total
Group
|
4.21c
|
42.77c
|
|
Adjusted basic earnings per
share3
|
7.47c
|
11.28c
|
|
Further information is available
in a spreadsheet at investors.vodafone.com/results
Notes:
1. The FY24 results reflect
average foreign exchange rates of €1:£0.86, €1:INR 89.80, €1:ZAR
20.31, €1:TRY 29.08 and €1:EGP 34.83.
2. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
3. Adjusted EBITDAaL and Adjusted
basic earnings per share are non-GAAP measures. See page 36 for
more information.
4. Includes depreciation on leased
assets of €3,003 million (FY23: €2,682 million).
5. Reversal of interest on lease
liabilities included within Adjusted EBITDAaL under the Group's
definition of that metric, for re-presentation in financing
costs.
Cash flow, funding & capital allocation
-
Cash from
operating activities: Decreased
8.3% to €16.6 billion (FY23: €18.1 billion) reflecting lower
operating profit, excluding a lower share of results in equity
accounted associates and joint ventures and a net gain in the prior
year resulting from the sale of Vantage Towers, Vodafone Ghana and
Vodafone Hungary, and adverse working capital movements, which
offset lower taxation payments.
-
Adjusted free
cash flow: Decreased by 37.2% to
€2.6 billion (FY23: inflow of €4.1 billion), reflecting lower
adjusted EBITDAaL. Adjusted free cash flow from Spain and Italy was
€0.7 billion.
-
Net
debt: Remained stable at €33.2
billion, with free cash inflow of €1.8 billion and other movements
of €1.1 billion, offset by acquisition and disposals of €0.3
billion and equity dividends of €2.4 billion.
-
Current
liquidity: Cash and cash equivalents and short-term investments totalled
€9.4 billion (€16.0 billion as at 31 March 2023). This includes
€1.9 billion of net collateral which has been posted to Vodafone
from counterparties as a result of positive mark-to-market
movements on derivative instruments (€4.6 billion as at 31 March
2023).
-
Shareholder
returns: Total dividends per share
are 9.0 eurocents (FY23: 9.0 eurocents) including a final dividend
per share of 4.5 cents. The ex-dividend date for the final dividend
is 6 June 2024 for ordinary shareholders and 7 June 2024 for ADR
holders, the record date is 7 June 2024 and the dividend is payable
on 2 August 2024.
|
|
FY24
|
FY23
|
Reported
|
Cash flow and funding
|
€m
|
€m
|
change %
|
Inflow from operating
activities
|
16,557
|
18,054
|
(8.3)
|
Outflow from investing
activities
|
(6,122)
|
(379)
|
(1,515.3)
|
Outflow from financing
activities
|
(15,855)
|
(13,430)
|
(18.1)
|
Net
cash (outflow)/inflow
|
(5,420)
|
4,245
|
(227.7)
|
Cash and cash equivalents at the
beginning of the financial year
|
11,628
|
7,371
|
|
Exchange (loss)/gain on cash and
cash equivalents
|
(94)
|
12
|
|
Cash and cash equivalents at the end of the financial
year
|
6,114
|
11,628
|
|
|
|
|
|
|
Closing borrowings less cash and cash equivalents (excl.
Spain and Italy)
|
(50,804)
|
(51,165)
|
0.7
|
Closing borrowings less cash and cash equivalents (incl.
Spain and Italy)
|
(54,168)
|
(54,685)
|
0.9
|
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
FY24
|
FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Adjusted free cash flow2,3
|
2,600
|
4,139
|
(37.2)
|
Licences and spectrum
|
(454)
|
(773)
|
|
Restructuring costs including
working capital movements
|
(254)
|
(249)
|
|
Integration capital
additions
|
(81)
|
(200)
|
|
Vantage Towers growth capital
expenditure
|
-
|
(497)
|
|
Other adjustments
|
(28)
|
163
|
|
Free cash flow2
|
1,783
|
2,583
|
(31.0)
|
|
|
|
|
|
Closing net debt (excl. Spain and
Italy)2
|
(33,242)
|
(33,250)
|
-
|
Closing net debt (incl. Spain and
Italy)2
|
(33,349)
|
(33,375)
|
0.1
|
Notes:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. Adjusted free cash flow, Free
cash flow and Net debt are non-GAAP measures. See page 36 for more
information.
3. Discontinued operations
generated €722 million in adjusted free cash flow for the year
ended 31 March 2024 (FY23: €703 million), in addition to the
reported total from continuing operations.
Outlook & capital
allocation ⫶ A
year of transition
|
|
Performance against FY24 guidance and
FY25
guidance
In May 2023, we set out guidance
for FY24 for Group adjusted EBITDAaL and adjusted free cash flow.
For FY24, we reported adjusted EBITDAaL and adjusted free cash flow
of €11.0 billion and €2.6 billion, excluding the financial results
from Vodafone Spain and Vodafone Italy. The FY24 outcome, as
reported, reflects adverse foreign exchange rate movements versus
those used for the basis of guidance, discontinued operations, and
other items, which in aggregate, impacted adjusted EBITDAaL by €2.4
billion and adjusted free cash flow by €0.9 billion. The table
below compares the guidance given and our actual
performance.
As Vodafone Italy and Vodafone
Spain are now recognised as discontinued operations, any financial
contribution in FY25 has been excluded from our FY25 guidance.
However, for FY25 we expect a net cash inflow from discontinued
operations of c.€0.4 billion, which is excluded from FY25
guidance. For further information please
refer to appendix VII in the accompanying presentation
available here:
investors.vodafone.com/results.
€bn
|
|
Adjusted
EBITDAaL1
|
Adjusted
FCF1,2
|
FY24 guidance
|
|
c.13.3
|
c.3.3
|
FY24 outcome - guidance basis3,4
|
|
13.4
|
3.5
|
Impact of exchange
rates
|
|
(0.3)
|
(0.2)
|
FY24 actual - constant portfolio
|
|
13.1
|
3.3
|
Impact of discontinued
operations
|
|
(2.1)
|
(0.8)
|
Impact of exchange
rates
|
|
(0.3)
|
(0.1)
|
FY24 re-based4,5,6
|
|
10.7
|
2.4
|
FY25 guidance4,5,7
|
|
c.11.0
|
at least
2.4
|
Notes:
1. Adjusted EBITDAaL and Adjusted
free cash flow are non-GAAP measures. See page 36 for more
information.
2. Adjusted free cash flow is Free
cash flow before licences and spectrum, restructuring costs arising
from discrete restructuring plans, integration capital additions
and working capital related items, and M&A.
3. The FY24 outcome on guidance
basis is derived by applying FY24 guidance foreign exchange rates
and includes Vodafone Spain and Vodafone Italy. The FY24 guidance
foreign exchange rates were €1: GBP 0.88; €1: ZAR 19.30; €1: TRY
21.10; €1: EGP 33.38.
4. Excluding the impact of
hyperinflationary accounting in Turkey.
5. Following the announcement that
Vodafone has entered into binding sale agreements with respect to
the sale of Vodafone Spain and Vodafone Italy, both businesses have
been reported as discontinued operations in accordance with IFRS.
The financial results of Vodafone Spain and Vodafone Italy continue
to be reflected in Vodafone Group's consolidated financial
statements, however the financial results from discontinued
operations are reported separately from our continuing operations,
and therefore, they are excluded from the FY24 re-based outcome and
FY25 guidance.
6. The FY24 re-based outcome is
derived by applying FY25 guidance foreign exchange
rates.
7. The FY25 guidance reflect the
following foreign exchange rates: €1: GBP 0.86; €1: ZAR 20.58; €1:
TRY 34.98; €1: EGP 51.75. The guidance assumes no material change
to the structure of the Group.
Capital allocation
In March 2024, we conducted a
broad capital allocation review, considering the Group's strategy
within its reshaped footprint. Following an extensive review of our
capital investment requirements, the current capital intensity will
be broadly maintained by market, which we believe allows for
appropriate investment in networks and growth opportunities. A new
leverage policy of 2.25x - 2.75x Net Debt to Adjusted EBITDAaL will
be adopted and we will target to operate within the bottom half of
this range. The new leverage policy supports a solid investment
grade credit rating and positions Vodafone to continue to invest
for growth over the long-term.
Following the right-sizing of the
portfolio as a result of the sale of Vodafone Spain and Vodafone
Italy, the Board has determined to adopt a new rebased dividend
from FY25 onwards. The Board is targeting a dividend of 4.5c per
share for FY25, with an ambition to grow it over time. The new
dividend has been set at a sustainable level, which ensures
appropriate cash flow cover and sufficient flexibility to invest in
the business for growth. The Board has also approved a capital
return through share buybacks of up to €2.0 billion of proceeds
from the sale of Vodafone Spain. The Board anticipates the
opportunity for further share buybacks of up to €2.0 billion
following the completion of the sale of Vodafone Italy, which is
expected in the first half of 2025.
Segment performance
⫶ Growth across all
segments
|
|
Following
the announcements that we have entered into binding agreements in
relation to the sale of Vodafone Spain and Vodafone Italy, we have
updated our financial reporting to recognise that Vodafone Spain
and Vodafone Italy are now discontinued operations, in accordance
with International Financial Reporting Standards ('IFRS').
Accordingly, Vodafone Spain and Vodafone Italy are excluded from
the results of continuing operations and are instead presented as a
single amount as a loss after tax from discontinued operations in
the Group's consolidated income statement. Discontinued operations
are also excluded from the Group's segment reporting. The FY23
comparatives in the tables below have been re-presented to reflect
that Vodafone Spain and Vodafone Italy are discontinued operations
and should be used as the basis of comparison to our FY24
results.
|
Geographic performance summary
Segment results
|
Total
revenue
|
Service
revenue
|
Adjusted
EBITDAaL1
|
Adjusted EBITDAaL
margin1
|
Capital
additions
|
|
|
FY24
|
FY23
|
FY24
|
FY23
|
FY24
|
FY23
|
FY24
|
FY23
|
FY24
|
FY23
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
%
|
%
|
€m
|
€m
|
|
Germany
|
12,957
|
13,113
|
11,453
|
11,433
|
5,017
|
5,323
|
38.7
|
40.6
|
2,515
|
2,558
|
|
UK
|
6,837
|
6,824
|
5,631
|
5,358
|
1,408
|
1,350
|
20.6
|
19.8
|
866
|
882
|
|
Other Europe
|
5,504
|
5,744
|
4,722
|
5,005
|
1,516
|
1,632
|
27.5
|
28.4
|
845
|
880
|
|
Turkey2,3
|
2,362
|
2,072
|
1,746
|
1,593
|
510
|
424
|
21.6
|
20.5
|
319
|
234
|
|
Africa3
|
7,420
|
8,076
|
5,951
|
6,556
|
2,539
|
2,880
|
34.2
|
35.7
|
1,005
|
1,123
|
|
Vantage Towers
|
-
|
1,338
|
-
|
-
|
-
|
795
|
|
|
-
|
551
|
|
Common Functions
|
1,864
|
1,750
|
559
|
530
|
29
|
20
|
|
|
781
|
839
|
|
Eliminations
|
(227)
|
(1,245)
|
(150)
|
(157)
|
-
|
-
|
|
|
-
|
-
|
|
Group4
|
36,717
|
37,672
|
29,912
|
30,318
|
11,019
|
12,424
|
30.0
|
33.0
|
6,331
|
7,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Downloadable performance information
is available at: investors.vodafone.com/results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment service revenue growth
|
FY23
|
FY24
|
|
Q4
|
H2
|
Total
|
Q1
|
Q2
|
H1
|
Q3
|
Q4
|
H2
|
Total
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
|
Germany
|
(2.8)
|
(2.3)
|
(1.6)
|
(1.3)
|
1.0
|
(0.1)
|
0.3
|
0.6
|
0.5
|
0.2
|
|
UK
|
(1.6)
|
0.5
|
4.0
|
3.0
|
5.1
|
4.1
|
5.5
|
6.8
|
6.2
|
5.1
|
|
Other Europe
|
(5.2)
|
(1.8)
|
0.1
|
(7.4)
|
(7.2)
|
(7.3)
|
(7.8)
|
0.3
|
(4.0)
|
(5.7)
|
|
Turkey2,3
|
32.4
|
9.3
|
(4.6)
|
(8.5)
|
21.6
|
7.4
|
6.8
|
15.6
|
11.7
|
9.6
|
|
Africa3
|
(11.2)
|
(4.5)
|
2.7
|
(14.3)
|
(14.8)
|
(14.6)
|
(7.5)
|
1.2
|
(3.4)
|
(9.2)
|
|
Group4
|
(3.2)
|
(1.6)
|
0.4
|
(4.7)
|
(1.9)
|
(3.3)
|
(1.5)
|
2.9
|
0.7
|
(1.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment organic service revenue
growth1
|
FY23
|
FY24
|
|
Q4
|
H2
|
Total
|
Q1
|
Q2
|
H1
|
Q3
|
Q4
|
H2
|
Total
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
|
Germany
|
(2.8)
|
(2.3)
|
(1.6)
|
(1.3)
|
1.1
|
(0.1)
|
0.3
|
0.6
|
0.5
|
0.2
|
|
UK
|
3.8
|
4.6
|
5.6
|
5.7
|
5.5
|
5.6
|
5.2
|
3.6
|
4.4
|
5.0
|
|
Other Europe
|
3.6
|
2.8
|
2.8
|
4.1
|
3.8
|
3.9
|
3.6
|
5.5
|
4.6
|
4.2
|
|
Turkey2,3
|
54.9
|
51.7
|
43.5
|
74.1
|
85.0
|
79.3
|
90.4
|
105.6
|
97.8
|
88.5
|
|
Africa3
|
7.0
|
7.5
|
7.5
|
9.0
|
9.0
|
9.0
|
8.8
|
10.0
|
9.4
|
9.2
|
|
Group4
|
3.4
|
3.6
|
3.9
|
5.4
|
6.6
|
6.0
|
6.3
|
7.1
|
6.7
|
6.3
|
|
Notes:
1. Organic service revenue growth,
Group Adjusted EBITDAaL and Group Adjusted EBITDAaL margin are
non-GAAP measures. See page 36 for more
information.
2. Comprises only Vodafone Turkey
in FY24. The comparative period includes the results of Vodafone
Ghana which, as previously reported, was sold in February
2023.
3. Service revenue growth and
Organic service revenue growth metrics for FY23 have been
re-presented to reflect the move of Vodafone Egypt to Vodacom from
1 April 2023 and the segment has been re-named Africa.
4. Prior year Group metrics for
Total revenue, Service revenue, Service revenue growth, Organic
Service revenue growth, Adjusted EBITDAaL, Adjusted EBITDAaL margin
and Capital additions have been re-presented to reflect that
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations and are therefore excluded from these Group
metrics.
Germany ⫶ Underlying improvement offset by
first MDU impact
|
|
|
|
|
|
|
38%
|
|
€13.0bn
|
|
0.2%
|
|
of Group service revenue
|
Total revenue
|
Organic service revenue
growth
|
|
|
|
|
|
|
46%
|
|
€5.0bn
|
|
(5.8%)
|
|
of Group Adjusted
EBITDAaL
|
Adjusted EBITDAaL
|
Organic Adjusted EBITDAaL
growth
|
|
|
|
|
|
|
|
|
FY24
|
FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%1
|
Total revenue
|
12,957
|
13,113
|
(1.2)
|
|
- Service revenue
|
11,453
|
11,433
|
0.2
|
0.2
|
- Other revenue
|
1,504
|
1,680
|
|
|
Adjusted EBITDAaL
|
5,017
|
5,323
|
(5.8)
|
(5.8)
|
Adjusted EBITDAaL margin
|
38.7%
|
40.6%
|
|
|
Note:
1. Organic
growth is a non-GAAP measure. See page 36 for more information.
Growth
Total revenue decreased by 1.2% to
€13.0 billion, driven by lower equipment revenue. Service revenue
grew by 0.2% (Q3: 0.3%, Q4: 0.6%) as the contribution from higher
broadband ARPU was largely offset by the cumulative impact of
broadband and TV customer losses and lower regulated rates for
terminating mobile calls. Growth improved in Q4, as higher consumer
mobile ARPU and customer base growth was partially offset by a 0.9
percentage point impact from the end to bulk TV contracting in
Multi Dwelling Units ('MDUs').
Fixed service revenue increased by
0.3% (Q3: 1.0%, Q4: -0.2%) as broadband ARPU growth was partially
offset by the impact of a lower broadband and TV customer
base. The slowdown in fixed service
revenue growth in Q4 was primarily driven by a 1.7 percentage point
impact from changes to German TV laws. Mobile service revenue was stable
year-on-year (Q3: -0.5%, Q4: +1.8%) as ARPU growth and higher
roaming and visitor revenue were offset by a lower prepaid customer
base and a reduction in mobile termination rates. Mobile service
revenue growth in Q4 improved having lapped the renewal and
rephasing of a large multi-year IoT contract last year, which had
adversely impacted prior quarters. Mobile service revenue growth in
Q4 was also supported by higher IoT project revenue, consumer
contract ARPU growth, and a higher customer base. Vodafone Business
service revenue was stable year-on-year (Q3: -1.9%, Q4: +1.0%) as
good demand for fixed services, including cloud and security, was
offset by a strong prior year performance in public sector and
lower IoT revenue following the renewal of a major multi-year IoT
automotive contract in the prior year.
Adjusted EBITDAaL declined by
5.8%, reflecting a 2.7 percentage point impact from higher energy
costs. The decline also reflected higher wage, inflation-linked
lease costs, and customer acquisition costs, as well as investments
made to support the MDU transition. The Adjusted EBITDAaL margin
was 1.9 percentage points lower year-on-year at 38.7%.
Customers
During the year, we re-engineered
our commercial model and launched a number of new products and
services to better serve our customers. In broadband, we restored
our market leading network quality position. This was reflected in
four major independent network test results from Connect, CHIP,
Computer BILD and nPerf where we achieved leading quality and
reliability scores. Reflecting inflationary pressure, we have
increased the price of our broadband packages. As expected, this
impacted our commercial performance with our broadband customer
base declining by 392,000 during the year. Our converged customer
base increased by 99,000 to 2.4 million.
Ahead of changes to German TV
laws, which take effect from July 2024 and change the practice of
bulk TV contracting in MDUs, we have started migrating end users to
new contracts at scale. Based on our experience to date, we expect
to retain around 50% of the 8.5 million MDU TV households. At the
end of March 2024, we had already actively retained 1.9 million
households. Our total TV customer base declined by 1.0 million
during the year, primarily due to the MDU transition, which began
in the last quarter of FY24.
We added 239,000 new mobile
contract customers in FY24, supported by our new propositions, the
ongoing optimisation of sales channels and an improved performance
of Vodafone's own brands. We also added 8.0 million IoT
connections, driven by continued strong demand from the automotive
sector. During the year, we agreed a long-term national roaming
partnership with 1&1. We expect to deliver mobile coverage
nationwide to 1&1's customers from the second half of the 2024
calendar year. Our fibre-to-the-home ('FTTH') joint venture, OXG
Glasfaser, started its network rollout during the year, initially
in Neuss, Düsseldorf, Marburg and Kassel. OXG Glasfaser will deploy
FTTH to up to seven million homes over a six-year period and is
complementary to our upgrade plans for our existing hybrid fibre
cable network.
UK ⫶ Strong growth in Consumer and
Business
|
|
|
|
|
|
|
19%
|
|
€6.8bn
|
|
5.0%
|
|
of Group service revenue
|
Total revenue
|
Organic service revenue
growth
|
|
|
|
|
|
|
13%
|
|
€1.4bn
|
|
4.0%
|
|
of Group Adjusted
EBITDAaL
|
Adjusted EBITDAaL
|
Organic Adjusted EBITDAaL
growth
|
|
|
|
|
|
|
|
|
FY24
|
FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%1
|
Total revenue
|
6,837
|
6,824
|
0.2
|
|
- Service revenue
|
5,631
|
5,358
|
5.1
|
5.0
|
- Other revenue
|
1,206
|
1,466
|
|
|
Adjusted EBITDAaL
|
1,408
|
1,350
|
4.3
|
4.0
|
Adjusted EBITDAaL margin
|
20.6%
|
19.8%
|
|
|
Note:
1. Organic
growth is a non-GAAP measure. See page 36 for more information.
Growth
Total revenue increased by 0.2% to
€6.8 billion as service revenue growth was offset by a decline in
equipment revenue. Service revenue increased by 5.1% (Q3: 5.5%, Q4:
6.8%). Organic growth in service revenue increased by 5.0% (Q3:
5.2%, Q4: 3.6%), driven by continued strong growth in the Consumer
and Business segments. The lower service revenue growth in Q4 was
driven by Business following strong project revenue in prior
periods.
Mobile service revenue grew by
5.4% (Q3: 5.8%, Q4: 6.8%). Organic growth in mobile service revenue
was 5.4% (Q3: 5.4%, Q4: 3.7%), driven by good commercial momentum,
annual price increases, and higher roaming revenue, partially
offset by the migration of the Virgin Media
MVNO off our network. The lower growth in
Q4 was driven by a strong Business performance in prior periods.
Fixed service revenue grew by 4.1% (Q3: 4.6%, Q4: 7.0%). Organic
growth in fixed service revenue was 3.9% (Q3: 4.6%, Q4: 3.5%)
driven by good Consumer customer base growth.
Vodafone Business service revenue
increased by 3.3% (Q3: 6.3%, Q4: 2.6%). Organic growth in Vodafone
Business service revenue was 3.2% (Q3: 5.8%, Q4: -0.5%), due to
strong growth in mobile supported by annual price increases. Growth was also supported by
our IoT business and during the year, we
announced we will be providing IoT connectivity to Britain's smart
metering network through our partnership with Data Communications
Company ('DCC'). Fixed sales momentum continued to improve
throughout the year. We also announced a new channel called
Business IT Hubs, which is planning to establish 300 franchise
partners to help SMEs better manage their IT solutions.
Adjusted EBITDAaL increased by
4.3% in the year. On an organic basis, Adjusted EBITDAaL increased
by 4.0%, with strong service revenue growth, partially offset by a
1.8 percentage point impact from higher energy costs, and the
migration of the Virgin Media MVNO off our network. The adjusted
EBITDAaL margin improved by 0.8 percentage points year-on-year on a
reported and organic basis to 20.6%.
Customers
During the year our mobile
contract customer base continued to grow, however this was offset
by low value disconnections in Business. In the second half of the
year, we were recognised as a Consumer NPS co-leader in the market
and we are now the joint lowest complained about mobile operator,
as measured by Ofcom, reflecting the significant improvements and
investment we have made to our customer experience over the last
few years. Our digital prepaid sub-brand 'VOXI' continued to grow,
with 120,000 customers added during the year. Through our
partnerships with CityFibre and Openreach we can now reach 15.3
million households with full fibre broadband, more than any other
provider in the UK. We are one of the fastest growing broadband
providers in the UK and our broadband customer base increased by
160,000.
Portfolio
In June 2023, we announced a
binding agreement to combine our UK business with Three UK to
create a sustainable, and competitive third scaled network operator
in the UK. Following the merger, which we expect to close around
the end of the 2024 calendar year, Vodafone and CK Hutchison will
own 51% and 49% of the combined business, respectively. This
combination is expected to provide customers with greater choice
and more value, drive greater competition, and enable increased
investment with a clear £11 billion plan to create one of Europe's
most advanced standalone 5G networks. Full details of the
transaction can be found here:
investors.vodafone.com/merger-of-vodafone-uk-and-three-uk.
Other Europe1
⫶ Service revenue growth
in all markets
|
|
|
|
|
|
|
|
|
16%
|
|
€5.5bn
|
|
4.2%
|
|
of Group service revenue
|
Total revenue
|
Organic service revenue
growth
|
|
|
|
|
|
|
14%
|
|
€1.5bn
|
|
1.5%
|
|
of Group Adjusted
EBITDAaL
|
Adjusted EBITDAaL
|
Organic Adjusted EBITDAaL
growth
|
|
|
|
|
|
|
|
|
FY24
|
FY231
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%2
|
Total revenue
|
5,504
|
5,744
|
(4.2)
|
|
- Service revenue
|
4,722
|
5,005
|
(5.7)
|
4.2
|
- Other revenue
|
782
|
739
|
|
|
Adjusted EBITDAaL
|
1,516
|
1,632
|
(7.1)
|
1.5
|
Adjusted EBITDAaL margin
|
27.5%
|
28.4%
|
|
|
Notes:
1. Other
Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania. The comparative metrics include the results
of Vodafone Hungary which, as previously reported, was sold in
January 2023.
2. Organic
growth is a non-GAAP measure. See page 36 for more
information.
Growth
Total revenue declined by 4.2% to
€5.5 billion, reflecting the disposal of Vodafone Hungary in the
prior year. Service revenue decreased by
5.7% (Q3: -7.8%, Q4: +0.3%). Organic growth in service
revenue increased by 4.2% (Q3: 3.6%, Q4:
5.5%), with all six markets growing during the year, supported by
good commercial momentum and our price actions in most markets. The
acceleration in quarterly trends was driven by public sector
project work.
In Portugal, both our Consumer and
Business segments continued to perform well, also supported by
inflation-linked contractual price increases implemented in March
2023. In Ireland, service revenue increased, driven by a higher
average customer base, and supported by our annual contractual
price increases. Service revenue in Greece grew, reflecting strong
demand for Business fixed services.
Vodafone Business service revenue
increased by 0.4% (Q3: -1.3%, Q4: 8.1%). Organic growth in Vodafone
Business service revenue was 7.9% (Q3: 7.8%, Q4: 12.2%) during the
year, with growth in both connectivity and digital services,
including IoT and Cloud. Growth in connectivity was supported by a
higher customer base, price increases in the Soho and SME customer
segments across our markets and growth in digital services, with
public sector contract wins in Romania.
Adjusted EBITDAaL decreased by
7.1% in the year. On an organic basis, Adjusted EBITDAaL grew by
1.5%, as service revenue growth and ongoing cost efficiencies were
offset by the 0.6 percentage point impact from higher energy costs,
as well as one-off bad debt impacts in relation to certain customer
contracts in Greece. The Adjusted EBITDAaL margin decreased by 0.9
percentage points year-on-year (organic: -1.4 percentage points) at
27.5%.
Customers
During FY24, we maintained our
good commercial momentum. In Portugal, we added 167,000 mobile
contract customers and 58,000 fixed broadband customers. In
Ireland, our mobile contract customers base increased by 30,000.
Through our fixed wholesale network access partnerships, we now
cover over 1.4 million households in Ireland with FTTH. In Greece,
we added 146,000 mobile contract customers, and our broadband
customer base declined by 12,000.
Portfolio
In September 2022, we announced
that we had entered into an agreement to buy Portugal's fourth
largest converged operator, Nowo Communications, from Llorca JVCO
Limited, the owner of Masmovil Ibercom S.A. The transaction is
conditional on regulatory approval. We submitted proposed remedies
which were rejected in early 2024. After reviewing the competition
authority's comments and exploring further options to address the
authority's concerns, we submitted revised proposals that are
currently being considered by the competition authority.
Turkey ⫶ Outperforming in an inflationary
environment
|
|
|
|
|
|
|
6%
|
|
€2.4bn
|
|
88.5%
|
|
of Group service revenue
|
Total revenue
|
Organic service revenue
growth
|
|
|
|
|
|
|
5%
|
|
€0.5bn
|
|
99.9%
|
|
of Group Adjusted
EBITDAaL
|
Adjusted EBITDAaL
|
Organic Adjusted EBITDAaL
growth
|
|
|
|
|
|
|
|
|
Turkey
|
Turkey
and Ghana1
|
|
|
|
|
FY24
|
FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%2
|
Total revenue
|
2,362
|
2,072
|
14.0
|
|
- Service revenue
|
1,746
|
1,593
|
9.6
|
88.5
|
- Other revenue
|
616
|
479
|
|
|
Adjusted EBITDAaL
|
510
|
424
|
20.3
|
99.9
|
Adjusted EBITDAaL margin
|
21.6%
|
20.5%
|
|
|
Notes:
1. The
comparative period includes the results of Vodafone Ghana which was
sold in February 2023 (previously reported within Other Markets,
which also included Turkey).
2. Organic
growth is a non-GAAP measure. See page 36 for more
information.
Growth
Total revenue increased by 14.0%
to €2.4 billion, with strong service revenue growth partly offset
by a significant devaluation of the local currency and the disposal
of Vodafone Ghana in the prior financial year.
Despite material currency
devaluation, service revenue
increased in euro terms
by 9.6% (Q3:6.8%, Q4: 15.6%). Organic growth in
service revenue in Turkey was 88.5% (Q3:
90.4%, Q4: 105.6%), driven by ongoing repricing actions to reflect
the high inflationary environment and value accretive base
management activities.
Vodafone Business service revenue
increased by 20.1% (Q3: 20.5%, Q4: 20.3%). Organic growth in
Vodafone Business service revenue was 87.4% (Q3: 94.7%, Q4: 102.2%)
during the year, driven by higher connectivity revenue and strong
Business demand for our cloud and IoT services. In February 2024,
we announced our partnership with DAMAC to build a new data centre
in Izmir.
Adjusted EBITDAaL increased by
20.3% in the year, growing in euro terms during FY24. On an organic
basis, adjusted EBITDAaL in Turkey increased by 99.9%, supported by
ongoing digitalisation and our continued focus on cost efficiency,
in the context of significant inflationary pressure on our cost
base. The Adjusted EBITDAaL margin increased by 1.1 percentage
points year-on-year (organic: 1.0 percentage points) at
21.6%.
Customers
We maintained our good commercial
momentum, adding 1.4 million mobile contract customers during the
year, including migrations of prepaid customers. We also increased
investments to improve our networks after the earthquake in the
prior year.
Hyperinflationary accounting in Turkey
Turkey was designated as a
hyperinflationary economy on 1 April 2022 in line with IAS 29
'Financial Reporting in Hyperinflationary Economies'. See note 1
'Basis of preparation' in the condensed consolidated financial
statements for further information.
Organic growth metrics exclude the
impact of the hyperinflation adjustment and foreign exchange
translation in Turkey. On an organic basis, Group service
revenue growth excluding Turkey was 3.7% (Q3: 3.6%, Q4: 4.0%) and
adjusted EBITDAaL excluding Turkey declined by 0.6%.
Africa ⫶ Resilient performance
|
|
|
|
|
|
|
20%
|
|
€7.4bn
|
|
9.2%
|
|
of Group service revenue
|
Total revenue
|
Organic service revenue
growth
|
|
|
|
|
|
|
23%
|
|
€2.5bn
|
|
6.4%
|
|
of Group Adjusted
EBITDAaL
|
Adjusted EBITDAaL
|
Organic Adjusted EBITDAaL
growth
|
|
|
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
|
FY24
|
FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%2
|
Total revenue
|
7,420
|
8,076
|
(8.1)
|
|
- Service revenue
|
5,951
|
6,556
|
(9.2)
|
9.2
|
- Other revenue
|
1,469
|
1,520
|
|
|
Adjusted EBITDAaL
|
2,539
|
2,880
|
(11.8)
|
6.4
|
Adjusted EBITDAaL margin
|
34.2%
|
35.7%
|
|
|
Notes:
1. The
comparative metrics for FY23 have been re-presented to reflect the
move of Vodafone Egypt to Vodacom from 1 April 2023 and the segment
has been re-named Africa.
2. Organic
growth is a non-GAAP measure. See page 36 for more
information.
Growth
Total revenue declined by 8.1% to
€7.4 billion due to the depreciation of local currencies versus the
euro. Service revenue decreased by 9.2% (Q3: -7.5%, Q4: +1.2%).
Organic growth in service revenue grew by
9.2% (Q3: 8.8%, Q4: 10.0%) with growth in South Africa, Egypt and
Vodacom's international markets.
In South Africa, service revenue
growth was supported by the Consumer mobile contract segment, which
benefited from a price increase in the first quarter, and good
fixed line growth in Consumer and Business. Growth slowed in Q4 due
to a strong prior year comparative, reflecting an acceleration in
customer data usage during widespread power outages, and pressure
on wholesale revenue. Financial services revenue grew by 7.9% to
€156.9 million on an organic basis, supported by growth in our
insurance services.
Service revenue in Egypt grew
strongly during the year and accelerated in Q4, above inflation.
The acceleration was supported by sustained customer base growth,
price increases in mobile and fixed, robust demand for data and
strong growth in our financial services product, 'Vodafone Cash'.
Vodafone Cash revenue more than doubled in FY24 to €95.8
million.
In Vodacom's international
markets, service revenue growth was supported by a higher customer
base and strong M-Pesa and data revenue growth. M-Pesa revenue grew
by 13.4% on an organic basis and now represents 26.8% of service
revenue.
Adjusted EBITDAaL declined by
11.8% during the year. On an organic basis, adjusted EBITDAaL
increased by 6.4%, supported by service revenue growth and cost
initiatives, partially offset by an increase in technology
operating expenses associated with higher energy costs. The
Adjusted EBITDAaL margin decreased by 1.5 percentage points
year-on-year (organic: -1.1 percentage points) to 34.2%.
Customers
In South Africa, we added 125,000
contract customers in the year, and now have a mobile contract base
of 6.8 million. We added 5.7 million mobile prepaid SIMs in the
year, supported by our big data led customer value management
capabilities which offer personalised bundles to customers. Across
our active customer base, 81.5% of our mobile customers now use
data services, an increase of 3.3 million year-on-year. Our
'VodaPay' super-app continued to gain traction with 5.8 million
registered users.
In Egypt, we added 437,000
contract customers and 2.4 million prepaid mobile customers during
the year, and we now have 48.3 million customers. 'Vodafone Cash'
now has 8.2 million active users with 2.8 million users added
during the year.
In Vodacom's international
markets, we added 4.0 million mobile customers and our mobile
customer base is now 54.2 million, with 63.5% of active customers
using our data services.
Further information on our
operations in Africa can be accessed here: vodacom.com.
Discontinued operations
|
|
|
|
|
|
|
Italy
|
|
FY24
|
FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%1
|
Total revenue
|
4,668
|
4,809
|
(2.9)
|
|
- Service revenue
|
4,184
|
4,251
|
(1.6)
|
(1.6)
|
- Other revenue
|
484
|
558
|
|
|
Note:
1. Organic
growth is a non-GAAP measure. See page 36 for more information.
On 15 March 2024, we announced
that we had entered into a binding agreement to sell Vodafone Italy
to Swisscom AG for €8 billion upfront cash proceeds (subject to
customary closing adjustments). Completion is expected to take
place during the first half of the 2025 calendar year. Full details
of the transaction can be found here:
investors.vodafone.com/sale-of-vodafone-italy.
The Group recorded a non-cash charge of €83
million, included in discontinued operations as a result of the
re-measurement of Vodafone Italy to fair value less costs to sell.
See note 3 to the condensed consolidated financial statements for
further information.
Total revenue declined 2.9% to
€4.7 billion due to lower service revenue and equipment revenue.
Service revenue declined by 1.6% (Q3: -1.3%, Q4: -2.5%), as
continued price pressure in the mobile value segment was only
partly offset by strong Business demand for our fixed line
connectivity and digital services. Vodafone Business service
revenue increased by 7.6% (Q3: 7.5%, Q4: 6.1%) during the year,
driven by strong fixed connectivity and digital services
growth.
|
|
|
|
|
|
Spain
|
|
FY24
|
FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change
%1
|
Total revenue
|
3,846
|
3,907
|
(1.6)
|
|
- Service revenue
|
3,429
|
3,514
|
(2.4)
|
(2.4)
|
- Other revenue
|
417
|
393
|
|
|
Note:
1. Organic
growth is a non-GAAP measure. See page 36 for more information.
On 31 October 2023, we announced
that we had entered into binding agreements with Zegona
Communications plc in relation to the sale of 100% of Vodafone
Spain. We expect final approval from the Spanish authorities to be
granted imminently, with completion to occur shortly thereafter. On
completion, we will receive €4.1 billion in cash (subject to
customary closing adjustments) and €0.9 billion in the form of
Redeemable Preference Shares, which redeem no later than six years
after closing. Vodafone and Zegona have entered into an agreement
whereby Vodafone will provide certain services to Vodafone Spain
after completion of the transaction and Vodafone will continue to
have a presence in Spain through its Innovation Hub in Malaga. Full
details of the transaction can be found here:
investors.vodafone.com/sale-of-vodafone-spain.
The Group recorded a non-cash charge of €345 million, included in
discontinued operations as a result of the re-measurement of
Vodafone Spain to fair value less costs to sell. See note 3 to the
condensed consolidated financial statements for further
information.
Total revenue declined by 1.6% to
€3.8 billion due to lower service revenue. Service revenue declined
by 2.4% (Q3: -1.1%, Q4: -2.9%) due to continued price competition
in the Consumer value segment, a lower customer base and a
reduction in mobile termination rates. Vodafone Business service
revenue declined by 1.2% (Q3: +2.2%, Q4: -2.7%) as lower mobile
connectivity revenue, due to price competition in the SoHo customer
segment, was only partially offset by good demand for Business
digital services, particularly in Q3.
Vodafone Investments
|
|
|
|
|
|
|
Associates and joint ventures
|
FY24
|
FY23
|
€m
|
€m
|
Vantage Towers (Oak Holdings 1
GmbH)
|
(85)
|
-
|
VodafoneZiggo Group Holding
B.V.
|
(177)
|
137
|
Safaricom Limited
|
159
|
195
|
Indus Towers Limited
|
140
|
50
|
Other1 (including TPG
Telecom Limited)
|
(133)
|
51
|
Share of results of equity accounted associates and joint
ventures
|
(96)
|
433
|
|
|
|
|
Note:
1. The
Group's investment in Vodafone Idea Limited ('VIL') was reduced to
€nil in the year ended 31 March 2020 and the Group has not recorded
any profit or loss in respect of its share of VIL's results since
that date.
Vantage Towers - 53.9% ownership
On 23 March 2023, we announced the
completion of Oak Holdings GmbH, our co-control partnership for
Vantage Towers with a consortium of long-term infrastructure
investors led by Global Infrastructure Partners and KKR. We
received initial net proceeds of €4.9 billion in March 2023, and a
further €500 million in July 2023, taking total net proceeds to
€5.4 billion and the Consortium's ownership in Oak Holdings GmbH to
40%. During the year, total revenue increased 6.3% to €1.1 billion,
driven by 2,400 net new tenancies and 1,100 new macro sites. As a
result, the tenancy ratio increased to 1.50x. Vodafone's share of
results in FY24 reflects the amortisation of intangible assets
arising from the completion of the co-control partnership for
Vantage Towers. During the year, Vodafone
received €196 million in dividends from Vantage Towers.
VodafoneZiggo Joint Venture (Netherlands) - 50.0%
ownership
The results of VodafoneZiggo are
prepared under US GAAP, which is broadly consistent with Vodafone's
IFRS basis of reporting. Total revenue increased 1.5% to €4.1
billion, as contractual price increases and mobile contract
customer growth were partially offset by a decline in the fixed
customer base. During the year, VodafoneZiggo added 129,000 mobile
contract customers. VodafoneZiggo's broadband customer base
declined by 115,000 customers to 3.2 million due to the competitive
price environment. The number of converged households increased by
20,000 and 48% of broadband customers are now converged, delivering
significant NPS and customer loyalty benefits. VodafoneZiggo now
offers gigabit speeds to 7.5 million homes, providing nationwide
coverage. Vodafone's lower share of results in FY24 was largely due
to lower adjusted EBITDA, lower gains on derivative financial
instruments and higher third-party interest expenses. During the
year, Vodafone received €100 million in equity distributions and
€51 million in interest payments from the joint venture.
Safaricom Associate (Kenya) - 27.8%
ownership
Safaricom service revenue declined
to €2.1 billion, as the devaluation of the local currency was only
partially offset by a higher customer base and strong mobile data
and M-Pesa growth. Vodafone's lower share of results was due to the
depreciation of the Kenyan shilling versus the euro. During the
year, Vodafone received €122 million in dividends from
Safaricom.
Indus Towers Limited Associate (India) - 21.0%
ownership
Following the sale of shares in
Indus Towers Limited ('Indus Towers') in February and March 2022,
the Group holds 567.2 million shares in Indus Towers. Vodafone's
higher share of results in FY24 was largely due to higher adjusted
EBITDAaL.
Vodafone Idea Limited Joint Venture (India) - 31.4%
ownership
See note 4 'Contingent liabilities
and legal proceedings' in the condensed consolidated financial
statements for more information.
Vodafone Idea Limited has
undertaken equity fund-raisings totalling €2.2 billion since 31
March 2024, reducing the Group's shareholding to 23.2%.
TPG Telecom Limited Joint Venture
(Australia) - 25.1% ownership
TPG Telecom Limited is a fully
integrated telecommunications operator in Australia. Hutchison
Telecommunications (Australia) Limited owns an equivalent economic
interest of 25.1%, with the remaining 49.9% listed as free float on
the Australian stock exchange. We also hold a 50% share of loan
facilities of AU$2.5 billion, US$1.0 billion and €0.6 billion
(2023: US$3.5 billion) held within the structure that holds the
Group's equity stake in TPG Telecom. During the year, Vodafone
received €23 million in dividends from TPG Telecom.
Net financing costs
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
FY24
|
FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Investment income
|
581
|
232
|
|
Financing costs
|
(2,626)
|
(1,609)
|
|
Net
financing costs
|
(2,045)
|
(1,377)
|
(48.5)
|
Adjustments for:
|
|
|
|
|
Mark-to-market losses
|
97
|
(534)
|
|
|
Foreign exchange losses
|
173
|
135
|
|
Adjusted net financing costs2
|
(1,775)
|
(1,776)
|
0.1
|
Notes:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. Adjusted net financing costs is
a non-GAAP measure. See page 36 for more
information.
Net financing costs increased by
€668 million, primarily due to year-on-year changes of
mark-to-market gains recycled from reserves on derivatives that
were previously in cash flow hedge relationships and mark-to-market
movements on the revaluation of the embedded derivative option
linked to the Group's bank borrowings secured against Indian
assets.
Adjusted net financing costs are
in line with prior year, reflecting both a decrease in average net
debt balances and higher returns on cash and short-term
investments, offset by interest movements on lease liabilities and
other items outside of net debt.
|
|
|
|
|
Taxation
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
FY24
|
FY23
|
Change
|
|
%
|
%
|
pps
|
Effective tax rate
|
3.1%
|
3.8%
|
(0.7)
|
Adjusted effective tax rate2
|
24.5%
|
25.6%
|
(1.1)
|
Notes:
1. The results for the year ended 31 March 2023 have been
re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are now reported as discontinued operations. See
note 3 'Discontinued operations and assets held for sale' in the
condensed consolidated financial statements for more
information.
2. Adjusted effective tax rate is
a non-GAAP measure. See page 36 for more information.
The Group's effective tax rate
('ETR') for the year ended 31 March 2024 was 3.1%, (FY23: 3.8%).
The rate remains low following the recognition of a €1,019 million
deferred tax asset on losses in Luxembourg as a result of
favourable case law during the year. The ETR also reflects a tax
credit of €249 million (2023: €309 million) relating to the impacts
of inflation in Turkey.
The year ended 31 March 2023
included gains on the disposals of Vantage Towers and Vodafone
Ghana which were largely exempt from tax, except for a €88 million
charge relating to the disposal of Vantage Towers, as well as the
hyperinflation accounting impacts in Turkey and utilisation of
losses in Luxembourg.
The Group's Adjusted ETR ('AETR')
for the year ended 31 March 2024 was 24.5% (FY23: 25.6%). The AETR
excludes the recognition of a deferred tax asset in Luxembourg, the
impact of a €598 million tax charge (2023: €33 million) relating to
the use of losses in Luxembourg and the effects of inflation in
Turkey.
The charge on losses in Luxembourg
is higher than the prior year because of an internal restructuring
in 2023 which resulted in a loss. As a result of that
restructuring, profits in Luxembourg are no longer subject to
changes in the value of investments. The effects of
hyperinflation accounting in Turkey, and the tax charge relating to
the disposal of Vantage Towers in 2023, are set out
above.
The main drivers for the reduction
in the AETR are the mix of profits between jurisdictions in 2024
compared to 2023 and Vodafone Spain moving to discontinued
operations accounting in 2024 as previously the non-recognition of
tax losses in Spain increased AETR.
Earnings per share
|
|
|
|
|
|
|
Re-presented1
|
Reported
|
|
|
FY24
|
FY23
|
change
|
|
|
eurocents
|
eurocents
|
eurocents
|
Basic earnings per share - Continuing
operations
|
4.45c
|
43.66c
|
(39.21)c
|
Basic earnings per share - Total Group
|
4.21c
|
42.77c
|
(38.56)c
|
|
|
|
|
|
Adjusted basic earnings per
share2
|
7.47c
|
11.28c
|
(3.81)c
|
Notes:
1. The results for the year ended 31
March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. Adjusted basic earnings per share is a non-GAAP measure. See
page 36 for more information.
Basic earnings per share from
continuing operations was 4.45 eurocents, compared to 43.66
eurocents for FY23. The decrease was primarily due to gains on
disposal in the prior year of Vantage Towers A.G. and Vodafone
Ghana, partially offset by the loss on the disposal of Vodafone
Hungary.
Adjusted basic earnings per share
was 7.47 eurocents, compared to 11.28 eurocents for FY23. The
decrease was primarily due to lower Adjusted EBITDAaL.
Cash flow
& funding
|
|
|
|
|
|
|
|
|
|
Analysis of cash flow
|
|
|
|
FY24
|
FY23
|
Reported
|
|
€m
|
€m
|
change %
|
Inflow from operating
activities
|
16,557
|
18,054
|
(8.3)
|
Outflow from investing
activities
|
(6,122)
|
(379)
|
(1,515.3)
|
Outflow from financing
activities
|
(15,855)
|
(13,430)
|
(18.1)
|
Net
cash outflow
|
(5,420)
|
4,245
|
(227.7)
|
Cash and cash equivalents at
beginning of the financial year
|
11,628
|
7,371
|
|
Exchange gain on cash and cash
equivalents
|
(94)
|
12
|
|
Cash and cash equivalents at the end of the financial
year
|
6,114
|
11,628
|
|
|
|
|
|
|
Cash inflow from operating
activities decreased to €16,557 million reflecting lower operating
profit, excluding a lower share of results in equity accounted
associates and joint ventures and a net gain in the prior year
resulting from the sale of Vantage Towers, Vodafone Ghana and
Vodafone Hungary, and adverse working capital movements, which
offset lower taxation payments.
Outflows from investing activities
increased to €6,122 million, primarily in relation to the decrease
in proceeds received in the prior year from disposal of interests
in subsidiaries and a lower net inflow in respect of short-term
investments, which outweighed proceeds from the sale of 3.9% of Oak
Holdings 1 GmbH and the decrease in the purchase of intangible
assets and property, plant and equipment in the year. Short-term
investments include highly liquid government and government-backed
securities and managed investment funds that are in highly rated
and liquid money market investments with liquidity of up to 90
days.
Outflows from financing activities
increased to €15,855 million as higher net cash outflows in respect
of borrowings, primarily arising from movements in collateral
balances, outweighed lower outflows in relation to the purchase of
treasury shares and in respect of discontinued
operations.
Analysis of cash flow
(continued)
|
|
Re-presented1
|
|
|
FY24
|
FY23
|
Reported
|
|
€m
|
€m
|
change %
|
Adjusted EBITDAaL2
|
11,019
|
12,424
|
(11.3)
|
Capital
additions3
|
(6,331)
|
(7,067)
|
|
Working capital
|
(309)
|
377
|
|
Disposal of property, plant and
equipment and intangible assets
|
14
|
90
|
|
Integration capital
additions
|
(81)
|
(200)
|
|
Restructuring costs including
working capital movements4
|
(254)
|
(249)
|
|
Licences and spectrum
|
(454)
|
(773)
|
|
Interest received and
paid5
|
(1,279)
|
(1,172)
|
|
Taxation
|
(724)
|
(1,228)
|
|
Dividends received from associates
and joint ventures
|
442
|
617
|
|
Dividends paid to non-controlling
shareholders in subsidiaries
|
(260)
|
(400)
|
|
Other
|
-
|
164
|
|
Free cash flow2
|
1,783
|
2,583
|
(31.0)
|
Acquisitions and
disposals
|
(346)
|
8,727
|
|
Equity dividends paid
|
(2,430)
|
(2,484)
|
|
Share
buybacks5
|
-
|
(1,893)
|
|
Foreign exchange
gain/(loss)
|
(64)
|
141
|
|
Other movements in net
debt6
|
1,065
|
(613)
|
|
Net
debt decrease2
|
8
|
6,461
|
|
Opening net
debt2
|
(33,250)
|
(39,711)
|
|
Closing net debt2
|
(33,242)
|
(33,250)
|
-
|
Net debt of Vodafone Spain and
Vodafone Italy2
|
(107)
|
(125)
|
|
Closing net debt incl. Vodafone Spain and Vodafone
Italy2
|
(33,349)
|
(33,375)
|
0.1
|
|
|
|
|
Free cash flow2
|
1,783
|
2,583
|
|
Adjustments:
|
|
|
|
- Licences and
spectrum
|
454
|
773
|
|
- Restructuring costs
including working capital movements4
|
254
|
249
|
|
- Integration capital
additions
|
81
|
200
|
|
- Vantage Towers growth
capital expenditure
|
-
|
497
|
|
- Other
adjustments7
|
28
|
(163)
|
|
Adjusted free cash flow2
|
2,600
|
4,139
|
|
Notes:
1. The results for the year ended 31
March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. Adjusted EBITDAaL, Free cash flow, Adjusted free cash flow and
Net debt are non-GAAP measures. See page 36 for more
information.
3. See
page 49 for an analysis of tangible and intangible additions in the
year.
4. Includes working capital in respect of integration capital
additions.
5. Interest received and paid excludes €406 million outflow
(FY23: €296 million) in relation to the cash portion of interest on
lease liabilities included within Adjusted EBITDAaL, and €nil of
cash flow (FY23: €26 million outflow) from the option structures
relating to the issue of the mandatory convertible bonds which is
included within Share buybacks. The share buyback programmes
completed on 15 March 2023.
6. Other
movements in net debt for FY24 includes a net inflow from
discontinued operations of €455 million (FY23: €1,175 million
outflow), mark-to-market losses recognised in the income statement
of €97 million (FY23: €534 million gain) and of €185 million (FY23:
€371 million) for the repayment of debt in relation to licences and
spectrum.
7. The
amount for FY23 includes €120 million received in respect of the
Group's fibre joint venture in Germany and an allocation of €43
million from the Vodafone Hungary proceeds for future services to
be provided by the Group.
Adjusted free cash flow decreased
by €1,539 million to €2,600 million in the period. This reflects a
decrease in Adjusted EBITDAaL in the period, adverse working
capital movements and lower dividends from associates and joint
ventures, which outweighed lower capital additions, lower taxation,
and lower dividends paid to non-controlling shareholders in
subsidiaries.
Acquisitions and disposals
includes €500 million in relation to the disposal of 3.9% of Oak
Holdings 1 GmbH in the year, offset by a final payment of €494
million to settle the Group's obligations to the minority
shareholders in Kabel Deutschland Holding A.G.
Borrowings and cash
position
|
|
|
|
|
|
FY24
|
FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Non-current borrowings
|
(48,328)
|
(51,669)
|
|
Current borrowings
|
(8,659)
|
(14,721)
|
|
Borrowings
|
(56,987)
|
(66,390)
|
|
Cash and cash equivalents
|
6,183
|
11,705
|
|
Borrowings less cash and cash equivalents
|
(50,804)
|
(54,685)
|
7.1
|
Borrowings principally includes
bonds of €40,743 million (€44,116 million as at 31 March 2023),
lease liabilities of €9,672 million (€13,364 million as at 31 March
2023), cash collateral liabilities of €2,628 million (€4,886
million as at 31 March 2023) and €1,720 million (€1,485 million as
at 31 March 2023) of bank borrowings that are secured against the
Group's shareholdings in Indus Towers and Vodafone Idea.
The decrease in borrowings of
€9,403 million was principally driven by repayment of bonds of
€4,847 million, a decrease in collateral liabilities of €2,258
million and the transfer of borrowings in Italy and Spain to
discontinued operations (€3,553 million), offset by the issuance of
new bonds of €1,314 million.
|
|
|
|
|
Funding position
|
|
|
|
|
FY24
|
FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Bonds
|
(40,743)
|
(44,116)
|
|
Bank loans
|
(767)
|
(795)
|
|
Other borrowings including
spectrum
|
(1,457)
|
(1,744)
|
|
Gross debt1
|
(42,967)
|
(46,655)
|
7.9
|
Cash and cash equivalents
|
6,183
|
11,705
|
|
Short-term
investments2
|
3,225
|
4,305
|
|
Derivative financial
instruments3
|
2,204
|
1,917
|
|
Net collateral
liabilities4
|
(1,887)
|
(4,647)
|
|
Net
debt1
|
(33,242)
|
(33,375)
|
0.4
|
Notes:
1. Gross
debt and Net debt are non-GAAP measures. See page 36 for more
information.
2. Short-term investments includes €1,201 million (FY23: €1,338
million) of highly liquid government and government-backed
securities and managed investment funds of €2,024 million (FY23:
€2,967 million) that are in highly rated and liquid money market
investments with liquidity of up to 90 days.
3. Derivative financial instruments excludes derivative movements
in cash flow hedging reserves of €498 million gain (FY23: €2,785
million gain).
4. Collateral arrangements on derivative financial instruments
result in cash being held as security. This is repayable when
derivatives are settled and is therefore deducted from
liquidity.
Net debt decreased by €133 million
to €33,242 million. This was driven by the free cash inflow of
€1,783 million together with other movements of €1,065 million,
offset by acquisitions and disposals of €346 million and equity
dividends of €2,430 million.
Other funding considerations
include:
|
FY24
|
FY23
|
|
|
|
€m
|
€m
|
|
Lease liabilities
|
(9,672)
|
(13,364)
|
|
Financial liabilities under put
options (KDG minority interests)
|
-
|
(485)
|
|
Net pension fund
liabilities
|
(196)
|
(258)
|
|
Guarantees over loan issued by
Australia joint venture
|
(1,479)
|
(1,611)
|
|
Equity characteristic of 50%
attributed by credit rating agencies to 'Hybrid bonds' included in
net debt of €8,993 million (€9,942 million as at 31 March
2023)
|
4,497
|
4,971
|
|
|
|
|
|
|
The Group's gross and net debt
includes certain bonds which have been designated in hedge
relationships, which are carried at €1,229 million higher value
(€1,282 million higher as at 31 March 2023) than their euro
equivalent redemption value. In addition, where bonds are issued in
currencies other than the euro, the Group has entered into foreign
currency swaps to fix the euro cash outflows on redemption. The
impact of these swaps is not reflected in gross debt and if it were
included, the euro equivalent value of the bonds would decrease by
€1,559 million (€1,440 million as at 31 March 2023).
Return on capital
employed
Return on capital employed
('ROCE') reflects how efficiently we are generating profit with the
capital we deploy. We calculate two ROCE
measures: i) Pre-tax ROCE for controlled operations only and ii)
Post-tax ROCE including associates and joint ventures. ROCE
calculated using GAAP measures for the 12 months ended 31 March
2024 was 3.4% (FY23: 13.0%), impacted by gains on disposal in the prior year of Vantage Towers A.G.
and Vodafone Ghana, partially offset by the loss on the disposal of
Vodafone Hungary.
The table below presents adjusted
ROCE metrics.
|
|
Re-presented1
|
|
|
FY242
|
FY232
|
Change
|
|
%
|
%
|
pps
|
Pre-tax ROCE (controlled)2,3
|
7.5%
|
8.2%
|
(0.7)
|
Post-tax ROCE (controlled and associates/joint
ventures)2,3
|
4.5%
|
6.1%
|
(1.6)
|
Notes:
1. The results for the year ended 31
March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. FY23
ROCE calculations exclude the results of Vantage Towers until its
disposal on 22 March 2023 and the investment in Oak Holdings 1 GmbH
from that date. FY23 capital employed for calculating post-tax ROCE
(controlled and associates/joint ventures), FY22 Capital employed
for calculating pre-tax ROCE (controlled) and FY22 capital employed
for calculating post-tax ROCE (controlled and associates/joint
ventures) have been adjusted to €57,911 million, €56,192 million
and €61,515 million, respectively, for the purposes of calculating
relevant FY23 averages.
3. ROCE is
calculated by dividing Operating profit by the average of capital
employed as reported in the consolidated statement of financial
position. Pre-tax ROCE (controlled) and Post-tax ROCE (controlled
and associates/joint ventures) are non-GAAP measures. See page 36
for more information.
Funding facilities
As at 31 March 2024, the Group had
undrawn revolving credit facilities of €7.8 billion comprising euro
and US dollar revolving credit facilities of €4.1 billion and
US$4.0 billion (€3.7 billion) which mature in 2029 and 2028
respectively. Both committed revolving credit facilities support US
and euro commercial paper programmes of up to US$15 billion (€13.9
billion) and €10 billion respectively.
Post employment
benefits
As at 31 March 2024, the
Group's net surplus of scheme assets over scheme
liabilities was €76 million (€71 million net surplus as at 31 March
2023).
Dividends
Dividends will continue to be
declared in euros, aligning the Group's shareholder returns with
the primary currency in which we generate free cash flow, and paid
in euros, pounds sterling and US dollars. The foreign exchange rate
at which future dividends declared in euros will be converted into
pounds sterling and US dollars will be calculated based on the
average World Markets Company benchmark rates over the five
business days during the week prior to the payment of the
dividend.
The Board is recommending total
dividends per share of 9.0 eurocents for the year. This includes a
final dividend of 4.5 eurocents compared to 4.5 eurocents in the
prior year.
The ex-dividend date for the final
dividend is 6 June 2024 for ordinary shareholders and 7 June 2024
for ADR holders, the record date is 7 June 2024 and the dividend is
payable on 2 August 2024. Shareholders may elect to receive their
dividend in either eurocents or GBP and the last day for election
will be 12 July 2024. Alternatively, shareholders may participate
in the dividend reinvestment plan and elections must be made by 12
July 2024. More information can be found at vodafone.com/dividends
Other
significant developments
|
|
|
Executive Committee
changes
The following changes were
effective from 1 April 2024:
-
Ahmed Essam was appointed Executive Chairman
Vodafone Germany and CEO European markets. Ahmed Essam was
previously CEO Vodafone UK and remains a member of the Executive
Committee.
-
Serpil Timuray, previously CEO Europe Cluster,
was appointed CEO Vodafone Investments and is responsible for the
Group's joint ventures, partner markets and the development of new
telecom partnerships. Serpil remains a member of the Executive
Committee.
-
Philippe Rogge, previously CEO Vodafone Germany
and member of the Executive Committee, decided to step down and
leave Vodafone.
Marika Auramo has been appointed
CEO of Vodafone Business and a member of the Executive Committee,
effective 1 July 2024.
Other leadership changes
Max Taylor, previously Chief
Commercial Officer of Vodafone UK, has been appointed CEO of
Vodafone UK.
Marcel de Groot, previously
Consumer Business Director, has been appointed CEO of Vodafone
Germany.
Condensed
consolidated financial statements
|
|
|
|
|
|
|
|
Consolidated income statement
|
|
|
|
|
|
|
|
Year
ended 31 March
|
|
|
|
|
Re-presented1
|
|
|
|
2024
|
2023
|
|
|
|
€m
|
€m
|
Revenue
|
|
|
36,717
|
37,672
|
Cost of sales
|
|
|
(24,459)
|
(24,359)
|
Gross profit
|
|
|
12,258
|
13,313
|
Selling and distribution
expenses
|
|
|
(2,674)
|
(2,777)
|
Administrative expenses
|
|
|
(5,768)
|
(5,351)
|
Net credit losses on financial
assets
|
|
|
(491)
|
(505)
|
Share of results of equity accounted
associates and joint ventures
|
|
|
(96)
|
433
|
Impairment
reversal/(loss)
|
|
|
64
|
(64)
|
Other income
|
|
|
372
|
9,402
|
Operating profit
|
|
|
3,665
|
14,451
|
Investment income
|
|
|
581
|
232
|
Financing costs
|
|
|
(2,626)
|
(1,609)
|
Profit before taxation
|
|
|
1,620
|
13,074
|
Income tax expense
|
|
|
(50)
|
(492)
|
Profit for the financial year - Continuing
operations
|
|
|
1,570
|
12,582
|
Loss for the financial year - Discontinued
operations
|
|
|
(65)
|
(247)
|
Profit for the financial year
|
|
|
1,505
|
12,335
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
- Owners of the parent
|
|
|
1,140
|
11,838
|
- Non-controlling
interests
|
|
|
365
|
497
|
Profit for the financial year
|
|
|
1,505
|
12,335
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
Continuing operations:
|
|
|
|
|
- Basic
|
|
|
4.45c
|
43.66c
|
- Diluted
|
|
|
4.44c
|
43.51c
|
Total Group:
|
|
|
|
|
- Basic
|
|
|
4.21c
|
42.77c
|
- Diluted
|
|
|
4.20c
|
42.62c
|
|
|
|
|
|
|
Note:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' for more information.
The accompanying notes are an
integral part of the condensed consolidated financial
statements.
Consolidated statement of comprehensive
income/(expense)
|
|
|
|
|
|
|
Year
ended 31 March
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
€m
|
€m
|
|
Profit for the financial year
|
|
|
|
1,505
|
12,335
|
|
Other comprehensive income/(expense):
|
|
|
|
|
|
|
Items that may be reclassified to the income statement in
subsequent years:
|
|
|
|
|
|
|
Foreign exchange translation
differences, net of tax
|
|
|
|
(440)
|
(1,236)
|
|
Foreign exchange translation
differences transferred to the income statement
|
|
|
|
23
|
(334)
|
|
Other, net of
tax2
|
|
|
|
(1,748)
|
963
|
|
Total items that may be reclassified to the income statement
in subsequent years
|
|
|
|
(2,165)
|
(607)
|
|
Items that will not be reclassified to the income statement
in subsequent years:
|
|
|
|
|
|
|
Net actuarial losses on defined
benefit pension schemes, net of tax
|
|
|
|
(58)
|
(160)
|
|
Total items that will not be reclassified to the income
statement in subsequent years
|
|
|
|
(58)
|
(160)
|
|
Other comprehensive expense
|
|
|
|
(2,223)
|
(767)
|
|
Total comprehensive (expense)/income for the financial
year
|
|
|
|
(718)
|
11,568
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
- Owners of the parent
|
|
|
|
(920)
|
11,267
|
|
- Non-controlling
interests
|
|
|
|
202
|
301
|
|
|
|
|
|
(718)
|
11,568
|
|
Notes:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' for more information.
2. Principally includes the impact
of the Group's cash flow hedges deferred to other comprehensive
income during the year.
The accompanying notes are an
integral part of the condensed consolidated financial
statements.
Consolidated statement of financial position
|
|
|
|
|
|
|
|
31
March
|
31
March
|
|
|
|
2024
|
2023
|
|
|
|
€m
|
€m
|
Non-current assets
|
|
|
|
|
Goodwill
|
|
|
24,956
|
27,615
|
Other intangible assets
|
|
|
13,896
|
19,592
|
Property, plant and
equipment
|
|
|
28,499
|
37,992
|
Investments in associates and joint
ventures
|
|
|
10,032
|
11,079
|
Other investments
|
|
|
1,006
|
1,093
|
Deferred tax assets
|
|
|
20,177
|
19,316
|
Post employment benefits
|
|
|
257
|
329
|
Trade and other
receivables
|
|
|
5,967
|
7,843
|
|
|
|
104,790
|
124,859
|
Current assets
|
|
|
|
|
Inventory
|
|
|
568
|
956
|
Taxation recoverable
|
|
|
76
|
279
|
Trade and other
receivables
|
|
|
8,594
|
10,705
|
Other investments
|
|
|
5,092
|
7,017
|
Cash and cash equivalents
|
|
|
6,183
|
11,705
|
|
|
|
20,513
|
30,662
|
Assets held for sale
|
|
|
19,047
|
-
|
Total assets
|
|
|
144,350
|
155,521
|
|
|
|
|
|
Equity
|
|
|
|
|
Called up share capital
|
|
|
4,797
|
4,797
|
Additional paid-in
capital
|
|
|
149,253
|
149,145
|
Treasury shares
|
|
|
(7,645)
|
(7,719)
|
Accumulated losses
|
|
|
(114,641)
|
(113,086)
|
Accumulated other comprehensive
income
|
|
|
28,202
|
30,262
|
Total attributable to owners of the parent
|
|
|
59,966
|
63,399
|
Non-controlling interests
|
|
|
1,032
|
1,084
|
Total equity
|
|
|
60,998
|
64,483
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Borrowings
|
|
|
48,328
|
51,669
|
Deferred tax liabilities
|
|
|
699
|
771
|
Post employment benefits
|
|
|
181
|
258
|
Provisions
|
|
|
1,615
|
1,572
|
Trade and other payables
|
|
|
2,328
|
2,184
|
|
|
|
53,151
|
56,454
|
Current liabilities
|
|
|
|
|
Borrowings
|
|
|
8,659
|
14,721
|
Financial liabilities under put
option arrangements
|
|
|
-
|
485
|
Taxation liabilities
|
|
|
393
|
457
|
Provisions
|
|
|
833
|
674
|
Trade and other payables
|
|
|
13,398
|
18,247
|
|
|
|
23,283
|
34,584
|
Liabilities held for sale
|
|
|
6,918
|
-
|
Total equity and liabilities
|
|
|
144,350
|
155,521
|
The accompanying notes are an
integral part of the condensed consolidated financial
statements.
Consolidated statement of changes in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Additional
paid-in
capital1
|
Treasury
shares
|
Accumulated
comprehensive
losses2
|
Equity
attributable to the owners
|
Non-
controlling
interests
|
Total
equity
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
1
April 2022
|
4,797
|
149,018
|
(7,278)
|
(91,189)
|
55,348
|
2,290
|
57,638
|
Issue or reissue of
shares
|
-
|
1
|
122
|
(113)
|
10
|
-
|
10
|
Share-based payments
|
-
|
126
|
-
|
-
|
126
|
9
|
135
|
Transactions with non-controlling
interests in subsidiaries
|
-
|
-
|
-
|
(287)
|
(287)
|
(1,118)
|
(1,405)
|
Comprehensive income
|
-
|
-
|
-
|
11,267
|
11,267
|
301
|
11,568
|
Dividends
|
-
|
-
|
-
|
(2,502)
|
(2,502)
|
(398)
|
(2,900)
|
Purchase of treasury
shares
|
-
|
-
|
(563)
|
-
|
(563)
|
-
|
(563)
|
31
March 2023
|
4,797
|
149,145
|
(7,719)
|
(82,824)
|
63,399
|
1,084
|
64,483
|
|
|
|
|
|
|
|
|
1
April 2023
|
4,797
|
149,145
|
(7,719)
|
(82,824)
|
63,399
|
1,084
|
64,483
|
Issue or reissue of
shares
|
-
|
-
|
74
|
(72)
|
2
|
-
|
2
|
Share-based payments
|
-
|
108
|
-
|
-
|
108
|
7
|
115
|
Transactions with non-controlling
interests in subsidiaries
|
-
|
-
|
-
|
(26)
|
(26)
|
(5)
|
(31)
|
Share of equity accounted entities
changes in equity
|
-
|
-
|
-
|
(164)
|
(164)
|
-
|
(164)
|
Comprehensive
(expense)/income
|
-
|
-
|
-
|
(920)
|
(920)
|
202
|
(718)
|
Dividends
|
-
|
-
|
-
|
(2,433)
|
(2,433)
|
(256)
|
(2,689)
|
31
March 2024
|
4,797
|
149,253
|
(7,645)
|
(86,439)
|
59,966
|
1,032
|
60,998
|
Notes:
1. Includes share premium, capital reserve, capital redemption
reserve, merger reserve and share-based payment reserve. The merger
reserve was derived from acquisitions made prior to 31 March 2004
and subsequently allocated to additional paid-in capital on
adoption of IFRS.
2. Includes accumulated losses and
accumulated other comprehensive income.
The accompanying notes are an
integral part of the condensed consolidated financial
statements.
Consolidated statement of cash flows
|
|
|
|
|
|
|
|
Year
ended 31 March
|
|
|
|
|
Re-presented1
|
|
|
|
2024
|
2023
|
|
|
|
€m
|
€m
|
Inflow from operating activities
|
|
|
16,557
|
18,054
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of interests in associates
and joint ventures
|
|
|
(75)
|
(78)
|
Purchase of intangible
assets
|
|
|
(2,641)
|
(2,799)
|
Purchase of property, plant and
equipment
|
|
|
(4,219)
|
(4,957)
|
Purchase of investments
|
|
|
(1,233)
|
(766)
|
Disposal of interests in
subsidiaries, net of cash disposed
|
|
|
(67)
|
6,976
|
Disposal of interests in associates
and joint ventures
|
|
|
500
|
-
|
Disposal of property, plant and
equipment and intangible assets
|
|
|
15
|
90
|
Disposal of investments
|
|
|
1,931
|
1,647
|
Dividends received from associates
and joint ventures
|
|
|
442
|
617
|
Interest received
|
|
|
542
|
321
|
Cash outflows from discontinued
operations
|
|
|
(1,317)
|
(1,430)
|
Outflow from investing activities
|
|
|
(6,122)
|
(379)
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from issue of long-term
borrowings
|
|
|
1,533
|
4,071
|
Repayment of borrowings
|
|
|
(8,970)
|
(10,501)
|
Net movement in short-term
borrowings
|
|
|
(1,636)
|
3,171
|
Net movement in
derivatives
|
|
|
144
|
261
|
Interest paid2
|
|
|
(2,227)
|
(1,815)
|
Payments for settlement of written
put options
|
|
|
(493)
|
(12)
|
Purchase of treasury
shares
|
|
|
-
|
(1,867)
|
Issue of ordinary share capital and
reissue of treasury shares
|
|
|
3
|
10
|
Equity dividends paid
|
|
|
(2,430)
|
(2,484)
|
Dividends paid to non-controlling
shareholders in subsidiaries
|
|
|
(260)
|
(400)
|
Other transactions with
non-controlling shareholders in subsidiaries
|
|
|
(16)
|
(692)
|
Cash outflows from discontinued
operations
|
|
|
(1,503)
|
(3,172)
|
Outflow from financing activities
|
|
|
(15,855)
|
(13,430)
|
|
|
|
|
|
Net
cash (outflow)/inflow
|
|
|
(5,420)
|
4,245
|
Cash and cash equivalents at
beginning of the financial year3
|
|
|
11,628
|
7,371
|
Exchange (loss)/gain on cash and
cash equivalents
|
|
|
(94)
|
12
|
Cash and cash equivalents at end of the financial
year3
|
|
|
6,114
|
11,628
|
Notes:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' for more information.
2. Interest paid includes €nil
(FY23: €26 million cash outflow) on derivative financial
instruments for the share buyback related to maturing tranches of
mandatory convertible bonds.
3. Comprises cash and cash
equivalents as presented in the consolidated statement of financial
position of €6,183million (FY23: €11,705 million), together with
overdrafts of €111 million (FY23: €77 million) and €42 million
(FY23: €nil) of cash and cash equivalents included within Assets
held for sale.
The accompanying notes are an
integral part of the condensed consolidated financial
statements.
Notes to
the condensed consolidated financial statements
1 Basis of preparation
The preliminary results for the
year ended 31 March 2024 are an abridged statement of the full
Annual Report which was approved by the Board of Directors on 14
May 2024. The consolidated financial statements in the full Annual
Report are prepared in accordance with UK-adopted International
Financial Reporting Standards ('IFRS'), with IFRS as issued by the
International Accounting Standards Board ('IASB') and with the
requirements of the Companies Act 2006.
The auditor's report on those
consolidated financial statements was unqualified, did not draw
attention to any matters by way of emphasis without qualifying
their report and did not contain statements under section 498(2) or
498(3) of the Companies Act 2006. The preliminary results do not
comprise statutory accounts within the meaning of section 434(3) of
the Companies Act 2006. The Annual Report for the year ended 31
March 2024 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting on 30 July
2024.
The financial information included
in this preliminary announcement does not itself contain sufficient
information to comply with IFRS. A separate announcement will be
made in accordance with Disclosure and Transparency Rules (DTR) 6.3
when the Annual Report for the year ended 31 March 2024 is made
available on the Company's website in June 2024.
The preparation of the preliminary
results requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the end of the reporting
period and the reported amounts of revenue and expenses during the
reporting period. Actual results could vary from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Going concern
The Group has €6.1 billion of cash
and cash equivalents available as at 31 March 2024 which, together
with undrawn revolving credit facilities of €7.8 billion, cover all
of the Group's reasonably expected cash requirements over the going
concern period. The Directors have reviewed trading and liquidity
forecasts for the Group, which were based on current trading
conditions, and considered a variety of scenarios. In addition to
the liquidity forecasts prepared, the Directors considered the
availability of the Group's revolving credit facilities which were
undrawn as at 31 March 2024. As a result of the assessment
performed, the Directors have concluded that the Group is able to
continue in operation for a period of at least 12 months from the
date of approving the consolidated financial statements and that it
is appropriate to continue to adopt the going concern basis in
preparing the consolidated financial statements.
Critical accounting judgements and
estimates
The Group's critical accounting
judgements and estimates are disclosed in the Group's Annual Report
for the year ended 31 March 2024.
New accounting pronouncements
adopted
On 1 April 2023, the Group adopted
certain new accounting policies where necessary to comply with
amendments to IFRS, none of which had a material impact on the
consolidated results, financial position or cash flows of the
Group. Further details are provided in the Group's Annual Report
for the prior year ended 31 March 2023.
Notes to
the condensed consolidated financial statements
1 Basis of preparation
(continued)
Hyperinflation
accounting
The Group continues to apply
hyperinflationary accounting, as specified in IAS 29, at its
Turkish operations whose functional currency is the Turkish lira
and to Safaricom's operations in Ethiopia where the Ethiopian birr
is the functional currency.
Turkish lira and Ethiopian birr
results and non-monetary asset and liability balances for the year
ended 31 March 2024 have been revalued to their present value
equivalent local currency amounts as at 31 March 2024, based on an
inflation index, before translation to euros at the reporting date
exchange rate of €1:34.94 TRL and €1:61.43 ETB,
respectively.
For the Group's operations in
Turkey, the gain or loss on net monetary assets resulting from IAS
29 application is recognised in the consolidated income statement
within Other income.
For Safaricom's operations in
Ethiopia, the impacts of IAS 29 accounting are reflected as an
adjustment to Investments in associates and joint ventures and to
Profit attributable to the joint ventures and
associates.
The inflation index in Turkey
selected to reflect the change in purchasing power was the consumer
price index ('CPI') issued by the Turkish Statistical Institute
which has risen by 68.50% during the year ended 31 March 2024. The
inflation index selected in Ethiopia is the CPI issued by the
Central Statistics Agency of Ethiopia which rose 26.20% during the
year ended 31 March
2024.
The main impacts of these
adjustments on the consolidated financial statements are shown
below.
|
Increase/(decrease)
|
|
2024
|
2023
|
Impact on the consolidated income statement for the years
ended 31 March
|
€m
|
€m
|
Revenue
|
111
|
85
|
Operating profit
|
66
|
(87)
|
Profit for the financial
year
|
(169)
|
(123)
|
|
|
|
|
Increase/(decrease)
|
|
31 March
2024
|
31 March
2023
|
Impact on the consolidated statement of financial position at
31 March
|
€m
|
€m
|
Net assets
|
981
|
814
|
Equity attributable to owners of the
parent
|
913
|
777
|
Non-controlling interests
|
68
|
37
|
2 Dividends
|
2024
|
2023
|
|
€m
|
€m
|
Declared and paid during the financial
year:
|
|
|
Final dividend for the year ended 31
March 2023: 4.50 eurocents per share
|
1,215
|
1,265
|
(2022: 4.50 eurocents per
share)
|
|
|
Interim dividend for the year ended
31 March 2024: 4.50 eurocents per share
|
1,218
|
1,237
|
(2023: 4.50 eurocents per
share)
|
|
|
|
2,433
|
2,502
|
|
|
|
Proposed after the end of the year and not recognised as a
liability:
|
|
|
Final dividend for the year ended 31
March 2024: 4.50 eurocents per share
|
1,219
|
1,215
|
(2023: 4.50 eurocents per
share)
|
|
|
Notes to
the condensed consolidated financial statements
3 Discontinued operations and assets held
for sale
Discontinued operations
Where operations constitute a
separately reportable segment and have been disposed of, or are
classified as held for sale, the Group classifies such operations
as discontinued.
Discontinued operations are
excluded from the results of continuing operations and are
presented as a single amount as profit or loss after tax from
discontinued operations in the Consolidated income statement.
Discontinued operations are also excluded from segment reporting.
All other notes to the Condensed consolidated financial statements
include amounts for continuing operations, unless indicated
otherwise.
Transactions between the Group's
continuing and discontinued operations are eliminated in full in
the Consolidated income statement. To the extent that the Group
considers that the commercial relationships with discontinued
operations will continue post-disposal, transactions are reflected
within continuing operations with an opposite charge or credit
reflected within the results of discontinued operations resulting
in a net nil impact on the Group's Profit for the financial year
for the years presented.
On 31 October 2023, the Group
announced that it had entered into binding agreements with Zegona
Communications plc ('Zegona') in relation to the sale of 100% of
Vodafone Holdings Europe, S.L.U. ('Vodafone Spain'). The expected
completion of the disposal is the first half of
2024.
On 15 March 2024, the Group
announced that it had entered into a binding agreement with
Swisscom AG ('Swisscom') in relation to the sale of 100% of
Vodafone Italia S.p.A. ('Vodafone Italy'). The expected completion
of the disposal is in the first half of 2025.
Consequently, the results of
Vodafone Spain and Vodafone Italy are reported as discontinued
operations and the assets and liabilities of both are presented as
held for sale in the consolidated statement of financial
position.
A summary of the results of these
discontinued operations is below.
|
|
|
Year
ended 31 March
|
|
|
|
2024
|
2023
|
|
|
|
€m
|
€m
|
(Loss)/profit for the financial year - Discontinued
operations
|
|
|
|
|
Vodafone Spain
|
|
|
(5)
|
(340)
|
Vodafone Italy
|
|
|
(60)
|
93
|
Total
|
|
|
(65)
|
(247)
|
|
|
|
|
|
Loss per share - Discontinued operations
|
|
|
|
|
- Basic
|
|
|
(0.24)c
|
(0.89)c
|
- Diluted
|
|
|
(0.24)c
|
(0.89)c
|
Notes to
the condensed consolidated financial statements
3 Discontinued operations and assets held
for sale (continued)
Segment analysis of discontinued operations
Vodafone Spain
The results of discontinued
operations in Spain are detailed below.
|
|
|
Year
ended 31 March
|
|
|
|
2024
|
2023
|
|
|
|
€m
|
€m
|
Revenue
|
|
|
3,773
|
3,675
|
Cost of sales
|
|
|
(2,593)
|
(2,959)
|
Gross profit
|
|
|
1,180
|
716
|
Selling and distribution
expenses
|
|
|
(259)
|
(314)
|
Administrative expenses
|
|
|
(435)
|
(575)
|
Net credit losses on financial
assets
|
|
|
(120)
|
(35)
|
Other expense
|
|
|
-
|
(122)
|
Operating profit/(loss)
|
|
|
366
|
(330)
|
Investment income
|
|
|
29
|
16
|
Financing costs
|
|
|
(56)
|
(26)
|
Profit/(loss) before taxation
|
|
|
339
|
(340)
|
Income tax credit
|
|
|
1
|
-
|
Profit/(loss) after tax of discontinued
operations
|
|
|
340
|
(340)
|
|
|
|
|
|
After tax loss on the re-measurement of disposal
group
|
|
|
(345)
|
-
|
|
|
|
|
|
Loss for the financial year from discontinued
operations
|
|
|
(5)
|
(340)
|
|
|
|
|
|
Total comprehensive expense for the financial year from
discontinued operations
|
|
|
|
|
Attributable to owners of the
parent
|
|
|
(5)
|
(340)
|
The consideration for Vodafone
Spain is comprised of €4.1 billion cash to be paid on completion
and non-cash consideration with a nominal value of €0.9
billion. The non-cash consideration comprises Redeemable
Preference Shares ('RPS') which will be issued to Vodafone by a
newly created entity, which will subscribe for new ordinary shares
in Zegona for an amount, based on the issue price for Zegona's
equity raise, that is equivalent to the amount of RPS being
subscribed for by Vodafone. The RPS will be redeemed 6 years after
completion, or earlier following a material liquidity event or exit
for Zegona that releases funds to its shareholders. A
proportion of the consideration is related to future services to be
provided by the Group to Zegona. For the
year ended 31 March 2024, the Group recorded a non-cash charge of
€345 million (pre and post-tax), included in discontinued
operations, as a result of the re-measurement of Vodafone Spain to
its fair value less costs to sell. The charge mostly results
from the non-recognition of €538 million (pre and post-tax)
depreciation and amortisation of non-current assets from the date
Vodafone Spain was classified as held for sale.
The fair value of the Group's
equity interest at 31 March 2024 was determined with reference to
the consideration expected from the agreed sale to Zegona less
adjustments for estimated completion adjustments, consideration for
future services to be received by Zegona from the Group and the
elimination of intercompany debt. This approach was considered to
result in a level 2 valuation in accordance with IFRS 13 as certain
estimated completion adjustments and the fair value of the non-cash
consideration, are not observable.
Notes to
the condensed consolidated financial statements
Vodafone Italy
The results of discontinued
operations in Italy are detailed below.
|
|
|
Year
ended 31 March
|
|
|
|
2024
|
2023
|
|
|
|
€m
|
€m
|
Revenue
|
|
|
4,579
|
4,722
|
Cost of sales
|
|
|
(3,438)
|
(3,532)
|
Gross profit
|
|
|
1,141
|
1,190
|
Selling and distribution
expenses
|
|
|
(244)
|
(238)
|
Administrative expenses
|
|
|
(760)
|
(710)
|
Net credit losses on financial
assets
|
|
|
(51)
|
(66)
|
Other expense
|
|
|
-
|
(1)
|
Operating profit
|
|
|
86
|
175
|
Investment income
|
|
|
-
|
-
|
Financing costs
|
|
|
(86)
|
(93)
|
Profit before taxation
|
|
|
-
|
82
|
Income tax credit
|
|
|
23
|
11
|
Profit after tax of discontinued operations
|
|
|
23
|
93
|
|
|
|
|
|
After tax loss on the re-measurement of disposal
group
|
|
|
(83)
|
-
|
|
|
|
|
|
(Loss)/profit for the financial year from discontinued
operations
|
|
|
(60)
|
93
|
|
|
|
|
|
Total comprehensive (expense)/income for the financial year
from discontinued operations
|
|
|
|
|
Attributable to owners of the
parent
|
|
|
(71)
|
80
|
The consideration for Vodafone
Italy is comprised of €8 billion cash to be paid on completion. A
proportion of the consideration is related to future services to be
provided by the Group to Swisscom. For the
year ended 31 March 2024, the Group recorded a non-cash charge of
€83 million (pre and post-tax), included in discontinued
operations, as a result of the re-measurement of Vodafone Italy to
its fair value less costs to sell. The charge mostly results
from the non-recognition of €93 million (€67 million net of tax)
depreciation and amortisation of non-current assets from the date
Vodafone Italy was classified as held for sale.
The fair value of the Group's
equity interest at 31 March 2024 was determined with reference to
the consideration expected to be received from the agreed sale to
Swisscom, less adjustments for estimated completion adjustments,
consideration for future services to be received by Swisscom from
the Group and the elimination of intercompany debt. This
approach was considered to result in a level 2 valuation in
accordance with IFRS 13 as, certain completion related adjustments
and estimates of the value of the future services to be provided,
are not observable.
Notes to
the condensed consolidated financial statements
3 Discontinued operations and assets held
for sale (continued)
Assets held for sale
Assets and liabilities relating to
Vodafone Spain and Vodafone Italy have been classified as held for
sale in the consolidated statement of financial position at 31
March 2024. The relevant assets and liabilities are detailed in the
table below.
|
Vodafone
Spain
|
Vodafone
Italy
|
Total
|
|
€m
|
€m
|
€m
|
Non-current assets
|
|
|
|
Goodwill
|
-
|
2,398
|
2,398
|
Other intangible assets
|
987
|
3,331
|
4,318
|
Property, plant and
equipment
|
4,957
|
4,307
|
9,264
|
Other investments
|
2
|
-
|
2
|
Deferred tax assets
|
-
|
461
|
461
|
Trade and other
receivables
|
223
|
167
|
390
|
|
6,169
|
10,664
|
16,833
|
Current assets
|
|
|
|
Inventory
|
39
|
134
|
173
|
Taxation recoverable
|
-
|
77
|
77
|
Trade and other
receivables
|
805
|
1,117
|
1,922
|
Cash and cash equivalents
|
13
|
29
|
42
|
|
857
|
1,357
|
2,214
|
|
|
|
|
Assets held for sale
|
7,026
|
12,021
|
19,047
|
|
|
|
|
Non-current liabilities
|
|
|
|
Borrowings
|
878
|
1,509
|
2,387
|
Deferred tax liabilities
|
3
|
-
|
3
|
Post employment benefits
|
-
|
45
|
45
|
Provisions
|
158
|
115
|
273
|
Trade and other payables
|
43
|
120
|
163
|
|
1,082
|
1,789
|
2,871
|
Current liabilities
|
|
|
|
Borrowings
|
346
|
673
|
1,019
|
Taxation liabilities
|
-
|
12
|
12
|
Provisions
|
23
|
67
|
90
|
Trade and other payables
|
1,203
|
1,723
|
2,926
|
|
1,572
|
2,475
|
4,047
|
|
|
|
|
Liabilities held for sale
|
2,654
|
4,264
|
6,918
|
Notes to
the condensed consolidated financial statements
4 Contingent liabilities and legal
proceedings
Vodafone Idea
As part of the agreement to merge
Vodafone India and Idea Cellular in 2017, the parties agreed a
mechanism for payments between the Group and Vodafone Idea Limited
('VIL') pursuant to the difference between the crystallisation of
certain identified contingent liabilities in relation to legal,
regulatory, tax and other matters, and refunds relating to Vodafone
India and Idea Cellular. Cash payments or cash receipts relating to
these matters must have been made or received by VIL before any
amount becomes due from or owed to the Group. Any future payments
by the Group to VIL as a result of this agreement would only be
made after satisfaction of this and other contractual
conditions. The Group's maximum potential exposure
under this mechanism is capped at INR 64 billion (€713
million).
The final liability calculation
date under the CLAM is 30 June 2025 and no further cash payments
are considered probable from the Group as at 31 March
2024.
The carrying value of the Group's
investment in VIL is €nil and the Group is recording no further
share of losses in respect of VIL. The Group's potential exposure
to liabilities within VIL is capped by the mechanism described
above; consequently, contingent liabilities arising from litigation
in India concerning the operations of Vodafone India are not
reported.
Indus Towers
Under the terms of the Indus and
Bharti Infratel merger in November 2020, a security package was
agreed for the benefit of the newly created merged entity, Indus
Towers, which could be invoked in the event that VIL was unable to
make MSA payments. The remaining element of the security package is
a secondary pledge over shares owned by Vodafone Group in Indus
Towers, ranking behind Vodafone's existing lenders for the
outstanding bank borrowings of €1.7 billion as at 31 March 2024
secured against Indian assets ('the bank borrowings'), with a
maximum liability cap of INR 42.5 billion (€472 million). In
the event of non-payment of relevant MSA obligations by VIL, Indus
Towers would have recourse to any secondary pledged shares, after
repayment of the bank borrowings in full, up to the value of the
liability cap.
Legal proceedings
The Group is currently involved in
a number of legal proceedings, including inquiries from, or
discussions with, government authorities that are incidental to its
operations.
Legal proceedings where the Group
considers that the likelihood of material future outflows of cash
or other resources is more than remote are disclosed below. Where
the Group assesses that it is probable that the outcome of legal
proceedings will result in a financial outflow, and a reliable
estimate can be made of the amount of that obligation, a provision
is recognised for these amounts.
In all cases, determining the
probability of successfully defending a claim against the Group
involves the application of judgement as the outcome is inherently
uncertain. The determination of the value of any future outflows of
cash or other resources, and the timing of such outflows, involves
the use of estimates. The costs incurred in complex legal
proceedings, regardless of outcome, can be significant.
The Group is not involved in any
material proceedings in which any of the Group's Directors, members
of senior management or affiliates are either a party adverse to
the Group or have a material interest adverse to the
Group.
Notes to
the condensed consolidated financial statements
4 Contingent liabilities and legal
proceedings (continued)
Tax cases
VISPL tax claims
Vodafone India Services Private
Limited ('VISPL') is involved in a number of tax cases. The total
value of the claims is approximately €468 million plus interest,
and penalties of up to 300% of the principal.
Of the individual tax claims, the
most significant is for approximately €238 million (plus interest
of €672 million), which VISPL has been assessed as owing in respect
of: (i) the sale of an international call centre by VISPL to
Hutchison Telecommunications International Limited group ('HTIL');
and (ii) the acquisition of and/or the alleged transfer of options
held by VISPL in Vodafone India Limited. Item (i) is subject to an
indemnity by HTIL. Item (ii), which forms the largest part of the
potential claim, is not subject to any indemnity. A stay of the tax
demand was obtained following a deposit of INR 2,000 million (€22
million) being paid, and a corporate guarantee being provided by
Vodafone International Holdings BV ('VIHBV') for the balance of tax
assessed. On 8 October 2015, the Bombay High Court ruled in favour
of Vodafone in relation to the options and the call centre sale.
The Indian Tax Authority has appealed to the Supreme Court of
India. The appeal hearing has been adjourned indefinitely. A claim
in respect of the transfer pricing margin charged for the
international call centre of HTIL prior to the 2007 transaction
with Vodafone for HTIL assets in India has now been
settled.
While there is some uncertainty as
to the outcome of the remaining tax cases involving VISPL, the
Group believes it has valid defences and does not consider it
probable that a financial outflow will be required to settle these
cases.
Netherlands tax case
Vodafone Europe BV ('VEBV')
received assessments totalling €267 million of tax and interest
from the Dutch tax authorities, who challenged the application of
the arm's length principle in relation to various intra-group
financing transactions. The Group entered into a guarantee for the
full value of the assessments issued. VEBV appealed against these
assessments to the District Court of the Hague where a hearing was
held in March 2023. The District Court issued its judgement in July
2023, upholding VEBV's appeal in relation to the majority of issues
and requiring the Dutch tax authorities to significantly reduce its
assessments. VEBV and the Dutch tax authorities have since appealed
the judgement. The appeal hearing date is not yet known but is
expected to be before the end of 2024.
The Group continues to believe it
has robust defences but has recorded a provision of €24 million for
tax and interest, reflecting the Group's current view of the
probable financial outflow required to fully resolve the issue and
has reduced the guarantee to the same value.
Other cases in the
Group
Germany: Kabel Deutschland takeover - class
actions
The German courts have been
determining the adequacy of the mandatory cash offer made to
minority shareholders in Vodafone's takeover of Kabel Deutschland
in 2013. Hearings took place in May 2019 and a decision was
delivered in November 2019 in Vodafone's favour, rejecting all
claims by minority shareholders. A number of shareholders appealed
which was rejected by the court in December 2021. Several minority
shareholders filed a further appeal before the Federal Court of
Justice which was dismissed in April 2024.
Germany: price increase class action
In November 2023, the
Verbraucherzentrale Bundesverband (Federation of German Consumer
Organisations) initiated a class action against Vodafone Germany in
the Hamm Higher Regional Court. Vodafone Germany implemented price
increases of €5 per month for fixed lines services in 2023 in
response to higher costs. The claim alleges that terms regarding
price increases in the consumer contracts entered into by Vodafone
Germany's customers up until August 2023 are invalid under German
civil law and seeks reimbursement of the additional charges plus
interest. Customers must enter their details onto the register of
collective actions on the Federal Office of Justice website in
order to participate in the claim. The register opened on 23 April
2024.
Whilst the Group intends to defend
the claim, it is not able to determine the likelihood or estimate
the amount of any possible financial loss at this early stage of
the proceedings.
Notes to
the condensed consolidated financial statements
4 Contingent liabilities and legal
proceedings (continued)
Germany: claims regarding transfer of data to credit
agencies
Individual consumers are bringing
claims against Vodafone Germany and/or the other national network
operators alleging that information was passed to credit agencies
up to February 2024 about contracts for mobile services without
consumer consent. The claims seek damages of up to €5,000 per
contract for GDPR (General Data Protection Regulation)
infringement. As at 31 March 2024, Vodafone Germany had been
notified of 316 claims filed in various regional courts. The other
national network operators are facing similar claims.
The Group's position is that the
transfer of data about the existence of a consumer contract (and
not about payments in relation to the contract) to credit agencies
is standard practice and justified for the purposes of fraud
prevention. However, given the increasing volume of claims,
Vodafone Germany has stopped this activity.
Although the outcome of these
claims is uncertain and consequently it is not possible to estimate
a potential financial loss, if any, at this stage, the Group
believes it has valid defences and that no present obligation
exists based on all available evidence.
Germany: investigation by federal data protection
authority
In 2021, the BfDI (Federal
Commissioner for Data Protection and Freedom of Information)
started an investigation into potential breaches of the GDPR in
relation to the systems used by Vodafone Germany's sales partners
to manage customer data.
Vodafone Germany is working
cooperatively with the authority to discuss the circumstances
giving rise to these issues and is currently conducting settlement
talks with the aim of reaching a constructive resolution of the
proceedings. Under the GDPR the authority has the power to impose
fines of up to 2% of the Group's annual revenue from the preceding
financial year.
A provision immaterial to the
financial statements has been recorded.
Italy: Iliad v Vodafone Italy
In July 2019, Iliad filed a claim
for €500 million against Vodafone Italy in the Civil Court of
Milan. The claim alleges anti-competitive behaviour in relation to
customer portability and certain advertising campaigns by Vodafone
Italy. The main hearing on the merits of the claim took place on 8
June 2021. On 17 April 2023, the Civil Court issued a judgement in
Vodafone Italy's favour and rejected Iliad's claim for damages in
full. Iliad filed an appeal before the Court of Appeal of Milan in
June 2023. The appeal process is ongoing.
The Group is currently unable to
estimate any possible loss in this claim in the event of an adverse
judgement on appeal but, while the outcome is uncertain, the Group
believes it has valid defences and that it is probable that no
present obligation exists.
Greece: Papistas Holdings SA, Mobile Trade Stores (formerly
Papistas SA) and Athanasios and Loukia Papistas v Vodafone
Greece
In October 2019, Mr. and Mrs.
Papistas, and companies owned or controlled by them, filed several
claims against Vodafone Greece with a total value of approximately
€330 million for purported damage caused by the alleged abuse of
dominance and wrongful termination of a franchise arrangement with
a Papistas company. Lawsuits which the Papistas claimants had
previously brought against Vodafone Greece, including one also
citing Vodafone Group Plc and certain Directors and officers of
Vodafone as defendants, were either withdrawn or left dormant.
Vodafone Greece filed a counter claim and all claims were heard in
February 2020. All of the Papistas claims were rejected by the
Athens Court of First Instance because the stamp duty payments
required to have the merits of the case considered had not been
made. Vodafone Greece's counter claim was also rejected. The
Papistas claimants and Vodafone Greece each filed appeals. The
appeal hearings took place on 23 February and 11 May 2023.
Judgement has been received and the Court dismissed both of the
appeals because the stamp duty payments had again not been made,
except for one aspect of the proceedings which will be dealt with
at a further hearing in February 2025. Whether the Papistas
claimants will appeal the judgement is unknown as at the date of
this report.
Vodafone is continuing vigorously
to defend the claims and based on the progress of the litigation so
far the Group believes that it is highly unlikely that there will
be an adverse ruling for the Group. On this basis, the Group does
not expect the outcome of these claims to have a material financial
impact.
Notes to
the condensed consolidated financial statements
4 Contingent liabilities and legal
proceedings (continued)
UK: Phones 4U in Administration v Vodafone Limited, Vodafone
Group Plc and Others
In December 2018, the
administrators of former UK indirect seller, Phones 4U, sued the
three main UK mobile network operators ('MNOs'), including
Vodafone, and their parent companies in the English High Court. The
administrators alleged collusion between the MNOs to withdraw their
business from Phones 4U thereby causing its collapse. The judge
ordered that there should be a split trial between liability and
damages. The first trial on liability took place from May to July
2022. On 10 November 2023, the High Court issued a judgement in
Vodafone's favour and rejected Phones 4U's allegations that the
defendants were in breach of competition law, consistent with
Vodafone's previously stated position that a present obligation
does not exist. Phones 4U has been granted permission to appeal the
judgement from the Court of Appeal. The appeal hearing will take
place in May 2025.
The Group intends to vigorously
defend the appeal and is not able to estimate any possible loss in
the event of an adverse judgement on appeal.
South Africa: Kenneth Makate v Vodacom (Pty)
Limited
Mr Kenneth Makate, a former
employee of Vodacom Pty Limited ('Vodacom South Africa'), started
legal proceedings in 2008 claiming compensation for a business idea
that led to the development of a service known as 'Please Call Me'
('PCM'). In July 2014, the Gauteng High Court ('the High Court')
ruled that Mr Makate had proven the existence of a contract, but
that Vodacom South Africa was not bound by that contract because
the responsible director did not have authority to enter into such
an agreement on Vodacom South Africa's behalf. The High Court and
Supreme Court of Appeal ('the SCA') turned down Mr Makate's
application for leave to appeal in December 2014 and March 2015,
respectively.
In April 2016, the Constitutional
Court of South Africa ('the Constitutional Court') granted leave to
appeal and upheld Mr Makate's appeal. It found that Vodacom South
Africa is bound by an agreement and ordered the parties to
negotiate, in good faith, and agree a reasonable compensation
amount payable to Mr Makate or, in the event of a deadlock, for the
matter to be referred to Vodacom Group's Chief Executive Officer
('the CEO') for determination. Mr Makate's application for the
aforementioned order to be varied from the determination of an
amount to a compensation model based on a share of revenue, was
dismissed by the Constitutional Court. In accordance with the
Constitutional Court order, and after negotiations failed, the CEO
issued his determination on 9 January 2019. However, the CEO's
award of R47 million (€2 million) was rejected by Mr Makate, who
subsequently brought an application in the High Court for judicial
review against the CEO's determination and award.
The High Court, in a judgement
delivered on 8 February 2022, set aside the CEO's determination and
ordered him to reassess the amount employing a set of criteria
which would have resulted in the payment of a higher compensation
amount, for the benefit of Mr Makate, than that determined by the
CEO. Vodacom South Africa appealed against the judgement and the
order of the High Court to the SCA. The SCA heard the appeal on 9
May 2023 and its judgement was handed down on 6 February 2024. A
majority of three judges, with a minority of two judges
dissenting, dismissed the appeal and ruled that Mr Makate is
entitled to be paid 5% - 7.5% of the total revenue of the PCM
product from March 2001 to the date of the judgement, plus
interest.
On 27 February 2024, Vodacom South
Africa applied for leave to appeal the judgement and order of the
SCA to the Constitutional Court, resulting in the suspension of the
operation of the judgement and order of the SCA. Mr Makate is
opposing Vodacom South Africa's application for leave to appeal.
Vodacom South Africa is challenging the SCA's judgement and order
on various grounds including, but not limited to the SCA ignoring
the evidence placed before it on the computation of the quantum of
compensation payable to Mr Makate, and the SCA issuing orders that
are legally unenforceable.
The CEO's determination in 2019
amounted to R47 million (€2 million). The minority judgement of the
SCA raised Mr Makate's compensation to approximately R186 million
(€9 million), while the SCA majority judgement would entitle Mr
Makate to a minimum compensation amount of R29 billion
(€1.4 billion). Consequently, the range of the possible
compensation outcomes in this matter is very wide.
The amount ultimately payable to
Mr Makate is uncertain and will depend on the determination of the
Constitutional Court to grant Vodacom South Africa's application
for leave to appeal and, if granted, on the success of Vodacom
South Africa's appeal against the judgement and order of the SCA,
on the merits of the case. The Group is continuing to challenge the
level of compensation payable to Mr Makate and a provision
immaterial to the financial statements has been
recorded.
Notes to
the condensed consolidated financial statements
4 Contingent liabilities and legal
proceedings (continued)
UK: Mr Justin Gutmann v Vodafone Limited and Vodafone Group
Plc
In November 2023, Mr Gutmann
issued claims in the Competition Appeal Tribunal seeking
permission, as a proposed class representative, to bring collective
proceedings against the four UK MNOs and their respective parent
companies. Vodafone Group Plc and Vodafone Limited are named
defendants to one of the claims with an alleged value of £1.4
billion (approximately €1.6 billion), including interest. It is
alleged that Vodafone and the other MNOs used their alleged market
dominance to overcharge customers after the expiry of the minimum
terms of certain mobile contracts (referred to as a 'loyalty
penalty').
Taking into account all available
evidence at this stage, the Group's assessment is that the
allegations are without merit and it intends to defend the claim.
The Group is currently unable to estimate any possible loss in
regards to this issue but, while the outcome is uncertain, the
Group believes it is probable that no present obligation
exists.
In the discussion of the Group's
reported operating results, non-GAAP measures are presented to
provide readers with additional financial information that is
regularly reviewed by management. This additional information
presented is not uniformly defined by all companies including those
in the Group's industry. Accordingly, it may not be comparable with
similarly titled measures and disclosures by other companies.
Additionally, certain information presented is derived from amounts
calculated in accordance with IFRS but is not itself a measure
defined under GAAP. Such measures should not be viewed in isolation
or as an alternative to the equivalent GAAP measure. The non-GAAP
measures discussed in this document are listed
below.
Non-GAAP measure
|
Defined on page
|
Closest equivalent GAAP measure
|
Reconciled on page
|
Performance metrics
|
|
|
|
Adjusted EBITDAaL
|
Page 37
|
Operating profit
|
Page 3
|
Organic Adjusted EBITDAaL
growth
|
Page 37
|
Not applicable
|
-
|
Organic revenue growth
|
Page 37
|
Revenue
|
Pages 38 to 41
|
Organic Group service revenue
growth excluding Turkey
|
Page 37
|
Service revenue
|
Pages 38 to 41
|
Organic Group Adjusted EBITDAaL
growth excluding Turkey
|
Page 37
|
Not applicable
|
-
|
Organic service revenue
growth
|
Page 37
|
Service revenue
|
Pages 38 to 41
|
Organic mobile service revenue
growth
|
Page 37
|
Service revenue
|
Pages 38 to 41
|
Organic fixed service revenue
growth
|
Page 37
|
Service revenue
|
Pages 38 to 41
|
Organic Vodafone Business (B2B)
service revenue growth (Group and Operating segments)
|
Page 37
|
Service revenue
|
Pages 38 to 41
|
Organic financial services revenue
growth in South Africa
|
Page 37
|
Service revenue
|
Pages 38 to 41
|
Other metrics
|
|
|
|
Adjusted profit attributable to
owners of the parent
|
Page 42
|
Profit attributable to owners of
the parent
|
Page 42
|
Adjusted basic earnings per
share
|
Page 42
|
Basic earnings per
share
|
Page 43
|
Cash flow, funding and capital allocation
metrics
|
|
|
|
Free cash flow
|
Page 43
|
Inflow from operating
activities
|
Page 44
|
Adjusted free cash flow
|
Page 43
|
Inflow from operating
activities
|
Pages 16 and 44
|
Gross debt
|
Page 43
|
Borrowings
|
Page 44
|
Net debt
|
Page 43
|
Borrowings less cash and cash
equivalents
|
Page 44
|
Pre-tax ROCE
(controlled)
|
Page 45
|
ROCE calculated using GAAP
measures
|
Pages 45 and 46
|
Post-tax ROCE (controlled and
associates/joint ventures)
|
Page 45
|
ROCE calculated using GAAP
measures
|
Pages 45 and 46
|
Financing and Taxation metrics
|
|
|
|
Adjusted net financing
costs
|
Page 47
|
Net financing costs
|
Page 14
|
Adjusted profit before
taxation
|
Page 47
|
Profit before taxation
|
Page 48
|
Adjusted income tax
expense
|
Page 47
|
Income tax expense
|
Page 48
|
Adjusted effective tax
rate
|
Page 47
|
Income tax expense
|
Page 48
|
Adjusted share of results of
equity accounted associates and joint ventures
|
Page 47
|
Share of results of equity
accounted associates and joint ventures
|
Page 48
|
Adjusted share of results of
equity accounted associates and joint ventures used in post-tax
ROCE
|
Page 47
|
Share of results of equity
accounted associates and joint ventures
|
Page 48
|
Non-GAAP
measures
Performance metrics
Non-GAAP measure
|
Purpose
|
Definition
|
Adjusted EBITDAaL
|
Adjusted EBITDAaL is used in
conjunction with financial measures such as operating profit to
assess our operating performance and profitability.
It is a key external metric used
by the investor community to assess performance of our
operations.
It is our segment performance
measure in accordance with IFRS 8 (Operating Segments).
|
Adjusted EBITDAaL is operating
profit after depreciation on lease-related right of use assets and
interest on lease liabilities but excluding depreciation,
amortisation and gains/losses on disposal of owned assets and
excluding share of results of equity accounted associates and joint
ventures, impairment losses/reversals, restructuring costs arising
from discrete restructuring plans, other income and expense and
significant items that are not considered by management to be
reflective of the underlying performance of the Group.
|
Adjusted EBITDAaL margin is
Adjusted EBITDAaL divided by Revenue.
Organic growth
Organic growth presents
performance on a comparable basis, excluding the impact of foreign
exchange rates, mergers and acquisitions, the hyperinflation
adjustment in Turkey and other adjustments to improve the
comparability of results between periods.
Organic growth is calculated for
revenue and profitability metrics, as follows:
-
Adjusted EBITDAaL;
-
Revenue;
-
Group service revenue excluding Turkey;
-
Group Adjusted EBITDAaL excluding
Turkey;
-
Service revenue;
-
Mobile service revenue;
-
Fixed service revenue;
-
Vodafone Business service revenue (Group and
Operating segments); and
-
Financial services revenue in South
Africa.
Whilst organic growth is not
intended to be a substitute for reported growth, nor is it superior
to reported growth, we believe that the measure provides useful and
necessary information to investors and other interested parties for
the following reasons:
-
It provides additional information on underlying
growth of the business without the effect of certain factors
unrelated to its operating performance;
-
It is used for internal performance analysis;
and
-
It facilitates comparability of underlying growth
with other companies (although the term 'organic' is not a defined
term under GAAP and may not, therefore, be comparable with
similarly-titled measures reported by other companies).
We have not provided a comparative
in respect of organic growth rates as the current rates describe
the change between the beginning and end of the current period,
with such changes being explained by the commentary in this
document. If comparatives were provided, significant sections of
the commentary for prior periods would also need to be included,
reducing the usefulness and transparency of this
document.
Non-GAAP
measures
Year
ended 31 March 2024
|
|
|
|
|
|
|
|
|
Re-presented1
|
Reported
growth
|
M&A
and Other
|
Foreign
exchange
|
Organic
growth
|
|
|
FY24
|
FY23
|
|
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Service revenue
|
|
|
|
|
|
|
Germany
|
11,453
|
11,433
|
0.2
|
-
|
-
|
0.2
|
|
Mobile service revenue
|
5,059
|
5,060
|
-
|
-
|
-
|
-
|
|
Fixed service revenue
|
6,394
|
6,373
|
0.3
|
-
|
-
|
0.3
|
UK
|
5,631
|
5,358
|
5.1
|
-
|
(0.1)
|
5.0
|
|
Mobile service revenue
|
4,142
|
3,928
|
5.4
|
-
|
-
|
5.4
|
|
Fixed service revenue
|
1,489
|
1,430
|
4.1
|
-
|
(0.2)
|
3.9
|
Other Europe2
|
4,722
|
5,005
|
(5.7)
|
10.6
|
(0.7)
|
4.2
|
Turkey3
|
1,746
|
1,593
|
9.6
|
10.7
|
68.2
|
88.5
|
Africa4
|
5,951
|
6,556
|
(9.2)
|
-
|
18.4
|
9.2
|
Common Functions
|
559
|
530
|
|
|
|
|
Eliminations
|
(150)
|
(157)
|
|
|
|
|
Total service revenue
|
29,912
|
30,318
|
(1.3)
|
1.9
|
5.7
|
6.3
|
Other revenue
|
6,805
|
7,354
|
|
|
|
|
Revenue
|
36,717
|
37,672
|
(2.5)
|
2.8
|
5.6
|
5.9
|
|
|
|
|
|
|
|
|
Other growth metrics
|
|
|
|
|
|
|
Group service revenue excluding
Turkey
|
28,197
|
28,912
|
(2.5)
|
2.4
|
3.8
|
3.7
|
Group Adjusted EBITDAaL excluding
Turkey
|
10,509
|
12,023
|
(12.6)
|
8.3
|
3.7
|
(0.6)
|
Turkey - Service revenue
|
1,746
|
1,440
|
21.3
|
(14.7)
|
81.9
|
88.5
|
Turkey - Adjusted
EBITDAaL
|
510
|
401
|
27.2
|
(12.8)
|
85.5
|
99.9
|
Vodafone Business - Service
revenue
|
7,735
|
7,757
|
(0.3)
|
1.8
|
3.5
|
5.0
|
Germany - Vodafone Business service
revenue
|
2,422
|
2,421
|
-
|
-
|
-
|
-
|
UK - Vodafone Business service
revenue
|
2,144
|
2,075
|
3.3
|
-
|
(0.1)
|
3.2
|
Other Europe - Vodafone Business
service revenue
|
1,502
|
1,496
|
0.4
|
8.1
|
(0.6)
|
7.9
|
Turkey - Vodafone Business service
revenue
|
233
|
194
|
20.1
|
(14.4)
|
81.7
|
87.4
|
South Africa - Financial services
revenue
|
157
|
167
|
(6.0)
|
-
|
13.9
|
7.9
|
M-Pesa revenue
|
389
|
367
|
6.0
|
-
|
7.4
|
13.4
|
Notes:
1. The
results for the year ended 31 March 2023 have been re-presented to
reflect that the results of Vodafone Spain and Vodafone Italy are
now reported as discontinued operations. See note 3 'Discontinued
operations and assets held for sale' in the condensed consolidated
financial statements for more information.
2. The
comparative period includes the results of Vodafone Hungary which,
as previously reported, was sold in January 2023.
3. The
comparative period includes the results of Vodafone Ghana which, as
previously reported, was sold in February 2023.
4. From 1
April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt to the Africa segment. The comparatives have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group metrics.
Non-GAAP
measures
Year
ended 31 March 2024
|
|
|
|
|
|
|
|
|
Re-presented1
|
Reported
growth
|
M&A
and Other
|
Foreign
exchange
|
Organic
growth
|
|
|
FY24
|
FY23
|
|
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Adjusted EBITDAaL
|
|
|
|
|
|
|
Germany
|
5,017
|
5,323
|
(5.8)
|
-
|
-
|
(5.8)
|
UK
|
1,408
|
1,350
|
4.3
|
-
|
(0.3)
|
4.0
|
Other Europe2
|
1,516
|
1,632
|
(7.1)
|
9.4
|
(0.8)
|
1.5
|
Turkey3
|
510
|
424
|
20.3
|
3.0
|
76.6
|
99.9
|
Africa4
|
2,539
|
2,880
|
(11.8)
|
-
|
18.2
|
6.4
|
Vantage Towers
|
-
|
795
|
|
|
|
|
Common Functions
|
29
|
20
|
|
|
|
|
Eliminations
|
-
|
-
|
|
|
|
|
Group
|
11,019
|
12,424
|
(11.3)
|
8.6
|
4.9
|
2.2
|
|
|
|
|
|
|
|
|
Percentage point change in Adjusted EBITDAaL
margin
|
|
|
|
|
|
|
Germany
|
38.7%
|
40.6%
|
(1.9)
|
-
|
-
|
(1.9)
|
UK
|
20.6%
|
19.8%
|
0.8
|
-
|
-
|
0.8
|
Other Europe2
|
27.5%
|
28.4%
|
(0.9)
|
(0.5)
|
-
|
(1.4)
|
Turkey3
|
21.6%
|
20.5%
|
1.1
|
(0.2)
|
0.1
|
1.0
|
Africa4
|
34.2%
|
35.7%
|
(1.5)
|
-
|
0.4
|
(1.1)
|
Group
|
30.0%
|
33.0%
|
(3.0)
|
2.0
|
(0.1)
|
(1.1)
|
Notes:
1. The
results for the year ended 31 March 2023 have been re-presented to
reflect that the results of Vodafone Spain and Vodafone Italy are
now reported as discontinued operations. See note 3 'Discontinued
operations and assets held for sale' in the condensed consolidated
financial statements for more information.
2. The
comparative period includes the results of Vodafone Hungary which,
as previously reported, was sold in January 2023.
3. The
comparative period includes the results of Vodafone Ghana which, as
previously reported, was sold in February 2023.
4. From 1
April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt to the Africa segment. The comparatives have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group metrics.
Non-GAAP
measures
Quarter ended 31 March 2024
|
|
|
|
|
|
|
|
|
|
Re-presented1
|
Reported
growth
|
M&A
and Other
|
Foreign
exchange
|
Organic
growth
|
|
|
Q4 FY24
|
Q4 FY23
|
|
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Service revenue
|
|
|
|
|
|
|
Germany
|
2,839
|
2,821
|
0.6
|
-
|
-
|
0.6
|
|
Mobile service revenue
|
1,257
|
1,235
|
1.8
|
-
|
-
|
1.8
|
|
Fixed service revenue
|
1,582
|
1,586
|
(0.3)
|
0.1
|
-
|
(0.2)
|
UK
|
1,409
|
1,319
|
6.8
|
-
|
(3.2)
|
3.6
|
|
Mobile service revenue
|
1,012
|
948
|
6.8
|
-
|
(3.1)
|
3.7
|
|
Fixed service revenue
|
397
|
371
|
7.0
|
-
|
(3.5)
|
3.5
|
Other Europe2
|
1,181
|
1,178
|
0.3
|
4.8
|
0.4
|
5.5
|
Turkey3
|
525
|
454
|
15.6
|
1.1
|
88.9
|
105.6
|
Africa4
|
1,484
|
1,466
|
1.2
|
-
|
8.8
|
10.0
|
Common Functions
|
140
|
128
|
|
|
|
|
Eliminations
|
(32)
|
(31)
|
|
|
|
|
Total service revenue
|
7,546
|
7,335
|
2.9
|
0.2
|
4.0
|
7.1
|
Other revenue
|
1,842
|
1,793
|
|
|
|
|
Revenue
|
9,388
|
9,128
|
2.8
|
1.2
|
4.3
|
8.3
|
|
|
|
|
|
|
|
|
Other growth metrics
|
|
|
|
|
|
|
Group service revenue excluding
Turkey
|
7,027
|
6,913
|
1.6
|
1.1
|
1.3
|
4.0
|
Turkey - Service revenue
|
525
|
430
|
22.1
|
(18.2)
|
101.7
|
105.6
|
Vodafone Business - Service
revenue
|
1,979
|
1,918
|
3.2
|
0.4
|
1.8
|
5.4
|
Germany - Vodafone Business service
revenue
|
605
|
599
|
1.0
|
-
|
-
|
1.0
|
UK - Vodafone Business service
revenue
|
545
|
531
|
2.6
|
-
|
(3.1)
|
(0.5)
|
Other Europe - Vodafone Business
service revenue
|
399
|
369
|
8.1
|
3.5
|
0.6
|
12.2
|
Turkey - Vodafone Business service
revenue
|
71
|
59
|
20.3
|
(17.9)
|
99.8
|
102.2
|
Notes:
1. The
results for the quarter ended 31 March 2023 have been re-presented
to reflect that the results of Vodafone Spain and Vodafone Italy
are now reported as discontinued operations. See note 3
'Discontinued operations and assets held for sale' in the condensed
consolidated financial statements for more
information.
2. The
comparative period includes the results of Vodafone Hungary which,
as previously reported, was sold in January 2023.
3. The
comparative period includes the results of Vodafone Ghana which, as
previously reported, was sold in February 2023.
4. From 1
April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt to the Africa segment. The comparatives have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group metrics.
Non-GAAP
measures
Quarter ended 31 December 2023
|
|
|
|
|
|
|
|
|
|
Re-presented1
|
Reported
growth
|
M&A
and Other
|
Foreign
exchange
|
Organic
growth
|
|
|
Q3 FY24
|
Q3 FY23
|
|
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Service revenue
|
|
|
|
|
|
|
Germany
|
2,892
|
2,882
|
0.3
|
-
|
-
|
0.3
|
|
Mobile service revenue
|
1,272
|
1,279
|
(0.5)
|
-
|
-
|
(0.5)
|
|
Fixed service revenue
|
1,620
|
1,603
|
1.1
|
(0.1)
|
-
|
1.0
|
UK
|
1,400
|
1,327
|
5.5
|
-
|
(0.3)
|
5.2
|
|
Mobile service revenue
|
1,034
|
977
|
5.8
|
-
|
(0.4)
|
5.4
|
|
Fixed service revenue
|
366
|
350
|
4.6
|
-
|
-
|
4.6
|
Other Europe2
|
1,175
|
1,275
|
(7.8)
|
12.4
|
(1.0)
|
3.6
|
Turkey3
|
393
|
368
|
6.8
|
19.5
|
64.1
|
90.4
|
Africa4
|
1,543
|
1,668
|
(7.5)
|
-
|
16.3
|
8.8
|
Common Functions
|
137
|
134
|
|
|
|
|
Eliminations
|
(35)
|
(37)
|
|
|
|
|
Total service revenue
|
7,505
|
7,617
|
(1.5)
|
2.5
|
5.3
|
6.3
|
Other revenue
|
1,841
|
1,978
|
|
|
|
|
Revenue
|
9,346
|
9,595
|
(2.6)
|
3.3
|
5.2
|
5.9
|
|
|
|
|
|
|
|
|
Other growth metrics
|
|
|
|
|
|
|
Group service revenue excluding
Turkey
|
7,119
|
7,290
|
(2.3)
|
2.7
|
3.2
|
3.6
|
Turkey - Service revenue
|
393
|
334
|
17.7
|
(10.7)
|
83.4
|
90.4
|
Vodafone Business - Service
revenue
|
1,943
|
1,954
|
(0.6)
|
2.5
|
3.1
|
5.0
|
Germany - Vodafone Business service
revenue
|
612
|
629
|
(2.7)
|
0.8
|
-
|
(1.9)
|
UK - Vodafone Business service
revenue
|
540
|
508
|
6.3
|
-
|
(0.5)
|
5.8
|
Other Europe - Vodafone Business
service revenue
|
375
|
380
|
(1.3)
|
9.7
|
(0.6)
|
7.8
|
Turkey - Vodafone Business service
revenue
|
53
|
44
|
20.5
|
(34.4)
|
108.6
|
94.7
|
Notes:
1. The
results for the quarter ended 31 December 2022 have been
re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are now reported as discontinued operations. See
note 3 'Discontinued operations and assets held for sale' in the
condensed consolidated financial statements for more
information.
2. The
comparative period includes the results of Vodafone Hungary which,
as previously reported, was sold in January 2023.
3. The
comparative period includes the results of Vodafone Ghana which, as
previously reported, was sold in February 2023.
4. From 1
April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt to the Africa segment. The comparatives have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group metrics.
Non-GAAP
measures
Other metrics
Non-GAAP
measure
|
Purpose
|
Definition
|
Adjusted profit attributable to
owners of the parent
|
This metric is used in the
calculation of Adjusted basic earnings per share.
|
Adjusted profit attributable to
owners of the parent excludes restructuring costs arising from
discrete restructuring plans, amortisation of customer bases and
brand intangible assets, impairment losses/reversals, other income
and expense and mark-to-market and foreign exchange movements,
together with related tax effects.
|
Adjusted basic earnings per
share
|
This performance measure is used
in discussions with the investor community.
|
Adjusted basic earnings per share
is Adjusted profit attributable to owners of the parent divided by
the weighted average number of shares outstanding. This is the same
denominator used when calculating basic earnings per
share.
|
Adjusted EBITDAaL and Adjusted profit attributable to owners
of the parent
The table below reconciles
Adjusted EBITDAaL and Adjusted profit attributable to owners of the
parent to their closest equivalent GAAP measures, being Operating
profit and Profit attributable to owners of the parent,
respectively.
|
|
|
|
|
|
FY24
|
FY23
Re-presented1
|
|
Reported
|
Adjustments
|
Adjusted
|
Reported
|
Adjustments
|
Adjusted
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
Adjusted EBITDAaL
|
11,019
|
-
|
11,019
|
12,424
|
-
|
12,424
|
Restructuring costs
|
(703)
|
703
|
-
|
(538)
|
538
|
-
|
Interest on lease
liabilities
|
440
|
-
|
440
|
355
|
-
|
355
|
Loss on disposal of property, plant
& equipment and intangible assets
|
(34)
|
-
|
(34)
|
(41)
|
-
|
(41)
|
Depreciation and amortisation on
owned assets2
|
(7,397)
|
606
|
(6,791)
|
(7,520)
|
555
|
(6,965)
|
Share of results of equity accounted
associates and joint ventures3
|
(96)
|
323
|
227
|
433
|
220
|
653
|
Impairment
reversal/(loss)
|
64
|
(64)
|
-
|
(64)
|
64
|
-
|
Other income
|
372
|
(372)
|
-
|
9,402
|
(9,402)
|
-
|
Operating profit
|
3,665
|
1,196
|
4,861
|
14,451
|
(8,025)
|
6,426
|
Investment income
|
581
|
-
|
581
|
232
|
-
|
232
|
Financing
costs4
|
(2,626)
|
270
|
(2,356)
|
(1,609)
|
(399)
|
(2,008)
|
Profit before taxation
|
1,620
|
1,466
|
3,086
|
13,074
|
(8,424)
|
4,650
|
Income tax
expense5
|
(50)
|
(650)
|
(700)
|
(492)
|
(532)
|
(1,024)
|
Profit for the financial year from continuing
operations
|
1,570
|
816
|
2,386
|
12,582
|
(8,956)
|
3,626
|
Loss for the financial year from
discontinued operations
|
(65)
|
65
|
-
|
(247)
|
247
|
-
|
Profit for the financial year
|
1,505
|
881
|
2,386
|
12,335
|
(8,709)
|
3,626
|
|
|
|
|
|
|
|
Profit attributable to:
|
|
|
|
|
|
|
- Owners of the parent
(Continuing)
|
1,205
|
816
|
2,021
|
12,085
|
(8,962)
|
3,123
|
- Owners of the parent (Total
Group)
|
1,140
|
881
|
2,021
|
11,838
|
(8,715)
|
3,123
|
- Non-controlling
interests
|
365
|
-
|
365
|
497
|
6
|
503
|
Profit for the financial year
|
1,505
|
881
|
2,386
|
12,335
|
(8,709)
|
3,626
|
Notes:
1.
The results for the year ended 31 March 2023 have
been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are now reported as discontinued operations. See
note 3 'Discontinued operations and assets held for sale' in the
condensed consolidated financial statements for more
information.
2.
Depreciation and amortisation on owned assets
excludes depreciation on leased assets and loss on disposal of
leased assets included within Adjusted EBITDAaL. See page 49 for an
analysis of depreciation and amortisation. The adjustment of €606
million (FY23: €555 million) relates to amortisation of customer
bases and brand intangible assets.
3.
See page 48 for a breakdown of the adjustments to
Share of results of equity accounted associates and joint ventures
to derive Adjusted share of results of equity accounted associates
and joint ventures.
4.
See 'Net financing costs' on page 14 for further
analysis.
5.
See 'Adjusted tax metrics' on page 48 for further
analysis.
Non-GAAP
measures
Adjusted basic earnings per share
The reconciliation of Adjusted
basic earnings per share to the closest equivalent GAAP measure,
basic earnings per share, is provided below.
|
|
Re-presented1
|
|
FY24
|
FY23
|
|
€m
|
€m
|
Profit attributable to owners of the
parent
|
1,140
|
11,838
|
Adjusted profit attributable to
owners of the parent
|
2,021
|
3,123
|
|
|
|
|
Million
|
Million
|
Weighted average number of shares
outstanding - Basic
|
27,056
|
27,680
|
|
|
|
|
eurocents
|
eurocents
|
Basic earnings per share
|
4.21c
|
42.77c
|
Adjusted basic earnings per share
|
7.47c
|
11.28c
|
Note:
1.
The results for the year ended 31 March 2023 have
been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are now reported as discontinued operations. See
note 3 'Discontinued operations and assets held for sale' in the
condensed consolidated financial statements for more
information.
Cash flow, funding and capital allocation
metrics
Cash flow and funding
Non-GAAP measure
|
Purpose
|
Definition
|
Free cash flow
|
Internal performance
reporting.
External metric used by investor
community.
Assists comparability with other
companies, although our metric may not be directly comparable to
similarly titled measures used by other companies.
|
Free cash flow is Adjusted
EBITDAaL after cash flows in relation to capital additions, working
capital movements including in respect of capital additions,
disposal of property, plant and equipment and intangible assets,
integration capital additions and restructuring costs, together
with related working capital, licences and spectrum, interest
received and paid, taxation, dividends received from associates and
joint ventures, dividends paid to non-controlling shareholders in
subsidiaries, payments in respect of lease liabilities and
other.
|
Adjusted free cash flow
|
Internal performance
reporting.
External metric used by investor
community.
Setting director and management
remuneration.
Key external metric used to
evaluate liquidity and the cash generated by our
operations.
|
Adjusted free cash flow is Free
cash flow before licences and spectrum, restructuring costs arising
from discrete restructuring plans, integration capital additions
and working capital related items, M&A and (prior to disposal)
Vantage Towers growth capital
expenditure.
Growth capital expenditure is
total capital expenditure excluding maintenance-type
expenditure.
|
Gross debt
|
Prominent metric used by debt
rating agencies and the investor community.
|
Non-current borrowings and current
borrowings, excluding lease liabilities, collateral liabilities and
borrowings specifically secured against Indian assets.
|
Net debt
|
Prominent metric used by debt
rating agencies and the investor community.
|
Gross debt less cash and cash
equivalents, short-term investments, derivative financial
instruments excluding mark-to-market adjustments and net collateral
assets.
|
Non-GAAP
measures
Cash flow and funding (continued)
The table below presents the
reconciliation between Inflow from operating activities and Free
cash flow.
|
|
Re-presented1
|
|
FY24
|
FY23
|
|
€m
|
€m
|
Inflow from operating activities
|
16,557
|
18,054
|
Net tax paid
|
724
|
1,228
|
Cashflows from discontinued
operations
|
(3,296)
|
(3,464)
|
Cash generated by operations
|
13,985
|
15,818
|
Capital additions
|
(6,331)
|
(7,067)
|
Working capital movement in respect
of capital additions
|
(141)
|
(120)
|
Disposal of property, plant and
equipment and intangible assets
|
14
|
90
|
Integration capital
additions
|
(81)
|
(200)
|
Working capital movement in respect
of integration capital additions
|
(37)
|
(5)
|
Licences and spectrum
|
(454)
|
(773)
|
Interest received and
paid2
|
(1,685)
|
(1,468)
|
Taxation
|
(724)
|
(1,228)
|
Dividends received from associates
and joint ventures
|
442
|
617
|
Dividends paid to non-controlling
shareholders in subsidiaries
|
(260)
|
(400)
|
Payments in respect of lease
liabilities
|
(3,135)
|
(2,747)
|
Other
|
190
|
66
|
Free cash flow
|
1,783
|
2,583
|
Notes:
1.
The results for the year ended 31 March 2023 have
been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are now reported as discontinued operations. See
note 3 'Discontinued operations and assets held for sale' in the
condensed consolidated financial statements for more
information.
2.
Includes interest on lease liabilities of €406
million (FY23: €296 million), excluding discontinued operations.
The table below presents the
reconciliation between Borrowing, Gross debt and Net
debt.
|
|
Year-end
FY24
|
Year-end
FY23
|
|
|
€m
|
€m
|
Borrowings
|
(56,987)
|
(66,390)
|
Lease liabilities
|
9,672
|
13,364
|
Bank borrowings secured against
Indian assets
|
1,720
|
1,485
|
Collateral liabilities
|
2,628
|
4,886
|
Gross debt
|
(42,967)
|
(46,655)
|
Collateral liabilities
|
(2,628)
|
(4,886)
|
Cash and cash equivalents
|
6,183
|
11,705
|
Short-term investments
|
3,225
|
4,305
|
Collateral assets
|
741
|
239
|
Derivative financial
instruments
|
2,702
|
4,702
|
Less mark-to-market gains deferred
in hedge reserves
|
(498)
|
(2,785)
|
Net
debt
|
(33,242)
|
(33,375)
|
Non-GAAP
measures
Return on Capital Employed
Non-GAAP measure
|
Purpose
|
Definition
|
Return on Capital Employed
('ROCE')
|
ROCE is a metric used by the
investor community and reflects how efficiently we are generating
profit with the capital we deploy.
|
We calculate ROCE by dividing
Operating profit by the average of capital employed as reported in
the consolidated statement of financial position. Capital employed
includes borrowings, cash and cash equivalents, derivative
financial instruments included in trade and other
receivables/payables, short-term investments, collateral assets,
financial liabilities under put option arrangements and
equity.
|
Pre-tax ROCE
(controlled)
Post-tax ROCE (controlled and
associates/joint ventures)
|
As above
|
We calculate pre-tax ROCE
(controlled) by using Operating profit excluding interest on lease
liabilities, restructuring costs arising from discrete
restructuring plans, impairment losses/reversals, other income and
expense, the impact of hyper-inflationary adjustments in Turkey and
the share of results of equity accounted associates and joint
ventures. On a post-tax basis, the measure includes our Adjusted
share of results from associates and joint ventures and a notional
tax charge. Capital is equivalent to net operating assets and is
calculated as the average of opening and closing balances of:
property, plant and equipment (including leased assets and lease
liabilities), intangible assets (including goodwill), operating
working capital (including held for sale assets and excluding
derivative balances) and provisions, excluding the impact of
hyper-inflationary adjustments in Turkey. Other assets that do not
directly contribute to returns are excluded from this measure and
include other investments, current and deferred tax balances and
post employment benefits. On a post-tax
basis, ROCE also includes our investments in associates and joint
ventures.
|
ROCE using GAAP measures
The table below presents the
calculation of ROCE using GAAP measures as reported in the
consolidated income statement and consolidated statement of
financial position.
|
|
Re-presented1
|
|
FY24
|
FY23
|
|
€m
|
€m
|
Operating profit2
|
3,665
|
14,451
|
|
|
|
Borrowings
|
56,987
|
66,390
|
Cash and cash equivalents
|
(6,183)
|
(11,705)
|
Derivative financial instruments
included in trade and other receivables
|
(4,226)
|
(6,124)
|
Derivative financial instruments
included in trade and other payables
|
1,524
|
1,422
|
Short-term investments
|
(3,225)
|
(4,305)
|
Collateral assets
|
(741)
|
(239)
|
Financial liabilities under put
option arrangements
|
-
|
485
|
Equity
|
60,998
|
64,483
|
Capital employed at end of the year
|
105,134
|
110,407
|
|
|
|
Average capital employed for the year
|
107,771
|
111,062
|
|
|
|
ROCE using GAAP measures
|
3.4%
|
13.0%
|
Notes:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. Operating profit includes Other
income/(expense), which includes merger and acquisition activity
that is non-recurring in nature.
Non-GAAP
measures
Return on Capital Employed ('ROCE') : Non-GAAP
basis
The table below presents the
calculation of ROCE using non-GAAP measures and reconciliations to
the closest equivalent GAAP measure.
|
|
Re-presented1
|
|
FY242
|
FY232
|
|
€m
|
€m
|
Operating profit
|
3,665
|
14,451
|
Interest on lease
liabilities
|
(440)
|
(355)
|
Restructuring costs
|
703
|
538
|
Other income
|
(372)
|
(9,402)
|
Share of results of equity accounted
associates and joint ventures
|
96
|
(433)
|
Impairment
(reversal)/loss
|
(64)
|
64
|
Other
adjustments3
|
296
|
(413)
|
Adjusted operating profit for calculating pre-tax ROCE
(controlled)
|
3,884
|
4,450
|
Adjusted share of results of equity
accounted associates and joint ventures used in post-tax
ROCE4
|
(116)
|
430
|
Notional tax at Adjusted effective
tax rate5
|
(923)
|
(1,249)
|
Adjusted operating profit for calculating post-tax ROCE
(controlled and associates/joint ventures)
|
2,845
|
3,631
|
|
|
|
Capital employed for calculating ROCE on a GAAP
basis
|
105,134
|
110,407
|
Adjustments to exclude:
|
|
|
- Leases
|
(9,672)
|
(13,364)
|
- Deferred tax assets
|
(20,177)
|
(19,316)
|
- Deferred tax
liabilities
|
699
|
771
|
- Taxation recoverable
|
(76)
|
(279)
|
- Taxation liabilities
|
393
|
457
|
- Other investments
|
(1,543)
|
(1,781)
|
- Investments in associates and
joint ventures
|
(10,032)
|
(11,079)
|
- Pension assets and
liabilities
|
(76)
|
(71)
|
- Removal of capital employed
related to discontinued operations
|
(12,129)
|
(12,180)
|
- Other
adjustments3
|
(1,009)
|
(877)
|
Adjusted capital employed for calculating pre-tax ROCE
(controlled)
|
51,512
|
52,688
|
Investments in associates and joint
ventures2
|
10,032
|
11,079
|
Adjusted capital employed for calculating post-tax ROCE
(controlled and associates/joint ventures)
|
61,544
|
63,767
|
|
|
|
Average capital employed for calculating pre-tax ROCE
(controlled)2
|
52,100
|
54,440
|
Average capital employed for calculating post-tax ROCE
(controlled and associates/joint
ventures)2
|
62,656
|
59,713
|
|
|
|
Pre-tax ROCE (controlled)
|
7.5%
|
8.2%
|
Post-tax ROCE (controlled and associates/joint
ventures)
|
4.5%
|
6.1%
|
Notes:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
2. FY23 ROCE calculations exclude
the results of Vantage Towers until its disposal on 22 March 2023
and the investment in Oak Holdings 1 GmbH from that date. FY23
capital employed for calculating post-tax ROCE (controlled and
associates/joint ventures), FY22 Capital employed for calculating
pre-tax ROCE (controlled) and FY22 capital employed for calculating
post-tax ROCE (controlled and associates/joint ventures) have been
adjusted to €57,911 million, €56,192 million and €61,515 million,
respectively, for the purposes of calculating relevant FY23
averages.
3. Comprises adjustments to
exclude hyperinflationary accounting in Turkey.
4. Adjusted share of results of
equity accounted associates and joint ventures used in post-tax
ROCE is a non-GAAP measure and excludes restructuring costs and
other income.
5. Includes tax at the Adjusted
effective tax rate of 24.5% (FY23: 25.6%).
Non-GAAP
measures
Financing and Taxation metrics
Non-GAAP measure
|
Purpose
|
Definition
|
Adjusted net financing
costs
|
This metric is used by both
management and the investor community.
This metric is used in the
calculation of Adjusted basic earnings per share.
|
Adjusted net financing costs
exclude mark-to-market and foreign exchange
gains/losses.
|
Adjusted profit before
taxation
|
This metric is used in the
calculation of the Adjusted effective tax rate (see
below).
|
Adjusted profit before taxation
excludes the tax effects of items excluded from Adjusted basic
earnings per share, including: impairment losses/reversals,
amortisation of customer bases and brand intangible assets,
restructuring costs arising from discrete restructuring plans,
other income and expense and mark-to-market and foreign exchange
movements.
|
Adjusted income tax
expense
|
This metric is used in the
calculation of the Adjusted effective tax rate (see
below).
|
Adjusted income tax expense
excludes the tax effects of items excluded from Adjusted basic
earnings per share, including: impairment losses/reversals,
amortisation of customer bases and brand intangible assets,
restructuring costs arising from discrete restructuring plans,
other income and expense and mark-to-market and foreign exchange
movements. It also excludes deferred tax movements relating to tax
losses in Luxembourg as well as other significant one-off
items.
|
Adjusted effective tax
rate
|
This metric is used by both
management and the investor community.
|
Adjusted income tax expense (see
above) divided by Adjusted profit before taxation (see
above).
|
Adjusted share of results of
equity accounted associates and joint ventures
|
This metric is used in the
calculation of Adjusted effective tax rate.
|
Share of results of equity
accounted associates and joint ventures excluding restructuring
costs, amortisation of acquired customer base and brand intangible
assets and other income and expense.
|
Adjusted share of results of
equity accounted associates and joint ventures used in post-tax
ROCE
|
This metric is used in the
calculation of post-tax ROCE (controlled and associates/joint
ventures).
|
Share of results of equity
accounted associates and joint ventures excluding restructuring
costs and other income and expense.
|
Non-GAAP
measures
Adjusted tax metrics
The table below reconciles Profit
before taxation and Income tax expense to Adjusted profit before
taxation, Adjusted income tax expense and Adjusted effective tax
rate.
|
|
|
Re-presented1
|
|
FY24
|
FY23
|
|
€m
|
€m
|
Profit before taxation
|
1,620
|
13,074
|
Adjustments to derive Adjusted
profit before tax
|
1,466
|
(8,424)
|
Adjusted profit before taxation
|
3,086
|
4,650
|
Adjusted share of results of equity
accounted associates and joint ventures
|
(227)
|
(653)
|
Adjusted profit before tax for calculating Adjusted effective
tax rate
|
2,859
|
3,997
|
|
|
|
|
Income tax expense
|
(50)
|
(492)
|
Tax on adjustments to derive
Adjusted profit before tax
|
(342)
|
(205)
|
Adjustments:
|
|
|
- Deferred tax on recognition
of Luxembourg losses in the year
|
(1,019)
|
-
|
- Deferred tax on use of
Luxembourg losses in the year
|
598
|
33
|
- UK corporate interest
restriction
|
78
|
15
|
- Tax relating to
hyperinflation accounting
|
35
|
(309)
|
- Tax relating to Vantage
Towers disposal
|
-
|
(66)
|
Adjusted income tax expense for calculating Adjusted tax
rate
|
(700)
|
(1,024)
|
Adjusted effective tax rate
|
24.5%
|
25.6%
|
Note:
1. The results for the year ended
31 March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
Adjusted share of results of equity accounted associates and
joint ventures
The table below reconciles
Adjusted share of results of equity accounted associates and joint
ventures to the closest GAAP equivalent, Share of results of equity
accounted associates and joint ventures.
|
FY24
|
FY23
|
|
€m
|
€m
|
Share of results of equity accounted associates and joint
ventures
|
(96)
|
433
|
Restructuring costs
|
7
|
6
|
Other income
|
(27)
|
(9)
|
Adjusted share of results of equity accounted associates and
joint ventures used in post-tax ROCE
|
(116)
|
430
|
Amortisation of acquired customer
base and brand intangible assets
|
343
|
223
|
Adjusted share of results of equity accounted associates and
joint ventures
|
227
|
653
|
Additional information
|
|
|
|
|
|
|
|
|
|
|
Analysis of depreciation and amortisation
The table below presents an
analysis of the different components of depreciation and
amortisation discussed in the document, reconciled to the GAAP
amounts in the consolidated income statement.
|
|
|
Re-presented1
|
|
|
FY24
|
FY23
|
|
€m
|
€m
|
Depreciation on leased assets -
included in Adjusted EBITDAaL
|
3,003
|
2,682
|
Depreciation on leased assets -
included in Restructuring costs
|
14
|
51
|
Depreciation on leased assets
|
3,017
|
2,733
|
|
|
|
|
Depreciation on owned
assets
|
3,882
|
4,140
|
Amortisation of owned intangible
assets
|
3,515
|
3,380
|
Depreciation and amortisation on
owned assets included in Restructuring costs
|
-
|
2
|
Depreciation and amortisation on owned
assets
|
7,397
|
7,522
|
|
|
|
|
Total depreciation and amortisation on owned and leased
assets
|
10,414
|
10,255
|
|
|
|
|
Loss on disposal of owned fixed
assets
|
34
|
41
|
Loss on disposal of leased
assets
|
-
|
(8)
|
Depreciation and amortisation - as recognised in the
consolidated income statement
|
10,448
|
10,288
|
Note:
1. The results for the year ended 31
March 2023 have been re-presented to reflect that the results of
Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 3 'Discontinued operations and assets held for
sale' in the condensed consolidated financial statements for more
information.
Analysis of tangible and intangible
additions
The table below presents an
analysis of the different components of tangible and intangible
additions discussed in the document.
|
|
FY24
|
FY23
|
|
|
€m
|
€m
|
|
Capital additions
|
6,331
|
8,378
|
|
Integration related capital
additions
|
81
|
287
|
|
Licence and spectrum
additions
|
283
|
439
|
|
Additions
|
6,695
|
9,104
|
|
|
|
|
|
|
Intangible asset
additions
|
2,622
|
3,250
|
|
Property, plant and equipment owned
additions
|
4,073
|
5,854
|
|
Total additions
|
6,695
|
9,104
|
|
Definitions
|
|
|
Key terms are defined below. See
page 36 for the location of definitions for non-GAAP
measures.
Term
|
Definition
|
Africa
|
Comprises the Vodacom
Group.
|
ARPU
|
Average revenue per user, defined
as customer revenue and incoming revenue divided by average
customers.
|
Capital additions
|
Comprises the purchase of property,
plant and equipment and intangible assets, other than licence and
spectrum payments and integration capital expenditure.
|
Common Functions
|
Comprises central teams and
business functions.
|
Converged customer
|
A customer who receives fixed and
mobile services (also known as unified communications) on a single
bill or who receives a discount across both bills.
|
Depreciation and
amortisation
|
The accounting charge that
allocates the cost of tangible or intangible assets, whether owned
or leased, to the income statement over its useful life. The
measure includes the profit or loss on disposal of property, plant
and equipment, software and leased assets.
|
Eliminations
|
Refers to the removal of
intercompany transactions to derive the consolidated financial
statements.
|
Europe
|
Comprises the Group's European
businesses and the UK.
|
Financial services
revenue
|
Financial services revenue includes
fees generated from the provision of advanced airtime, overdraft,
financing and lending facilities, as well as merchant payments and
the sale of insurance products (e.g. device insurance, life
insurance and funeral cover).
|
Fixed service revenue
|
Service revenue (see below)
relating to the provision of fixed line and carrier
services.
|
FTTH
|
Fibre to the home.
|
GAAP
|
Generally Accepted Accounting
Principles.
|
IFRS
|
International Financial Reporting
Standards.
|
Incoming revenue
|
Comprises revenue from termination
rates for voice and messaging to Vodafone customers.
|
Integration capital
additions
|
Capital additions incurred in
relation to significant changes in the operating model, such as the
integration of recently acquired subsidiaries.
|
Internet of Things
('IoT')
|
The network of physical objects
embedded with electronics, software, sensors, and network
connectivity, including built-in mobile SIM cards, that enable
these objects to collect data and exchange communications with one
another or a database.
|
Mobile service revenue
|
Service revenue (see below)
relating to the provision of mobile services.
|
MVNO
|
Companies that provide mobile phone
services under wholesale contracts with a mobile network operator,
but do not have their own licence or spectrum or the infrastructure
required to operate a network.
|
Operating expenses
|
Comprise primarily sales and
distribution costs, network and IT related expenditure and business
support costs.
|
Other Europe
|
Other Europe markets comprise
Portugal, Ireland, Greece, Romania, Czech Republic and Albania. The
prior period comparative results include Vodafone Hungary which was
disposed of in January 2023.
|
Other revenue
|
Other revenue principally includes
equipment revenue, interest income, income from partner market
arrangements and lease revenue, including in respect of the lease
out of passive tower infrastructure.
|
Reported growth
|
Reported growth is based on amounts
reported in euros and determined under IFRS.
|
Revenue
|
The total of Service revenue (see
below) and Other revenue (see above).
|
Roaming
|
Roaming allows customers to make
calls, send and receive texts and data on our and other operators'
mobile networks, usually while travelling abroad.
|
Service revenue
|
Service revenue is all revenue
related to the provision of ongoing services to the Group's
consumer and enterprise customers, together with roaming revenue,
revenue from incoming and outgoing network usage by non-Vodafone
customers and interconnect charges for incoming calls.
|
SME
|
Small and medium sized
enterprises.
|
Vodafone Business
|
Vodafone Business supports
organisations in a digital world. With Vodafone's expertise in
connectivity, our leading IoT platform and our global scale, we
deliver the results that organisations need to progress and thrive.
We support businesses of all sizes and sectors.
|
1. References to Vodafone are to Vodafone Group Plc and
references to Vodafone Group are to Vodafone Group Plc and its
subsidiaries unless otherwise stated. Vodafone, the Vodafone Speech
Mark Devices, Vodacom and Together we can are trade marks owned by
Vodafone. Other product and company names mentioned herein may be
the trade marks of their respective owners.
2. All growth rates reflect a comparison to the quarter ended 31
March 2023 unless otherwise stated.
3. References to "Q1", "Q2", "Q3" and "Q4" are to the three
months ended 30 June, 30 September, 31 December and 31 March.
References to the "year", "financial year" or "FY24" are to the
financial year ended 31 March 2024. References to "last year",
"last financial year" or "FY23" are to the financial year ended 31
March 2023. References to "H1 FY24" are to the six month period
ended 30 September 2023. References to "H1 FY23" are to the six
month period ended 30 September 2022.
4. Vodacom refers to the Group's interest in Vodacom Group
Limited ('Vodacom') as well as its operations, including
subsidiaries in South Africa, Egypt, DRC, Tanzania, Mozambique and
Lesotho.
5. This document contains references to our and our affiliates'
websites. Information on any website is not incorporated into this
update and should not be considered part of this update.
Forward-looking statements and other matters
|
|
|
This document contains
'forward-looking statements' within the meaning of the US Private
Securities Litigation Reform Act of 1995 with respect to the
Group's financial condition, results of operations and businesses
and certain of the Group's plans and objectives. In particular,
such forward-looking statements include, but are not limited to,
statements with respect to: the Group's portfolio transformation
plan; expectations regarding the Group's financial condition or
results of operations and the guidance for Adjusted EBITDAaL and
Adjusted free cash flow for the financial year ending 31 March
2025; the announced agreement to combine Vodafone UK and Three UK;
the announced agreements to dispose of Vodafone Spain and Vodafone
Italy; changes to German TV laws and the migration of users
to individual TV customer contracts; expectations for the Group's
future performance generally; the transaction to purchase Nowo
Communications; the Group's strategic partnership with Microsoft;
the digital transformation of the Group's business customers; the
Group's partnership with DCC in the UK; expectations regarding the
operating environment and market conditions and trends, including
customer usage, competitive position and macroeconomic pressures,
price trends and opportunities in specific geographic markets;
intentions and expectations regarding the development, launch and
expansion of products, services and technologies, either introduced
by Vodafone or by Vodafone in conjunction with third parties or by
third parties independently; expectations regarding the integration
or performance of current and future investments, associates, joint
ventures, non-controlled interests and newly acquired businesses;
the impact of regulatory and legal proceedings involving the Group
and of scheduled or potential regulatory changes; certain of the
Group's plans and objectives, including the Group's
strategy.
Forward-looking statements are
sometimes but not always identified by their use of a date in the
future or such words as 'will', 'may', 'expects', 'believes',
'intends', 'plans', 'further', 'ongoing', 'anticipates', 'could' or
'targets'. By their nature, forward-looking statements are
inherently predictive, speculative and involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by these forward-looking statements. These
factors include, but are not limited to the following: general
economic and political conditions in the jurisdictions in which the
Group operates and changes to the associated legal, regulatory and
tax environments; increased competition; levels of investment in
network capacity and the Group's ability to deploy new
technologies, products and services, including artificial
intelligence; the Group's ability to
optimise its portfolio in line with its business transformation
plan; evolving cyber threats to the
Group's services and confidential data; rapid changes to existing
products and services and the inability of new products and
services to perform in accordance with expectations; the ability of
the Group to integrate new technologies, products and services with
existing networks, technologies, products and services; the Group's
ability to generate and grow revenue; slower than expected impact
of new or existing products, services or technologies on the
Group's future revenue, cost structure and capital expenditure
outlays; slower than expected customer growth, reduced customer
retention, reductions or changes in customer spending and increased
pricing pressure; the Group's ability to extend and expand its
spectrum resources, to support ongoing growth in customer demand
for mobile data services; the Group's ability to secure the timely
delivery of high-quality products from suppliers; loss of
suppliers, disruption of supply chains, shortages and greater than
anticipated prices of new mobile handsets; changes in the costs to
the Group of, or the rates the Group may charge for, terminations
and roaming minutes; the impact of a failure or significant
interruption to the Group's telecommunications, data centres,
networks, IT systems or data protection systems; the Group's
ability to realise expected benefits from acquisitions,
partnerships, joint ventures, associates, franchises, brand
licences, platform sharing or other arrangements with third
parties, including the signed agreement to combine Vodafone's UK
business with Three UK and the Group's strategic partnership with
Microsoft; acquisitions and divestments of Group businesses and
assets and the pursuit of new, unexpected strategic opportunities;
the Group's ability to integrate acquired business or assets; the
extent of any future write-downs or impairment charges on the
Group's assets, or restructuring charges incurred as a result of an
acquisition or disposition; developments in the Group's financial
condition, earnings and distributable funds and other factors that
the Board takes into account in determining the level of dividends;
the Group's ability to satisfy working capital requirements;
changes in foreign exchange rates; changes in the regulatory
framework in which the Group operates; the impact of legal or other
proceedings against the Group or other companies in the
communications industry; and changes in statutory tax rates and
profit mix, including the disposals of Vodafone Spain and Vodafone
Italy.
A review of the reasons why actual
results and developments may differ materially from the
expectations disclosed or implied within forward-looking statements
can be found in the summary of our principal risks in the Group's
Annual Report for the year ended 31 March 2023 and half-year
results for the six months ended 30 September 2023. The Annual
Report and half-year results can be found on the Vodafone Group's
website (http://investors.vodafone.com/reports-information).
All subsequent written or oral forward-looking statements
attributable to Vodafone or any member of the Vodafone Group or any
persons acting on their behalf are expressly qualified in their
entirety by the factors referred to above. No assurances can be
given that the forward-looking statements in this document will be
realised. Subject to compliance with applicable law and
regulations, Vodafone does not intend to update these
forward-looking statements and does not undertake any obligation to
do so.
Copyright © Vodafone Group 2024
-End-