REG - Vodafone Group Plc - Vodafone Group H1 FY25 Results
12/11/2024 07:00
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RNS Number : 7924L Vodafone Group Plc 12 November 2024
Vodafone Group Plc
H1 FY25 Results
12 November 2024
Results in line with expectations and good operational progress
"We continue to make good progress on our strategy to change Vodafone. The
approval processes for our transactions in the UK and Italy are nearing
conclusion. These will complete our programme to reshape the group for growth.
We are also investing in Germany to strengthen our market position and taking
steps to expand our B2B capabilities.
As we move through this year of transition, our results in the first half have
been consistent with our expectations and we are reiterating our full year
guidance. We grew service revenue by 4.8% and Adjusted EBITDAaL by 3.8%. We
delivered good performances across our markets, with the exception of Germany,
where we have been impacted as expected by the TV law change.
I am confident that the actions we are taking will deliver growth for Vodafone
this year and a further acceleration into FY26."
Margherita Della Valle
Group Chief Executive
Financial highlights
€5.4 billion cash proceeds 2.25 eurocents Reiterated
Vodafone Spain & Vantage disposals Interim dividend per share FY25 financial guidance
- Total revenue: Increased by 1.6% to €18.3 billion in H1 (FY24 H1:
€18.0 billion) as service revenue growth was partially offset by adverse
foreign exchange movements.
- Service revenue: On a reported basis grew by 1.7% to €15.1 billion in
H1 (FY24 H1: €14.9 billion) and on an organic basis increased 4.8% in H1,
with an anticipated slowdown in Germany offset by growth in Other Europe,
Africa & Turkey.
- Germany: Declined by 6.2% in Q2 (Q1: -1.5%), as anticipated, primarily
due to the impact of the MDU TV law change. Excluding this impact, service
revenue in Germany declined by 2.4% in Q2 (Q1: -0.3%) due to a lower customer
base following price increases in the prior year. As part of the MDU TV law
change, we have now actively retained 4.0 million households, which is in line
with our expectations.
- Business: Organic service revenue accelerated to 4.0% in Q2 (Q1: 2.6%),
supported by demand for digital services.
- Africa: Organic growth remained consistent in Q2 at 9.7% (Q1: 10.0%),
supported by price increases in South Africa and above-inflation growth in
Egypt, driven by strong demand for data and financial services.
- Operating profit: On a reported basis increased by 28.3% to €2.4
billion in H1 (FY24 H1: €1.9 billion), primarily driven by a €0.7 billion
gain on the disposal of an 18% stake in Indus Towers.
- Adjusted EBITDAaL: On an organic basis increased by 3.8% to €5.4
billion (FY24 H1: €5.4 billion), supported by service revenue growth and
lower energy costs in Europe.
- Share buybacks: Second €500 million tranche almost complete, with 1.2
billion shares repurchased for €1.0 billion by 11 November 2024.
- FY25 guidance reiterated: Adjusted EBITDAaL of c.€11 billion and
Adjusted free cash flow to be at least €2.4 billion.
Strategic highlights
- Customers: Customer experience transformation underway. Customer
detractors have continued to reduce across all segments, and we have leading
or co-leading net promotor scores ('NPS') in 9 out of 15 markets.
- Simplicity: Our commercial shared operations business is now
operational, with Accenture investing its first tranche of its €150 million
commitment in October 2024. We are also progressing with the 3,100 role
reductions announced in Germany.
- Growth: Pre-tax ROCE increased from the 6.4% reported in H1 FY24 to
7.2%, with a +1.4 percentage point benefit from the reshaped Group primarily
offset by the impacts from deconsolidating Vantage and the MDU TV law change
in Germany.
For more information, please contact:
Investor Relations: Investors.vodafone.com ir@vodafone.co.uk Media Relations: Vodafone.com/media/contact GroupMedia@vodafone.com
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14
2FN, England. Registered in England No. 1833679
Awebcast Q&A session will be held at 10:00 GMT on 12 November 2024. The
webcast and supporting information can be accessed at Investors.vodafone.com
Strategic Review ⫶ Executing on our priorities
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. In the
first six months of FY25, we have executed across a number of focus areas, and
we have summarised our progress below and in an accompanying presentation and
video Q&A available here: investors.vodafone.com/results
(https://investors.vodafone.com/results) .
Investing in the turnaround of Germany
- Customers: We continue to invest in the customer experience and have
increased our brand investment. Whilst there is more to do, the number of
customer detractors is falling and we are seeing improved commercial
performance.
- Networks: We continue to upgrade our award-winning cable network and
we are now able to market the largest Gigabit footprint in Germany, supported
by our new wholesale agreements with Deutsche Telekom and Deutsche Glasfaser.
- Partnerships: We started onboarding 1&1 customers to our network
in August 2024.
- Transformation: We continue to make progress on the simplification of
our Germany operations. We are now halfway through the execution of our 3,100
role reduction plan and have reshaped the leadership team with our new
Commercial, Business and IT directors being onboarded.
Vodafone Business capabilities
- Products: Supported by Microsoft, Google & Mastercard
partnerships. SME managed services & DaaS platforms launched.
- Capabilities: New Business CEO & Director for Germany & Other
Europe, & over 200 specialist digital sales team members.
Efficiency via simplification of shared operations & AI
- Shared operations: Our commercial shared operations are now
operational, with Accenture investing its first tranche of its €150 million
commitment in our partnership in October 2024.
- Transformation through AI: We are rolling out our new AI-driven
digital assistants to our agents, and directly to our customers with our
SuperTobi chatbot. Our AI adoption is supported by our strategic partnerships
with Microsoft & Google.
Portfolio actions
- UK: The Competition and Market Authority's phase 2 review is ongoing and
we have made a number of commitments in response to the CMA's provisional
findings and notice of possible remedies. The final decision is due by 7
December, with completion expected in early 2025.
- Italy: The Competition Authority's final decision is due by 10
December, with completion expected in early 2025.
- Romania: Along with Digi Romania, we have signed a memorandum of
understanding with Hellenic Telecommunications in relation to a potential
acquisition of separate parts of its subsidiary Telekom Romania. The
discussions remain at an early stage and there is no certainty that a
transaction will be agreed.
Vodafone Investments
- Vantage Towers: In July, we announced the sale of a further 10% stake
in Oak Holdings GmbH, the partnership that co-controls Vantage Towers, for
€1.3 billion, achieving the planned 50:50 joint ownership structure.
- Indus Towers: In June, we announced that we had sold an 18% stake in
Indus Towers Limited, with the gross proceeds of €1.7 billion used to
substantially repay existing lenders in India.
Customers Simplicity
H1 FY25 H1 FY25
Consumer NPS
Germany YoY Stable Europe opex savings (FY23-H1 FY25) € billion 0.3
UK YoY Increased Productivity (role reductions) '000 6.3
Other Europe YoY Stable Shared operations NPS (Oct'24) % 86
South Africa YoY Stable Employee engagement index (Oct'24) % 75
Detractors
Germany YoY Improved Growth
UK YoY Improved H1 FY25
Other Europe YoY Improved Organic Service revenue growth(1) % 4.8
South Africa YoY Improved B2B organic service revenue growth(1) % 3.3
Organic Adjusted EBITDAaL growth(1)
Revenue market share % 3.8
Germany YoY Decreased Adjusted free cash outflow(1) € million (950)
UK YoY Increased Pre-tax return on capital employed(1) % 7.2
Other Europe YoY Increased
South Africa YoY Stable
Network quality 'Very good' reliability in all European mobile markets
1. Non-GAAP measure. See page 49.
Financial Review ⫶ Africa & Turkey driving growth
Financial results
- Total revenue: Increased by 1.6% to €18.3 billion in H1, as organic
service revenue growth was partially offset by adverse foreign exchange
movements.
- Service revenue: Increased by 1.7%, on a reported basis and increased
by 4.8% on an organic basis in H1. An anticipated slowdown in Germany was
offset by growth in Other Europe, Africa & Turkey. Vodafone Business
continued to grow at an accelerating pace during H1, supported by demand for
digital services, particularly cloud and security.
- Operating profit: Increased by 28.3% to €2.4 billion in H1,
primarily driven by a €0.7 billion gain on the disposal of an 18% stake in
Indus Towers in Q1.
- Adjusted EBITDAaL: Increased by 3.8% on an organic basis in H1,
supported by service revenue growth and lower energy costs in Europe.
Adjusted EBITDAaL in Germany declined by 9.3%, including a 8.2 percentage
point impact related to the MDU TV law change.
- Earnings per share: Basic earnings per share from continuing
operations was 3.92 eurocents in H1, compared to a basic loss per share of
0.40 eurocents in the same period of the prior year, primarily due to higher
operating profit. Adjusted basic earnings per share was 4.84 eurocents,
compared to 3.72 eurocents in the prior year.
- Discontinued operations: Vodafone Spain and Vodafone Italy are
reported as discontinued operations and are therefore excluded from the
results of continuing operations. Discontinued operations are also excluded
from the Group's segment reporting. The disposal of Vodafone Spain completed
on 31 May 2024. See note 5 'Discontinued operations and assets for sale' in
the condensed consolidated financial statements for more information."
Re-presented(2)
H1 FY25(1) H1 FY24 Reported
€m €m change %
Revenue 18,276 17,983 1.6
- Service revenue 15,109 14,861 1.7
- Other revenue 3,167 3,122
Adjusted EBITDAaL(3,4) 5,411 5,427 (0.3)
Restructuring costs (58) (102)
Interest on lease liabilities(5) 220 217
Loss on disposal of property, plant and equipment and intangible assets (12) (18)
Depreciation and amortisation of owned assets (3,672) (3,613)
Share of results of equity accounted associates and joint ventures (40) (51)
Impairment reversal - 64
Other income/(expense) 533 (67)
Operating profit 2,382 1,857 28.3
Investment income 566 368
Financing costs (843) (1,395)
Profit before taxation 2,105 830
Income tax expense (900) (746)
Profit for the financial period - Continuing operations 1,205 84
Profit/(loss) for the financial period - Discontinued operations 16 (239)
Profit/(loss) for the financial period 1,221 (155)
Attributable to:
- Owners of the parent 1,064 (346)
- Non-controlling interests 157 191
Profit/(loss) for the financial period 1,221 (155)
Basic earnings/(loss) per share - Continuing operations 3.92c (0.40)c
Basic earnings/(loss) per share - Total Group 3.98c (1.28)c
Adjusted basic earnings per share(3) 4.84c 3.72c
Further information is available in a spreadsheet at
investors.vodafone.com/results
Notes:
1. The H1 FY25 results reflect average foreign exchange rates of
€1:£0.85, €1:INR 90.94, €1:ZAR 19.87, €1:TRY 35.87 and €1:EGP
52.30.
2. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are now reported as discontinued operations. See note 5 '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 49 for more information.
4. Includes depreciation on leased assets of €1,564 million (H1 FY24:
€1,504 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 & dividend
- Cash from operating activities: Increased 1.8% to €5.6 billion
reflecting lower working capital outflows compared to the comparative period,
together with lower tax payments, offset by a lower inflow from discontinued
operations.
- Adjusted free cash flow: An outflow of €950 million versus an
outflow of €1.4 billion in the prior year period. This improvement reflects
lower cash tax, lower working capital outflow as well as higher dividends
received from associates and joint ventures.
- Net debt: Decreased to €31.8 billion (€33.2 billion as at 31 March
2024), primarily driven by the proceeds from the sale of Vodafone Spain for
€4.1 billion as well as the 10% stake in Oak Holdings for €1.3 billion,
offset by a free cash outflow of €1.1 billion, equity dividends of €1.2
billion and the share buyback of €0.9 billion.
- Current liquidity: Cash and cash equivalents and short-term
investments totalled €11.1 billion (€9.4 billion as at 31 March 2024).
This includes €1.4 billion of net collateral which has been posted to
Vodafone from counterparties as a result of positive mark-to-market movements
on derivative instruments (€1.9 billion as at 31 March 2024).
- Shareholder returns: The interim dividend per share is 2.25 eurocents
(FY24 H1: 4.5 eurocents). The ex-dividend date for the interim dividend is 21
November 2024 for ordinary shareholders, the record date is 22 November 2024
and the dividend is payable on 7 February 2025.
H1 FY25 H1 FY24 Reported
Cash flow and funding €m €m change %
Inflow from operating activities 5,644 5,544 1.8
Inflow/(outflow) from investing activities 2,467 (3,808) 164.8
Outflow from financing activities (7,333) (6,378) (15.0)
Net cash inflow/(outflow) 778 (4,642) 116.8
Cash and cash equivalents at the beginning of the financial period 6,114 11,628
Exchange (loss)/gain on cash and cash equivalents (21) 45
Cash and cash equivalents at the end of the financial period 6,871 7,031
Closing borrowings less cash and cash equivalents (excl. Vodafone Spain and (48,745) (54,466) 10.5
Vodafone Italy)
Closing borrowings less cash and cash equivalents (incl. Vodafone Spain and (50,831) (57,910) 12.2
Vodafone Italy)
Re-presented(1)
H1 FY25 H1 FY24 Reported
€m €m change %
Adjusted free cash flow(2,3) (950) (1,380) 31.2
Licences and spectrum (12) (183)
Restructuring costs including working capital movements (115) (142)
Integration capital additions (12) (28)
Other adjustments (7) -
Free cash flow(2) (1,096) (1,733) 36.8
Closing net debt (excl. Vodafone Spain and Vodafone Italy)(2) (31,775) (36,126) 12.0
Closing net debt (incl. Vodafone Spain and Vodafone Italy)(2) (31,747) (36,240) 12.4
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are now reported as discontinued operations. See note 5 '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 49 for more information.
3. There was an outflow of €99 million from discontinued operations in
adjusted free cash flow for the six months ended 30 September 2024 (H1 FY24:
€94 million outflow), in addition to the reported total from continuing
operations.
Outlook & capital allocation
In May 2024, we set out guidance for FY25 for Group adjusted EBITDAaL and
adjusted free cash flow, which we reiterate today.
As Vodafone Italy is recognised as a discontinued operation, its adjusted free
cash flow has been excluded from our FY25 guidance. For further information
please refer to appendix VII in the accompanying presentation available here:
investors.vodafone.com/performance/annual-reporting
(https://investors.vodafone.com/performance/annual-reporting) .
FY25 guidance(1,2)
Adjusted EBITDAaL(3,5) c.€11.0 billion
Adjusted free cash flow(3,4,5) at least €2.4 billion
Notes:
1. 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.
2. Vodafone Spain and Vodafone Italy are both reported as discontinued
operations in accordance with IFRS. The financial results from discontinued
operations are reported separately from our continuing operations, and
therefore, they are excluded from FY25 guidance.
3. Adjusted EBITDAaL and Adjusted free cash flow are non-GAAP measures. See
page 49 for more information.
4. 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.
5. Excluding the impact of hyperinflationary accounting in Turkey.
Capital allocation
In March 2024, we conducted a broad capital allocation review, considering the
Group's strategy within its reshaped footprint.
- Investment: Following an extensive review of our capital investment
requirements, the current capital intensity will be broadly maintained at a
market level, which will allow for appropriate investment in networks and
growth opportunities. Capital additions in H1 FY25 include an extraordinary
core network software licence of €300 million for the next 5 years (with no
cash impact in FY25), as well as upfront network investment in Germany in
relation to the 1&1 national roaming agreement.
- Leverage: A new leverage policy of 2.25x - 2.75x Net Debt to Adjusted
EBITDAaL has been adopted and we 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.
- Shareholder returns (dividends): Following the right-sizing of the
portfolio as a result of the sale of Vodafone Spain and Vodafone Italy, the
Board determined to adopt a new rebased dividend from FY25 onwards. The Board
is targeting a full year dividend of 4.5 eurocents per share for FY25, with an
ambition to grow it over time, and has declared an interim dividend of 2.25
eurocents per share (H1 FY24: 4.50 eurocents). The new dividend was set at a
sustainable level, which ensures appropriate cash flow cover and sufficient
flexibility to invest in the business for growth.
- Shareholder returns (share buybacks): The Board also approved a
capital return through share buybacks of up to €2.0 billion of the 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 to occur in early 2025. So far in
FY25, an initial tranche of €500 million of share buybacks was completed on
6 August 2024, resulting in the repurchase of 591 million shares. A second
tranche of €500 million of shares buybacks commenced on 7 August 2024 and is
expected to complete in November 2024. It is expected that the commencement of
the third tranche of €500 million of share buybacks will be announced
shortly thereafter.
Segment performance
Vodafone Spain and Vodafone Italy are reported as 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
profit/(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 H1 FY24 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
H1 FY25 results. The disposal of Vodafone Spain completed on 31 May 2024.
Geographic performance summary
Segment results Total revenue Service revenue Adjusted EBITDAaL(1) Adjusted EBITDAaL margin(1) Capital additions
H1 FY25 H1 FY24 H1 FY25 H1 FY24 H1 FY25 H1 FY24 H1 FY25 H1 FY24 H1 FY25 H1 FY24
€m €m €m €m €m €m % % €m €m
Germany 6,122 6,405 5,500 5,722 2,290 2,527 37.4 39.5 1,035 1,171
UK 3,448 3,377 2,891 2,822 707 640 20.5 19.0 355 380
Other Europe(2) 2,804 2,679 2,410 2,366 784 766 28.0 28.6 341 361
Turkey 1,391 1,128 1,103 828 394 254 28.3 22.5 185 140
Africa 3,705 3,590 2,951 2,924 1,214 1,241 32.8 34.6 444 469
Common Functions(3) 906 929 322 282 22 (1) 627 356
Eliminations (100) (125) (68) (83) - - - -
Group(4) 18,276 17,983 15,109 14,861 5,411 5,427 29.6 30.2 2,987 2,877
Downloadable performance information is available at:
investors.vodafone.com/results
Segment service revenue growth FY24 FY25
Q1 Q2 H1 Q3 Q4 H2 Total Q1 Q2 H1
% % % % % % % % % %
Germany (1.3) 1.0 (0.1) 0.3 0.6 0.5 0.2 (1.5) (6.2) (3.9)
UK 3.0 5.1 4.1 5.5 6.8 6.2 5.1 2.0 2.9 2.4
Other Europe(2) (7.4) (7.2) (7.3) (7.8) 0.3 (4.0) (5.7) 1.6 2.1 1.9
Turkey (8.5) 21.6 7.4 6.8 15.6 11.7 9.6 54.7 18.8 33.2
Africa (14.3) (14.8) (14.6) (7.5) 1.2 (3.4) (9.2) 1.6 0.3 0.9
Group(4) (4.7) (1.9) (3.3) (1.5) 2.9 0.7 (1.3) 3.2 0.2 1.7
Segment organic service revenue growth(1) FY24 FY25
Q1 Q2 H1 Q3 Q4 H2 Total Q1 Q2 H1
% % % % % % % % % %
Germany (1.3) 1.1 (0.1) 0.3 0.6 0.5 0.2 (1.5) (6.2) (3.9)
UK 5.7 5.5 5.6 5.2 3.6 4.4 5.0 - 1.2 0.6
Other Europe(2) 4.1 3.8 3.9 3.6 5.5 4.6 4.2 2.3 2.6 2.5
Turkey 74.1 85.0 79.3 90.4 105.6 97.8 88.5 91.9 89.1 90.3
Africa 9.0 9.0 9.0 8.8 10.0 9.4 9.2 10.0 9.7 9.9
Group(4) 5.4 6.6 6.0 6.3 7.1 6.7 6.3 5.4 4.2 4.8
Group profitability FY24 FY25
Q1 Q2 H1 H2 Total Q1 Q2 H1
Operating profit €m 1,081 776 1,857 1,808 3,665 1,545 837 2,382
Adjusted EBITDAaL(1) €m 2,626 2,801 5,427 5,592 11,019 2,681 2,730 5,411
Adjusted EBITDAaL margin(1) % 29.9 30.5 30.2 29.8 30.0 29.7 29.5 29.6
Organic Adjusted EBITDAaL growth(1) % 3.3 1.2 2.2 5.1 2.5 3.8
Notes:
1. Organic service revenue growth, Group Adjusted EBITDAaL and Group Adjusted
EBITDAaL margin are non-GAAP measures. See page 49 for more information.
2. Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
3. Capital additions in H1 FY25 includes software arrangements managed
centrally on behalf of the Group.
4. Prior period 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 reported as discontinued operations and
are therefore excluded from these Group metrics.
Germany ⫶ MDUs impact financials, operational progress continues
36% €6.1bn (3.9%)
of Group service revenue Total revenue Organic service revenue growth
42% €2.3bn (9.3%)
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
H1 FY25 H1 FY24 Reported Organic
€m €m change % change %(1)
Total revenue 6,122 6,405 (4.4)
- Service revenue 5,500 5,722 (3.9) (3.9)
- Other revenue 622 683
Adjusted EBITDAaL 2,290 2,527 (9.3) (9.3)
Adjusted EBITDAaL margin 37.4% 39.5%
Note:
1. Organic growth is a non-GAAP measure. See page 49 for more information.
Growth
Total revenue decreased by 4.4% to €6.1 billion as a result of lower service
and equipment revenue. As anticipated, service revenue declined by 3.9% (Q1:
-1.5%, Q2: -6.2%), primarily due to a 2.6 percentage point impact (Q1: -1.2
percentage points; Q2: -3.8 percentage points) from the end to bulk TV
contracting in Multi Dwelling Units ('MDU'), which came into full effect from
July 2024, as well as a lower broadband customer base following price
increases in the prior year. The decline in quarterly trends was primarily
driven by the full impact of the TV law change and the lapping of broadband
price increases in the prior year.
Fixed service revenue decreased by 5.9% (Q1: -2.0%, Q2: -9.7%) due to the
cumulative impact of TV and broadband customer losses. The MDU transition had
a -6.9 percentage point impact (Q1: -2.1 percentage points) on fixed service
revenue growth in Q2. Excluding this impact, the quarterly slowdown was
primarily driven by the introduction of price increases in the prior year.
Mobile service revenue decreased by 1.3% (Q1: -0.8%, Q2: -1.8%) as lower
mobile termination rates and higher non-recurring payments from third-party
resellers in Q2 in the prior year, were only partially offset by a higher
contract customer base. Vodafone Business service revenue declined by 1.7%
(Q1: -1.7%, Q2: -1.7%) as price pressure in the mobile segment was only
partially offset by good growth in digital services.
Adjusted EBITDAaL declined by 9.3%, primarily due to a 8.2 percentage point
impact related to the MDU transition. Excluding this impact, the decline in
adjusted EBITDAaL was driven by lower service revenue and incremental
commercial investment in A&R, brand and Vodafone Business capabilities as
we have chosen to prioritise investment in this market to drive our
performance. This was partially offset by a 3.4 percentage point benefit from
lower energy costs. The Adjusted EBITDAaL margin was 2.1 percentage points
lower year-on-year at 37.4%.
Customers
In 2024, our market-leading broadband network quality position has continued
to be recognised in independent network test results from Connect, CHIP,
ComputerBild and nPerf. However, the impact of broadband price increases last
year continued to affect our commercial performance in H1, with our broadband
customer base declining by 88,000 (Q1: -55,000; Q2: -33,000), including the
loss of 41,000 (Q1: -32,000; Q2: -9,000) customers on our gigabit-capable
network. We experienced further improvement in broadband net additions in Q2,
as the churn related to the prior year price increases is now behind us. Our
fibre-to-the-home ('FTTH') joint venture, OXG, continues to progress its
network rollout with construction now having started in 21 cities. OXG has
signed up more than 20 construction partners and will continue to add more to
ramp up build capacity. In October, we became the largest fibre provider in
Germany through our wholesale agreements with Deutsche Telekom & Deutsche
Glasfaser as we can now market gigabit speeds to almost 5 million households
beyond our cable footprint.
German TV laws relating to the practice of bulk TV contracting in MDUs changed
in July 2024 and we have continued to migrate end users to new contracts at
scale. By the end of September 2024, we had retained 4.0 million households,
which is in line with our expectation that we would retain around 50% of the
8.5 million MDU TV households. We will continue to engage with the remaining
households affected by the law change and drive penetration. Our total TV
customer base declined by 2.9 million during the period, primarily due to the
MDU transition.
Despite higher competitive intensity in the mobile market, our Consumer mobile
contract customer base increased by 30,000 in the period, as our increased
focus on higher value branded and direct sales channels was offset by the
anticipated loss of low-margin customers through resellers' channels. In
addition, we saw 35,000 disconnections from business accounts, partly driven
by some large contract tenders in the prior year. We added a further 2.8
million IoT connections, driven by continued demand from the automotive
sector.
UK ⫶ Consumer customer satisfaction supporting growth
19% €3.4bn 0.6%
of Group service revenue Total revenue Organic service revenue growth
13% €0.7bn 8.4%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
H1 FY25 H1 FY24 Reported Organic
€m €m change % change %(1)
Total revenue 3,448 3,377 2.1
- Service revenue 2,891 2,822 2.4 0.6
- Other revenue 557 555
Adjusted EBITDAaL 707 640 10.5 8.4
Adjusted EBITDAaL margin 20.5% 19.0%
Note:
1. Organic growth is a non-GAAP measure. See page 49 for more information.
Growth
Total revenue increased by 2.1% to €3.4 billion due to service revenue
growth and the appreciation of GBP:EUR. Service revenue increased by 2.4% (Q1:
2.0%, Q2: 2.9%) due to foreign exchange movements and organic growth in
service revenue which increased by 0.6% (Q1: 0.0%, Q2: 1.2%), as growth in
Consumer was offset by a decline in Business.
Mobile service revenue grew by 0.6% (Q1: 0.6%, Q2: 0.6%), as the appreciation
of GBP:EUR was offset by a decline in organic growth in mobile service revenue
of 1.3% (Q1: -1.4%, Q2: -1.1%). The decline in organic growth was primarily
driven by the significantly lower level of inflation-linked price rises
compared to the prior year and the ongoing dilution of the back book from
front book pricing in mobile, partially offset by Consumer customer base
growth. Fixed service revenue grew by 7.9% (Q1: 6.1%, Q2: 9.6%) and organic
growth in fixed service revenue was 6.0% (Q1 4.1%, Q2: 8.0%). Growth was
supported by foreign exchange movements, continued growth in the customer base
and ARPU growth in Consumer. Vodafone Business service revenue decreased by
0.5% (Q1: -1.1%, Q2: 0.2%) and organic growth in Vodafone Business service
revenue declined by 2.4% (Q1: -3.0%, Q2: -1.7%) as the appreciation of GBP:EUR
and growth in fixed was offset by a decline in mobile, primarily driven by
lower inflation-linked price increases and ARPU pressure. The higher growth in
Q2 was supported by the phasing of project revenue.
Adjusted EBITDAaL increased by 10.5% in the period, and on an organic basis,
adjusted EBITDAaL increased by 8.4%. The increase in EBITDAaL was primarily
driven by service revenue growth, a 2.7 percentage point benefit from lower
energy costs, and other cost efficiencies, as well as foreign exchange
movements in the reported measure. The Adjusted EBITDAaL margin improved by
1.5 percentage points year-on-year on a reported and organic basis to 20.5%.
Customers
In mobile, our Consumer contract customer base increased by 65,000 in the
period, supported by our customer experience improvements and Vodafone 'EVO'
handset proposition, resulting in record low H1 churn. This was offset by
large low-value contract disconnections in Business and a reclassification of
part of the mobile customer base to IoT, with our total contract customer base
declining by 35,000 in H1. In fixed, we continue to be one of the fastest
growing broadband providers in the UK and our customer base increased by
94,000 in the period. We now cover 17.3 million households, and in July, we
announced that we now offer faster speeds of up to 2.2Gbps in more locations
than any other provider. On 12 September, we became one of the first providers
to support the new 'One Touch Switching' service, making it even easier for
customers to join us. In H1, we hit our highest ever Consumer NPS level and
were recognised as Consumer NPS co-leader in the market, reflecting the
significant improvements and investment we have made to our customer
experience.
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 in early 2025,
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. As part of its investigation into the merger,
the UK's Competition and Markets Authority ('CMA') published its provisional
findings and notice of possible remedies in September 2024, followed up with a
remedies working paper in November. The final decision is expected by 7
December 2024. We disagree with the CMA's provisional findings and have
provided them with our response. We will continue to constructively engage
with the CMA and remain confident that we can work with them to secure
approval. Completion is expected in early 2025. Full details of the
transaction can be found here:
investors.vodafone.com/merger-of-vodafone-uk-and-three-uk
(https://investors.vodafone.com/sites/vodafone-ir/files/2023-06/merger-of-vodafone-uk-and-three-uk-13-june-2023-vodafone.pdf)
Other Europe(1) ⫶ Continued Service revenue and EBITDAaL growth
16% €2.8bn 2.5%
of Group service revenue Total revenue Organic service revenue growth
14% €0.8bn 3.1%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
H1 FY25 H1 FY24 Reported Organic
€m €m change % change %(2)
Total revenue 2,804 2,679 4.7
- Service revenue 2,410 2,366 1.9 2.5
- Other revenue 394 313
Adjusted EBITDAaL 784 766 2.3 3.1
Adjusted EBITDAaL margin 28.0% 28.6%
Notes:
1. Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
2. Organic growth is a non-GAAP measure. See page 49 for more information.
Growth
Total revenue grew by 4.7% to €2.8 billion as higher service and equipment
revenue was partially offset by the depreciation of local currencies versus
the euro. Service revenue increased by 1.9% (Q1: 1.6%, Q2: 2.1%) as adverse
foreign exchange movements were offset by organic growth in service revenue of
2.5% (Q1: 2.3%, Q2: 2.6%), driven by a higher customer base in mobile and
broadband, price actions in most markets, partly offset by lower mobile
termination rates. Business project revenue accelerated during Q2.
In Portugal, both our Consumer and Business segments continued to perform
well, also supported by inflation-linked contractual price increases
implemented in February 2024. In Ireland, service revenue was impacted by
lower mobile termination rates and lower Business fixed revenue, partially
offset by a higher customer base in mobile and broadband base growth. Service
revenue in Greece increased, particularly due to growth in the public
sector.
Vodafone Business service revenue increased by 4.5% (Q1: 2.5%, Q2: 6.6%), as
organic growth in Vodafone Business service revenue of 5.4% in H1 (Q1: 3.3%,
Q2: 7.5%) was offset by adverse foreign exchange movements. Organic growth was
mainly driven by digital services, as well as public sector project work in
Portugal, Greece and Romania.
Adjusted EBITDAaL increased by 2.3% in the period and, on an organic basis, by
3.1%, supported by service revenue growth and ongoing cost control. The
Adjusted EBITDAaL margin decreased by 0.6 percentage points year-on-year to
28.0%.
Customers
We added 231,000 mobile contract customers across our six markets, mainly
driven by Portugal and Greece. In Portugal, we added 67,000 contract customers
in mobile and 12,000 in fixed broadband. In Greece, the mobile contract base
grew by 86,000, though fixed broadband customers declined by 10,000. In
Ireland, our mobile contract customer base increased by 9,000 and the
broadband customer base by 15,000. Through our fixed wholesale network access
partnerships, including our fibre joint venture, SIRO, we now cover over 1.4
million households in Ireland with FTTH.
Turkey ⫶ Consistently strong real growth
7% €1.4bn 90.3%
of Group service revenue Total revenue Organic service revenue growth
7% €0.4bn 114.2%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
H1 FY25 H1 FY24 Reported Organic
€m €m change % change %(1)
Total revenue 1,391 1,128 23.3
- Service revenue 1,103 828 33.2 90.3
- Other revenue 288 300
Adjusted EBITDAaL 394 254 55.1 114.2
Adjusted EBITDAaL margin 28.3% 22.5%
Note:
1. Organic growth is a non-GAAP measure. See page 49 for more information.
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. See page 49 for more information.
Growth
Total revenue increased by 23.3% to €1.4 billion, with service revenue
growth partly offset by depreciation of the local currency versus the euro in
prior quarters.
Service revenue increased in euro terms by 33.2% (Q1: 54.7%, Q2: 18.8%) as
organic growth in service revenue in Turkey of 90.3% (Q1: 91.9%, Q2: 89.1%),
primarily driven by ongoing price actions and continued customer base growth,
was only partially offset by adverse foreign exchange movements.
Vodafone Business service revenue increased in euro terms by 48.6% (Q1:
71.1%%, Q2: 32.8%) and organic growth in Vodafone Business service revenue was
111.2% (Q1: 112.6%, Q2: 109.9%) during the period, with growth primarily
supported by Business demand for our digital services, as well as inflationary
mobile price actions.
Adjusted EBITDAaL continued to grow in euro terms and increased by 55.1%
during the period and on an organic basis, adjusted EBITDAaL in Turkey
increased by 114.2%. Adjusted EBITDAaL growth was supported by service revenue
growth, ongoing digitalisation and our continued focus on cost efficiency. The
Adjusted EBITDAaL margin increased by 5.8 percentage points year-on-year
(organic: 6.0 percentage points) to 28.3%.
Customers
We added 369,000 mobile contract customers during the first half of FY25,
including migrations of prepaid customers.
Africa ⫶ Robust performance
20% €3.7bn 9.9%
of Group service revenue Total revenue Organic service revenue growth
22% €1.2bn 6.7%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
H1 FY25 H1 FY24 Reported Organic
€m €m change % change %(1)
Total revenue 3,705 3,590 3.2
- Service revenue 2,951 2,924 0.9 9.9
- Other revenue 754 666
Adjusted EBITDAaL 1,214 1,241 (2.2) 6.7
Adjusted EBITDAaL margin 32.8% 34.6%
Note:
1. Organic growth is a non-GAAP measure. See page 49 for more information.
Growth
Total revenue increased by 3.2% to €3.7 billion as higher service and
equipment revenue was offset by the depreciation of the Egyptian pound versus
the euro. Service revenue increased by 0.9% (Q1: 1.6%, Q2: 0.3%) and organic
growth in service revenue was 9.9% (Q1: 10.0%, Q2: 9.7%) with growth in South
Africa, Egypt and all of Vodacom's international markets, apart from
Mozambique.
In South Africa, service revenue growth was supported by the Consumer mobile
contract segment, which benefited from price increases implemented in the
first quarter, and good fixed line growth in Consumer and Business. Growth
slowed in Q2 due to Consumer prepaid mobile, which faced a tough comparative.
Financial services revenue grew by 11.7% to €86 million, supported by growth
in our insurance services.
Service revenue in Egypt continued to grow above inflation during the period
and the strong performance was supported by sustained customer base growth,
price actions, demand for data and growth in our financial services product,
'Vodafone Cash'. Vodafone Cash revenue increased by 22.5% to €49 million and
now represents 7.6% of Egypt's service revenue.
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 6.4% to €200 million, and now represents 27.0% of service revenue.
Vodacom Business service revenue grew by 2.7% (Q1: 2.3%; Q2: 3.0%) and organic
growth in Vodacom Business service revenue was 8.8% (Q1: 8.4%; Q2: 9.2%), with
South Africa supported by strong demand for digital services and fixed
connectivity.
Adjusted EBITDAaL declined by 2.2% because of the depreciation of local
currencies versus the euro. On an organic basis, adjusted EBITDAaL increased
by 6.7%, as service revenue growth and cost initiatives were partly offset by
one-off costs in the DRC related to bad debt and inflation escalations. The
adjusted EBITDAaL margin decreased by 1.8 percentage points year-on-year
(organic: -1.1 percentage points) to 32.8%.
Customers
In South Africa, we added 113,000 contract customers in the period, and now
have a mobile contract base of 6.9 million. Across our active customer base,
78.1% of our mobile customers now use data services, an increase of 3.9
percentage points or 1.2 million year-on-year. Our 'VodaPay' super-app
continued to gain traction with 8.4 million registered users.
In Egypt, we added 326,000 contract customers and 1.2 million prepaid mobile
customers during the period, and we now have 49.9 million customers. 'Vodafone
Cash' reached 9.6 million active users with 1.4 million users added during the
period.
In Vodacom's international markets, we added 2 million mobile customers in H1
and our mobile customer base is now 56.1 million, with 68.4% of active
customers using our data services. Our M-Pesa customer base now totals 23.8
million.
Further information on our operations in Africa can be accessed here:
vodacom.com (https://vodacom.com) .
Discontinued operations
Italy H1 FY25 H1 FY24 Reported Organic
€m €m change % change %(1)
Total revenue 2,249 2,320 (3.1)
- Service revenue 2,041 2,098 (2.7) (2.7)
- Other revenue 208 222
Note:
1. Organic growth is a non-GAAP measure. See page 49 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 in early 2025. Full details of the transaction can be found here:
investors.vodafone.com/sale-of-vodafone-italy
(https://otp.tools.investis.com/clients/uk/vodafone4/rns/regulatory-story.aspx?cid=221&newsid=1799593)
.
Total revenue declined 3.1% to €2.2 billion due to lower service revenue and
equipment revenue. Service revenue declined by 2.7% (Q1: -2.6%, Q2: -2.8%), as
continued price pressure in the mobile value segment was only partly offset by
Business demand for our fixed line connectivity and digital services.
Vodafone Investments
Associates and joint ventures H1 FY25 H1 FY24
€m €m
Vantage Towers (Oak Holdings 1 GmbH) (27) (78)
VodafoneZiggo Group Holding B.V. (59) (78)
Safaricom Limited 79 89
Indus Towers Limited 55 62
Other(1) (including TPG Telecom Limited) (88) (46)
Share of results of equity accounted associates and joint ventures (40) (51)
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 - 44.7% ownership
In 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, followed by a
further €500 million in July 2023 and €1.3 billion in August 2024, taking
total net proceeds to €6.6 billion and the Consortium's ownership in Oak
Holdings GmbH to 50%. Our effective stake in Vantage Towers is 44.7%. During
the period, total revenue increased by 7.1% to €601 million, supported by
1,015 net new tenancies and 318 new macro sites. As a result, the tenancy
ratio increased to 1.51x (31 March 2024: 1.50x). Vodafone's share of results
in the period reflects the amortisation of intangible assets arising from the
completion of the co-control partnership for Vantage Towers. During the
period, Vantage Towers distributed €158 million in dividends to Vodafone.
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
0.5% to €2.0 billion, as contractual price increases were partially offset
by a decline in the fixed customer base. During the period, VodafoneZiggo's
mobile contract customer base declined by 16,000 due to the loss of low ARPU
local government contracts in the prior year, while the broadband customer
base declined by 43,000 customers due to the competitive price environment.
VodafoneZiggo's converged products & services deliver significant NPS and
customer loyalty benefits, and 49% of broadband customers are now converged.
VodafoneZiggo now offers gigabit speeds to 7.6 million homes, providing
nationwide coverage. During the period, VodafoneZiggo successfully acquired
100 MHz spectrum license in the 3.5 GHz band. Vodafone's lower share of losses
was driven by higher gains on derivative financial instruments and higher
operating income which were partially offset by higher tax and interest
expenses. During H1 FY25, Vodafone received €26 million in interest payments
from the joint venture.
Safaricom Associate (Kenya) - 27.8% ownership
Safaricom service revenue grew by 23.3% to €1.3 billion, driven by organic
growth of 14.1% and favourable foreign exchange movements of the Kenyan
shilling versus the euro. Vodafone's lower share of results was due to the
devaluation of the Ethiopian Birr. During the period, Vodafone received €73
million in dividends from Safaricom.
TPG Telecom Limited Joint Venture (Australia) - 25.1% ownership
TPG Telecom Limited ('TPG') is a fully integrated telecommunications operator
in Australia and is listed on the Australian stock exchange. The Group owns an
equivalent economic interest of 25.1%, via an 11% direct stake in TPG and a
14% indirect stake, held through a 50:50 joint venture with CK Hutchison.
During the year, the Group received €12 million in dividends from its direct
stake in TPG. The Group provides guarantees amounting to $1.0 billion and
€0.6 billion (2023: US$1.75 billion) in relation to its 50% share in a
multicurrency loan facility held by the joint venture. In October 2024, TPG
announced the sale of its fixed network infrastructure assets and enterprise,
government and wholesale fixed telecommunications services business for
AU$5.25 billion. The transaction is subject to regulatory approval and other
customary conditions precedent.
Indus Towers Limited Associate (India) - 3.0% ownership
In June 2024, we announced that we had sold 484.7 million shares in Indus,
representing 18.0% of share capital. The INR 153.0 billion (€1.7 billion) in
gross proceeds were used to substantially repay loans secured against our
Investments in Indus Towers Limited and Vodafone Idea Limited. Following the
transaction, the Group classifies its remaining 3.0% investment in Indus as an
Other Investment.
Vodafone Idea Limited Joint Venture (India) - 22.6% ownership
After undertaking equity fund-raisings and allotments to vendors since March
2024, the Group's shareholding in Vodafone Idea Limited has reduced to 22.6%.
For more information, see note 29 'Contingent liabilities and legal
proceedings' to the consolidated financial statements of Vodafone Group Plc
for the year ended 31 March 2024.
Net financing costs
Re-presented(1)
H1 FY25 H1 FY24 Reported
€m €m change %
Investment income 566 368
Financing costs (843) (1,395)
Net financing costs (277) (1,027) 73.0
Adjustments for:
Mark-to-market (gains)/losses (55) 141
Foreign exchange losses 14 90
Fair value gains on Other Investments through profit and loss (242) -
Adjusted net financing costs(2) (560) (796) 29.6
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 '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 49 for more
information.
Net financing costs of €277 million (H1 FY24: €1,027 million) decreased by
€750 million and include a gain of €238 million on certain bonds bought
back prior to their maturity dates; a revaluation gain of €242 million from
Other investments classified at fair value through profit and loss and
mark-to-market gains on derivatives in the period.
Adjusted net financing costs of €560 million (H1 FY24: €796 million)
decreased by €236 million, mainly as a result of the gain from the early
redemption of the bonds bought back in the period. Excluding this one-off
item, Adjusted net financing costs remained in line with the prior period.
Taxation
Re-presented(1)
H1 FY25 H1 FY24 Reported
% % change pps
Effective tax rate 42.8% 89.9% (47.1)
Adjusted effective tax rate(2) 18.0% 28.6% (10.6)
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 '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 49 for more
information.
The Group's Effective tax rate ('ETR') for H1 FY25 was 42.8%.
This reflects one-off items including a €164 million tax charge arising on
the €26 million net gain on the disposal of a 10% stake in Oak Holdings
GmbH, the recognition of a financial liability at fair value of €238 million
on Indus Towers (see note 11 'Fair value of financial instruments' in the
condensed consolidated financial statements) without tax credit, and a net
€41 million tax charge as an effect of hyper-inflation accounting
adjustments in Turkey (H1 FY24: €121 million charge).
The Group's Adjusted ETR ('AETR') for H1 FY25 was 18.0% (H1 FY24: 28.6%).
This eliminates the above stated significant one-off items, a €714 million
accounting gain on the sale of an 18% stake in Indus Towers Limited without
tax gain and a €319 million deferred tax charge for utilisation of
recognised tax losses in Luxembourg. It is lower than our expectations for the
full year for which we expect a tax rate in the mid-twenties percent range.
The BEPS Pillar Two Minimum Tax legislation was enacted in July 2023 in the UK
with effect from 2024. The Group has applied the temporary exception under IAS
12 in relation to the accounting for deferred taxes arising from the
implementation of the Pillar Two rules. The H1 FY25 tax charge includes a
current tax charge of €5 million relating to Pillar 2 income taxes.
The ETR for H1 FY24 included €250 million relating to the use of prior year
losses in Luxembourg, a €78 million tax charge arising on the completion of
the Vantage Towers share disposal in H1 FY24, and a €121 million charge as
an effect of hyper-inflation accounting adjustments in Turkey. These items,
when excluded, resulted in an AETR for H1 FY24 of 28.6%.
Earnings per share
Re-presented(1) Reported
H1 FY25 H1 FY24 change
eurocents eurocents eurocents
Basic earnings/(loss) per share - Continuing operations 3.92c (0.40)c 4.32c
Basic earnings/(loss) per share - Total Group 3.98c (1.28)c 5.26c
Adjusted basic earnings per share(2) 4.84c 3.72c 1.12c
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 '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 49 for
more information.
Basic earnings per share from continuing operations was 3.92 eurocents,
compared to a basic loss per share of 0.40 eurocents for H1 FY24. The increase
was primarily due to higher operating profit, combined with lower net
financing costs.
Adjusted basic earnings per share was 4.84 eurocents, compared to 3.72
eurocents for H1 FY24. The increase was primarily due to lower adjusted net
financing costs.
Cash flow & funding
Analysis of cash flow
H1 FY25 H1 FY24 Reported
€m €m change %
Inflow from operating activities 5,644 5,544 1.8
Inflow/(outflow) from investing activities 2,467 (3,808) 164.8
Outflow from financing activities (7,333) (6,378) (15.0)
Net cash inflow/(outflow) 778 (4,642) 116.8
Cash and cash equivalents at the beginning of the financial period 6,114 11,628
Exchange (loss)/gain on cash and cash equivalents (21) 45
Cash and cash equivalents at the end of the financial period 6,871 7,031
Cash inflow from operating activities increased to €5,644 million reflecting
lower working capital outflows compared to the comparative period, together
with lower tax payments, offset by a lower inflow from discontinued
operations.
Inflow from investing activities increased by €6,275 million to €2,467
million, primarily in relation to proceeds received from the disposal of 10%
of Oak Holdings 1 GmBH (€1,336 million) and the disposal of 18% of Indus
Towers Limited (€1,684 million). Additionally, the Group disposed of
Vodafone Spain to Zegona Communications plc ('Zegona') for total cash
consideration of €4,069 million (subject to closing accounts adjustments),
of which €3,669 million is included in this line. The remaining €400
million relates to the future use of the Vodafone brand and certain
procurement services to be provided by the Group to Zegona and is included in
Inflow from operating activities.
Outflows from financing activities increased to €7,333 million as higher net
cash outflows in respect of borrowings, higher interest paid arising from the
repayment of borrowings secured against Indian assets and higher outflows in
relation to the purchase of treasury shares outweighed a smaller cash outflow
in respect of discontinued operations.
Analysis of cash flow (continued)
Re-presented(1)
H1 FY25 H1 FY24 Reported
€m €m change %
Adjusted EBITDAaL(2) 5,411 5,427 (0.3)
Capital additions(3) (2,987) (2,877)
Working capital(4) (2,636) (2,807)
Disposal of property, plant and equipment and intangible assets 7 6
Integration capital additions (12) (28)
Restructuring costs including working capital movements(5) (115) (142)
Licences and spectrum (12) (183)
Interest received and paid(6,7) (493) (552)
Taxation (393) (472)
Dividends received from associates and joint ventures 243 75
Dividends paid to non-controlling shareholders in subsidiaries (157) (167)
Other 48 (13)
Free cash flow(2) (1,096) (1,733) 36.8
Acquisitions and disposals 6,564 266
Equity dividends paid (1,201) (1,210)
Share buybacks (879) -
Foreign exchange (loss)/gain (177) 14
Other movements in net debt(7,8) (1,744) (213)
Net debt decrease/(increase)(2) 1,467 (2,876)
Opening net debt(2) (33,242) (33,250)
Closing net debt(2) (31,775) (36,126) 12.0
Net debt of Vodafone Spain and Vodafone Italy(2) 28 (114)
Closing net debt incl. Vodafone Spain and Vodafone Italy(2) (31,747) (36,240) 12.4
Free cash flow(2) (1,096) (1,733)
Adjustments:
- Licences and spectrum 12 183
- Restructuring costs including working capital movements(5) 115 142
- Integration capital additions 12 28
- Other adjustments 7 -
Adjusted free cash flow(2) (950) (1,380)
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 '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 49 for more information.
3. See page 62 for an analysis of tangible and intangible additions in the
year.
4. Includes the impact of €143 million of Trade payables for which the Group
has extended payment terms from 30 to 90 days through the use of reverse
factoring at 30 September 2024 (31 March 2024: €nil).
5. Includes working capital in respect of integration capital additions.
6. Interest received and paid excludes €208 million outflow (H1 FY24: €188
million) in relation to the cash portion of interest on lease liabilities
included within Adjusted EBITDAaL.
7. During the period and following the disposal of an 18% interest in Indus
Towers on 19 June 2024, the Group has repaid €1,699 million of bank
borrowings that are secured against the Group's shareholdings in Indus Towers
and Vodafone Idea. €537 million of this repayment comprises accrued
interest, which is included in Other movements in net debt together with the
principal repayment of €1,162 million. €94 million (31 March 2024:
€1,720 million) remains outstanding on the facility at 30 September 2024.
8. Other movements in net debt for H1 FY25 includes a net outflow from
discontinued operations of €224 million (H1 FY24: €242 million outflow),
together with the partial repayment of borrowings secured against Indian
assets of €1,699 million (H1 FY24: €nil).
Acquisitions and disposals includes the disposal of 10% of Oak Holdings 1 GmBH
(€1,336 million) and the disposal of 18% of Indus Towers Limited (€1,684
million). Additionally, the Group disposed of Vodafone Spain to Zegona
Communications plc ("Zegona") for total cash consideration of €4,069 million
(subject to closing accounts adjustments), of which €3,669 million is
included in this line. The remaining €400 million relates to the future use
of the Vodafone brand and certain procurement services to be provided by the
Group to Zegona.
Adjusted free cash flow was an outflow of €950 million in the period,
representing an improvement of €430 million compared to the comparative
period. This reflects higher dividends from associates and joint ventures and
lower taxation.
Borrowings and cash position
Re-presented(1)
H1 FY25 Year-end FY24 Reported
€m €m change %
Non-current borrowings (47,232) (49,259)
Current borrowings (8,521) (7,728)
Borrowings (55,753) (56,987)
Cash and cash equivalents 7,008 6,183
Borrowings less cash and cash equivalents (48,745) (50,804) 4.1
Note:
1. On 1 April 2024, the Group adopted amendments to
IAS 1 'Presentation of Financial Statements' which has impacted the
classification of certain bonds between Current borrowings and Non-current
borrowings. See note 1 'Basis of preparation' for more information.
Borrowings principally includes bonds of €39,522 million (31 March 2024:
€40,743 million), lease liabilities of €10,790 million (31 March 2024:
€9,672 million), cash collateral liabilities of €2,179 million (31 March
2024: €2,628 million) and €94 million (31 March 2024: €1,720 million) of
bank borrowings that are secured against the Group's shareholdings in Indus
Towers and Vodafone Idea.
The decrease in borrowings of €1,234 million was primarily driven by the
repayment of the bank borrowings secured against Indus and VIL assets of
€1,699 million, repayment of bonds of €3,812 million, a net reduction in
collateral liabilities of €449 million and favourable foreign exchange
movements of €480 million, partially offset by the issue of new bonds of
€3,352 million, an increase in lease liabilities of €1,118 million and an
increase in other borrowings of €986 million.
Funding position
H1 FY25 Year-end FY24 Reported
€m €m change %
Bonds (39,522) (40,743)
Bank loans (725) (767)
Other borrowings including spectrum (2,443) (1,457)
Gross debt(1) (42,690) (42,967) 0.6
Cash and cash equivalents 7,008 6,183
Short-term investments(2) 4,101 3,225
Derivative financial instruments(3) 1,196 2,204
Net collateral liabilities(4) (1,390) (1,887)
Net debt(1) (31,775) (33,242) 4.4
Notes:
1. Gross debt and Net debt are non-GAAP measures. See page 49 for more
information.
2. Short-term investments includes €1,997 million (31 March 2024: €1,201
million) of highly liquid government and government-backed securities and
managed investment funds of €2,104 million (31 March 2024: €2,024 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 €735 million gain (31 March 2024: €498 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 €1,467 million to €31,775 million. This was driven
by cash proceeds from acquisitions and disposals (€6,564 million), partially
offset by a free cash outflow of €1,096 million, equity dividends of
€1,201 million, share buybacks of €879 million and €1,699 million in
relation to the partial repayment of borrowings secured against Indian assets.
Other funding considerations include:
H1 FY25 Year-end FY24
€m €m
Lease liabilities (10,790) (9,672)
Pension fund liabilities (174) (181)
Guarantees over loan issued by Australia joint venture (1,450) (1,479)
Equity characteristic of 50% attributed by credit rating agencies to 'Hybrid 4,497 4,497
bonds' included in net debt, EUR swapped value of €8,993 million (€8,993
million as at 31 March 2024)(1)
Note:
1. The balance at 30 September 2024 includes equity
characteristic for Hybrid bonds of €415 million (EUR swapped value of €830
million) that were repaid on 3 October 2024.
The Group's gross and net debt includes certain bonds which have been
designated in hedge relationships, which are carried at €968 million higher
value (€1,229 million higher as at 31 March 2024) 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 €788 million (€1,559 million as at 31 March 2024).
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 30 September 2024
was 3.9% (H1 FY24: 11.7%), impacted by lower operating profit.
The table below presents adjusted ROCE metrics. Pre-Tax ROCE (controlled) was
7.2%, 0.8pp ahead of the equivalent metric presented in H1 FY24 of 6.4%. The
re-presentation to reflect the results of Vodafone Spain and Vodafone Italy as
discontinued operations has the effect of improving ROCE in the prior period
by 1.4pp to 7.8%.
Re-presented(1)
H1 FY25(2) H1 FY24(2) Reported
% % Change pps
Pre-tax ROCE (controlled)(2) 7.2% 7.8% (0.6)
Post-tax ROCE (controlled and associates/joint ventures)(2) 4.6% 5.0% (0.4)
Notes:
1. The results for the 12 months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' in the condensed consolidated financial statements
for more information.
2. The half-year ROCE calculation is based on returns for the 12 months ended
30 September. 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 49 for more
information.
Funding facilities
As at 30 September 2024, the Group had undrawn revolving credit facilities of
€7.6 billion comprising euro and US dollar revolving credit facilities of
€4.1 billion and US$4.0 billion (€3.5 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 (€13.4 billion) and
€10 billion respectively.
Post employment benefits
As at 30 September 2024, the Group's net surplus of scheme assets over scheme
liabilities was €193 million (€76 million net surplus as at 31 March
2024).
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 has announced an interim dividend per share of 2.25 eurocents (H1
FY24: 4.50 eurocents).
The ex-dividend date for the interim dividend is 21 November 2024 for ordinary
shareholders and 22 November 2024 for ADR holders, the record date is 22
November 2024 and the dividend is payable on 7 February 2025.
Shareholders may elect to receive their dividend in either eurocents or GBP
and the last day for election will be 17 January 2025. Alternatively,
shareholders may participate in the dividend reinvestment plan and elections
must be made by 17 January 2025. More information can be found at
vodafone.com/dividends
Other significant developments
Executive Committee changes
On 15 April 2024, the Group announced that Marika Auramo had been appointed
CEO of Vodafone Business with effect from 1 July 2024 and became a member of
the Executive Committee from the same date.
On 18 July 2024, the Group announced that Aldo Bisio will step down as CEO
Vodafone Italy and a Group Executive Committee member on 15 November 2024.
Aldo Bisio will remain a non-executive member of the Board of Directors of
Vodafone Italy to oversee the regulatory approval process of the sale of
Vodafone Italy to Swisscom.
Other leadership changes
Sabrina Casalta, currently CFO Vodafone Italy, will be appointed interim CEO
Vodafone Italy from 15 November 2024 through to the completion of the sale of
Vodafone Italy.
Portfolio update
Vodafone Spain
On 31 May 2024, the Group announced it had completed the sale of Vodafone
Holdings Europe, S.L.U. ('Vodafone Spain') to Zegona Communications plc for
€4.1 billion in cash (subject to closing accounts adjustments) and €0.9
billion in the form of redeemable preference shares.
Indus Towers
On 19 June 2024, the Group announced the sale of an 18% stake in Indus Towers
Limited ('Indus') through an accelerated book-building offering ('placing').
The placing raised INR 153.0 billion (€1.7 billion) in gross proceeds.
Following the placing, the Group holds a 3.1% shareholding in Indus.
Vantage Towers
On 22 July 2024, the Group announced the sale of a further 10% stake in Oak
Holdings GmbH, the partnership that co-controls Vantage Towers, for €1.3
billion. Oak Holdings GmbH owns 89.3% of Vantage Towers and Vodafone's
effective ownership is now 44.7% following this transaction. Vodafone received
€1.3 billion from the sale of this equity stake.
Risk factors
Principal risks
The key factors and uncertainties that could have a significant effect on the
Group's financial performance, include the following:
Adverse changes in macroeconomic conditions
Adverse changes to economic conditions could result in reduced customer
spending, higher interest rates, adverse inflation, or adverse foreign
exchange rates. Adverse conditions could also lead to limited debt refinancing
options and/or an increase in costs
Adverse market conditions
Increasing competition could lead to price wars, reduced margins, loss of
market share and/or damage to market value.
Adverse political and policy environment
Adverse political and policy measures impacting our strategy could result in
increased costs, create a competitive disadvantage, or have a negative impact
on our return on capital employed.
Company transformation
Failure to effectively and successfully transform Vodafone to adapt to future
challenges and demands could result in outdated business models, increased
operational complexity, and hinder growth.
Cyber threat
An external cyber attack, insider threat or supplier breach could cause
service interruption or data breach.
Data management and privacy
Data breaches, misuse of data, data manipulation, inappropriate data sharing,
poor data quality or data unavailability could lead to fines, reputational
damage, loss of value, loss of business opportunity, and failure to meet
customer expectations.
Disintermediation
Failure to effectively respond to threats from emerging technology or
disruptive business models could lead to a loss of customer relevance, market
share and new/existing revenue streams.
Portfolio transformation and governance of investments
Failure to manage appropriate joint ventures ('JVs'), and other investments or
challenges to the timely completions of inflight portfolio actions may result
in a loss of growth potential and shareholder value.
Supply chain disruption
Disruption in our supply chain could mean that we are unable to execute our
strategic plans, resulting in product and service, unavailability and delays,
increased cost, reduced choice, and lower network quality.
Technology resilience and future readiness
Network, system or platform outages or ineffective execution of the technology
strategy could lead to dissatisfied customers and/or impact revenue.
Watchlist risks
Our watchlist risk process enables us to monitor material risks to the Group
which fall outside principal risks. These include, but are not limited to:
Environmental, Social and Governance ('ESG')
Failure to prioritise ESG considerations may result in reputational damage.
Negative publicity related to environmental harm, social issues, or governance
failures can lead to loss of trust amongst customers, investors and the
broader public.
Infrastructure competitiveness
We continue to provide the appropriate broadband technology in our fixed and
mobile networks. Our technology strategy incorporates our fixed and mobile
network evolution steps to enhance our coverage and network performance.
Legal compliance
Non-compliance with laws and regulations including anti-bribery, competition
law, anti-money laundering, trade controls and sanctions, potentially leading
to fines and reputational risk.
Product innovation
Failure to create and deliver new products and service categories that
diversify revenue growth, unlock new consumer engagement and mitigate
disruption from digital natives.
Tax
Tax risk covers our management of tax across the markets in which we operate
and how we respond to changes in tax law, which may have an impact on the
Group.
Emerging risks
We face a number of uncertainties where an emerging risk may potentially
impact us. In general, we encounter three types of emerging risks. The first
type is a new risk in a known context, where it emerges from the external
environment and can impact the organisation's activities. An example of this
is the potential impact of conflict in the Middle East. The second type is a
known risk in a new context, such as the need for new skills and talent to
support future services. The third type is a new risk in a new context, such
as the impact of the commercial space age.
We continue to identify new emerging risk trends, using inputs from analysis
of the external environment and internal sources. We evaluate our risks across
different time periods, allowing us to provide the appropriate level of focus
on these emerging risks. We categorise our emerging risk into five different
categories: technological, political/regulatory, economic, societal and
business environment, so that the relevant expertise across the business can
assess the potential impacts and time horizon of these risks.
In some cases, there may be insufficient information to fully analyse and
understand the likelihood, impact or velocity of the risk. As a result, we may
not be able to develop a complete mitigation plan until we have a better
understanding of the threat.
Our emerging risks, within predefined risk categories, are provided to the
ExCo and the Audit and Risk Committee for further scrutiny.
Responsibility statement
We confirm that to the best of our knowledge:
- The unaudited condensed consolidated financial statements have been
prepared in accordance with IAS 34, 'Interim Financial Reporting', as issued
by the International Accounting Standards Board and as contained in UK-adopted
international accounting standards; and
- The interim management report includes a fair review of the
information required by Disclosure Guidance and Transparency Rules sourcebook
4.2.7 and Disclosure Guidance and Transparency Rules sourcebook 4.2.8.
Neither the Company nor the directors accept any liability to any person in
relation to the half-year financial report except to the extent that such
liability could arise under English law. Accordingly, any liability to a
person who has demonstrated reliance on any untrue or misleading statement or
omission shall be determined in accordance with section 90A and schedule 10A
of the Financial Services and Markets Act 2000.
The names and functions of the Vodafone Group Plc Board of Directors can be
found at:
www.vodafone.com/board (http://www.vodafone.com/board)
By Order of the Board
Maaike de Bie
Group General Counsel and Company Secretary
12 November 2024
Unaudited condensed consolidated financial statements
Consolidated income statement
Six months ended 30 September
Re-presented(1)
2024 2023
Note €m €m
Revenue 2 18,276 17,983
Cost of sales (12,123) (12,016)
Gross profit 6,153 5,967
Selling and distribution expenses (1,355) (1,286)
Administrative expenses (2,700) (2,546)
Net credit losses on financial assets (209) (224)
Share of results of equity accounted associates and joint ventures (40) (51)
Impairment reversal - 64
Other income/(expense) 533 (67)
Operating profit 2 2,382 1,857
Investment income 566 368
Financing costs (843) (1,395)
Profit before taxation 2,105 830
Income tax expense 4 (900) (746)
Profit for the financial period - Continuing operations 1,205 84
Profit/(loss) for the financial period - Discontinued operations 16 (239)
Profit/(loss) for the financial period 1,221 (155)
Attributable to:
- Owners of the parent 1,064 (346)
- Non-controlling interests 157 191
Profit/(loss) for the financial period 1,221 (155)
Earnings per share
Continuing operations:
- Basic 6 3.92c (0.40)c
- Diluted 6 3.91c (0.40)c
Total Group:
- Basic 6 3.98c (1.28)c
- Diluted 6 3.97c (1.28)c
Note:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' for more information.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of comprehensive income/(expense)
Six months ended 30 September
Re-presented(1)
2024 2023
€m €m
Profit/(loss) for the financial period 1,221 (155)
Other comprehensive income/(expense):
Items that may be reclassified to the income statement in subsequent years:
Foreign exchange translation differences, net of tax 228 (95)
Foreign exchange translation differences transferred to the income statement 115 23
Other, net of tax(2) 134 (1,150)
Total items that may be reclassified to the income statement in subsequent 477 (1,222)
periods
Items that will not be reclassified to the income statement in subsequent
years:
Fair value gains on equity instruments classified as Other investments, net of 166 -
tax
Net actuarial gains/(losses) on defined benefit pension schemes, net of tax 75 (58)
Total items that will not be reclassified to the income statement in 241 (58)
subsequent periods
Other comprehensive income/(expense) 718 (1,280)
Total comprehensive income/(expense) for the financial period 1,939 (1,435)
Attributable to:
- Owners of the parent 1,869 (1,626)
- Non-controlling interests 70 191
1,939 (1,435)
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' for more information.
2. Principally includes the impact of the Group's cash flow hedges recognised
in other comprehensive income during the period.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of financial position
Re-presented(1)
30 September 31 March
2024 2024
Note €m €m
Non-current assets
Goodwill 25,073 24,956
Other intangible assets 13,400 13,896
Property, plant and equipment 29,680 28,499
Investments in associates and joint ventures 8 7,090 10,032
Other investments 2,489 1,006
Deferred tax assets 19,716 20,177
Post employment benefits 367 257
Trade and other receivables 6,186 5,967
104,001 104,790
Current assets
Inventory 691 568
Taxation recoverable 197 76
Trade and other receivables 9,913 8,594
Other investments 6,062 5,092
Cash and cash equivalents 7,008 6,183
23,871 20,513
Assets held for sale 11,687 19,047
Total assets 139,559 144,350
Equity
Called up share capital 4,678 4,797
Additional paid-in capital 149,423 149,253
Treasury shares (7,770) (7,645)
Accumulated losses (115,695) (114,641)
Accumulated other comprehensive income 29,007 28,202
Total attributable to owners of the parent 59,643 59,966
Non-controlling interests 943 1,032
Total equity 60,586 60,998
Non-current liabilities
Borrowings 47,232 49,259
Share of net liabilities in joint ventures and associates 8 49 -
Deferred tax liabilities 650 699
Post employment benefits 174 181
Provisions 1,699 1,615
Trade and other payables 3,126 2,328
52,930 54,082
Current liabilities
Borrowings 8,521 7,728
Taxation liabilities 669 393
Provisions 752 833
Trade and other payables 12,205 13,398
22,147 22,352
Liabilities held for sale 3,896 6,918
Total equity and liabilities 139,559 144,350
Note:
1. On 1 April 2024, the Group adopted amendments to IAS 1 'Presentation of
Financial Statements' which has impacted the classification of certain bonds
between Current borrowings and Non-current borrowings. See note 1 'Basis of
preparation' for more information.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of changes in equity
Share Additional Treasury Accumulated Equity attributable to the owners Non- Total equity
capital paid-in shares comprehensive controlling
capital(1) losses(2) interests
€m €m €m €m €m €m €m
1 April 2023 4,797 149,145 (7,719) (82,824) 63,399 1,084 64,483
Issue or reissue of shares - 1 72 (72) 1 - 1
Share-based payments - 65 - - 65 4 69
Transactions with non-controlling interests in subsidiaries - - - (8) (8) (3) (11)
Share of equity-accounted entitiesʼ changes in equity - - - (164) (164) - (164)
Comprehensive (expense)/income - - - (1,626) (1,626) 191 (1,435)
Dividends - - - (1,215) (1,215) (166) (1,381)
30 September 2023 4,797 149,211 (7,647) (85,909) 60,452 1,110 61,562
1 April 2024 4,797 149,253 (7,645) (86,439) 59,966 1,032 60,998
Issue or reissue of shares 1 - 76 (75) 2 - 2
Share-based payments - 50 - - 50 3 53
Transactions with non-controlling interests in subsidiaries - - - (32) (32) (7) (39)
Comprehensive income - - - 1,869 1,869 70 1,939
Dividends - - - (1,212) (1,212) (155) (1,367)
Purchase of treasury shares - - (1,000) - (1,000) - (1,000)
Cancellation of shares (120) 120 799 (799) - - -
30 September 2024 4,678 149,423 (7,770) (86,688) 59,643 943 60,586
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 unaudited condensed
consolidated financial statements.
Consolidated statement of cash flows
Six months ended 30 September
Re-presented(1)
2024 2023
Note €m €m
Inflow from operating activities 9 5,644 5,544
Cash flows from investing activities
Purchase of interests in associates and joint ventures (45) (52)
Purchase of intangible assets (1,023) (1,278)
Purchase of property, plant and equipment (2,182) (2,352)
Purchase of investments (1,167) (1,703)
Disposal of interests in subsidiaries, net of cash disposed 3,578 (67)
Disposal of interests in associates and joint ventures 3,020 500
Disposal of property, plant and equipment and intangible assets 7 7
Disposal of investments 363 1,556
Dividends received from associates and joint ventures 243 75
Interest received 285 295
Cash outflows from discontinued operations (612) (789)
Inflow/(outflow) from investing activities 2,467 (3,808)
Cash flows from financing activities
Proceeds from issue of long-term borrowings 3,919 1,430
Repayment of borrowings (6,923) (4,843)
Net movement in short-term borrowings (249) 41
Net movement in derivatives 316 138
Interest paid (1,523) (1,034)
Purchase of treasury shares (879) -
Issue of ordinary share capital and reissue of treasury shares - 1
Equity dividends paid (1,201) (1,210)
Dividends paid to non-controlling shareholders in subsidiaries (157) (167)
Other transactions with non-controlling shareholders in subsidiaries (23) (17)
Cash outflows from discontinued operations (613) (717)
Outflow from financing activities (7,333) (6,378)
Net cash inflow/(outflow) 778 (4,642)
Cash and cash equivalents at the beginning of the financial period(2) 6,114 11,628
Exchange (loss)/gain on cash and cash equivalents (21) 45
Cash and cash equivalents at the end of the financial period(2) 6,871 7,031
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' for more information.
2. Comprises cash and cash equivalents as presented in the consolidated
statement of financial position of €7,008 million (€7,148 million as at 30
September 2023), together with overdrafts of €165 million (€117 million as
at 30 September 2023) and €28 million (€nil as at 30 September 2023) of
cash and cash equivalents included within Assets held for sale.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Notes to the unaudited condensed consolidated financial statements
1 Basis of preparation
The unaudited condensed consolidated financial statements for the six months
ended 30 September 2024:
· are prepared in accordance with International Accounting Standard 34
'Interim Financial Reporting' ('IAS 34') as issued by the International
Accounting Standards Board ('IASB') and as adopted by the United Kingdom;
· are presented on a condensed basis as permitted by IAS 34 and
therefore do not include all disclosures that would otherwise be required in a
full set of financial statements and should be read in conjunction with the
Group's Annual Report for the year ended 31 March 2024;
· with the exception of IAS 1 'Presentation of Financial Statements'
(see below) apply the same accounting policies, presentation and methods of
calculation as those followed in the preparation of the Group's consolidated
financial statements for the year ended 31 March 2024, which were prepared in
accordance with UK-adopted International Accounting Standards ('IAS'), with
International Financial Reporting Standards ('IFRS') as issued by the IASB and
with the requirements of the UK Companies Act 2006. Income taxes are accrued
using the tax rate that is expected to be applicable for the full financial
year, adjusted for certain discrete items which occurred in the interim period
in accordance with IAS 34.
· include all adjustments, consisting of normal recurring adjustments,
necessary for a fair statement of the results for the periods presented;
· do not constitute statutory accounts with the meaning of section
434(3) of the UK Companies Act 2006; and
· were approved by the Board of Directors on 12 November 2024.
The information relating to the year ended 31 March 2024 is extracted from the
Group's published Annual Report for that year, which has been delivered to the
Registrar of Companies, and on which the auditor's report was unqualified and
did not contain any emphasis of matter of statements under section 498(2) or
498(3) of the UK Companies Act 2006.
The preparation of the unaudited condensed consolidated financial statements
requires management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the end of the reporting period, and the reported amounts
of revenue and expenses during the period. Actual results could vary from
these estimates. These 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 revisions 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 a robust liquidity position as at 30 September 2024 with €6.9
billion of cash and cash equivalents and €4.1 billion of liquid short-term
investments available, together with undrawn revolving credit facilities of
€7.6 billion, which cover all 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. As a result of the
assessment performed, the Directors have concluded that the Group is able to
continue in operation for the period up to and including December 2025 and
that it is appropriate to continue to adopt the going concern basis in
preparing the unaudited condensed consolidated financial statements.
Notes to the unaudited condensed consolidated financial statements
1 Basis of preparation (continued)
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.
Judgements relating to potential indicators of impairment
The Group performs its annual impairment test for goodwill and indefinite
lived intangible assets as at 31 March.
At interim reporting periods the Group performs a review to identify any
indicator of impairment that may indicate that the carrying amount of any of
the Group's cash generating units ('CGUs') may not be recoverable. As part of
this assessment as at 30 September 2024, the Group reviewed the key
assumptions underlying the value in use valuations used in the annual
impairment test at 31 March 2024. This included the year-to-date and expected
future performance of the Group's CGUs, as well as considering the valuation
implications of changes in other factors such as discount rates and the
assessment of long term growth rates. As a result of operating trends in the
half year, a value in use assessment was performed for Vodafone Germany as at
30 September 2024. See note 3 'Impairment review'.
The Group's review of the potential impact of indicators of impairment did not
indicate that the carrying amount of any of the Group's CGUs, including
Vodafone Germany, was not recoverable as at 30 September 2024.
Hyperinflationary economies
The Turkish and Ethiopian economies were designated as hyperinflationary from
30 June 2022 and 31 December 2022, respectively. The Group has applied IAS 29
'Financial Reporting in Hyperinflationary Economies' to its Turkish and
Ethiopian operations whose functional currencies are Turkish lira and
Ethiopian birr from 1 April 2022.
In applying IAS 29, the Turkish lira and Ethiopian birr results and
non-monetary asset and liability balances for relevant financial periods have
been revalued to their present value equivalent local currency amounts at the
reporting date, based on the consumer price indexes issued by the Turkish
Statistical Institute and the Central Statistics Agency of Ethiopia,
respectively. Comparative periods are not restated per IAS 21 'The Effects of
Changes in Foreign Exchange rates'. The respective indices have risen by
18.07% and 6.10% (2023: 30.08% and 12.09%) during the six months ended 30
September 2024. The revalued balances are translated to euros at the reporting
date exchange rate of €1 : 38.15 TRL and €1 : 132.80 ETB (2023: €1 :
29.03 TRL and €1 : 58.73 ETB), respectively, applying IAS 21.
For the Group's operations in Turkey:
· The gain or loss on the revaluation of net monetary assets resulting
from IAS 29 application is recognised in the Consolidated income statement
within Other income.
· The Group also presents the gain or loss on cash and cash equivalents
as monetary items together with the effect of inflation on operating,
investing and financing cash flows as one number in the Consolidated statement
of cash flows.
· The Group has presented the equity revaluation effects and the impact
of currency movements within other comprehensive income as such amounts are
judged to meet the definition of 'exchange differences'.
For Safaricom's operations in Ethiopia, the impacts are reflected as an
increase to Investments in associates and joint ventures in the Consolidated
statement of financial position and an increase to Share of results of equity
accounted associates and joint ventures recognised in the Consolidated income
statement.
Notes to the unaudited condensed consolidated financial statements
1 Basis of preparation (continued)
The main impacts of the aforementioned adjustments for the Group's Turkish and
Ethiopian operations on the Consolidated financial statements are shown below.
Increase/(decrease)
2024 2023
Impact on the consolidated income statement for the six months ended 30 €m €m
September
Revenue 5 35
Operating profit(1) (154) (5)
Profit for the financial period(1) (225) (140)
Increase/(decrease)
30 September 31 March
2024 2024
Impact on the consolidated statement of financial position €m €m
Net assets 907 981
Equity attributable to owners of the parent 872 913
Non-controlling interests 35 68
Note:
1. Includes €31 million gain on the net monetary assets/liabilities (Six
months ended 30 September 2023: €360 million gain).
In addition, it is likely that Egypt will meet the requirements to be
designated as a hyperinflationary economy under IAS 29 in the coming months.
If the Egyptian economy is designated as hyperinflationary, the Group's
financial reporting relating to its operations in Egypt will be reported in
accordance with IAS 29 applying the Group's policy detailed above.
New accounting pronouncements adopted
On 1 April 2024, the Group adopted certain new accounting policies where
necessary to comply with amendments with IFRS, none of which had a material
impact on the consolidated results, financial position or cash flows of the
Group, except as described below. Further details are provided in the Group's
Annual Report for the year ended 31 March 2024.
Amendments to IAS 1 'Presentation of Financial Statements'
The Group previously classified balances relating to certain bonds as current
liabilities if it was the Group's intention to exercise options to redeem them
within 12 months of the reporting date. Following the adoption of the IAS 1
amendments on 1 April 2024, bonds that are repayable in more than 12 months
are classified as Non-current liabilities regardless of any intention to
redeem the bonds early.
The impact of adopting the amendments on the consolidated statement of
financial position at 31 March 2024 is that €931 million of bonds previously
presented within Current borrowings have been re-presented as bonds within
Non-current borrowings; there is no impact at 30 September 2024.
Notes to the unaudited condensed consolidated financial statements
2 Segmental analysis
Operating segments
The Group's operating segments are established on the basis of those
components of the Group that are evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Group has determined the chief operating decision maker to be
its Group Chief Executive. The Group has a single group of similar services
and products, being the supply of communications services and related
products.
In October 2023, the Group announced the disposal of Vodafone Spain which
completed on 31 May 2024. In March 2024, the Group announced the planned
disposal of Vodafone Italy. Consequently, Vodafone Spain and Vodafone Italy
were classified as discontinued operations and they were no longer reporting
segments of the Group.
Revenue is attributed to a country based on the location of the Group company
reporting the revenue. Transactions between operating segments are charged at
arm's-length prices.
The operating segments for Germany, UK and Africa are individually material
for the Group and are each reporting segments for which certain financial
information is provided. The aggregation of smaller operating segments into
the Other Europe and Turkey reporting segments reflects, in the opinion of
management, the similar local market economic characteristics and regulatory
environments for each of those operating segments as well as the similar
products and services sold and comparable classes of customers. In the case of
the Other Europe segment (comprising Albania, Czech Republic, Greece, Ireland,
Portugal and Romania), this largely reflects membership or a close association
with the European Union, whilst the Turkey segment sits outside the European
Union and has different economic and regulatory environment characteristics.
Common Functions is a separate reporting segment and comprises activities
which are undertaken primarily in central Group entities that do not meet the
criteria for aggregation with other reporting segments.
Revenue disaggregation
Revenue reported for the period includes revenue from contracts with
customers, comprising service and equipment revenue, as well as other revenue
items including revenue from leases and interest revenue arising from
transactions with a significant financing component. The tables below and
overleaf disaggregate the Group's revenue by reporting segment.
The table below presents the results for the six months ended 30 September
2024.
Service revenue Equipment revenue Revenue from contracts with customers Other revenue(1) Interest revenue Total segment revenue Adjusted EBITDAaL
€m €m €m €m €m €m €m
Six months ended 30 September 2024
Germany 5,500 443 5,943 171 8 6,122 2,290
UK 2,891 517 3,408 14 26 3,448 707
Other Europe 2,410 322 2,732 61 11 2,804 784
Turkey 1,103 285 1,388 3 - 1,391 394
Africa 2,951 509 3,460 228 17 3,705 1,214
Common Functions(2) 322 21 343 562 1 906 22
Eliminations (68) - (68) (32) - (100) -
Group 15,109 2,097 17,206 1,007 63 18,276 5,411
Notes:
1. Other revenue includes lease revenue recognised under IFRS 16 'Leases'.
2. Comprises central teams and business functions.
Notes to the unaudited condensed consolidated financial statements
2 Segmental analysis (continued)
The table below presents the comparative information for the six months ended
30 September 2023.
Service revenue Equipment revenue Revenue from contracts with customers Other revenue(1) Interest revenue Total segment revenue Adjusted EBITDAaL
€m €m €m €m €m €m €m
Six months ended 30 September 2023 Re-presented(2)
Germany 5,722 503 6,225 173 7 6,405 2,527
UK 2,822 526 3,348 17 12 3,377 640
Other Europe 2,366 285 2,651 21 7 2,679 766
Turkey 828 297 1,125 3 - 1,128 254
Africa 2,924 473 3,397 178 15 3,590 1,241
Common Functions(3) 282 24 306 624 (1) 929 (1)
Eliminations (83) - (83) (42) - (125) -
Group 14,861 2,108 16,969 974 40 17,983 5,427
Notes:
1. Other revenue includes lease revenue recognised under IFRS 16 'Leases'.
2. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations and are therefore excluded. See note 5
'Discontinued operations and assets held for sale' for more information.
3. Comprises central teams and business functions.
A reconciliation of Adjusted EBITDAaL, the Group's measure of segment profit,
to the Group's profit before taxation for the financial period is shown below.
Six months ended 30 September
Re-presented(1)
2024 2023
€m €m
Adjusted EBITDAaL 5,411 5,427
Restructuring costs (58) (102)
Interest on lease liabilities 220 217
Loss on disposal of property, plant and equipment and intangible assets (12) (18)
Depreciation and amortisation on owned assets (3,672) (3,613)
Share of results of equity accounted associates and joint ventures (40) (51)
Impairment reversal - 64
Other income/(expense)(2) 533 (67)
Operating profit 2,382 1,857
Investment income(3) 566 368
Financing costs(4) (843) (1,395)
Profit before taxation 2,105 830
Notes:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are now reported as discontinued operations. See note 5 'Discontinued
operations and assets held for sale' for more information.
2. Principally comprises a gain of €714 million in respect of the disposal
of part of the Group's interest in Indus Towers Limited ('Indus') (see note 10
'Disposals' for further details), partially offset by €238 million in
respect of security arrangements provided to Indus over the Group's 3.0%
interest in Indus.
3. Includes gains of €242 million from debt and equity securities held at
Fair value through profit and loss.
4. Includes a gain of €238 million from the early redemption of bonds prior
to their maturity dates.
Notes to the unaudited condensed consolidated financial statements
2 Segmental analysis (continued)
The Group's non-current assets are disaggregated as follows:
30 September 31 March
2024 2024
€m €m
Non-current assets(1)
Germany 42,253 42,931
UK 7,871 6,863
Other Europe 7,424 7,564
Turkey 1,784 1,644
Africa 6,579 6,377
Common Functions 2,242 1,972
Group 68,153 67,351
Note:
1. Comprises goodwill, other intangible assets and property, plant and
equipment.
3 Impairment review
A value in use assessment was performed for Vodafone Germany as at 30
September 2024.
Vodafone Germany's estimated recoverable amount exceeds the carrying value by
€0.5 billion as at 30 September 2024 (31 March 2024: €2.3 billion). If the
assumptions used in the impairment review were changed to a greater extent
than as presented in the following table, the changes would, in isolation,
lead to an impairment loss being recognised for the six months ended 30
September 2024.
Key assumptions used in the value in use calculation Change required for value in use to equal the carrying value
30 September 31 March 30 September 31 March
2024 2024 2024 2024
% % pps pps
Pre-tax discount rate 7.5 8.3 0.1 0.5
Long-term growth rate 1.2 1.0 (0.1) (0.4)
Projected adjusted 5 year adjusted EBITDAaL CAGR(1) 2.3 2.4 (0.2) (1.2)
Projected capital expenditure(1) 16.9 - 20.0 17.4 - 19.9 0.8 3.9
Note:
1. Projected adjusted EBITDAaL CAGR is the compound annual growth rate from
the end of FY25 of Vodafone Germany's business plan after the incremental
commercial investment. Projected capital expenditure (which excludes licences
and spectrum) is expressed as capital expenditure as a percentage of revenue
for the 5 years following FY25 in the business plan.
Notes to the unaudited condensed consolidated financial statements
4 Taxation
Six months ended 30 September
Re-presented(1)
2024 2023
€m €m
United Kingdom corporation tax (expense)/income
Current period (44) (38)
Adjustments in respect of prior periods 2 (19)
Overseas current tax (expense)/income
Current period (551) (394)
Adjustments in respect of prior periods 39 -
Total current tax expense (554) (451)
Deferred tax on origination and reversal of temporary differences
United Kingdom deferred tax (27) (24)
Overseas deferred tax (319) (271)
Total deferred tax expense (346) (295)
Total income tax expense (900) (746)
Note:
1. The results for the six months ended 30 September
2023 have been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are reported as discontinued operations. See note 5
'Discontinued operations and assets held for sale' for more information.
Deferred tax on losses in Luxembourg
The tax charge for the six months ended 30 September 2024 includes a deferred
tax charge of €319 million on the use of losses in Luxembourg. The Group
does not currently recognise deferred tax assets forecasted to be used 60
years beyond the balance sheet date. Reductions in intercompany borrowing and
a minor decrease in base rate yields means that the period over which we
expect to recover the losses is 53 to 58 years, slightly higher than the 52 to
57 years disclosed as at 31 March 2024. The actual use of these losses and the
period over which they may be used is dependent on many factors including the
level of profitability in Luxembourg, changes in tax law and any changes to
the structure of the Group.
Further details about the Group's tax losses can be found in Note 6 'Taxation'
to the consolidated financial statements of Vodafone Group Plc for the year
ended 31 March 2024.
Notes to the unaudited condensed consolidated financial statements
5 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
disposal of 100% of Vodafone Holdings Europe, S.L.U. ('Vodafone Spain'). On 31
May 2024, the Group announced it had completed the disposal of Vodafone Spain.
See note 10 'Disposals'.
On 15 March 2024, the Group announced that it had entered into a binding
agreement with Swisscom AG ('Swisscom') in relation to the disposal of 100% of
Vodafone Italia S.p.A. ('Vodafone Italy'). The expected completion of the
disposal is in early 2025.
Consequently, the results of Vodafone Spain and Vodafone Italy are reported as
discontinued operations. The assets and liabilities of Vodafone Italy are
presented as held for sale in the consolidated statement of financial
position.
A summary of the results of these discontinued operations is below.
Six months ended 30 September
2024 2023
€m €m
Profit/(loss) for the financial period - Discontinued operations
Vodafone Spain(1) 76 (187)
Vodafone Italy (60) (52)
Total 16 (239)
Earnings/(loss) per share - Discontinued operations
- Basic 0.06c (0.88)c
- Diluted 0.06c (0.88)c
Note:
1. The results for Vodafone Spain are for the two months to 31 May 2024 when
the sale concluded.
Notes to the unaudited condensed consolidated financial statements
5 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.
Six months ended 30 September
2024 2023
€m €m
Revenue 603 1,887
Cost of sales (321) (1,511)
Gross profit 282 376
Selling and distribution expenses (27) (150)
Administrative expenses (34) (328)
Net credit losses on financial assets (15) (51)
Operating profit/(loss) 206 (153)
Investment income 3 -
Financing costs (8) (35)
Profit/(loss) before taxation 201 (188)
Income tax credit - 1
Profit/(loss) after tax of discontinued operations 201 (187)
Loss on sale of disposal group (125) -
Profit/(loss) for the financial period from discontinued operations 76 (187)
Total comprehensive income/(expense) for the financial period from
discontinued operations
Attributable to owners of the parent 77 (184)
On 31 May 2024, the Group announced that it had completed the disposal of
Vodafone Spain. See note 10 'Disposals' for more information.
Notes to the unaudited condensed consolidated financial statements
5 Discontinued operations and assets held for sale (continued)
Segment analysis of discontinued operations
Vodafone Italy
The results of discontinued operations in Italy are detailed below.
Six months ended 30 September
2024 2023
€m €m
Revenue 2,210 2,269
Cost of sales (840) (1,750)
Gross profit 1,370 519
Selling and distribution expenses (114) (121)
Administrative expenses (246) (426)
Net credit losses on financial assets (26) (20)
Other expense - (1)
Operating profit / (loss) 984 (49)
Financing costs (45) (43)
Profit/(loss) before taxation 939 (92)
Income tax (expense) / credit (260) 40
Profit/(loss) after tax of discontinued operations 679 (52)
After tax loss on the re-measurement of disposal group (739) -
Loss for the financial period from discontinued operations (60) (52)
Total comprehensive expense for the financial period from discontinued
operations
Attributable to owners of the parent (56) (50)
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 period ended 30
September 2024, the Group recorded a non-cash charge of €739 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 €976 million (€701
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 30 September 2024 was
determined with reference to the consideration expected to be received from
the agreed disposal 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 unaudited condensed consolidated financial statements
5 Discontinued operations and assets held for sale (continued)
Assets held for sale
Assets and liabilities held for sale at 31 March 2024 comprised Vodafone Spain
and Vodafone Italy. Assets and liabilities held for sale at 30 September 2024
comprised Vodafone Italy.
The relevant assets and liabilities are detailed in the table below.
30 September 31 March
2024 2024
€m €m
Non-current assets
Goodwill 1,674 2,398
Other intangible assets 3,416 4,318
Property, plant and equipment 4,895 9,264
Other investments - 2
Deferred tax assets 208 461
Trade and other receivables 143 390
10,336 16,833
Current assets
Inventory 117 173
Taxation recoverable 76 77
Trade and other receivables 1,130 1,922
Cash and cash equivalents 28 42
1,351 2,214
Assets held for sale 11,687 19,047
Non-current liabilities
Borrowings 1,387 2,387
Deferred tax liabilities - 3
Post employment benefits 36 45
Provisions 120 273
Trade and other payables 92 163
1,635 2,871
Current liabilities
Borrowings 727 1,019
Taxation liabilities 12 12
Provisions 82 90
Trade and other payables 1,440 2,926
2,261 4,047
Liabilities held for sale 3,896 6,918
Notes to the unaudited condensed consolidated financial statements
6 Earnings per share
Six months ended 30 September
2024 2023
Millions Millions
Weighted average number of shares for basic earnings per share 26,718 27,033
Effect of dilutive potential shares: restricted shares and share options 110 -
Weighted average number of shares for diluted earnings per share 26,828 27,033
Earnings per share attributable to owners of the parent during the period
Six months ended 30 September
Re-presented(1)
2024 2023
€m €m
Profit/(loss) for earnings per share from continuing operations attributable 1,048 (107)
to owners
Profit/(loss) for earnings per share from discontinued operations attributable 16 (239)
to owners
Profit/(loss) for basic and diluted earnings per share 1,064 (346)
Re-presented(1)
eurocents eurocents
Basic earnings/(loss) per share from continuing operations 3.92 (0.40)
Basic earnings/(loss) per share from discontinued operations 0.06 (0.88)
Basic earnings/(loss) per share 3.98 (1.28)
Re-presented(1)
eurocents eurocents
Diluted earnings/(loss) per share from continuing operations 3.91 (0.40)
Diluted earnings/(loss) per share from discontinued operations 0.06 (0.88)
Diluted earnings/(loss) per share 3.97 (1.28)
Note:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' for more information.
7 Dividends
Six months ended 30 September
2024 2023
€m €m
Declared during the financial period:
Final dividend for the year ended 31 March 2024: 4.50 eurocents per share 1,212 1,215
(2023: 4.50 eurocents per share)
Proposed after the end of the reporting period and not recognised as a
liability:
Interim dividend for the year ending 31 March 2025: 2.25 eurocents per share 585 1,218
(2024: 4.50 eurocents per share)
Notes to the unaudited condensed consolidated financial statements
8 Joint ventures and associates
30 September 31 March
2024 2024
€m €m
Oak Holdings 1 GmbH 6,104 7,620
VodafoneZiggo Group Holdings B.V. 458 516
TPG Telecom Limited - (2)
Other 64 69
Investments in joint ventures 6,626 8,203
Safaricom PLC 423 627
Indus Towers Limited(1) - 1,104
Other 41 98
Investments in associates 464 1,829
Investments in joint ventures and associates 7,090 10,032
TPG Telecom Limited (49) -
Share of net liabilities in joint ventures and associates (49) -
Note:
1. In June 2024, the Group announced the sale of an 18% stake in Indus Towers
Limited ('Indus') through an accelerated book-building offering ('placing').
Following the placing, Indus is no longer classified as an associate and the
remaining investment is included in Other investments.
9 Reconciliation of net cash flow from operating activities
Six months ended 30 September
Re-presented(1)
2024 2023
€m €m
Profit for the financial period 1,205 84
Investment income (566) (368)
Financing costs 843 1,395
Income tax expense 900 746
Operating profit 2,382 1,857
Adjustments for:
Share-based payments and other non-cash charges 68 54
Depreciation and amortisation 5,238 5,117
(Gain)/loss on disposal of property, plant and equipment and intangible (1) 17
assets
Share of results of equity accounted associates and joint ventures 40 51
Impairment reversal - (64)
Other (income)/expense (533) 67
Increase in inventory (107) (64)
Increase in trade and other receivables (1,356) (1,154)
Decrease in trade and other payables (784) (1,151)
Cash generated by operations 4,947 4,730
Taxation (393) (472)
Cashflows from discontinued operations 1,090 1,286
Net cash flow from operating activities 5,644 5,544
Note:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' for more information.
Notes to the unaudited condensed consolidated financial statements
10 Disposals
Summary of the disposal of subsidiaries
The difference between the carrying value of the net assets disposed of and
the fair value of consideration received is recorded as a gain or loss on
disposal. Foreign exchange translation gains or losses relating to
subsidiaries, joint arrangements and associates that the Group has disposed
of, and that have previously been recorded in other comprehensive income or
expense, are also recognised as part of the gain or loss on disposal.
Aggregate cash consideration in respect of the disposal of subsidiaries, net
of cash disposed, for the six months ended 30 September 2024 was €3,578
million (six months ended 30 September 2023: €67m), comprising cash received
for the disposal of subsidiaries of €3,669 million, primarily in relation to
the disposal of Vodafone Spain, less cash disposed of €91 million.
Vodafone Spain
On 31 May 2024, the Group announced it had completed the sale of Vodafone
Holdings Europe, S.L.U. ('Vodafone Spain') to Zegona Communications plc
('Zegona') for €4,069 million in cash (subject to closing accounts
adjustments) and up to €900 million of non-cash consideration in the form of
redeemable preference shares. €400 million of the cash received relates to
future services to be provided by the Group to Zegona and has been deferred on
the Group's Statement of financial position.
The table below summarises the net assets disposed and the resulting loss on
disposal of €125 million.
€m
Other intangible assets (996)
Property, plant and equipment (5,058)
Other investments (3)
Inventory (40)
Trade and other receivables (1,033)
Cash and cash equivalents (91)
Current and deferred taxation 2
Borrowings 1,205
Trade and other payables 1,143
Provisions 181
Net assets disposed (4,690)
Cash proceeds(1) 3,669
Non-cash consideration (Zegona shares)(2) 807
Other effects 89
Net loss on disposal(3) (125)
Note:
1. Excludes €400 million of consideration related to future services to
be provided by the Group to Zegona.
2. The non-cash consideration comprises an investment in Zegona shares
with a fair value of €807 million at the transaction date. See note 11 'Fair
value of financial instruments' for further information.
3. Included in Profit/(loss) for the financial period - Discontinued
operations in the Consolidated income statement.
Notes to the unaudited condensed consolidated financial statements
10 Disposals (continued)
Summary of the disposal of joint ventures and associates
The aggregate cash consideration in respect of disposals of joint ventures and
associates is as follows:
Six months ended 30 September
2024 2023
€m €m
Cash consideration received
Vantage Towers 1,336 500
Indus Towers Limited 1,684 -
3,020 500
Vantage Towers
On 22 July 2024, the Group announced the sale of a further 10% stake in Oak
Holdings GmbH, the partnership that co-controls Vantage Towers, for €1,336
million. Oak Holdings GmbH owns 89.3% of Vantage Towers.
A net gain on disposal of €26 million has been recorded within Other
income/expense in the Consolidated income statement.
Indus Towers
On 19 June 2024, the Group announced the sale of an 18% stake in Indus Towers
Limited ('Indus') through an accelerated book-building offering ('placing').
The placing raised INR 153.0 billion (€1,684 million) in gross proceeds.
Following the placing, the Group de-recognised its remaining associate
investment in Indus, which is now classified as an Other Investment recorded
at fair value through profit and loss.
A net gain on disposal of €714 million has been recorded within Other
income/expense in the Consolidated income statement.
Notes to the unaudited condensed consolidated financial statements
11 Fair value of financial instruments
30 September 31 March
2024 2024
€m €m
Financial assets at fair value(1)
Money market funds (included within Cash and cash equivalents)(2) 2,013 2,015
Debt and equity securities (included within Other investments)(3) 6,149 3,749
Derivative financial instruments (included within Trade and other 3,962 4,226
receivables)(4,5)
Trade receivables at fair value through Other comprehensive income (included 1,123 735
with Trade and other receivables)(6)
13,247 10,725
Financial liabilities at fair value(1)
Derivative financial instruments (included within Trade and other 2,031 1,524
payables)(4,5)
Financial guarantee (included within Trade and other payables)(7) 238 -
2,269 1,524
Notes:
1. The fair value of assets and liabilities are classified in the Fair Value
hierarchy as follows: Level 1 comprises items where the fair value in
determined by unadjusted quoted prices in active markets. Level 2 comprises
items where the fair value is determined from inputs other than quotes prices,
that are observable for the asset or liability, either directly or indirectly
by unadjusted market quoted prices in active markets and market accepted
valuation techniques. Level 3 comprises items where the fair value determined
by including one or more unobservable inputs to the valuation methodology.
2. Items are measured at fair value and the valuation basis is Level 1.
3. Quoted debt and equity securities of €2,991 million (31 March 2024:
€1,687 million) are measured at fair value and classified as Level 1.
Further equity and debt securities of €2,140 million (31 March 2024:
€2,062 million) are measured at fair value and classified as Level 2. The
remaining balance represents the Group's investments in Zegona ordinary shares
of €915 million (31 March 2024: €nil) and convertible loan notes of €103
million, measured at fair value and classified as Level 3 due to some of the
inputs to the valuation model being unobservable inputs.
4. Derivative financial assets and liabilities are measured at fair value
and classified as Level 2.
5. €3,772 million (31 March 2024: €4,011 million) of derivative
financial assets and €1,912 million (31 March 2024: €1,468 million) of
derivative financial liabilities are classified as Non-current.
6. Trade receivables at fair value through Other comprehensive income are
measured at fair value and classified as Level 2. Of this €461 million (31
March 2024: €294 million) are classified as Non-current.
7. Financial guarantee is a secondary pledge over the shares owned by
Vodafone Group in Indus Towers, ranking behind the Group's existing lenders
for the outstanding bank borrowings secured against Indian assets. This is
measured at fair value and classified as Level 2.
The fair value of the Group's financial assets held at amortised cost
approximates to their fair value.
The fair value of the Group's financial liabilities held at amortised cost
approximate to fair value with the exception of outstanding bonds with a
carrying value of €39,522 million (31 March 2024: €40,743 million). These
bonds have a fair value at 30 September of €36,550 million (31 March 2024:
€37,144 million), based on Level 1 of the fair value hierarchy.
Level 3 financial instruments
Investment in Zegona ordinary shares
Following the completion of the sale of Vodafone Spain on 31 May 2024 (See
note 10 'Disposals'), the Group received the non-cash consideration component
in the form of €900 million Redeemable Preference Shares ('RPS') issued by
EJLSHM Funding Ltd ('EJLSHM'). The RPS will be redeemed 6 years after
completion, or earlier if there is a material liquidity event or exit from
Zegona that releases funds to its shareholders. The RPS have a nominal value,
including accrued interest, of €915 million at 30 September 2024.
EJLSHM subscribed for new ordinary shares in Zegona, equivalent to the value
of the RPS, the future proceeds from which will be used to repay the RPS. Per
the contractual arrangement, these ordinary shares do not carry voting rights,
and their value is capped at the nominal value, including accrued interest, of
the RPS. EJSHM is a consolidated special purpose entity for the Group,
resulting in the elimination of the RPS and the recognition of an investment
in the Zegona shares for the Group. The Zegona shares are recorded at fair
value through profit and loss and have a fair value of €915 million on 30
September 2024.
The valuation approach for the Zegona shares reflects the contractual terms of
the RPS arrangement and utilises a bespoke option model which draws on
observable Level 2 market data inputs, including bond yields, share prices,
and foreign exchange rates. The model also includes certain key inputs that
requires judgement. These include the timing on when EJLSHM will sell its
shares in Zegona to settle its RPS liability to the Group, Zegona's share
price volatility and the share's expected dividend yield.
Notes to the unaudited condensed consolidated financial statements
11 Fair value of financial instruments (continued)
The only judgement that has a material impact on the valuation is the Zegona
share price volatility. An increase/(decrease) of the share price volatility
by 10% would (decrease)/increase the valuation by €35 million /€nil (due
to fair value being capped at the nominal value of the RPS, including accrued
interest) at 30 September 2024.
Convertible loan notes ('CLN')
Vodafone invested US$25 million in CLN on 22 January 2024 with a maturity date
of 22 January 2034. The CLN has a conversion feature which allows, in whole or
in part, for the outstanding principal and interest to be converted into fully
paid shares of AST SpaceMobile, Inc. ('ASTS'). The investment is accounted for
at fair value through profit or loss, with its fair value at 30 September 2024
of €103 million, included within equities and debt securities. Both Vodafone
and ASTS have the option to convert the CLN to shares at any time after twelve
months following the initial closing. ASTS's option is subject to certain
conditions. The valuation uses a Monte Carlo simulation with Level 2 inputs
being the ASTS's market share price, risk-free-rate, share price volatility
and the effective interest rate. Level 3 inputs do not have a material impact
on the valuation.
Notes to the unaudited condensed consolidated financial statements
12 Contingent liabilities and legal proceedings
Note 29 'Contingent liabilities and legal proceedings' to the consolidated
financial statements of Vodafone Group Plc for the year ended 31 March 2024
sets forth the Group's contingent liabilities and legal proceedings as of 31
March 2024. There have been no material changes to the Group's contingent
liabilities or legal proceedings during the period covered by this report,
except as disclosed below.
Legal proceedings
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 the 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') to determine such
compensation amount. 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
R47million (€2.4 million) was rejected by Mr Makate, who subsequently
brought an application in the High Court for the review of 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. On 26
August 2024, the Constitutional Court issued a directive that it will hear
Vodacom South Africa's application for leave to appeal in tandem with its
appeal against the SCA judgement and order. The record of the proceedings in
the SCA, with relevant annotations, was filed in the Constitutional Court on
26 September 2024. Vodacom South Africa, as the applicant, filed its written
arguments on 10 October 2024 and Mr Makate filed his response on 18 October
2024. The matter will be heard by the Constitutional Court on 21 November
2024.
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 incapable of being implemented and
enforced.
The CEO's determination in 2019 amounted to R47 million (€2.4 million). The
minority judgement of the SCA raised Mr Makate's compensation to an amount
payable of R186 million (€9.6 million) The value of the compensation amount
for Mr Makate, as per the SCA's majority judgement and order, would at a
minimum be R29 billion (€1.5 billion). Mr Makate, in his recent submissions
to the Constitutional Court, has stated that his request is for compensation
in the capital amount of R9.4 billion (€493 million), plus interest from 18
January 2019. 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
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 unaudited condensed consolidated financial statements
13 Related party transactions
Related party transactions with the Group's joint arrangements and associates
primarily comprise fees for the use of products and services including network
airtime and access charges, fees for the provision of network infrastructure
and cash pooling arrangements. No related party transactions have been entered
into during the period which might reasonably affect any decisions made by the
users of these unaudited condensed consolidated financial statements except as
disclosed below.
Six months ended 30 September
2024 2023
€m €m
Sales of goods and services to associates 11 15
Purchase of goods and services from associates 2 3
Sales of goods and services to joint arrangements 158 133
Purchase of goods and services from joint arrangements 362 392
Interest income receivable from joint arrangements(1) 25 26
Interest expense payable to joint arrangements(1) 144 109
30 September 31 March
2024 2024
Trade balances owed:
by associates 9 19
to associates 1 1
by joint arrangements 208 190
to joint arrangements 359 379
Other balances owed by joint arrangements(1) 1,386 1,105
Other balances owed to joint arrangements(2) 5,349 4,940
Notes:
1. Amounts arise primarily through VodafoneZiggo and Oak Holdings 1 GmbH.
Interest is paid/received in line with market rates.
2. Amounts are primarily in relation to leases of tower space from Oak
Holdings 1 GmbH.
In the six months ended 30 September 2024, the Group made contributions to
defined benefit pension schemes of €23 million (Six months ended 30
September 2023: €26 million).
In the six months ended 30 September 2024, dividends of €0.8 million were
paid to Board and Executive Committee members (Six months ended 30 September
2023: €1.0 million).
Dividends received from joint ventures and associates are disclosed in the
consolidated statement of cash flows.
Independent review report to Vodafone Group Plc
Conclusion
We have been engaged by Vodafone Group Plc (the Company) to review the
unaudited condensed consolidated financial statements in the half yearly
financial report for the six months ended 30 September 2024, which comprises
the consolidated income statement, the consolidated statement of comprehensive
income/(expense), the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated statement of
cash flows and the related notes 1 to 13 to the condensed consolidated
financial statements. We have read the other information contained in the half
yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
unaudited condensed consolidated financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the unaudited condensed consolidated financial statements in the
half yearly financial report for the six months ended 30 September 2024 is not
prepared, in all material respects, in accordance with UK-adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1 'Basis of preparation', the annual financial statements
of the Group are prepared in accordance with UK adopted international
accounting standards, with International Financial Reporting Standards as
issued by the IASB, and with the requirements of the UK Companies Act 2006.
The unaudited condensed consolidated financial statements included in this
half yearly financial report has been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34')
as issued by the International Accounting Standards Board ('IASB') and as
adopted by the United Kingdom.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half yearly financial report, the directors are responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half yearly report, we are responsible for expressing to the
Company a conclusion on the unaudited condensed consolidated financial
statements in the half yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) 'Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
12 November 2024
Non-GAAP measures
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
Organic revenue growth Page 50 Revenue Pages 51, 53 and 54
Organic service revenue growth Page 50 Service revenue Pages 51, 53 and 54
Organic mobile service revenue growth Page 50 Service revenue Pages 51, 53 and 54
Organic fixed service revenue growth Page 50 Service revenue Pages 51, 53 and 54
Organic Vodafone Business service revenue growth Page 50 Service revenue Pages 51, 53 and 54
Organic M-Pesa revenue Page 50 Service revenue Page 51
Organic financial services revenue growth in South Africa Page 50 Service revenue Page 51
Adjusted EBITDAaL Page 50 Operating profit Page 3
Organic Adjusted EBITDAaL growth Page 50 Not applicable Page 52
Other metrics
Adjusted profit attributable to owners of the parent Page 55 Profit attributable to owners of the parent Page 55
Adjusted basic earnings per share Page 55 Basic earnings per share Page 56
Cash flow, funding and capital allocation metrics
Free cash flow Page 56 Inflow from operating activities Page 57
Adjusted free cash flow Page 56 Inflow from operating activities Pages 16 and 57
Gross debt Page 56 Borrowings Page 57
Net debt Page 56 Borrowings less cash and cash equivalents Page 57
Pre-tax ROCE (controlled) Page 58 ROCE calculated using GAAP measures Pages 58 and 59
Post-tax ROCE (controlled and associates/joint ventures) Page 58 ROCE calculated using GAAP measures Pages 58 and 59
Financing and Taxation metrics
Adjusted net financing costs Page 60 Net financing costs Page 14
Adjusted profit before taxation Page 60 Profit before taxation Page 61
Adjusted income tax expense Page 60 Income tax expense Page 61
Adjusted effective tax rate Page 60 Income tax expense Page 61
Adjusted share of results of equity accounted associates and joint ventures Page 60 Share of results of equity accounted associates and joint ventures Page 61
Adjusted share of results of equity accounted associates and joint ventures Page 60 Share of results of equity accounted associates and joint ventures Page 61
used in post-tax ROCE
Non-GAAP measures
Performance metrics
Non-GAAP measure Purpose Definition
Adjusted EBITDAaL Adjusted EBITDAaL is used in conjunction with financial measures such as Adjusted EBITDAaL is operating profit after depreciation on lease-related
operating profit to assess our operating performance and profitability. right of use assets and interest on lease liabilities but excluding
depreciation, amortisation and gains/losses on disposal of owned assets and
It is a key external metric used by the investor community to assess excluding share of results of equity accounted associates and joint ventures,
performance of our operations. impairment losses/reversals, restructuring costs arising from discrete
restructuring plans, other income and expense and significant items that are
It is our segment performance measure in accordance with IFRS 8 (Operating not considered by management to be reflective of the underlying performance of
Segments). 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:
- Revenue;
- Service revenue;
- Mobile service revenue;
- Fixed service revenue;
- Vodafone Business service revenue;
- M-Pesa revenue;
- South Africa financial services revenue;
- Adjusted EBITDAaL; and
- Adjusted EBITDAaL margin
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
Six months ended 30 September 2024
Re-presented(1) Reported growth M&A and Other Foreign exchange Organic growth
H1 FY25 H1 FY24
€m €m % pps pps %
Service revenue
Germany 5,500 5,722 (3.9) - - (3.9)
Mobile service revenue 2,497 2,530 (1.3) - - (1.3)
Fixed service revenue 3,003 3,192 (5.9) - - (5.9)
UK 2,891 2,822 2.4 - (1.8) 0.6
Mobile service revenue 2,108 2,096 0.6 - (1.9) (1.3)
Fixed service revenue 783 726 7.9 - (1.9) 6.0
Other Europe 2,410 2,366 1.9 - 0.6 2.5
Turkey 1,103 828 33.2 (0.8) 57.9 90.3
Africa 2,951 2,924 0.9 - 9.0 9.9
Common Functions 322 282
Eliminations (68) (83)
Total service revenue 15,109 14,861 1.7 - 3.1 4.8
Other revenue 3,167 3,122
Revenue 18,276 17,983 1.6 - 3.1 4.7
Other growth metrics
Vodafone Business - Service revenue 3,890 3,813 2.0 - 1.3 3.3
Germany - Vodafone Business service revenue 1,184 1,205 (1.7) - - (1.7)
UK - Vodafone Business service revenue 1,054 1,059 (0.5) - (1.9) (2.4)
Other Europe - Vodafone Business service revenue 761 728 4.5 - 0.9 5.4
Turkey - Vodafone Business service revenue 162 109 48.6 (1.5) 64.1 111.2
Africa - Vodacom Business service revenue 541 527 2.7 - 6.1 8.8
South Africa - Financial services revenue 86 77 11.7 - (2.2) 9.5
Vodacom International M-Pesa 200 188 6.4 - 4.0 10.4
Egypt - Vodafone Cash revenue 49 40 22.5 - 71.4 93.9
Note:
1. The results for the six months ended 30 September 2024 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' in the condensed consolidated financial statements
for more information.
Non-GAAP measures
Six months ended 30 September 2024
Re-presented(1) Reported growth M&A and Other Foreign exchange Organic growth
H1 FY25 H1 FY24
€m €m % pps pps %
Adjusted EBITDAaL
Germany 2,290 2,527 (9.3) - - (9.3)
UK 707 640 10.5 - (2.1) 8.4
Other Europe 784 766 2.3 - 0.8 3.1
Turkey 394 254 55.1 (8.5) 67.6 114.2
Africa 1,214 1,241 (2.2) - 8.9 6.7
Common Functions 22 (1)
Eliminations - -
Group 5,411 5,427 (0.3) 0.7 3.4 3.8
Percentage point change in Adjusted EBITDAaL margin
Germany 37.4% 39.5% (2.1) 0.1 - (2.0)
UK 20.5% 19.0% 1.5 - - 1.5
Other Europe 28.0% 28.6% (0.6) - - (0.6)
Turkey 28.3% 22.5% 5.8 0.3 (0.1) 6.0
Africa 32.8% 34.6% (1.8) - 0.7 (1.1)
Group 29.6% 30.2% (0.6) 0.3 0.1 (0.2)
Note:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' in the condensed consolidated financial statements
for more information.
Non-GAAP measures
Quarter ended 30 September 2024
Re-presented(1) Reported growth M&A and Other Foreign exchange Organic growth
Q2 FY25 Q2 FY24
€m €m % pps pps %
Service revenue
Germany 2,722 2,903 (6.2) - - (6.2)
Mobile service revenue 1,266 1,290 (1.8) - - (1.8)
Fixed service revenue 1,456 1,613 (9.7) - - (9.7)
UK 1,462 1,421 2.9 - (1.7) 1.2
Mobile service revenue 1,063 1,057 0.6 - (1.7) (1.1)
Fixed service revenue 399 364 9.6 - (1.6) 8.0
Other Europe 1,230 1,205 2.1 - 0.5 2.6
Turkey 588 495 18.8 37.4 32.9 89.1
Africa 1,502 1,498 0.3 - 9.4 9.7
Common Functions 176 151
Eliminations (36) (47)
Total service revenue 7,644 7,626 0.2 1.0 3.0 4.2
Other revenue 1,596 1,564
Revenue 9,240 9,190 0.5 1.3 2.8 4.6
Other growth metrics
Vodafone Business - Service revenue 1,979 1,935 2.3 0.5 1.2 4.0
Germany - Vodafone Business service revenue 598 609 (1.7) - - (1.7)
UK - Vodafone Business service revenue 532 531 0.2 - (1.9) (1.7)
Other Europe - Vodafone Business service revenue 389 365 6.6 - 0.9 7.5
Turkey - Vodafone Business service revenue 85 64 32.8 42.0 35.1 109.9
Africa - Vodacom Business service revenue 276 268 3.0 - 6.2 9.2
Note:
1. The results for the quarter ended 30 September 2023 have been re-presented
to reflect that the results of Vodafone Spain and Vodafone Italy are reported
as discontinued operations. See note 5 'Discontinued operations and assets
held for sale' in the condensed consolidated financial statements for more
information.
Non-GAAP measures
Quarter ended 30 June 2024
Reported growth M&A and Other Foreign exchange Organic growth
Q1 FY25 Q1 FY24
€m €m % pps pps %
Service revenue
Germany 2,778 2,819 (1.5) - - (1.5)
Mobile service revenue 1,231 1,240 (0.8) - - (0.8)
Fixed service revenue 1,547 1,579 (2.0) - - (2.0)
UK 1,429 1,401 2.0 - (2.0) -
Mobile service revenue 1,045 1,039 0.6 - (2.0) (1.4)
Fixed service revenue 384 362 6.1 - (2.0) 4.1
Other Europe 1,180 1,161 1.6 - 0.7 2.3
Turkey 515 333 54.7 (80.1) 117.3 91.9
Africa 1,449 1,426 1.6 - 8.4 10.0
Common Functions 146 131
Eliminations (32) (36)
Total service revenue 7,465 7,235 3.2 (1.2) 3.4 5.4
Other revenue 1,571 1,558
Revenue 9,036 8,793 2.8 (1.3) 3.3 4.8
Other growth metrics
Vodafone Business - Service revenue 1,911 1,878 1.8 (0.6) 1.4 2.6
Germany - Vodafone Business service revenue 586 596 (1.7) - - (1.7)
UK - Vodafone Business service revenue 522 528 (1.1) - (1.9) (3.0)
Other Europe - Vodafone Business service revenue 372 363 2.5 - 0.8 3.3
Turkey - Vodafone Business service revenue 77 45 71.1 (89.7) 131.2 112.6
Africa - Vodacom Business service revenue 265 259 2.3 - 6.1 8.4
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, mark-to-market and foreign exchange movements and fair value
movements on Other investments through profit and loss, 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.
H1 FY25 H1 FY24 Re-presented(1)
Reported Adjustments Adjusted Reported Adjustments Adjusted
€m €m €m €m €m €m
Adjusted EBITDAaL 5,411 - 5,411 5,427 - 5,427
Restructuring costs (58) 58 - (102) 102 -
Interest on lease liabilities 220 - 220 217 - 217
Loss on disposal of property, plant & equipment and intangible assets (12) - (12) (18) - (18)
Depreciation and amortisation on owned assets(2) (3,672) 303 (3,369) (3,613) 302 (3,311)
Share of results of equity accounted associates and joint ventures(3) (40) 104 64 (51) 164 113
Impairment reversal - - - 64 (64) -
Other income 533 (533) - (67) 67 -
Operating profit 2,382 (68) 2,314 1,857 571 2,428
Investment income 566 (242) 324 368 - 368
Financing costs(4) (843) (41) (884) (1,395) 231 (1,164)
Profit before taxation 2,105 (351) 1,754 830 802 1,632
Income tax expense(5) (900) 596 (304) (746) 311 (435)
Profit for the financial period - Continuing operations 1,205 245 1,450 84 1,113 1,197
Profit/(loss) for the financial period - Discontinued operations 16 (16) - (239) 239 -
Profit/(loss) for the financial period 1,221 229 1,450 (155) 1,352 1,197
Profit attributable to:
- Owners of the parent (Continuing) 1,048 245 1,293 (107) 1,113 1,006
- Owners of the parent (Total Group) 1,064 229 1,293 (346) 1,352 1,006
- Non-controlling interests 157 - 157 191 - 191
Profit/(loss) for the financial period 1,221 229 1,450 (155) 1,352 1,197
Notes:
1. The results for the six months ended 30 September
2023 have been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are reported as discontinued operations. See note 5
'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 62 for an analysis of depreciation
and amortisation. The adjustment of €303 million (H1 FY24: €302 million)
relates to amortisation of customer bases and brand intangible assets.
3. See page 61 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 61 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-presented(1)
H1 FY25 H1 FY24
€m €m
Profit/(loss) attributable to owners of the parent 1,064 (346)
Adjusted profit attributable to owners of the parent 1,293 1,006
Million Million
Weighted average number of shares outstanding - Basic 26,718 27,033
eurocents eurocents
Basic earnings/(loss) per share 3.98c (1.28)c
Adjusted basic earnings per share 4.84c 3.72c
Note:
1. The results for the six months ended 30 September
2023 have been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are reported as discontinued operations. See note 5
'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. Free cash flow is Adjusted EBITDAaL after cash flows in relation to capital
additions, working capital movements including in respect of capital
External metric used by investor community. additions, disposal of property, plant and equipment and intangible assets,
integration capital additions and restructuring costs, together with related
Assists comparability with other companies, although our metric may not be working capital, licences and spectrum, interest received and paid (excluding
directly comparable to similarly titled measures used by other companies. interest on Bank borrowings secured against Indian assets), 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. Adjusted free cash flow is Free cash flow before licences and spectrum,
restructuring costs arising from discrete restructuring plans, integration
External metric used by investor community. capital additions and working capital related items and M&A.
Setting director and management remuneration.
Key external metric used to evaluate liquidity and the cash generated by our
operations.
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-presented(1)
H1 FY25 H1 FY24
€m €m
Inflow from operating activities 5,644 5,544
Net tax paid 393 472
Cashflows from discontinued operations (1,090) (1,286)
Cash generated by operations 4,947 4,730
Capital additions (2,987) (2,877)
Working capital movement in respect of capital additions (196) (530)
Disposal of property, plant and equipment and intangible assets 7 7
Integration capital additions (12) (28)
Working capital movement in respect of integration capital additions 2 (43)
Licences and spectrum (12) (183)
Interest received and paid(2) (701) (739)
Taxation (393) (472)
Dividends received from associates and joint ventures 243 75
Dividends paid to non-controlling shareholders in subsidiaries (157) (167)
Payments in respect of lease liabilities (1,583) (1,599)
Other (254) 93
Free cash flow (1,096) (1,733)
Notes:
1. The results for the six months ended 30 September
2023 have been re-presented to reflect that the results of Vodafone Spain and
Vodafone Italy are reported as discontinued operations. See note 5
'Discontinued operations and assets held for sale' in the condensed
consolidated financial statements for more information.
2. Includes interest on lease liabilities of €208
million (H1 FY24: €188 million), excluding discontinued operations.
The table below presents the reconciliation between Borrowing, Gross debt and
Net debt.
H1 FY25 Year-end FY24
€m €m
Borrowings (55,753) (56,987)
Lease liabilities 10,790 9,672
Bank borrowings secured against Indian assets 94 1,720
Collateral liabilities 2,179 2,628
Gross debt (42,690) (42,967)
Collateral liabilities (2,179) (2,628)
Cash and cash equivalents 7,008 6,183
Short-term investments 4,101 3,225
Collateral assets 789 741
Derivative financial instruments 1,931 2,702
Less mark-to-market gains deferred in hedge reserves (735) (498)
Net debt (31,775) (33,242)
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 calculate ROCE by dividing Operating profit by the average of capital
we are generating profit with the capital we deploy. 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) 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 and the share of results of
Post-tax ROCE (controlled and associates/joint ventures) 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 based on the average of month end capital employed balances
during the period 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. 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.
For the purpose of the half-year ROCE calculation, the returns are based on
the 12 months ended 30 September and the denominator is based on the average
of month end capital employed balances from the opening position as at 30
September 2023 and ending as at 30 September 2024.
Re-presented(1)
H1 FY25 H1 FY24
€m €m
Operating profit(2) 4,190 13,293
Borrowings 55,753 65,058
Cash and cash equivalents (7,008) (7,148)
Derivative financial instruments included in trade and other receivables (3,962) (5,273)
Derivative financial instruments included in trade and other payables 2,031 1,792
Short-term investments (4,101) (4,094)
Collateral assets (789) (649)
Financial liabilities under put option arrangements - 493
Equity 60,586 61,562
Capital employed at end of the period 102,510 111,741
Average capital employed for the period 107,126 113,225
ROCE using GAAP measures 3.9% 11.7%
Notes:
1. The results for the 12 months ended 30 September 2024 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 '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.
For the purpose of the half-year ROCE calculation, the returns are based on
the 12 months ended 30 September and the denominator is based on the average
of month end capital employed balances from the opening position as at 30
September 2023 and ending as at 30 September 2024.
Re-presented(1)
H1 FY25 H1 FY24
€m €m
Operating profit 4,190 13,293
Interest on lease liabilities (443) (406)
Restructuring costs 659 515
Other income (972) (9,138)
Share of results of equity accounted associates and joint ventures 85 (6)
Other adjustments(2) 355 283
Adjusted operating profit for calculating pre-tax ROCE (controlled) 3,874 4,541
Adjusted share of results of equity accounted associates and joint ventures (148) (9)
used in post-tax ROCE(4)
Notional tax at Adjusted effective tax rate(4) (795) (1,217)
Adjusted operating profit for calculating post-tax ROCE (controlled and 2,931 3,315
associates/joint ventures)
Capital employed for calculating ROCE on a GAAP basis 102,510 111,741
Adjustments to exclude:
- Leases (10,790) (13,039)
- Deferred tax assets (19,716) (19,460)
- Deferred tax liabilities 650 728
- Taxation recoverable (197) (296)
- Taxation liabilities 669 453
- Other investments (3,050) (1,630)
- Investments in associates and joint ventures (7,041) (10,457)
- Pension assets and liabilities (193) (30)
- Removal of capital employed related to discontinued operations (7,791) (12,185)
- Other adjustments(2) (1,063) (914)
Adjusted capital employed for calculating pre-tax ROCE (controlled) 53,988 54,911
Investments in associates and joint ventures(2) 7,041 10,457
Adjusted capital employed for calculating post-tax ROCE (controlled and 61,029 65,368
associates/joint ventures)
Average capital employed for calculating pre-tax ROCE (controlled) 53,898 57,868
Average capital employed for calculating post-tax ROCE (controlled and 63,365 66,164
associates/joint ventures)
Pre-tax ROCE (controlled) 7.2% 7.8%
Post-tax ROCE (controlled and associates/joint ventures) 4.6% 5.0%
Notes:
1. The results for the 12 months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' in the condensed consolidated financial statements
for more information.
2. Comprises adjustments to exclude hyperinflationary accounting in Turkey.
3. 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.
4. Includes tax at the Adjusted effective tax rate of 18.0% (H1 FY24: 28.6%).
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. Adjusted net financing costs exclude mark-to-market and foreign exchange
gains/losses, together with fair value movements on Other investments through
This metric is used in the calculation of Adjusted basic earnings per share. profit and loss.
Adjusted profit before taxation This metric is used in the calculation of the Adjusted effective tax rate (see Adjusted profit before taxation excludes the tax effects of items excluded
below). 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, mark-to-market and foreign exchange movements and fair value
movements on Other investments through profit and loss.
Adjusted income tax expense This metric is used in the calculation of the Adjusted effective tax rate (see Adjusted income tax expense excludes the tax effects of items excluded from
below). 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,
mark-to-market and foreign exchange movements and fair value movements on
Other investments through profit and loss. 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 This metric is used in the calculation of post-tax ROCE (controlled and Share of results of equity accounted associates and joint ventures excluding
used in post-tax ROCE associates/joint ventures). 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-presented(1)
H1 FY25 H1 FY24
€m €m
Profit before taxation 2,105 830
Adjustments to derive Adjusted profit before tax (351) 802
Adjusted profit before taxation 1,754 1,632
Adjusted share of results of equity accounted associates and joint ventures (64) (113)
Adjusted profit before tax for calculating Adjusted effective tax rate 1,690 1,519
Income tax expense (900) (746)
Tax on adjustments to derive Adjusted profit before tax (8) (108)
Adjustments:
- Deferred tax charge for utilisation of recognised tax losses in Luxembourg 319 250
- UK corporate interest restriction 35 48
- Tax relating to hyperinflation accounting adjustments(2) 86 121
- Tax relating to Vantage Towers share disposal 164 -
Adjusted income tax expense for calculating Adjusted tax rate (304) (435)
Adjusted effective tax rate 18.0% 28.6%
Notes:
1. The results for the six months ended 30 September have been re-presented to
reflect that the results of Vodafone Spain and Vodafone Italy are reported as
discontinued operations. See note 5 'Discontinued operations and assets held
for sale' in the condensed consolidated financial statements for more
information.
2. Includes a €47 million tax credit (H1 FY24: €30 million) on the
unadjusted accounting losses arising from hyperinflation accounting.
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.
H1 FY25 H1 FY24
€m €m
Share of results of equity accounted associates and joint ventures (40) (51)
Restructuring costs 7 7
Other income (59) (16)
Adjusted share of results of equity accounted associates and joint ventures (92) (60)
used in post-tax ROCE
Amortisation of acquired customer base and brand intangible assets 156 173
Adjusted share of results of equity accounted associates and joint ventures 64 113
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-presented(1)
H1 FY25 H1 FY24
€m €m
Depreciation on leased assets - included in Adjusted EBITDAaL 1,564 1,504
Depreciation on leased assets - included in Restructuring costs 2 -
Depreciation on leased assets 1,566 1,504
Depreciation on owned assets 1,889 1,918
Amortisation of owned intangible assets 1,783 1,695
Depreciation and amortisation on owned assets 3,672 3,613
Total depreciation and amortisation on owned and leased assets 5,238 5,117
Loss on disposal of owned fixed assets 12 18
Gain on disposal of leased assets (13) (1)
Depreciation and amortisation - as recognised in the consolidated income 5,237 5,134
statement
Note:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 '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.
Re-presented(1)
H1 FY25 H1 FY24
€m €m
Capital additions 2,987 2,877
Integration related capital additions 12 27
Licence and spectrum additions 9 250
Additions 3,008 3,154
Intangible asset additions 1,226 1,271
Property, plant and equipment owned additions 1,782 1,883
Total additions 3,008 3,154
Note:
1. The results for the six months ended 30 September 2023 have been
re-presented to reflect that the results of Vodafone Spain and Vodafone Italy
are reported as discontinued operations. See note 5 'Discontinued operations
and assets held for sale' in the condensed consolidated financial statements
for more information.
Definitions
Key terms are defined below. See page 49 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.
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.
Indian assets Comprises the Group's investments in Indus Towers Limited and Vodafone Idea
Limited.
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.
MDU Multi Dwelling Units.
Mobile service revenue Service revenue (see below) relating to the provision of mobile services.
NPS Net Promoter Score.
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.
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.
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.
Notes
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 six months ended 30
September 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 "FY25" are to the financial year ended 31 March 2025.
References to "last year", "last financial year" or "FY24" are to the
financial year ended 31 March 2024. References to "H1 FY25" are to the six
month period ended 30 September 2024. References to "H1 FY24" are to the six
month period ended 30 September 2023.
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 mobile
network sharing agreement with Virgin Media O2; the announced agreement to
dispose of 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 Group's share buyback programme; 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', 'continue', 'plans', 'further', 'ongoing', 'anticipates', or
'could'. 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, the
mobile network sharing agreement with Virgin Media O2 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
disposal of 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 2024. The Annual Report can be found
on the Vodafone Group's website (http://investors.vodafone.com/results
(http://investors.vodafone.com/results) ). 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-
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