UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULES 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Dated
November 14, 2023
Commission
File Number: 001-10086
VODAFONE GROUP
PUBLIC LIMITED COMPANY
(Translation
of registrant’s name into English)
VODAFONE
HOUSE, THE CONNECTION, NEWBURY, BERKSHIRE, RG14 2FN,
ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F ✓
Form 40-F _
This
Report on Form 6-K contains a Stock Exchange Announcement dated 14
November 2023 entitled Half-year Report
Vodafone Group
Plc ⫶ H1
FY24 results
14 November 2023
Initial strategic progress & improved revenue
trends
Margherita Della Valle, Group Chief Executive,
commented:
"During the first half of the year, we have delivered improved
revenue growth in nearly all of our markets and have returned to
growth in Germany in the second quarter.
Vodafone's transformation is progressing. Our focus on customers
and simplifying our business is beginning to bear fruit, although
much more needs to be done. We have also announced transactions to
strengthen our position in the UK and exit the challenging Spanish
market in order to right-size our portfolio for
growth."
Financial results
|
|
H1 FY24
|
H1 FY23
|
Change
|
Page
|
€m
|
€m
|
%
|
Group revenue
|
4
|
21,937
|
22,930
|
(4.3)
|
Group service revenue
|
4
|
18,618
|
19,207
|
4.2*
|
|
|
|
|
|
|
Operating profit1
|
4
|
1,655
|
2,968
|
(44.2)
|
Adjusted EBITDAaL2
|
4
|
6,378
|
7,244
|
0.3*
|
(Loss)/profit for the financial period1
|
4
|
(155)
|
1,202
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share1
|
15
|
(1.28)c
|
3.37c
|
|
Adjusted basic earnings per share1,2
|
15
|
3.43c
|
5.90c
|
|
|
|
|
|
|
|
Interim dividend per share
|
18
|
4.50c
|
4.50c
|
|
|
|
|
|
|
|
Cash inflow from operating activities
|
15
|
5,544
|
6,280
|
(11.7)
|
Adjusted free cash flow2
|
16
|
(1,474)
|
(513)
|
|
|
|
|
|
|
|
Net debt2
|
17
|
(36,240)
|
(45,523)
|
20.4
|
|
|
|
|
|
|
* represents organic growth. See page 2. ǀ 1. H1
FY23 re-presented for the reclassification of Indus Towers. See
page 33. ǀ 2. Non-GAAP measure. See page
40.
|
●
Group
service revenue growth of 4.2%* in H1 FY24, or 2.3%* excluding
Turkey, with both Europe (Q1: 0.4%*, Q2: 1.5%*) and Africa (Q1:
9.0%*, Q2: 9.0%*) growing
●
Good
improvement in Germany (Q1: -1.3%*, Q2: 1.1%*) and continued
acceleration in Vodafone Business with 4.4%* growth in H1
FY24
● Group revenue decline of 4.3% to €21.9
billion due to adverse foreign exchange rate movements and the
disposal of Vantage Towers, Vodafone Hungary and Vodafone Ghana in
the prior financial year
● Operating profit decrease of 44.2% to €1.7
billion reflecting business disposals in the prior financial year,
adverse foreign exchange rate movements and lower share of results
of associates and joint ventures
● Adjusted EBITDAaL growth of 0.3%* despite a
significant increase in energy costs
● Adjusted free cash outflow of €1.5 billion
in the period, reflecting lower Adjusted EBITDAaL and lower
dividends from associates and joint ventures
●
Announced
merger in the UK and sale of Vodafone Spain as we right-size
Vodafone for growth
● FY24 guidance reiterated with Adjusted EBITDAaL
expected to be 'broadly flat' at around €13.3 billion and
Adjusted free cash flow to be 'around' €3.3
billion
● Interim dividend per share of 4.5 eurocents,
record date 24 November 2023
For more information, please contact:
Investor
Relations
Media Relations
Investors.vodafone.com Vodafone.com/media/contact
ir@vodafone.co.uk GroupMedia@vodafone.com
Registered Office: Vodafone House, The Connection, Newbury,
Berkshire RG14 2FN, England. Registered in England No.
1833679
A webcast Q&A session will be held at 10:00 GMT on 14 November
2023. The webcast and supporting information can be accessed
at investors.vodafone.com
Financial summary
All amounts marked with an '*' in this document represent organic
growth which 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 figures are non-GAAP measures. See non-GAAP measures on page
40 for more information.
|
Segmental reporting
|
From 1 April 2023, the Group revised its segmental reporting by
moving Vodafone Egypt from the Other Markets segment to the Vodacom
segment. This is the effective date on which the Group's reporting
structure changed to reflect the transfer of Vodafone Egypt to the
Vodacom Group. All comparatives for these two segments have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group metrics.
|
Financial performance
Total
revenue declined by 4.3% to €21.9 billion (FY23 H1:
€22.9 billion) driven by adverse foreign exchange rate
movements and the disposal of Vantage Towers, Vodafone Hungary and
Vodafone Ghana in the prior financial year.
On a
reported basis, Adjusted EBITDAaL decreased to €6.4 billion
(FY23 H1: €7.2 billion), with organic growth of 0.3%* despite
a significant increase in energy costs. Adjusted EBITDAaL margin
was 0.8* percentage points lower year-on-year at
29.1%.
Operating
profit decreased by 44.2% to €1.7 billion and the Group made
a loss for the period of €0.2 billion (FY23 H1: €1.2
billion profit) reflecting the disposal of Vantage Towers, Vodafone
Hungary and Vodafone Ghana in the prior financial year, adverse
foreign exchange rate movements, and lower share of results of
equity accounted associates and joint ventures in the current
year.
Basic loss per share was 1.28 eurocents, compared to basic earnings
per share of 3.37 eurocents1 in the prior year
period.
Cash flow, funding & capital allocation
Cash inflow from operating activities decreased to €5.5
billion (FY23 H1: €6.3 billion), reflecting lower operating
profit and adverse working capital movements, which offset lower
taxation payments.
Adjusted free cash flow decreased by €1.0 billion to an
outflow of €1.5 billion in the period. This reflects a
decrease in Adjusted EBITDAaL in the period, together with lower
dividends from associates and joint ventures, which outweighed
lower taxation, lower interest received and paid, and lower
dividends paid to non-controlling shareholders in
subsidiaries.
Net debt increased by €2.9 billion to €36.2 billion
(€33.4 billion as at 31 March 2023). This was primarily
driven by the free cash outflow of €2.0 billion and equity
dividends of €1.2 billion.
Current liquidity, which includes cash and equivalents and
short-term investments, is €11.2 billion (€16.0 billion
as at 31 March 2023). This includes €3.8 billion of net
collateral which has been posted to Vodafone from counterparties as
a result of positive mark-to-market movements on derivative
instruments (€4.6 billion as at 31 March 2023).
The interim dividend per share is 4.5 eurocents (FY23 H1: 4.5
eurocents). The ex-dividend date for the interim dividend is 23
November 2023 for ordinary shareholders, the record date is 24
November 2023 and the dividend is payable on 2 February
2024.
1. The results for the six months
ended 30 September 2022 have been re-presented to reflect that
Indus Towers Limited is no longer reported as held for sale. There
is no impact on previously reported Revenue and Adjusted EBITDAaL.
However, Operating profit has increased by €33 million whilst
Profit before taxation and Profit for the financial period both
decreased by €41 million compared to amounts previously
reported. Consequently, Basic earnings per share decreased by 0.15c
and Adjusted basic earnings per share decreased by 0.12c compared
to amounts previously reported. See note 4 'Assets held for sale'
in the unaudited condensed consolidated financial statements for
more information.
Strategic progress
In May 2023, we set out a new roadmap for Vodafone, based on our
need to change and focus on three priorities: Customers, Simplicity
and Growth. An outline of this plan is contained in a video
presentation available here: investors.vodafone.com/results.
During the first half of FY24, we have made early progress in
executing this plan. Highlights include:
Customers
● We introduced a series of new initiatives to
improve customer service, supported by re-allocating €150
million of investment to this area. Each of our markets is now
executing a detailed action plan to eliminate customer pain
points,and we have aligned our incentives to this
objective.
● As a result we have seen some early progress in
customer satisfaction, with stable or improving promoter scores in
most markets despite the inflationary
environment.
Simplicity
● In H1 we have completed c.2,700 role reductions
out of the 11,000 planned over 3 years.
● We have concluded a thorough
review of our shared operations, and are preparing to introduce new
MSA structures between markets and shared operations on a price x
quantity x quality model. Our commercialisation of shared
operations will be supported by a new partnership with
Accenture.
Growth
●
Germany returned to
growth, with service revenue in Q2 FY24 of
1.1%*.
●
Vodafone Business
service revenue continued to accelerate at 4.4%* in H1 FY24, with
growth across all customer segments and markets, except
Spain.
●
We have taken two
significant steps to right-size our portfolio for
growth:
− in
June 2023, we announced our merger of Vodafone UK and Three UK;
and
− in
October 2023, we announced our exit from the Spanish market through
the sale of Vodafone Spain.
A more detailed summary of our progress is contained within an
accompanying presentation and video Q&A available
here: investors.vodafone.com/results.
Outlook
In May 2023, we set out guidance for FY24 for our expectations of
Adjusted EBITDAaL and Adjusted free cash flow, which we still
expect to meet.
|
|
FY24 guidance
|
Adjusted
EBITDAaL1,3
|
|
'Broadly
flat' at around €13.3 billion
|
Adjusted
free cash flow1,2,3
|
|
'Around'
€3.3 billion
|
The guidance above reflects the following:
●
Foreign
exchange rates used when setting guidance were as follows: EUR 1 :
GBP 0.88; EUR 1 : ZAR 19.30; EUR 1 :
TRY 21.10; and EUR 1 : EGP 33.38.
●
Our
guidance assumes no material change to the structure of the
Group3.
1. Adjusted EBITDAaL and Adjusted free cash flow are non-GAAP
measures. See page 40 for more information.
2. Adjusted free cash flow is Free cash flow before licences and
spectrum, restructuring costs arising from discrete restructuring
plans, integration capital additions and working capital related
items, and M&A.
3. Guidance for FY24 includes Adjusted EBITDAaL and Adjusted free
cash flow for Vodafone Spain for the 12 months ending 31 March
2024. Following the announcement that Vodafone has entered into a
binding sale agreement, in accordance with IFRS, Vodafone Spain
will be reported as a discontinued operation, with its net result
reported as a single line in the Group's income statement until the
completion of the transaction.
Financial performance ⫶ Service
revenue growth in both Europe & Africa
●
Group
service revenue growth of 4.2%* in the first half of FY24, with
both Europe and Africa growing
●
Service
revenue growth in Turkey of 79.3%* driven
by higher inflation. Group service revenue growth excluding Turkey
was 2.3%*
●
Group
revenue decline of 4.3% to €21.9 billion due to adverse
foreign exchange rate movements and the disposal of Vantage Towers,
Vodafone Hungary and Vodafone Ghana in the prior financial
year
●
Organic
Adjusted EBITDAaL increase of 0.3%* despite a significant increase
in energy costs
●
Lower share of
results of equity accounted associates and joint ventures of
-€51 million (FY23 H1: €376 million), primarily due to
VodafoneZiggo, reflecting lower adjusted EBITDA, lower gains on
derivative instruments and higher interest expense, and Vantage
Towers, due to amortisation of intangible assets following the
completion of the joint venture
●
Operating profit
decrease of 44.2% to €1.7 billion reflecting business
disposals in the prior financial year, adverse foreign exchange
rate movements and lower share of results of associates and joint
ventures in the current year
Group financial performance
|
|
|
Re-presented2
|
|
|
|
H1 FY241
|
H1 FY23
|
Reported
|
|
€m
|
€m
|
change %
|
Revenue
|
21,937
|
22,930
|
(4.3)
|
- Service revenue
|
18,618
|
19,207
|
(3.1)
|
- Other revenue
|
3,319
|
3,723
|
|
Adjusted EBITDAaL3,4
|
6,378
|
7,244
|
(12.0)
|
Restructuring costs
|
(212)
|
(142)
|
|
Interest on lease liabilities5
|
281
|
204
|
|
Loss on disposal of property, plant and equipment and intangible
assets
|
(22)
|
(11)
|
|
Depreciation and amortisation of owned assets
|
(4,626)
|
(4,807)
|
|
Share of results of equity accounted associates and joint
ventures
|
(51)
|
376
|
|
Impairment reversal
|
64
|
-
|
|
Other (expense)/income
|
(157)
|
104
|
|
Operating profit
|
1,655
|
2,968
|
(44.2)
|
Investment income
|
368
|
137
|
|
Financing costs
|
(1,473)
|
(1,418)
|
|
Profit before taxation
|
550
|
1,687
|
|
Income tax expense
|
(705)
|
(485)
|
|
(Loss)/profit for the financial period
|
(155)
|
1,202
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
- Owners of the parent
|
(346)
|
945
|
|
- Non-controlling interests
|
191
|
257
|
|
(Loss)/profit for the financial period
|
(155)
|
1,202
|
|
|
|
|
|
|
Basic (loss)/earnings per share
|
(1.28)c
|
3.37c
|
|
Adjusted basic earnings per share3
|
3.43c
|
5.90c
|
|
Further information is available in a spreadsheet
at investors.vodafone.com/results
Notes:
1.
The H1 FY24 results reflect average foreign exchange rates of
€1:£0.86, €1:INR 89.71, €1:ZAR 20.29,
€1:TRY 25.99 and €1:EGP 33.64.
2.
The results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. There is no impact on previously
reported Revenue and Adjusted EBITDAaL. However, Operating profit
has increased by €33 million whilst Profit before taxation
and Profit for the financial period both decreased by €41
million compared to amounts previously reported. Consequently,
Basic earnings per share decreased by 0.15c and Adjusted basic
earnings per share decreased by 0.12c compared to amounts
previously reported. See note 4 'Assets held for sale' in the
unaudited condensed consolidated financial statements for more
information.
3.
Adjusted EBITDAaL and Adjusted basic earnings per share are
non-GAAP measures. See page 40 for more
information.
4.
Includes depreciation on leased assets of €2,157 million (H1
FY23: €2,046 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic performance summary
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Other
|
Common
|
Elimi-
|
|
|
|
|
Germany
|
Italy
|
UK
|
Spain
|
Europe
|
Vodacom
|
Markets
|
Functions
|
nations
|
Group
|
|
H1 FY24
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
|
Total revenue
|
6,405
|
2,320
|
3,377
|
1,929
|
2,679
|
3,590
|
1,128
|
721
|
(212)
|
21,937
|
|
Service revenue
|
5,722
|
2,098
|
2,822
|
1,731
|
2,366
|
2,924
|
828
|
282
|
(155)
|
18,618
|
|
Adjusted EBITDAaL1
|
2,527
|
645
|
640
|
394
|
766
|
1,241
|
254
|
(89)
|
-
|
6,378
|
|
Adjusted EBITDAaL margin
(%)1
|
39.5%
|
27.8%
|
19.0%
|
20.4%
|
28.6%
|
34.6%
|
22.5%
|
|
|
29.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Downloadable performance information is available
at: investors.vodafone.com/results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY23
|
|
FY24
|
Organic service revenue growth %*1
|
Q1
|
Q2
|
H1
|
Q3
|
Q4
|
H2
|
Total
|
|
Q1
|
Q2
|
H1
|
Germany
|
(0.5)
|
(1.1)
|
(0.8)
|
(1.8)
|
(2.8)
|
(2.3)
|
(1.6)
|
|
(1.3)
|
1.1
|
(0.1)
|
Italy
|
(2.3)
|
(3.4)
|
(2.8)
|
(3.3)
|
(2.7)
|
(3.0)
|
(2.9)
|
|
(1.6)
|
(1.0)
|
(1.3)
|
UK
|
6.5
|
6.9
|
6.7
|
5.3
|
3.8
|
4.6
|
5.6
|
|
5.7
|
5.5
|
5.6
|
Spain
|
(3.0)
|
(6.0)
|
(4.5)
|
(8.7)
|
(3.7)
|
(6.2)
|
(5.4)
|
|
(3.0)
|
(2.7)
|
(2.8)
|
Other Europe
|
2.5
|
2.9
|
2.7
|
2.1
|
3.6
|
2.8
|
2.8
|
|
4.1
|
3.8
|
3.9
|
Vodacom2
|
6.9
|
8.3
|
7.6
|
8.0
|
7.0
|
7.5
|
7.5
|
|
9.0
|
9.0
|
9.0
|
Other Markets2
|
32.3
|
39.7
|
36.0
|
48.8
|
54.9
|
51.7
|
43.5
|
|
74.1
|
85.0
|
79.3
|
Group
|
2.5
|
2.5
|
2.5
|
1.8
|
1.9
|
1.8
|
2.2
|
|
3.7
|
4.7
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
1.
Organic service revenue growth, Group Adjusted EBITDAaL and Group
Adjusted EBITDAaL margin are non-GAAP measures. See page 40 for
more information.
2.
Organic service revenue growth metrics for FY23 have been
re-presented for the Other Markets and Vodacom segments to reflect
the move of Vodafone Egypt from the Other Markets segment to the
Vodacom segment. This is no impact on previously reported Group
metrics.
|
|
|
|
|
|
Germany ⫶ 31%
of Group service revenue
|
|
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
6,405
|
6,592
|
(2.8)
|
|
- Service revenue
|
5,722
|
5,730
|
(0.1)
|
(0.1)
|
- Other revenue
|
683
|
862
|
|
|
Adjusted EBITDAaL
|
2,527
|
2,677
|
(5.6)
|
(5.6)
|
Adjusted EBITDAaL margin
|
39.5%
|
40.6%
|
|
|
Total revenue decreased by 2.8% to €6.4 billion, driven by
lower equipment revenue.
On an organic basis, service revenue was broadly stable at -0.1%*
(Q1: -1.3%*, Q2: 1.1%*) as the contribution from higher broadband
and mobile ARPU was offset by the cumulative impact of customer
losses, and a reduction in mobile termination rates. In Q2, both
fixed and mobile service revenue returned to growth, benefiting
from our broadband price increases and higher mobile
ARPU.
Fixed service revenue increased by 0.3%* (Q1: -0.9%*, Q2: 1.4%*),
as broadband ARPU growth offset the impact of a lower broadband and
TV customer base. Q2 service revenue returned to growth, supported
by our broadband base price increases, which started to take effect
in May. This impacted our commercial performance, as expected, and
we lost 157,000 cable broadband customers and 97,000 DSL customers
in H1, reflecting anticipated price increase driven disconnections.
The performance of our hybrid fibre cable gigabit network continued
to improve. We achieved strong results in all four major
independent network tests from Connect, CHIP, Computer BILD and
nPerf. Gigabit speeds are now available to over 24 million
households across our hybrid fibre cable network.
Our TV customer base declined by 213,000 and our converged customer
base increased by 36,000 to 2.3 million Consumer converged
accounts. Ahead of changes to German TV laws, which take effect
from July 2024 and end the practise of bulk TV contracting in Multi
Dwelling Units ('MDUs'), we continue to progress preparations to
manage this transition. We have performed three trials to
re-contract customers, with a success rate of 35-65%. In total, we
have 8.5 million MDU TV customers, and they generate around
€800 million in basic-TV revenue.
Mobile service revenue declined by 0.6%* (Q1: -1.9%*, Q2: 0.7%*)
reflecting a lower customer base and a reduction in mobile
termination rates, partially offset by higher ARPU. Q2 service
revenue returned to growth, supported by higher non-recurring
payments from service providers and higher roaming and visitor
revenue. We added 93,000 contract customers in the period driven by
an improved Vodafone branded performance. As part of our ongoing
commercial repositioning, we launched refreshed, fully flexible
'FamilyCard' plans.
Vodafone Business service revenue increased by 0.5%* (Q1: 0.0%*,
Q2: 1.0%*) during the period, largely due to growth in the 'SoHo'
customer segment, which was supported by higher fixed line ARPU,
and good demand for our Cloud and Security services. We added 4.3
million IoT connections in the period, driven by strong demand from
the automotive sector. In August, we launched 'Vodafone Zscaler
Security Service', a secure access gateway solution which utilises
the Cloud platform to deliver a safe and productive environment,
specifically designed for small and medium enterprise customers. In
November, we announced a new agreement with BASF, a leading global
chemical manufacturing company. We will become a key partner for
the operations and maintenance of their industrial private 5G
networks globally, with the first being their production site in
Germany.
Adjusted EBITDAaL declined by 5.6%*, reflecting a 4.3 percentage
points impact from higher energy costs, as well as higher wage and
inflation-indexed lease costs. The Adjusted EBITDAaL margin was
1.2* percentage points lower year-on-year at 39.5%.
In September 2023, our fibre-to-the-home ('FTTH') joint venture
started its network rollout in the city of Neuss. This partnership,
which will deploy FTTH to up to seven million homes over a six-year
period, is complementary to our upgrade plans for our existing
hybrid fibre cable network.
|
|
|
|
|
|
UK ⫶
15% of Group service
revenue
|
|
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
3,377
|
3,392
|
(0.4)
|
|
- Service revenue
|
2,822
|
2,712
|
4.1
|
5.6
|
- Other revenue
|
555
|
680
|
|
|
Adjusted EBITDAaL
|
640
|
685
|
(6.6)
|
(5.3)
|
Adjusted EBITDAaL margin
|
19.0%
|
20.2%
|
|
|
Total revenue declined by 0.4% to €3.4 billion, as service
revenue growth was largely offset by a decline in equipment revenue
and the depreciation of the pound sterling against the
euro.
On an organic basis, service revenue increased by 5.6%* (Q1: 5.7%*,
Q2: 5.5%*). This was driven by continued strong growth in Consumer,
and an acceleration in Business growth, partially offset by lower
wholesale MVNO revenue.
Mobile service revenue grew by 6.2%* (Q1: 6.4%*, Q2: 6.1%*), driven
by a higher average customer base and annual price increases in
Consumer, good growth in Business and higher roaming revenue. Our
contract customer base was impacted by the one-off disconnections
of 179,000 zero-ARPU legacy SIMs during the period. Excluding
these, our contract customer base declined by 49,000 (Q1: -66,000,
Q2: 17,000) due to retail price increases implemented in a
competitive environment, particularly from MVNOs. Consumer contract
churn improved by 0.4 percentage points year-on-year to 12.1%,
despite implementing annual contractual price increase during the
period. Our digital prepaid sub-brand 'VOXI' continued to grow,
with 72,000 customers added during the period.
Fixed service revenue grew by 3.8%* (Q1: 3.7%*, Q2: 3.9%*) with
strong growth in Consumer. Our broadband customer base increased by
69,000 during the period and we now have 1.3 million customers.
Through our partnerships with CityFibre and Openreach we can now
reach 13.2 million households with full fibre broadband, more than
any other provider in the UK.
Vodafone Business service revenue increased by 3.8%* (Q1: 4.4%*,
Q2: 3.2%*) in the first half, supported by strong growth in mobile
driven by 'SME' and Corporate customer segments. This was partially
offset by a stable fixed line performance due to customer and
product lifecycle churn. In August, we announced our partnership
with Data Communications Company, providing connectivity for
Britain's smart meter network. Through our 4G managed IoT
connectivity, we will help customers reduce their energy
consumption.
Adjusted EBITDAaL declined by 5.3%*, of which 3.3 percentage points
was due to higher energy costs. Excluding this impact, Adjusted
EBITDAaL declined, as good underlying service revenue growth was
offset by the complete migration of the Virgin Media MVNO off our
network. The Adjusted EBITDAaL margin declined 1.2* percentage
points year-on-year at 19.0%.
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 before the end of calendar 2024, Vodafone
will own 51% of the combined business and CK Hutchison 49%. This
combination will provide customers with greater choice and more
value, drive greater competition, and enable increased investment
with a clear £11 billion plan to create one of Europe's most
advanced standalone 5G networks. Full details of the transaction
can be found here: investors.vodafone.com/merger-of-vodafone-uk-and-three-uk
|
|
|
|
|
|
Italy ⫶
11% of Group service
revenue
|
|
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
2,320
|
2,377
|
(2.4)
|
|
- Service revenue
|
2,098
|
2,125
|
(1.3)
|
(1.3)
|
- Other revenue
|
222
|
252
|
|
|
Adjusted EBITDAaL
|
645
|
759
|
(15.0)
|
(15.0)
|
Adjusted EBITDAaL margin
|
27.8%
|
31.9%
|
|
|
Total revenue declined 2.4% to €2.3 billion due to lower
service revenue and equipment revenue.
Service revenue declined by 1.3%* (Q1 -1.6%*, Q2: -1.0%*), as a
result of continued price pressure in the value segment, partly
offset by strong Business demand for fixed line connectivity and
digital services. The improvement in quarterly trends was supported
by seasonally higher mobile roaming and visitor
revenue.
Mobile service revenue declined by 5.1%* (Q1: -5.8%*, Q2: -4.4%*).
Price competition in the mobile value segment remained intense
during the period. The quarter-on-quarter improvement reflected
roaming and visitor revenue growth during the summer period, as
well as our pricing actions. Our second brand 'ho.' continued to
grow, with 117,000 net additions, and now has 3.1 million
customers. In October, we agreed an extension to our wholesale MVNO
agreement with PostePay until the end of 2028.
Fixed service revenue increased by 8.0%* (Q1: 8.7%*, Q2: 7.3%*)
driven by good Business demand for connectivity and digital
services, including strong take up in the Business voucher
programme, an initiative related to the EU Recovery and Resilience
Facility ('ERF') that subsidises high-speed broadband connectivity.
Our broadband customer base declined by 46,000 during the period,
reflecting the impact of new market entrants, but we added 26,000
fixed-wireless access ('FWA') customers, which are reported in our
mobile customer base.
Our next generation network ('NGN') broadband services are now
available to 23.6 million households, including 9.0 million through
our own network and our partnership with Open Fiber. This is
complemented by our fixed-wireless access services which now cover
3.9 million households via 5G FWA and 1.5 million households via 4G
FWA.
Vodafone Business grew by 8.4%* (Q1: 9.4%*, Q2: 7.5%*) during the
period, driven by further acceleration in fixed service revenue,
supported by good demand for both our connectivity and digital
services. We recently announced that Vodafone will provide hybrid
5G Mobile Private Network infrastructure to SNAM, one of Europe's
largest natural gas transportation companies, with dedicated
coverage enabling innovative solutions for the energy transition in
Italy.
Adjusted EBITDAaL declined by 15.0%* including a 10.1 percentage
point impact due to higher energy costs. Adjusted EBITDAaL growth
was also impacted by lower mobile service revenue and other
inflationary costs, partially offset by our continued strong focus
on cost control. The Adjusted EBITDAaL margin was 4.1* percentage
points lower year-on-year at 27.8%.
|
|
|
|
|
|
Spain ⫶
9% of Group service
revenue
|
|
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
1,929
|
1,965
|
(1.8)
|
|
- Service revenue
|
1,731
|
1,782
|
(2.9)
|
(2.8)
|
- Other revenue
|
198
|
183
|
|
|
Adjusted EBITDAaL
|
394
|
445
|
(11.5)
|
(11.6)
|
Adjusted EBITDAaL margin
|
20.4%
|
22.6%
|
|
|
Total revenue declined by 1.8% to €1.9 billion due to lower
service revenue.
On an organic basis, service revenue declined by 2.8%* (Q1: -3.0%*,
Q2: -2.7%*) driven by a lower customer base, continued price
competition in the Consumer value segment and a reduction in mobile
termination rates. This was partially offset by the positive
contribution from inflation-linked price increases and good demand
for our Business digital services. The acceleration in quarterly
trends was further supported by the improvement in our commercial
performance.
In mobile, our contract customer base declined by 9,000 during the
period, reflecting higher disconnections in Q1, following our
implementation of inflation-linked price increases in January. Our
net additions improved in Q2, supported by strong growth in the
reseller segment due to non-recurring customer acquisitions, our
commercial actions to strengthen the Vodafone brand and lower churn
following the completion of our price actions. Contract churn
improved by 1.7 percentage points year-on-year during the period to
18.2%.
Our broadband customer base declined by 85,000 and our TV customer
base decreased by 49,000 due to intense price competition in the
value segment. Our converged customer base remained broadly stable
at 2.1 million. At the beginning of Q1, we closed 15% of our retail
stores and chose not to renew several dealership channel contracts
in order to increase our distribution efficiency.
Vodafone Business service revenue declined by 2.0%* (Q1: -2.8%*,
Q2: -1.2%*) during the period, as good growth in digital services
and public sector contract wins were offset by declining mobile
connectivity revenue, due to price competition in the 'SoHo'
customer segment.
Adjusted EBITDAaL declined by 11.6%*, which reflects a 4.1
percentage point impact from one-off tax benefits in the prior year
and a 2.9 percentage point impact from higher energy
costs.
On 31 October 2023, we announced that Vodafone has entered into
binding agreements with Zegona Communications plc in relation to
the sale of 100% of Vodafone Spain. On completion, which is
expected to take place in the first half of 2024, Vodafone's
consideration will comprise at least €4.1 billion in cash and
up to €0.9 billion in the form of Redeemable Preference
Shares, which redeem no later than six years after closing. The
enterprise value of €5.0 billion is equivalent to a multiple
of 5.3x Adjusted EBITDAaL and 12.7x OpFCF for the 12-month period
ended 31 March 2023. Full details of the transaction can be found
here: investors.vodafone.com/sale-of-vodafone-spain.
|
|
|
|
|
|
Other Europe ⫶
13% of Group service
revenue
|
|
|
|
|
|
H1 FY24
|
H1 FY231
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
2,679
|
2,894
|
(7.4)
|
|
- Service revenue
|
2,366
|
2,552
|
(7.3)
|
3.9
|
- Other revenue
|
313
|
342
|
|
|
Adjusted EBITDAaL
|
766
|
843
|
(9.1)
|
0.7
|
Adjusted EBITDAaL margin
|
28.6%
|
29.1%
|
|
|
Note:
1. Comparatives
include the results of Vodafone Hungary. As previously reported,
Vodafone Hungary was sold in January 2023.
Total revenue declined by 7.4% to €2.7 billion, reflecting
the disposal of Vodafone Hungary in the prior year.
On an organic basis, service revenue increased by 3.9%* (Q1: 4.1%*,
Q2: 3.8%*), with all six markets growing during the period,
supported by our price actions in most markets.
In Portugal, both the Consumer and Business segments continued to
perform well, with a further acceleration in service revenue
growth, supported by inflation-linked contractual price increases
implemented in March 2023. We added 80,000 mobile contract
customers and 21,000 fixed broadband customer during the period. In
September 2022, we announced that we had entered into an agreement
to buy Portugal's fourth largest converged operator, Nowo
Communications, from Llorca JVCO Limited, the owner of Masmovil
Ibercom S.A. The transaction is conditional on regulatory
approval.
In Ireland, service revenue increased, driven by good commercial
momentum and a higher average customer base, and supported by our
annual contractual price increases. We added 10,000 mobile contract
customers during the period. Through our fixed wholesale network
access partnerships, we now cover over 1 million households with
FTTH.
Service revenue in Greece grew, reflecting good growth in our
Business fixed segment, supported by public sector demand. During
the period we added 78,000 mobile contract customers, and our
broadband customer base declined by 6,000.
Vodafone Business service revenue increased by 5.8%* (Q1: 6.4%*,
Q2: 5.2%*) during the period, with growth in both connectivity and
digital services, including IoT and SD-WAN solutions. Growth in
connectivity was supported by a higher customer base, price
increases in the 'SoHo' and 'SME' customer segments across markets,
and public sector contract wins in Greece and Romania.
Adjusted EBITDAaL grew by 0.7%*, as service revenue growth and
ongoing cost efficiencies offset the impact from higher energy
costs. The Adjusted EBITDAaL margin decreased by 1.0* percentage
points year-on-year at 28.6%.
|
|
|
|
|
|
Vodacom ⫶
16% of Group service
revenue
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
3,590
|
4,179
|
(14.1)
|
|
- Service revenue
|
2,924
|
3,422
|
(14.6)
|
9.0
|
- Other revenue
|
666
|
757
|
|
|
Adjusted EBITDAaL
|
1,241
|
1,527
|
(18.7)
|
4.9
|
Adjusted EBITDAaL margin
|
34.6%
|
36.5%
|
|
|
Note:
1.
Comparative metrics for H1 FY23 have been re-presented to reflect
the move of Vodafone Egypt from the Other Markets segment to the
Vodacom segment from 1 April 2023.
Total revenue declined by 14.1% to €3.6 billion due to the
depreciation of local currencies versus the euro.
On an organic basis, Vodacom's service revenue grew by 9.0%* (Q1:
9.0%*, Q2: 9.0%*) with growth in South Africa, Egypt and Vodacom's
international markets. The stable quarterly trend reflected an
acceleration in South Africa, from strong prepaid revenue growth,
offset by a slowdown in the international markets due to
macroeconomic pressures.
In South Africa, service revenue growth was driven by the Consumer
mobile segment, which benefited from price increases, a higher
prepaid customer base, and good fixed line growth. We added 2.2
million mobile prepaid customers in the period, supported by our
Big Data led customer value management capabilities which offer
personalised bundles to customers. Across our active customer base,
74.2% of our mobile customers now use data services, an increase of
2.0 million year-on-year. Financial Services revenue grew by 10.8%*
to €77 million, supported by growth in our insurance
services. Our 'VodaPay' super-app has continued to gain traction
with 4.1 million registered users.
Service revenue in Egypt continued to grow strongly, reflecting
increased data usage, good commercial momentum with our financial
services product, 'Vodafone Cash', which now has 6.7 million active
users, and our refreshed 'Vodafone Flex' proposition offering
customers flexible in-bundle content options. During the period, we
added 184,000 contract customers and 1.3 million prepaid mobile
customers.
In Vodacom's international markets, service revenue growth was
supported by an increase in data revenue, a higher customer base,
and M-Pesa growth. Growth slowed in Q2, due to price competition in
Mozambique, and macroeconomic pressures in the DRC. M-Pesa revenue
grew by 13.8%* and now represents 26.3% of service revenue. We now
have 53.7 million mobile customers, with 62.5% of active customers
using data services.
Vodacom's Adjusted EBITDAaL increased by 4.9%*, supported by
service revenue growth and cost initiatives, partially offset by an
increase in payroll and technology operating expenses as we
continued to improve the resilience of our network in South Africa.
The Adjusted EBITDAaL margin decreased by 1.2* percentage points to
34.6%.
Further information on our operations in Africa can be accessed
here: vodacom.com.
|
|
|
|
|
|
Other Markets1 ⫶
4% of Group service
revenue
|
|
|
|
|
|
|
Re-presented2
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
Organic
|
|
€m
|
€m
|
change %
|
change %*
|
Total revenue
|
1,128
|
976
|
15.6
|
|
- Service revenue
|
828
|
771
|
7.4
|
79.3
|
- Other revenue
|
300
|
205
|
|
|
Adjusted EBITDAaL
|
254
|
228
|
11.4
|
89.1
|
Adjusted EBITDAaL margin
|
22.5%
|
23.4%
|
|
|
Notes:
1.
The Other Markets segment only includes Vodafone Turkey in FY24.
The comparatives include the results of Vodafone Ghana which, as
previously reported, was sold in February 2023.
2. The comparatives
for H1 FY23 have been re-presented to reflect the move of Vodafone
Egypt from the Other Markets segment to the Vodacom segment from 1
April 2023.
Total revenue increased by 15.6% to €1.1 billion, with strong
service revenue growth offset by significant currency
devaluation.
On an organic basis, service revenue in Turkey grew by 79.3%* (Q1:
74.1%*, Q2: 85.0%), and despite material currency devaluation, also
increased in euro terms in H1. This was driven by continued
customer base growth and ongoing repricing actions to reflect the
high inflationary environment. We maintained our good commercial
momentum, adding 688,000 mobile contract customers during the
period, including migrations of prepaid customers.
Adjusted EBITDAaL in Turkey increased by 89.1%* despite significant
inflationary pressure on our cost base, and grew in euro terms
during the period. The Adjusted EBITDAaL margin increased by 0.1*
percentage points year-on-year at 22.5%.
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 in the period in Turkey. Group service revenue growth
excluding Turkey was 2.3%* (Q1: 1.8%*, Q2: 2.8%*) and Adjusted
EBITDAaL excluding Turkey declined by 2.0%*.
|
|
|
|
Associates and joint ventures
|
|
|
|
|
|
Re-presented1
|
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
|
Vantage Towers (Oak Holdings 1 GmbH)
|
(78)
|
-
|
|
VodafoneZiggo Group Holding B.V.
|
(78)
|
162
|
|
Safaricom Limited
|
89
|
110
|
|
Indus Towers Limited
|
62
|
33
|
|
Other2 (including
TPG Telecom Limited)
|
(46)
|
71
|
Share of results of equity accounted associates and joint
ventures
|
(51)
|
376
|
Notes:
1.
The results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. The share of results from Indus Towers
Limited has increased to €33 million compared to €nil
as previously reported. See note 4 'Assets held for sale' in
the unaudited condensed consolidated financial statements for more
information.
2.
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 (Oak Holdings 1 GmbH Joint Venture)
On
23 March 2023, we announced the completion of Oak Holdings GmbH,
our co-control partnership for Vantage Towers with a consortium of
long-term infrastructure investors led by Global Infrastructure
Partners and KKR. We received initial net proceeds of €4.9
billion in March 2023, and a further €500 million in July
2023, taking total net proceeds to €5.4 billion and the
Consortium's ownership in Oak Holdings GmbH to 40%. We agreed a
further six-month window for the Consortium to acquire additional
shares in Oak Holdings at the same price, up to a maximum of 50%
ownership, by the end of 2023.
Total
revenue increased 7.2% to €561 million in H1 FY24, driven by
920 new tenancies and new macro sites. As a result, the tenancy
ratio increased to 1.48x. Adjusted EBITDAaL increased by 3.7%* to
€283 million, driven by revenue growth, partly offset by
increased operating expenses and higher ground lease
expenses.
Vodafone's
share of results in H1 FY24 reflects the amortisation of intangible
assets arising from the completion of the co-control partnership
for Vantage Towers.
See
note 2 'Segmental analysis' in the condensed consolidated financial
statements for more information.
VodafoneZiggo Joint Venture (Netherlands)
The results of
VodafoneZiggo, in which Vodafone owns a 50% stake, are prepared
under US GAAP, which is broadly consistent with Vodafone's IFRS
basis of reporting.
Total
revenue remained broadly stable at €2.0 billion, as
contractual price increases and mobile contract customer growth
were offset by a decline in the fixed customer base and lower
handset sales.
During
the period, VodafoneZiggo added 67,000 mobile contract customers,
supported by best-in-class net promoter score. VodafoneZiggo's
broadband customer base declined by 65,000 customers to 3.2 million
due to price increases, and continued competitive environment. The
number of converged households remained stable with 47.5% of
broadband customers now converged, delivering significant NPS and
customer loyalty benefits. VodafoneZiggo now offers gigabit speeds
to 7.5 million homes, providing nationwide coverage.
Vodafone's
lower share of results in H1 FY24 was largely due to lower adjusted
EBITDA, lower gains on derivative financial instruments and higher
third-party interest expenses.
During
the period, Vodafone received €26 million in interest
payments from the joint venture.
Safaricom Associate (Kenya)
Safaricom service revenue
declined to €1.0 billion, as the benefits of
strong mobile data growth and higher customer base were offset by
the devaluation of local currency.
Vodafone's lower share of results was due to the depreciation of
the Kenyan shilling versus the euro.
During the period, Vodafone received €63 million in dividends
from Safaricom.
|
|
|
|
|
Net financing costs
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Investment income
|
368
|
137
|
|
Financing costs
|
(1,473)
|
(1,418)
|
|
Net financing costs
|
(1,105)
|
(1,281)
|
13.7
|
Adjustments for:
|
|
|
|
|
Mark-to-market losses
|
141
|
41
|
|
|
Foreign exchange losses
|
90
|
299
|
|
Adjusted net financing costs2
|
(874)
|
(941)
|
7.1
|
Notes:
1. The
results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Consequently, Investment income
decreased by €74 million compared to €211 million as
previously reported. See note 4 'Assets held for sale' in the
unaudited condensed consolidated financial statements for more
information.
2.
Adjusted net financing costs is a non-GAAP measure. See page 40 for
more information.
Net
financing costs decreased by €176 million, primarily due to
non-recurring foreign exchange losses in the prior period on
intercompany funding arrangements with Vodafone Ghana and Vodafone
Hungary partially offset by a mark-to-market loss recognised in the
current period on the revaluation of the embedded derivative option
linked to the Group's bank borrowings secured against Indian
assets.
Adjusted
net financing costs decreased by €67 million, reflecting both
a decrease in average net debt balances and higher returns on cash
and short-term investments.
|
|
|
|
|
Taxation
|
|
|
|
|
|
|
Re-presented1
|
|
|
|
H1 FY24
|
H1 FY23
|
Change
|
|
%
|
%
|
pps
|
Effective tax rate
|
128.2%
|
28.7%
|
99.5
|
Adjusted effective tax rate2
|
30.3%
|
27.2%
|
3.1
|
Notes:
1.
The results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers is no longer reported as
held for sale. Consequently, the Effective tax rate increased by
0.6pps compared to 28.1% as previously reported. Similarly, the
Adjusted effective tax rate increased by 1.0pps compared to 26.2%
as previously reported. See note 4 'Assets held for sale' in the
unaudited condensed consolidated financial statements for more
information.
2.
Adjusted effective tax rate is a non-GAAP measure. See page 40 for
more information.
The Group's Effective tax rate for H1 FY24 was 128.2%.
The Group's Adjusted effective tax rate for H1 FY24 was 30.3% (H1
FY23: 27.2%). This is higher than our expectations for the full
year tax rate, which we continue to expect to be in the high 20%s
and is mainly due to a €78 million tax charge arising on
proceeds received as part of the Vantage Towers transaction carried
out in H1 FY24.
The Effective tax rate for H1 FY24 includes €250 million
relating to the use of prior year losses in Luxembourg, an increase
in deferred tax assets in Turkey of €28 million following the
rise in the corporate tax rate to 25% (previously 20%) as well as
the Vantage Towers transaction mentioned above. The Effective tax
rate for H1 FY23 did not include these amounts. H1 FY24 also
includes a €121 million charge as an effect of
hyper-inflation accounting policies in Turkey (H1 FY23: €55
million).
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
Re-presented1
|
Reported
|
|
|
H1 FY24
|
H1 FY23
|
change
|
|
|
eurocents
|
eurocents
|
eurocents
|
Basic (loss)/earnings per share
|
(1.28)c
|
3.37c
|
(4.65)c
|
Adjusted basic earnings per share2
|
3.43c
|
5.90c
|
(2.47)c
|
Notes:
1. The
results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Consequently, basic earnings per share
decreased by 0.15c compared to 3.52c as previously reported.
Adjusted basic earnings per share decreased by 0.12c compared to
6.02c as previously reported. See note 4 'Assets held for sale' in
the unaudited condensed consolidated financial statements for more
information.
2. Adjusted
basic earnings per share is a non-GAAP measure. See page 40 for
more information.
Basic
loss per share was 1.28 eurocents, compared to basic earnings per
share of 3.37 eurocents for H1 FY23, principally due to lower
Operating profit.
Adjusted
basic earnings per share was 3.43 eurocents, compared to 5.90
eurocents for H1 FY23, principally due to lower Adjusted
EBITDAaL.
Cash flow, capital allocation and funding
|
|
|
|
Analysis of cash flow
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
|
€m
|
€m
|
change %
|
Inflow from operating activities
|
5,544
|
6,280
|
(11.7)
|
Outflow from investing activities
|
(3,808)
|
(4,089)
|
6.9
|
Outflow from financing activities
|
(6,378)
|
(2,993)
|
(113.1)
|
Net cash outflow
|
(4,642)
|
(802)
|
(478.8)
|
Cash and cash equivalents at beginning of the financial
period
|
11,628
|
7,371
|
|
Exchange gain on cash and cash equivalents
|
45
|
282
|
|
Cash and cash equivalents at end of the financial
period
|
7,031
|
6,851
|
|
Cash
inflow from operating activities decreased to €5,544 million
reflecting lower operating profit and adverse working capital
movements, which offset lower taxation
payments.
Outflow
from investing activities decreased by 6.9% to €3,808
million, primarily in relation to lower spend on property, plant
and equipment and proceeds from the sale of 3.9% of Oak Holdings 1
GmbH in the period, which outweighed lower dividends received from
associates and joint ventures and a higher net outflow in respect
of short-term investments. Short-term investments include highly
liquid government and government-backed securities and managed
investment funds that are in highly rated and liquid money market
investments with liquidity of up to 90 days.
Outflows
from financing activities increased by 113.1% to €6,378
million. Lower inflows from the net movement in short-term
borrowings arising from collateral receipts outweighed higher
proceeds from the issue of long-term borrowings and lower outflows
in relation to the purchase of treasury shares.
|
|
|
|
Analysis of cash flow (continued)
|
|
|
|
|
H1 FY24
|
H1 FY23
|
Reported
|
|
€m
|
€m
|
change %
|
Adjusted EBITDAaL1
|
6,378
|
7,244
|
(12.0)
|
Capital additions2
|
(3,365)
|
(3,541)
|
|
Working capital
|
(3,378)
|
(3,405)
|
|
Disposal of property, plant and equipment and intangible
assets
|
12
|
-
|
|
Integration capital additions
|
(66)
|
(101)
|
|
Restructuring costs including working capital
movements3
|
(238)
|
(214)
|
|
Licences and spectrum
|
(173)
|
(2,181)
|
|
Interest received and paid4
|
(560)
|
(688)
|
|
Taxation
|
(472)
|
(672)
|
|
Dividends received from associates and joint ventures
|
75
|
463
|
|
Dividends paid to non-controlling shareholders in
subsidiaries
|
(167)
|
(290)
|
|
Other
|
3
|
140
|
|
Free cash flow1
|
(1,951)
|
(3,245)
|
39.9
|
Acquisitions and disposals
|
266
|
(98)
|
|
Equity dividends paid
|
(1,210)
|
(1,263)
|
|
Share buybacks4
|
-
|
(1,004)
|
|
Foreign exchange gain/(loss)
|
14
|
(65)
|
|
Other movements in net debt5
|
16
|
1,730
|
|
Net debt increase1
|
(2,865)
|
(3,945)
|
|
Opening net debt1
|
(33,375)
|
(41,578)
|
|
Closing net debt1
|
(36,240)
|
(45,523)
|
20.4
|
|
|
|
|
Free cash flow1
|
(1,951)
|
(3,245)
|
|
Adjustments:
|
|
|
|
- Licences and spectrum
|
173
|
2,181
|
|
- Restructuring costs including working capital
movements3
|
238
|
214
|
|
- Integration capital additions
|
66
|
101
|
|
- Vantage Towers growth capital expenditure
|
-
|
236
|
|
Adjusted free cash flow1
|
(1,474)
|
(513)
|
|
Notes:
1. Adjusted
EBITDAaL, Free cash flow, Adjusted free cash flow and Net debt are
non-GAAP measures. See page 40 for more
information.
2. See
page 52 for an analysis of tangible and intangible additions in the
year.
3. Includes
working capital in respect of integration capital additions.
4. Interest
received and paid excludes €246 million outflow (H1 FY23:
€153 million) in relation to the cash portion of interest on
lease liabilities included within Adjusted EBITDAaL, €nil
million of cash outflow (H1 FY23: €58 million) of interest
arising from the repayment of debt in respect of licenses and
spectrum and €nil million of cash inflow (H1 FY23: €86
million) from the option structures relating to the issue of the
mandatory convertible bonds which is included within Share
buybacks. The share buyback programmes completed on 15 March
2023.
5. 'Other
movements on net debt' for H1 FY24 includes mark-to-market losses
recognised in the income statement of €141 million (H1 FY23:
€127 million loss), together with €nil million (H1
FY23: €1,739 million) for the repayment of debt in relation
to licenses and spectrum in Italy.
Adjusted
free cash flow decreased by €961 million to an outflow of
€1,474 million in the period. This reflects a decrease in
Adjusted EBITDAaL in the period, together with lower dividends from
associates and joint ventures, which outweighed lower taxation,
lower interest received and paid and lower dividends paid to
non-controlling shareholders in subsidiaries.
Acquisitions
and disposals includes €500 million in relation to the
disposal of 3.9% of Oak Holdings 1 GmbH in the period.
|
|
|
|
|
Borrowings and cash position
|
|
|
|
|
|
H1 FY24
|
Year-end FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Non-current borrowings
|
(52,717)
|
(51,669)
|
|
Current borrowings
|
(12,341)
|
(14,721)
|
|
Borrowings
|
(65,058)
|
(66,390)
|
|
Cash and cash equivalents
|
7,148
|
11,705
|
|
Borrowings less cash and cash equivalents
|
(57,910)
|
(54,685)
|
(5.9)
|
Borrowings
principally includes bonds of €43,316 million (€44,116
million as at 31 March 2023), lease liabilities of €13,039
million (€13,364 million as at 31 March 2023), cash
collateral liabilities of €4,431 million (€4,886
million as at 31 March 2023) and €1,597 million (€1,485
million as at 31 March 2023) of bank borrowings that are secured
against the Group's shareholdings in Indus Towers and Vodafone
Idea.
The decrease in borrowings of €1,332 million was principally
driven by repayment of bonds of €2,744 million and a decrease
in collateral liabilities of €455 million offset by the
issuance of long-term bonds of €1,314 million and adverse
foreign exchange movements on bonds of €607
million.
|
|
|
|
|
Funding position
|
|
|
|
|
H1 FY24
|
Year-end FY23
|
Reported
|
|
|
€m
|
€m
|
change %
|
Bonds
|
(43,316)
|
(44,116)
|
|
Bank loans
|
(968)
|
(795)
|
|
Other borrowings including spectrum
|
(1,707)
|
(1,744)
|
|
Gross debt1
|
(45,991)
|
(46,655)
|
1.4
|
Cash and cash equivalents
|
7,148
|
11,705
|
|
Short-term investments2
|
4,094
|
4,305
|
|
Derivative financial instruments3
|
2,291
|
1,917
|
|
Net collateral liabilities4
|
(3,782)
|
(4,647)
|
|
Net debt1
|
(36,240)
|
(33,375)
|
(8.6)
|
Notes:
1. Gross
debt and Net debt are non-GAAP measures. See page 40 for more
information.
2. Short-term
investments includes €1,911 million (€1,338 million as
at 31 March 2023) of highly liquid government and government-backed
securities and managed investment funds of €2,183 million
(€2,967 million as at 31 March 2023) 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 €1,190 million gain (€2,785 million
gain as at 31 March 2023).
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 increased by €2,865 million to €36,240
million. This was driven by the free cash outflow of €1,952
million and equity dividends of €1,210 million.
Other funding considerations include:
|
H1 FY24
|
Year-end FY23
|
|
|
|
€m
|
€m
|
|
Lease liabilities
|
(13,039)
|
(13,364)
|
|
Financial liabilities under put options (KDG minority
interests)
|
(493)
|
(485)
|
|
Net pension fund liabilities
|
(235)
|
(258)
|
|
Guarantees over loan issued by Australia joint venture
|
(1,653)
|
(1,611)
|
|
Equity characteristic of 50% attributed by credit rating agencies
to 'Hybrid bonds' included in net debt of €8,993 million
(€9,942 million as at 31 March 2023)1
|
4,497
|
4,971
|
|
|
|
|
|
|
Note:
1. Balance
as at 30 September 2023 excludes any equity characteristic for
Hybrid bonds included in net debt of €438 million that are
expected to be repaid during H2 FY24. The Group subsequently
announced on 7 November 2023 that it will repay these securities on
3 January 2024.
The Group's gross and net debt includes certain bonds which have
been designated in hedge relationships, which are carried at
€1,317 million higher value (€1,282 million higher as
at 31 March 2023) than their euro equivalent redemption value. In
addition, where bonds are issued in currencies other than the euro,
the Group has entered into foreign currency swaps to fix the euro
cash outflows on redemption. The impact of these swaps is not
reflected in gross debt and if it were included, the euro
equivalent value of the bonds would decrease by €1,995
million (€1,440 million as at 31 March 2023).
Return on capital employed
Return on capital employed ('ROCE') reflects how efficiently we are
generating profit with the capital we deploy. We
calculate two ROCE measures: i) Pre-tax ROCE for controlled
operations only and ii) Post-tax ROCE including associates and
joint ventures. ROCE calculated using GAAP measures for the 12
months ended 30 September 2023 was 11.5% (FY23: 12.9%), arising
from lower operating profit.
The table below presents adjusted ROCE metrics.
|
|
Re-presented1
|
|
|
H1 FY242
|
H1 FY232
|
Change
|
|
%
|
%
|
pps
|
Pre-tax ROCE
(controlled)3
|
6.4%
|
6.9%
|
(0.5)
|
Post-tax ROCE (controlled and
associates/joint ventures)3
|
4.1%
|
5.2%
|
(1.1)
|
Notes:
1. The
results for the 12 months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Consequently, Post-tax ROCE (controlled
and associates/joint ventures) has increased by 0.1pps compared to
5.1% as previously reported. There is no impact on Pre-tax ROCE
(controlled). See note 4 'Assets held for sale' in the unaudited
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 calculations for H1 FY24 include the
results of Vantage Towers until its disposal on 22 March 2023 and
the results of Oak Holdings 1 GmbH from that
date.
3. ROCE
is calculated by dividing Operating profit by the average of
capital employed as reported in the consolidated statement of
financial position. Pre-tax ROCE (controlled) and Post-tax ROCE
(controlled and associates/joint ventures) are non-GAAP measures.
See page 40 for more information.
Funding facilities
As at
30 September 2023, the Group had undrawn revolving credit
facilities of €7.8 billion comprising euro and US dollar
revolving credit facilities of €4.0 billion and US$4.0
billion (€3.8 billion) which mature in 2025 and 2028
respectively. Both committed revolving credit facilities support US
and euro commercial paper programmes of up to US$15 billion
(€14.2 billion) and €10 billion
respectively.
Post employment benefits
As at 30 September 2023, the Group's
net surplus of scheme assets over scheme liabilities was €30
million (€71 million net surplus as at 31 March
2023).
Dividends
Dividends will continue to be declared in euros, aligning the
Group's shareholder returns with the primary currency in which we
generate free cash flow, and paid in euros, pounds sterling and US
dollars. The foreign exchange rate at which future dividends
declared in euros will be converted into pounds sterling and US
dollars will be calculated based on the average World Markets
Company benchmark rates over the five business days during the week
prior to the payment of the dividend.
The Board has announced an interim dividend per share of 4.50
eurocents (H1 FY23: 4.50 eurocents).
The ex-dividend date for the interim dividend is 23 November 2023
for ordinary shareholders, the record date is 24 November 2023 and
the dividend is payable on 2 February 2024. Dividend payments on
ordinary shares will be paid directly into a nominated bank or
building society account.
Other significant developments
Board changes
As previously announced, Sir Crispin Davis, Dame Clara Furse and
Valerie Gooding did not seek re-election at the 2023 Annual General
Meeting and retired from the Board at the conclusion of the meeting
on 25 July 2023.
Consequently, the Senior Independent Director role has transitioned
to David Nish, the Remuneration Committee Chair role to Amparo
Moraleda and both Delphine Ernotte Cunci and Christine Ramon have
been appointed Workforce Engagement Leads.
On 24 July 2023, we announced the appointment of Luka Mucic as
Group Chief Financial Officer and as an Executive Director of
Vodafone, effective from 1 September 2023.
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 consumer
spending, higher interest rates, adverse inflation, currency
devaluations or movements in foreign exchange rates. Adverse
conditions could also lead to limited debt refinancing options
and/or an increase in costs.
Adverse market conditions
Significant
activity by competition, such as price wars, new market entrants or
business practices, may lead to reduced margins and market share,
and increased customer churn.
Adverse political and policy environment
An
adverse political and policy environment could impact our strategy
and result in increased costs, create competitive disadvantage or
have a negative impact on our return on capital
employed.
Cyber threat
An
external attack, insider threat or supplier breach could cause
service interruption or confidential data breaches.
Data management and privacy
Data
breaches, misuse of data, data manipulation, inappropriate data
sharing, or data unavailability could lead to fines, reputational
damage, loss of value, loss of business opportunity, and failure to
meet our customers' 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.
Organisational simplification
Failure
to effectively execute on our goal to simplify our organisation and
operating model could result in reduced speed of decision-making
and delivery, reduced clarity on accountabilities, and higher
cost.
Strategic transformation
Failure
to effectively execute our transformational activities, including
shaping our portfolio and delivering on product innovation, could
result in loss of business value and/or additional
cost.
Supply chain disruption
Disruption
in our supply chain could mean that we are unable to execute our
strategic plans, resulting in 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:
Climate change
As
part of our commitment to operate ethically and sustainably, we are
dedicated to understanding climate-related risks and opportunities
and embedding responses to these into our business strategy and
operations.
Electromagnetic field ('EMF')
The
health and safety of our customers and the wider public has always
been, and continues to be, a priority for us. We refer to the
current body of scientific evidence so that the services and
products we provide are within prescribed safety limits and adhere
to all relevant standards and national laws.
Infrastructure competitiveness
We
continue to provide the appropriate broadband technology in our
fixed and mobile networks. Our Technology 2025 Strategy
incorporates our fixed and mobile network evolution steps to
enhance our coverage and network performance.
Legal compliance
The
legal compliance risk is made up of multiple sub-risks (sanctions
and trade controls, competition law, anti-bribery and anti-money
laundering). Controls are in place to monitor and manage these
risks and ensure compliance with the relevant regulations and
legislation.
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. We have controls in place to govern each of
these areas in line with our tax principles.
Emerging risks
We face a number of uncertainties where an emerging risk may
potentially impact us. In some cases, there may be insufficient
information to understand the likelihood, impact or velocity of the
risk. Also, we might not be able to fully define a mitigation plan
until we have a better understanding of the threat.
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 work with the relevant experts across the business to assess the
potential impacts and time horizon of these risks. Our emerging
risks, within preferred risk categories, are provided to the
Executive Committee 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
By
Order of the Board
Maaike de Bie
Group General Counsel and Company Secretary
14 November 2023
Unaudited condensed consolidated financial statements
Consolidated income statement
|
|
|
|
|
|
|
|
Six months ended 30 September
|
|
|
|
|
Re-presented1
|
|
|
|
2023
|
2022
|
|
Note
|
|
€m
|
€m
|
Revenue
|
2
|
|
21,937
|
22,930
|
Cost of sales
|
|
|
(15,277)
|
(15,580)
|
Gross profit
|
|
|
6,660
|
7,350
|
Selling and distribution expenses
|
|
|
(1,557)
|
(1,711)
|
Administrative expenses
|
|
|
(3,009)
|
(2,819)
|
Net credit losses on financial assets
|
|
|
(295)
|
(332)
|
Share of results of equity accounted associates and joint
ventures
|
|
|
(51)
|
376
|
Impairment reversal
|
|
|
64
|
-
|
Other (expense)/income
|
|
|
(157)
|
104
|
Operating profit
|
2
|
|
1,655
|
2,968
|
Investment income
|
|
|
368
|
137
|
Financing costs
|
|
|
(1,473)
|
(1,418)
|
Profit before taxation
|
|
|
550
|
1,687
|
Income tax expense
|
3
|
|
(705)
|
(485)
|
(Loss)/profit for the financial period
|
|
|
(155)
|
1,202
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
- Owners of the parent
|
|
|
(346)
|
945
|
- Non-controlling interests
|
|
|
191
|
257
|
(Loss)/profit for the financial period
|
|
|
(155)
|
1,202
|
|
|
|
|
|
(Loss)/earnings per share
|
|
|
|
|
Total Group:
|
|
|
|
|
- Basic
|
5
|
|
(1.28)c
|
3.37c
|
- Diluted
|
5
|
|
(1.28)c
|
3.36c
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of comprehensive income/expense
|
|
|
|
|
|
|
|
Six months ended 30 September
|
|
|
|
|
Re-presented1
|
|
|
|
2023
|
2022
|
|
|
|
€m
|
€m
|
(Loss)/profit for the financial period
|
|
|
(155)
|
1,202
|
Other comprehensive (expense)/income:
|
|
|
|
|
Items that may be reclassified to the income statement in
subsequent periods:
|
|
|
|
|
Foreign exchange translation differences, net of tax
|
|
|
(95)
|
(421)
|
Foreign exchange translation differences transferred to the income
statement
|
|
|
23
|
-
|
Other, net of tax2
|
|
|
(1,150)
|
924
|
Total items that may be reclassified to the income statement in
subsequent periods
|
|
|
(1,222)
|
503
|
Items that will not be reclassified to the income statement in
subsequent periods:
|
|
|
|
|
Net actuarial losses on defined benefit pension schemes, net of
tax
|
|
|
(58)
|
(42)
|
Total items that will not be reclassified to the income statement
in subsequent periods
|
|
|
(58)
|
(42)
|
Other comprehensive (expense)/income
|
|
|
(1,280)
|
461
|
Total comprehensive (expense)/income for the financial
period
|
|
|
(1,435)
|
1,663
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
- Owners of the parent
|
|
|
(1,626)
|
1,377
|
- Non-controlling interests
|
|
|
191
|
286
|
|
|
|
(1,435)
|
1,663
|
Notes:
1.
The results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. See note 4 'Assets held for sale' for
more information.
2.
Principally includes the impact of the Group's cash flow hedges
deferred to other comprehensive income during the
period.
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
Unaudited condensed consolidated financial statements
Consolidated statement of financial position
|
|
|
|
|
|
|
|
30 September
|
31 March
|
|
|
|
2023
|
2023
|
|
Note
|
|
€m
|
€m
|
Non-current assets
|
|
|
|
|
Goodwill
|
|
|
27,544
|
27,615
|
Other intangible assets
|
|
|
18,874
|
19,592
|
Property, plant and equipment
|
|
|
37,363
|
37,992
|
Investments in associates and joint ventures
|
7
|
|
10,457
|
11,079
|
Other investments
|
|
|
1,078
|
1,093
|
Deferred tax assets
|
|
|
19,460
|
19,316
|
Post employment benefits
|
|
|
265
|
329
|
Trade and other receivables
|
|
|
7,226
|
7,843
|
|
|
|
122,267
|
124,859
|
Current assets
|
|
|
|
|
Inventory
|
|
|
1,009
|
956
|
Taxation recoverable
|
|
|
296
|
279
|
Trade and other receivables
|
|
|
11,459
|
10,705
|
Other investments
|
|
|
5,917
|
7,017
|
Cash and cash equivalents
|
|
|
7,148
|
11,705
|
|
|
|
25,829
|
30,662
|
|
|
|
|
|
Total assets
|
|
|
148,096
|
155,521
|
|
|
|
|
|
Equity
|
|
|
|
|
Called up share capital
|
|
|
4,797
|
4,797
|
Additional paid-in capital
|
|
|
149,211
|
149,145
|
Treasury shares
|
|
|
(7,647)
|
(7,719)
|
Accumulated losses
|
|
|
(114,891)
|
(113,086)
|
Accumulated other comprehensive income
|
|
|
28,982
|
30,262
|
Total attributable to owners of the parent
|
|
|
60,452
|
63,399
|
Non-controlling interests
|
|
|
1,110
|
1,084
|
Total equity
|
|
|
61,562
|
64,483
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Borrowings
|
|
|
52,717
|
51,669
|
Deferred tax liabilities
|
|
|
728
|
771
|
Post employment benefits
|
|
|
235
|
258
|
Provisions
|
|
|
1,481
|
1,572
|
Trade and other payables
|
|
|
2,375
|
2,184
|
|
|
|
57,536
|
56,454
|
Current liabilities
|
|
|
|
|
Borrowings
|
|
|
12,341
|
14,721
|
Financial liabilities under put option arrangements
|
|
|
493
|
485
|
Taxation liabilities
|
|
|
453
|
457
|
Provisions
|
|
|
732
|
674
|
Trade and other payables
|
|
|
14,979
|
18,247
|
|
|
|
28,998
|
34,584
|
|
|
|
|
|
Total equity and liabilities
|
|
|
148,096
|
155,521
|
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
Unaudited condensed consolidated financial statements
Consolidated statement of changes in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Additional
paid-in
capital1
|
Treasury
shares
|
Accumulated
comprehensive
losses2
|
Equity attributable to the owners
|
Non-
controlling
interests
|
Total equity
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
1 April 2022 Re-presented3
|
4,797
|
149,018
|
(7,278)
|
(91,189)
|
55,348
|
2,290
|
57,638
|
Issue or reissue of shares
|
-
|
1
|
108
|
(100)
|
9
|
-
|
9
|
Share-based payments
|
-
|
66
|
-
|
-
|
66
|
5
|
71
|
Transactions with non-controlling interests in
subsidiaries
|
-
|
-
|
-
|
(24)
|
(24)
|
(12)
|
(36)
|
Comprehensive income
|
-
|
-
|
-
|
1,377
|
1,377
|
286
|
1,663
|
Dividends
|
-
|
-
|
-
|
(1,265)
|
(1,265)
|
(285)
|
(1,550)
|
30 September 2022
Re-presented3
|
4,797
|
149,085
|
(7,170)
|
(91,201)
|
55,511
|
2,284
|
57,795
|
|
|
|
|
|
|
|
|
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
|
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.
3.
The results for the period ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. As at 30 September 2022, accumulated
comprehensive losses decreased by €58 million, resulting in
an increase of €58 million in total equity compared to
amounts previously reported. As at 1 April 2022, accumulated
comprehensive losses decreased by €96 million, resulting in
an increase of €96 million in total equity compared to
amounts previously reported. See Note 4 'Assets held for sale' for
more information.
The accompanying notes are an integral part of the unaudited
condensed consolidated financial statements.
Unaudited condensed consolidated financial statements
Consolidated statement of cash flows
|
|
|
|
|
|
|
|
Six months ended 30 September
|
|
|
|
2023
|
2022
|
|
Note
|
|
€m
|
€m
|
Inflow from operating activities
|
8
|
|
5,544
|
6,280
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of interests in subsidiaries, net of cash
acquired
|
|
|
-
|
-
|
Purchase of interests in associates and joint ventures
|
|
|
(52)
|
(61)
|
Purchase of intangible assets
|
|
|
(1,536)
|
(1,433)
|
Purchase of property, plant and equipment
|
|
|
(2,888)
|
(3,456)
|
Purchase of investments
|
|
|
(1,704)
|
(871)
|
Disposal of interests in subsidiaries, net of cash
disposed
|
|
|
(67)
|
-
|
Disposal of interests in associates and joint ventures
|
|
|
500
|
-
|
Disposal of property, plant and equipment and intangible
assets
|
|
|
12
|
-
|
Disposal of investments
|
|
|
1,557
|
1,130
|
Dividends received from associates and joint ventures
|
|
|
75
|
463
|
Interest received
|
|
|
295
|
139
|
Outflow from investing activities
|
|
|
(3,808)
|
(4,089)
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from issue of long-term borrowings
|
|
|
1,430
|
187
|
Repayment of borrowings
|
|
|
(5,492)
|
(5,549)
|
Net movement in short-term borrowings
|
|
|
40
|
6,194
|
Net movement in derivatives
|
|
|
138
|
(205)
|
Interest paid1
|
|
|
(1,101)
|
(952)
|
Purchase of treasury shares
|
|
|
-
|
(1,090)
|
Issue of ordinary share capital and reissue of treasury
shares
|
|
|
1
|
9
|
Equity dividends paid
|
|
|
(1,210)
|
(1,263)
|
Dividends paid to non-controlling shareholders in
subsidiaries
|
|
|
(167)
|
(290)
|
Other transactions with non-controlling shareholders in
subsidiaries
|
|
|
(17)
|
(34)
|
Outflow from financing activities
|
|
|
(6,378)
|
(2,993)
|
|
|
|
|
|
Net cash outflow
|
|
|
(4,642)
|
(802)
|
|
|
|
|
|
Cash and cash equivalents at beginning of the financial
period2
|
|
|
11,628
|
7,371
|
Exchange gain on cash and cash equivalents
|
|
|
45
|
282
|
Cash and cash equivalents at end of the financial
period2
|
|
|
7,031
|
6,851
|
Notes:
1.
Interest paid includes €nil million (Six months ended 30
September 2022: €86 million inflow) in relation to derivative
financial instruments for the Share buyback related to maturing
tranches of mandatory convertible
bonds.
2.
Comprises cash and cash equivalents as presented in the
consolidated statement of financial position of €7,148
million (€7,072 million as at 30 September 2022), together
with overdrafts of €117 million (€226 million as at 30
September 2022) and €nil million (€5 million as at 30
September 2022) 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 2023:
● 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 2023;
●
with the exception of
IFRS 17 'Insurance contracts' (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 2023,
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 within the meaning of section 434(3) of the UK
Companies Act 2006; and
●
were approved by the
Board of directors on 14 November 2023.
The information relating to the year ended 31 March 2023 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 auditors' report was unqualified and did not contain
any emphasis of matter or 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 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 revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Going concern
The Group has a strong liquidity position as at 30 September 2023
with €7.1 billion of cash and cash equivalents and €4.1
billion of liquid short-term investments available, together with
undrawn revolving credit facilities of €7.8 billion (of which
€4.0 billion becomes due for renewal in February 2025), 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 including
not being able to renew the credit facility in February 2025 and
not being able to access the capital markets during the assessment
period. 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 March 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
2023.
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 2023, the Group reviewed the key assumptions
underlying the value in use valuations used in the annual
impairment test at 31 March 2023. This included the year to-date
performance of the Group's CGUs against their budgets, as well as
considering the valuation implications of changes in other factors
such as risk free discount rates and the assessment of long term
growth rates.
The Group's review of the potential impact of indicators of
impairment and recoverable amounts did not indicate that the
carrying amount of any of the Group's CGUs was not recoverable as
at 30 September 2023.
Hyperinflation accounting
The Group continues to apply hyperinflationary accounting, as
specified in IAS 29, at its Turkish operations whose functional
currency is the Turkish lira and to Safaricom's operations in
Ethiopia where the Ethiopian birr is the functional
currency.
Turkish lira and Ethiopian birr results and non-monetary asset and
liability balances for the six months ended 30 September 2023 have
been revalued to their present value equivalent local currency
amount as at 30 September 2023, based on an inflation index, before
translation to euros at the reporting date exchange rate of
€1 : 29.03 TRL and €1 : 58.73 ETB,
respectively.
For the Group's operations in Turkey, the gain or loss on net
monetary assets resulting from IAS 29 application is recognised in
the consolidated income statement within Other
income.
For Safaricom's operations in Ethiopia, the impacts of IAS 29
accounting are reflected as an increase to Investments in
associates and joint ventures and an increase to Profit
attributable to the joint ventures and
associates.
The inflation index in Turkey selected to reflect the change in
purchasing power was the consumer price index ('CPI') issued by the
Turkish Statistical Institute which has risen by 30.08% during the
six months ended 30 September 2023. The inflation index selected in
Ethiopia is the CPI issued by the Central Statistics Agency of
Ethiopia which rose 12.09% during the six months ended 30 September
2023.
The main impacts of these adjustments on the consolidated financial
statements are shown
below.
|
Increase/(decrease)
|
|
|
|
|
Six months ended 30 September
|
|
2023
|
2022
|
|
€m
|
€m
|
Revenue
|
35
|
21
|
Operating profit
|
(5)
|
(14)
|
Profit for the financial period
|
(140)
|
(40)
|
|
|
|
|
30 September 2023
|
31 March 2023
|
Non-current assets
|
849
|
814
|
Equity attributable to owners of the parent
|
811
|
777
|
Non-controlling interests
|
54
|
37
|
Notes to the unaudited condensed consolidated financial
statements
1 Basis of preparation
(continued)
New accounting pronouncements adopted
On 1 April 2023, the Group adopted certain new accounting policies
where necessary to comply with amendments to IFRS, none of which
had a material impact on the consolidated results, financial
position or cash flows of the Group, except as described below.
Further details are provided in the Group's Annual Report for the
year ended 31 March 2023.
IFRS 17 'Insurance Contracts'
IFRS 17 'Insurance Contracts' was adopted by the Group on 1 April
2023. The Standard sets out revised principles for the recognition,
measurement, presentation, and disclosure of obligations relating
to insurance contracts issued by preparers in order to provide a
single accounting model for all types of insurance.
The Group issues certain short and long-term contracts - primarily
being (i) the reinsurance of handset and other device insurance
issued by a fronting insurer to the Group's customers; and (ii) the
reinsurance of a third-party annuity policy issued to the Vodafone
and Cable & Wireless ('CWW') sections of the Vodafone UK Group
Pension Scheme. The
adoption of IFRS 17 did not have a material impact on prior period
equity.
The adoption of IFRS 17 will result in separate insurance and
reinsurance liability line items being presented within the Trade
and other payables disclosure notes to be included within the
Group's consolidated financial statements for the year ending 31
March 2024, with corresponding reductions in the Other payables
line item. The reclassification as at 31 March 2023 will be
€256 million and €63 million within the long and
short-term Trade and other payables notes, respectively. The long
and short-term Insurance and reinsurance liability amounts included
within Trade and other payables at 30 September 2023 are €236
million and €93 million, respectively.
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 Chief Executive
Officer. The Group has a single group of similar services and
products, being the supply of communications services and related
products.
From 1 April 2023, the Group revised its segments by moving
Vodafone Egypt from the Other Markets segment to the Vodacom
segment to reflect the effective date of changes made to the
Group's internal reporting structure, following the transfer of
Vodafone Egypt to the Vodacom Group in December 2022.
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.
Segment information is primarily provided on the basis of
geographic areas, being the basis on which the Group manages the
rest of its worldwide interests.
The operating segments for Germany, Italy, UK, Spain and Vodacom
(which is a legal entity encompassing South Africa, Vodafone Egypt
and certain other smaller African markets) are individually
material for the Group and are each reporting segments for which
certain financial information is provided. In addition, the Vantage
Towers operating segment was a separately listed part of the Group
until its disposal into a joint venture on 22 March
2023.
The aggregation of other operating segments into the Other Europe
and Other Markets 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 region
(comprising Albania, Czech Republic, Greece, Hungary (until
disposal in January 2023), Ireland, Portugal and Romania), this
largely reflects membership or a close association with the
European Union, while the Other Markets segment (comprising Turkey
and Ghana (until disposal in February 2023)) largely includes
developing economies with less stable economic or regulatory
environments. 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 2023.
|
Service revenue
|
Equipment revenue
|
Revenue from contracts with customers
|
Other revenue1
|
Interest revenue
|
Total segment revenue
|
Adjusted EBITDAaL
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
Six months ended 30 September 2023
|
|
|
|
|
|
|
|
Germany
|
5,722
|
503
|
6,225
|
173
|
7
|
6,405
|
2,527
|
Italy
|
2,098
|
180
|
2,278
|
37
|
5
|
2,320
|
645
|
UK
|
2,822
|
526
|
3,348
|
17
|
12
|
3,377
|
640
|
Spain
|
1,731
|
167
|
1,898
|
26
|
5
|
1,929
|
394
|
Other Europe
|
2,366
|
285
|
2,651
|
21
|
7
|
2,679
|
766
|
Vodacom
|
2,924
|
473
|
3,397
|
178
|
15
|
3,590
|
1,241
|
Other Markets
|
828
|
297
|
1,125
|
3
|
-
|
1,128
|
254
|
Vantage Towers
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Common Functions2
|
282
|
24
|
306
|
416
|
(1)
|
721
|
(89)
|
Eliminations
|
(155)
|
-
|
(155)
|
(57)
|
-
|
(212)
|
-
|
Group
|
18,618
|
2,455
|
21,073
|
814
|
50
|
21,937
|
6,378
|
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 2022.
|
Service revenue
|
Equipment revenue
|
Revenue from contracts with customers
|
Other revenue1
|
Interest revenue
|
Total segment revenue
|
Adjusted EBITDAaL
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
Six months ended 30 September 2022
|
|
|
|
|
|
|
|
Germany
|
5,730
|
675
|
6,405
|
178
|
9
|
6,592
|
2,677
|
Italy
|
2,125
|
198
|
2,323
|
49
|
5
|
2,377
|
759
|
UK
|
2,712
|
630
|
3,342
|
34
|
16
|
3,392
|
685
|
Spain
|
1,782
|
142
|
1,924
|
31
|
10
|
1,965
|
445
|
Other Europe
|
2,552
|
281
|
2,833
|
53
|
8
|
2,894
|
843
|
Vodacom2
|
3,422
|
536
|
3,958
|
207
|
14
|
4,179
|
1,527
|
Other Markets2
|
771
|
203
|
974
|
2
|
-
|
976
|
228
|
Vantage Towers
|
-
|
-
|
-
|
657
|
-
|
657
|
330
|
Common Functions3
|
268
|
23
|
291
|
405
|
-
|
696
|
(250)
|
Eliminations
|
(155)
|
-
|
(155)
|
(643)
|
-
|
(798)
|
-
|
Group
|
19,207
|
2,688
|
21,895
|
973
|
62
|
22,930
|
7,244
|
Notes:
1. Other
revenue includes lease revenue recognised under IFRS 16
'Leases'.
2. Components
of revenue and Adjusted EBITDAaL metrics for the six months ended
30 September 2022 have been re-presented for the Other Markets and
Vodacom segments to reflect the move of Vodafone Egypt from the
Other Markets segment to the Vodacom segment. There is no impact on
previously reported Group metrics.
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-presented1
|
|
2023
|
2022
|
|
€m
|
€m
|
Adjusted EBITDAaL
|
6,378
|
7,244
|
Restructuring costs
|
(212)
|
(142)
|
Interest on lease liabilities
|
281
|
204
|
Loss on disposal of property, plant & equipment and intangible
assets
|
(22)
|
(11)
|
Depreciation and amortisation on owned assets
|
(4,626)
|
(4,807)
|
Share of results of equity accounted associates and joint
ventures
|
(51)
|
376
|
Impairment reversal
|
64
|
-
|
Other (expense)/income
|
(157)
|
104
|
Operating profit
|
1,655
|
2,968
|
Investment income
|
368
|
137
|
Financing costs
|
(1,473)
|
(1,418)
|
Profit before taxation
|
550
|
1,687
|
Note:
1. The
results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. See note 4 'Assets for sale' for more
information.
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
|
|
2023
|
2023
|
|
€m
|
€m
|
Non-current assets1
|
|
|
Germany
|
43,301
|
43,878
|
Italy
|
9,956
|
10,235
|
UK
|
6,638
|
6,629
|
Spain
|
5,991
|
6,331
|
Other Europe
|
7,586
|
7,815
|
Vodacom2
|
6,789
|
6,796
|
Other Markets2
|
1,534
|
1,502
|
Common Functions3
|
1,986
|
2,013
|
Group
|
83,781
|
85,199
|
Notes:
1. Comprises
goodwill, other intangible assets and property, plant &
equipment.
2. Non-current
assets at 31 March 2023 have
been re-presented for the Other Markets and Vodacom segments to
reflect the move of Vodafone Egypt from the Other Markets segment
to the Vodacom segment. There is no impact on previously reported
Group metrics
3.
Comprises central teams and business functions.
3 Taxation
|
Six months ended 30 September
|
|
2023
|
2022
|
|
€m
|
€m
|
United Kingdom corporation tax (expense)/income
|
|
|
Current period
|
(38)
|
(4)
|
Adjustments in respect of prior
periods
|
(19)
|
9
|
Overseas current tax (expense)/income
|
|
|
Current period
|
(394)
|
(446)
|
Adjustments in respect of prior
periods
|
-
|
12
|
Total current tax expense
|
(451)
|
(429)
|
|
|
|
Deferred tax on origination and reversal of temporary
differences
|
|
|
United Kingdom deferred tax
|
(24)
|
(10)
|
Overseas deferred tax
|
(230)
|
(46)
|
Total deferred tax expense
|
(254)
|
(56)
|
|
|
|
Total income tax expense
|
(705)
|
(485)
|
Deferred tax on losses in Luxembourg
The tax charge for the six months ended 30 September 2023 includes
deferred tax on the use of losses in Luxembourg. The Group would
not recognise losses in Luxembourg which would be forecast to be
used beyond 60 years. Current volatility in interest rates means
that the period over which we expect to recover the losses is in
line with the 35 to 39 years disclosed as at 31 March 2023. 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 2023.
IAS 12 amendment
The Group will make additional qualitative and quantitative
disclosures regarding its exposure to Pillar Two income taxes in
the consolidated financial statements for year ending 31 March
2024, in accordance with amendments to IAS 12 'Income Taxes' which
were endorsed by the UK Endorsement Board in July 2023. The
Group has applied the mandatory temporary exception to the
accounting for deferred taxes arising from the jurisdictional
implementation of the Pillar Two rules set out therein. The
impact of the rules is under review but is not expected to be
material.
Notes to the unaudited condensed consolidated financial
statements
4 Assets held for sale
Reclassification of Indus Towers Limited
In the condensed consolidated financial statements for the six
months ended 30 September 2022, the Group's 21% interest in Indus
Towers Limited was reported within Assets held for sale. Whilst the
Group remains focused on achieving a sale, the investment was not
assessed as meeting the requirements of held for sale at 31 March
2023 and this remained the position at 30 September
2023.
Impact on the consolidated income statement
Comparative amounts for the six months ended 30 September 2022 have
been re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. The reclassification has no impact on
revenue and gross profit reported in the consolidated income
statement for the six months ended 30 September 2022, but the
following line items have been impacted:
−
Share
of results of equity accounted associates and joint ventures
increased by €33 million.
−
Investment
income decreased by €74 million.
Consequently, operating profit increased by €33 million.
Profit before taxation and Profit for the financial period both
decreased by €41 million and Total comprehensive income
decreased by €38 million compared to the amounts previously
reported.
5 Earnings per share
|
Six months ended 30 September
|
|
2023
|
2022
|
|
Millions
|
Millions
|
Weighted average number of shares for basic earnings per
share
|
27,033
|
28,037
|
Effect of dilutive potential shares: restricted shares and share
options
|
-
|
104
|
Weighted average number of shares for diluted earnings per
share
|
27,033
|
28,141
|
|
|
|
Earnings per share attributable to owners of the parent during the
period
|
|
|
|
Six months ended 30 September
|
|
|
Re-presented1
|
|
2023
|
2022
|
|
€m
|
€m
|
(Loss)/profit for basic and diluted earnings per share
|
(346)
|
945
|
|
|
|
|
|
Re-presented1
|
|
eurocents
|
eurocents
|
Basic (loss)/earnings per share
|
(1.28)
|
3.37
|
Diluted (loss)/earnings per share
|
(1.28)
|
3.36
|
Note:
1. The
results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Profit for basic and diluted earnings
per share has decreased by €41 million compared to the amount
previously reported. Consequently, basic earnings per share
decreased by 0.15 eurocents and diluted earnings per share
decreased by 0.14 eurocents compared to amounts previously
reported. See note 4 'Assets held for sale' for more
information.
Notes to the unaudited condensed consolidated financial
statements
6 Equity dividends
|
Six months ended 30 September
|
|
2023
|
2022
|
|
€m
|
€m
|
Declared during the financial period:
|
|
|
Final dividend for the year ended 31 March 2023: 4.50 eurocents per
share
|
|
|
(2022: 4.50 eurocents per share)
|
1,215
|
1,265
|
Proposed after the end of the reporting period and not recognised
as a liability:
|
|
|
Interim dividend for the year ending 31 March 2024: 4.50 eurocents
per share
|
|
|
(2023: 4.50 eurocents per share)
|
1,218
|
1,237
|
7 Investments in associates and joint
ventures
|
30 September
|
31 March
|
|
2023
|
2023
|
|
€m
|
€m
|
Oak Holdings 1 GmbH
|
7,883
|
8,634
|
VodafoneZiggo Group Holding B.V.
|
715
|
793
|
TPG Telecom Limited
|
57
|
108
|
Other
|
77
|
43
|
Investment in joint ventures
|
8,732
|
9,578
|
Safaricom PLC
|
554
|
509
|
Indus Towers Limited
|
1,051
|
908
|
Other
|
120
|
84
|
Investment in associates
|
1,725
|
1,501
|
|
10,457
|
11,079
|
On 18 July 2023, the Group completed the sale of 3.9% of Oak
Holdings 1 GmbH for cash consideration of €500 million.
Vodafone retains an interest of 60.3% in Oak Holdings 1
GmbH.
8 Reconciliation of net cash flow
from operating activities
|
Six months ended 30 September
|
|
|
Re-presented1
|
|
2023
|
2022
|
|
€m
|
€m
|
(Loss)/profit for the financial period
|
(155)
|
1,202
|
Investment income
|
(368)
|
(137)
|
Financing costs
|
1,473
|
1,418
|
Income tax expense
|
705
|
485
|
Operating profit
|
1,655
|
2,968
|
Adjustments for:
|
|
|
Share-based payments and other non-cash
charges
|
63
|
46
|
Depreciation and amortisation
|
6,802
|
6,853
|
Loss on disposal of property, plant &
equipment and intangible assets
|
20
|
9
|
Share of results of equity accounted associates
and joint ventures
|
51
|
(376)
|
Impairment reversal
|
(64)
|
-
|
Other expense/(income)
|
157
|
(104)
|
Increase in inventory
|
(57)
|
(175)
|
Increase in trade and other
receivables
|
(1,145)
|
(1,381)
|
Decrease in trade and other
payables
|
(1,466)
|
(888)
|
Cash generated by operations
|
6,016
|
6,952
|
Taxation
|
(472)
|
(672)
|
Net cash flow from operating activities
|
5,544
|
6,280
|
Note:
1. The
results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Profit for the financial period
decreased by €41 million and Operating profit decreased by
€33 million compared to amounts previously reported. The
Share of results of equity accounted associates and joint ventures
increased by €33 million compared to the amount previously
reported. Consequently, there was no impact on Cash generated by
operations or Net cash flow from operating
activities.
Notes to the unaudited condensed consolidated financial
statements
9 Fair value of financial
instruments
The table below sets out the financial instruments held at fair
value by the Group.
|
30 September
|
31 March
|
|
2023
|
2023
|
|
€m
|
€m
|
Financial assets at fair value:
|
|
|
Money market funds (included within Cash and
cash equivalents)1
|
2,780
|
7,781
|
Debt and equity securities (included within
Other investments)2
|
4,671
|
5,808
|
Derivative financial instruments (included
within Trade and other receivables)3,4
|
5,273
|
6,124
|
Trade receivables at fair value through Other
comprehensive income (included within Trade and
|
1,329
|
903
|
other receivables)2
|
|
|
|
14,053
|
20,616
|
|
|
|
Financial liabilities at fair value:
|
|
|
Derivative financial instruments (included
within Trade and other payables)3,4
|
1,792
|
1,422
|
|
1,792
|
1,422
|
Notes:
1. Items
are measured at fair value and the valuation basis is Level 1
classification, which comprises financial instruments where fair
value is determined by unadjusted quoted prices in active markets.
2. Quoted
debt and equity securities of €2,446 million (€2,794
million as at 31 March 2023) are Level 1 classification which
comprises items where fair value is determined by unadjusted quoted
prices in active markets. The remaining items are measured at fair
value and the basis is Level 2 classification which comprises items
where fair value is determined from inputs other than quoted prices
that are observable for the asset or liability, either directly or
indirectly.
3.
Derivative financial assets include €31 million (€198
million as at 31 March 2023) of embedded derivative option for
which the valuation basis is Level 3 classification where fair
value is determined from inputs that are not based on observable
market data (i.e unobservable inputs). The remaining items are also
measured at fair value and the basis is Level 2
classification.
4.
€4,904 million (€5,642 million as at 31 March 2023) of
derivative financial assets and €1,362 million (€1,116
million as at 31 March 2023) of derivative financial liabilities
are classified as non-current.
The fair value of the Group's financial assets held at amortised
cost approximates to fair value with the exception of non-current
debt securities with a carrying value of €1,000 million
(€999 million as at 31 March 2023) and a fair value of
€769 million (€803 million as at 31 March 2023). Fair
value is based on Level 2 of the fair value hierarchy which
comprises items where fair value is determined from inputs other
than quoted prices that are observable for the asset or liability,
either directly or indirectly.
The fair value of the Group's financial liabilities held at
amortised cost approximates to fair value with the exception of
non-current bonds with a carrying value of €41,128 million
(€39,512 million as at 31 March 2023) and a fair value of
€34,913 million (€35,044 million as at 31 March 2023).
Fair value is based on Level 1 of the fair value hierarchy using
quoted market prices.
Level 3 financial instruments
The Group's borrowings include €1,597 million (€1,485
million as at 31 March 2023) of bank borrowings that are secured
against the Group's shareholdings in Indus Towers and Vodafone Idea
and will be repaid through the realisation of proceeds from those
assets. This arrangement contains an embedded derivative option
which has been separately fair valued. The 30 September 2023
valuation of the embedded derivative asset of €31 million
(€198 million as at 31 March 2023) is presented within
derivative assets within trade and other receivables in current
assets in the consolidated statement of financial
position.
The loss in the period of €167 million (€6 million gain
in the six months ended 30 September 2022) on the revaluation of
the embedded derivative option is recognised within financing costs
in the consolidated income statement.
A Black Scholes model for European put options has been used as a
valuation model and primarily uses market inputs (quoted share
prices and volatilities for Indus Towers and Vodafone Idea) along
with a strike price equal to the amount payable under the loan. The
valuation includes an unobservable adjustment to reflect the
potential timeframe to settle the loan and has been modelled using
a range of potential durations up to 31 March 2025. As a result of
this unobservable adjustment, the option is classified as a level 3
instrument under the fair value hierarchy. An increase/(decrease)
in durations of six months to settle the loan would
increase/(decrease) the derivative asset by €77
million/(€22 million).
Notes to the unaudited condensed consolidated financial
statements
10 Related party transactions
Transactions with associates and joint ventures
Related party transactions with the Group's joint ventures and
associates primarily consists of fees for the use of products and
services including network airtime and access charges, fees for the
provision of network infrastructure and cash pooling ventures. 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
|
|
2023
|
2022
|
|
€m
|
€m
|
Sales of goods and services to associates
|
15
|
11
|
Purchase of goods and services from associates
|
3
|
65
|
Sales of goods and services to joint arrangements
|
133
|
110
|
Purchase of goods and services from joint arrangements
|
392
|
69
|
Interest expense payable to associates1
|
-
|
25
|
Interest income receivable from joint
arrangements1
|
26
|
22
|
Interest expense payable to joint arrangements2
|
109
|
-
|
|
|
|
|
30 September
|
31 March
|
|
2023
|
2023
|
|
€m
|
€m
|
Trade balances owed:
|
|
|
by associates
|
8
|
7
|
to associates
|
1
|
1
|
by joint arrangements
|
143
|
170
|
to joint arrangements
|
287
|
329
|
Other balances owed by joint arrangements1
|
1,178
|
980
|
Other balances owed to joint arrangements2
|
5,323
|
5,628
|
Notes:
1. Amounts
arise primarily through VodafoneZiggo Group Holding B.V.. 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.
On 28 September 2023 the Group sold M-Pesa Holding Company Limited
('MPHCL'), which holds funds on trust for M-Pesa customers, to
Safaricom Plc for US$1. Balances included in the Group's
consolidated statement of financial position at the date of
disposal included short-term investments of €1,195 million
and €1,156 million due to M-Pesa customers recorded within
Other investments and Trade and other payables, respectively.
In the six months ended 30 September 2023, the Group made
contributions to defined benefit pension schemes of €26
million (Six months ended 30 September 2022: €11
million).
In the six months ended 30 September 2023, dividends of €1.0
million were paid to Board and Executive Committee members (Six
months ended 30 September 2022: €1.2 million).
Dividends received from associates and joint ventures are disclosed
in the consolidated statement of cash flows.
Notes to the unaudited condensed consolidated financial
statements
11 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 2023 sets forth the Group's contingent
liabilities and legal proceedings as of 31 March 2023. 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
Netherlands tax case
Vodafone Europe BV (VEBV) received assessments totalling €267
million of tax and interest from the Dutch Tax Authorities, who
challenged the application of the arm's length principle in
relation to various intra-group financing transactions. The Group
entered into a guarantee for the full value of the assessments
issued. VEBV appealed against these assessments to the District
Court of the Hague where a hearing was held in March 2023. The
District Court issued its judgement in July 2023, upholding VEBV's
appeal in relation to the majority of issues and requiring the
Dutch Tax Authorities to significantly reduce its assessments. VEBV
and the Dutch Tax Authorities have since appealed the
judgement.
The Group continues to believe it has robust defences but has
recorded a provision of €24 million for tax and interest,
reflecting its current view of the probable financial outflow
required to fully resolve the issue and has reduced the guarantee
to the same value.
Greece: Papistas Holdings SA, Mobile Trade Stores (formerly
Papistas SA) and Athanasios and Loukia Papistas v Vodafone
Greece
In October 2019, Mr. and Mrs. Papistas, and companies owned or
controlled by them, filed several claims against Vodafone Greece
with a total value of approximately €330 million for
purported damage caused by the alleged abuse of dominance and
wrongful termination of a franchise arrangement with a Papistas
company. Lawsuits which the Papistas claimants had previously
brought against Vodafone Group Plc and certain directors and
officers of Vodafone were withdrawn. Vodafone Greece filed a
counter-claim and all claims were heard in February 2020. All of
the Papistas claims were rejected by the Athens Court of First
Instance because the stamp duty payments required to have the
merits of the case considered had not been made. Vodafone
Greece's counter claim was also rejected. The Papistas claimants
and Vodafone Greece each filed appeals. The appeal hearings took
place on 23 February and 11 May 2023. Judgement has been received
in respect of the May appeal hearing for two of the claims and the
Court dismissed the appeals because the stamp duty payments had
again not been made. Whether the Papistas claimants will appeal the
judgement is unknown as of the date of this report. We are waiting
to receive the judgement relating to the February appeal hearing
for the remaining claim.
We are continuing vigorously to defend the claims and, based on the
progress of the litigation so far, the Group believes that it is
highly unlikely that there will be an adverse ruling for the Group.
On this basis, the Group does not expect the outcome of these
claims to have a material financial impact.
UK: Phones 4U in Administration v Vodafone Limited and Vodafone
Group Plc and Others
In December 2018, the administrators of former UK indirect seller,
Phones 4U, sued the three main UK mobile network operators
('MNOs'), including Vodafone, and their parent companies in the
English High Court. The administrators alleged collusion between
the MNOs to pull their business from Phones 4U, thereby causing its
collapse. The judge ordered that there should be a split trial
between liability and damages. The first trial on liability took
place from May to July 2022. On 10 November 2023, the High
Court issued a judgement in Vodafone's favour and rejected Phones
4U's allegations that the defendants were in breach of competition
law, confirming our previously stated position that a present
obligation does not exist. It is not known whether Phones 4U will
seek to appeal the judgement as of the date of this
report.
Notes to the unaudited condensed consolidated financial
statements
12 Subsequent events
Disposal of Vodafone Spain
On 31 October 2023, the Group announced that it had entered into
binding agreements with Zegona Communications plc
('Zegona') in relation to the sale of 100% of Vodafone
Holdings Europe, S.L.U. ('Vodafone Spain') (the
'Transaction').
On completion, Vodafone's consideration will comprise at least
€4.1 billion in cash (subject to customary completion
adjustments) and up to €0.9 billion in the form of Redeemable
Preference Shares ('RPS') which redeem, for an amount comprising
the subscription price and accrued preferential dividend, no later
than 6 years after closing.
Completion of the Transaction is conditional on certain approvals
being obtained from current Zegona shareholders as well as
regulatory clearances and is expected to take place in the first
half of 2024.
Minority shareholders in Kabel Deutschland Holding
A.G.
The Group's obligations to the minority shareholders in Kabel
Deutschland Holding A.G., reflected as a financial liability under
put option arrangements in the Group's consolidated statement of
financial position, were settled by a final payment of €494
million on 20 October 2023.
Hybrid bonds
On 7 November 2023, the Group announced that on 3 January 2024 it
will exercise its call option to repurchase and cancel
outstanding capital securities of €438 million due on 3
January 2079. This follows a previous bond buyback exercise
completed in June 2023 for €1,562 million of the original
€2,000 million securities issued.
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
2023, which comprise 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 12. 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 2023 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'
(IRSE) 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 UK adopted
International Accounting Standard 34, 'Interim Financial
Reporting'.
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 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
14 November 2023
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
|
|
|
|
Adjusted
EBITDAaL
|
Page
41
|
Operating
profit
|
Page
4
|
Organic
Adjusted EBITDAaL growth
|
Page
41
|
Not
applicable
|
-
|
Organic
revenue growth
|
Page
41
|
Revenue
|
Pages
42 to 44
|
Organic
Group service revenue growth excluding Turkey
|
Page
41
|
Service
revenue
|
Pages
42 to 44
|
Organic
Group Adjusted EBITDAaL growth excluding Turkey
|
Page
41
|
Not
applicable
|
-
|
Organic
service revenue growth
|
Page
41
|
Service
revenue
|
Pages
42 to 44
|
Organic
mobile service revenue growth
|
Page
41
|
Service
revenue
|
Pages
42 to 44
|
Organic
fixed service revenue growth
|
Page
41
|
Service
revenue
|
Pages
42 to 44
|
Organic
Vodafone Business service revenue growth
|
Page
41
|
Service
revenue
|
Pages
42 to 44
|
Organic
financial services revenue growth in South Africa
|
Page
41
|
Service
revenue
|
Pages
42 to 44
|
Other metrics
|
|
|
|
Adjusted
profit attributable to owners of the parent
|
Page
45
|
Profit
attributable to owners of the parent
|
Page
45
|
Adjusted
basic earnings per share
|
Page
45
|
Basic
earnings per share
|
Page
46
|
Cash flow, funding and capital allocation metrics
|
|
|
|
Free
cash flow
|
Page
46
|
Inflow
from operating activities
|
Page
47
|
Adjusted
free cash flow
|
Page
46
|
Inflow
from operating activities
|
Pages
16 and 47
|
Gross
debt
|
Page
46
|
Borrowings
|
Page
47
|
Net
debt
|
Page
46
|
Borrowings
less cash and cash equivalents
|
Page
47
|
Pre-tax
ROCE (controlled)
|
Page
48
|
ROCE
calculated using GAAP measures
|
Pages
48 and 49
|
Post-tax
ROCE (controlled and associates/joint ventures)
|
Page
48
|
ROCE
calculated using GAAP measures
|
Pages
48 and 49
|
Financing and Taxation metrics
|
|
|
|
Adjusted
net financing costs
|
Page
50
|
Net
financing costs
|
Page
14
|
Adjusted
profit before taxation
|
Page
50
|
Profit
before taxation
|
Page
51
|
Adjusted
income tax expense
|
Page
50
|
Income
tax expense
|
Page
51
|
Adjusted
effective tax rate
|
Page
50
|
Income
tax expense
|
Page
51
|
Adjusted
share of results of equity accounted associates and joint
ventures
|
Page
50
|
Share
of results of equity accounted associates and joint
ventures
|
Page
51
|
Adjusted
share of results of equity accounted associates and joint ventures
used in post-tax ROCE
|
Page
50
|
Share
of results of equity accounted associates and joint
ventures
|
Page
51
|
Non-GAAP measures
Performance metrics
Non-GAAP measure
|
Purpose
|
Definition
|
Adjusted
EBITDAaL
|
Adjusted
EBITDAaL is used in conjunction with financial measures such as
operating profit to assess our operating performance and
profitability.
It is a
key external metric used by the investor community to assess
performance of our operations.
It is
our segment performance measure in accordance with IFRS 8
(Operating Segments).
|
Adjusted
EBITDAaL is operating profit after depreciation on lease-related
right of use assets and interest on lease liabilities but excluding
depreciation, amortisation and gains/losses on disposal of owned
assets and excluding share of results of equity accounted
associates and joint ventures, impairment losses/reversals,
restructuring costs arising from discrete restructuring plans,
other income and expense and significant items that are not
considered by management to be reflective of the underlying
performance of the Group.
|
Adjusted EBITDAaL margin is Adjusted EBITDAaL divided by
Revenue.
Organic growth
All amounts marked with an '*' in this document represent organic
growth which presents performance on a comparable basis, excluding
the impact of foreign exchange rates, mergers and acquisitions, the
hyperinflation adjustments in Turkey and other adjustments to
improve the comparability of results between periods.
Organic growth is calculated for revenue and profitability metrics,
as follows:
- Adjusted
EBITDAaL;
- Revenue;
- Group
service revenue excluding Turkey;
- Group
Adjusted EBITDAaL excluding Turkey;
- Service
revenue;
- Mobile
service revenue;
- Fixed
service revenue;
- Vodafone
Business service revenue; and
- Financial
services revenue in South Africa.
Whilst organic growth is not intended to be a substitute for
reported growth, nor is it superior to reported growth, we believe
that the measure provides useful and necessary information to
investors and other interested parties for the following
reasons:
- It
provides additional information on underlying growth of the
business without the effect of certain factors unrelated to its
operating performance;
- It
is used for internal performance analysis; and
- It
facilitates comparability of underlying growth with other companies
(although the term 'organic' is not a defined term under GAAP and
may not, therefore, be comparable with similarly-titled measures
reported by other companies).
We have not provided a comparative in respect of organic growth
rates as the current rates describe the change between the
beginning and end of the current period, with such changes being
explained by the commentary in this document. If comparatives were
provided, significant sections of the commentary for prior periods
would also need to be included, reducing the usefulness and
transparency of this document.
Non-GAAP measures
|
|
|
Reported
growth
|
M&A
and
Other
|
Foreign
exchange
|
Organic
growth*
|
Six months ended 30 September 2023
|
H1 FY24
|
H1 FY23
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Service revenue1
|
|
|
|
|
|
|
Germany
|
5,722
|
5,730
|
(0.1)
|
-
|
-
|
(0.1)
|
|
Mobile service revenue
|
2,530
|
2,546
|
(0.6)
|
-
|
-
|
(0.6)
|
|
Fixed service revenue
|
3,192
|
3,184
|
0.3
|
-
|
-
|
0.3
|
Italy
|
2,098
|
2,125
|
(1.3)
|
-
|
-
|
(1.3)
|
|
Mobile service revenue
|
1,431
|
1,507
|
(5.0)
|
(0.1)
|
-
|
(5.1)
|
|
Fixed service revenue
|
667
|
618
|
7.9
|
0.1
|
-
|
8.0
|
UK
|
2,822
|
2,712
|
4.1
|
-
|
1.5
|
5.6
|
|
Mobile service revenue
|
2,096
|
2,003
|
4.6
|
-
|
1.6
|
6.2
|
|
Fixed service revenue
|
726
|
709
|
2.4
|
-
|
1.4
|
3.8
|
Spain
|
1,731
|
1,782
|
(2.9)
|
0.1
|
-
|
(2.8)
|
Other Europe2
|
2,366
|
2,552
|
(7.3)
|
12.4
|
(1.2)
|
3.9
|
Vodacom3
|
2,924
|
3,422
|
(14.6)
|
-
|
23.6
|
9.0
|
Other Markets2,3
|
828
|
771
|
7.4
|
18.3
|
53.6
|
79.3
|
Common Functions
|
282
|
268
|
-
|
-
|
-
|
-
|
Eliminations
|
(155)
|
(155)
|
|
|
|
|
Total service revenue
|
18,618
|
19,207
|
(3.1)
|
2.0
|
5.3
|
4.2
|
Other revenue
|
3,319
|
3,723
|
|
|
|
|
Revenue
|
21,937
|
22,930
|
(4.3)
|
2.2
|
5.3
|
3.2
|
|
|
|
|
|
|
|
|
Other growth metrics
|
|
|
|
|
|
|
Group service revenue excluding Turkey
|
17,809
|
18,549
|
(4.0)
|
2.1
|
4.2
|
2.3
|
Group Adjusted EBITDAaL excluding Turkey
|
6,124
|
7,029
|
(12.9)
|
6.4
|
4.5
|
(2.0)
|
Turkey - Service revenue
|
828
|
676
|
22.5
|
(5.4)
|
62.2
|
79.3
|
Turkey - Adjusted EBITDAaL
|
254
|
215
|
18.1
|
145.9
|
(74.9)
|
89.1
|
Vodafone Business - Service revenue
|
5,124
|
5,149
|
(0.5)
|
1.4
|
3.5
|
4.4
|
Germany - Vodafone Business service revenue
|
1,205
|
1,193
|
1.0
|
(0.5)
|
-
|
0.5
|
Italy - Vodafone Business service revenue
|
754
|
695
|
8.5
|
(0.1)
|
-
|
8.4
|
UK - Vodafone Business service revenue
|
1,059
|
1,036
|
2.2
|
-
|
1.6
|
3.8
|
Spain - Vodafone Business service revenue
|
557
|
569
|
(2.1)
|
0.1
|
-
|
(2.0)
|
Other Europe - Vodafone Business service revenue
|
728
|
747
|
(2.5)
|
9.4
|
(1.1)
|
5.8
|
South Africa - Financial services revenue
|
77
|
82
|
(6.1)
|
-
|
16.9
|
10.8
|
|
|
|
|
|
|
|
|
Adjusted EBITDAaL
|
|
|
|
|
|
|
Germany
|
2,527
|
2,677
|
(5.6)
|
-
|
-
|
(5.6)
|
Italy
|
645
|
759
|
(15.0)
|
-
|
-
|
(15.0)
|
UK
|
640
|
685
|
(6.6)
|
-
|
1.3
|
(5.3)
|
Spain
|
394
|
445
|
(11.5)
|
(0.1)
|
-
|
(11.6)
|
Other Europe2
|
766
|
843
|
(9.1)
|
11.1
|
(1.3)
|
0.7
|
Vodacom3
|
1,241
|
1,527
|
(18.7)
|
-
|
23.6
|
4.9
|
Other Markets2,3
|
254
|
228
|
11.4
|
21.7
|
56.0
|
89.1
|
Vantage Towers
|
-
|
330
|
(100.0)
|
100.0
|
-
|
-
|
Common Functions
|
(89)
|
(250)
|
|
|
|
|
Eliminations
|
-
|
-
|
|
|
|
|
Group
|
6,378
|
7,244
|
(12.0)
|
6.9
|
5.4
|
0.3
|
|
|
|
|
|
|
|
|
Percentage point change in Adjusted EBITDAaL margin
|
|
|
|
|
|
|
Germany
|
39.5%
|
40.6%
|
(1.1)
|
(0.1)
|
-
|
(1.2)
|
Italy
|
27.8%
|
31.9%
|
(4.1)
|
-
|
-
|
(4.1)
|
UK
|
19.0%
|
20.2%
|
(1.2)
|
-
|
-
|
(1.2)
|
Spain
|
20.4%
|
22.6%
|
(2.2)
|
(0.1)
|
-
|
(2.3)
|
Other Europe2
|
28.6%
|
29.1%
|
(0.5)
|
(0.4)
|
(0.1)
|
(1.0)
|
Vodacom3
|
34.6%
|
36.5%
|
(1.9)
|
-
|
0.7
|
(1.2)
|
Other Markets2,3
|
22.5%
|
23.4%
|
(0.9)
|
0.9
|
0.1
|
0.1
|
Group
|
29.1%
|
31.6%
|
(2.5)
|
1.5
|
0.2
|
(0.8)
|
Notes:
1. Prior
to disposal, Vantage Towers revenue was reported by the Group as
other revenue, not service revenue.
2. Comparatives
include the results of Vodafone Hungary and Vodafone Ghana which
were included in the Other Europe and Other Markets segments,
respectively, until their disposal. As previously reported,
Vodafone Hungary was sold in January 2023 and Vodafone Ghana was
sold in February 2023.
3. From
1 April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt from the Other Markets segment to the Vodacom
segment. This is the effective date on which the Group's reporting
structure changed to reflect the transfer of Vodafone Egypt to the
Vodacom Group. All comparatives for these two segments have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group
metrics.
Non-GAAP measures
|
|
|
|
Reported
growth
|
M&A
and
Other
|
Foreign
exchange
|
Organic
growth*
|
Quarter ended 30 September 2023
|
Q2 FY24
|
Q2 FY23
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Service revenue
|
|
|
|
|
|
|
Germany
|
2,903
|
2,873
|
1.0
|
0.1
|
-
|
1.1
|
|
Mobile service revenue
|
1,290
|
1,282
|
0.6
|
0.1
|
-
|
0.7
|
|
Fixed service revenue
|
1,613
|
1,591
|
1.4
|
-
|
-
|
1.4
|
Italy
|
1,063
|
1,073
|
(0.9)
|
(0.1)
|
-
|
(1.0)
|
|
Mobile service revenue
|
729
|
762
|
(4.3)
|
(0.1)
|
-
|
(4.4)
|
|
Fixed service revenue
|
334
|
311
|
7.4
|
(0.1)
|
-
|
7.3
|
UK
|
1,421
|
1,352
|
5.1
|
-
|
0.4
|
5.5
|
|
Mobile service revenue
|
1,057
|
1,000
|
5.7
|
-
|
0.4
|
6.1
|
|
Fixed service revenue
|
364
|
352
|
3.4
|
-
|
0.5
|
3.9
|
Spain
|
860
|
884
|
(2.7)
|
-
|
-
|
(2.7)
|
Other Europe1
|
1,205
|
1,298
|
(7.2)
|
12.1
|
(1.1)
|
3.8
|
Vodacom2
|
1,498
|
1,758
|
(14.8)
|
-
|
23.8
|
9.0
|
Other Markets1,2
|
495
|
407
|
21.6
|
(11.3)
|
74.7
|
85.0
|
Common Functions
|
151
|
140
|
|
|
|
|
Eliminations
|
(88)
|
(92)
|
|
|
|
|
Total service revenue
|
9,508
|
9,693
|
(1.9)
|
1.0
|
5.6
|
4.7
|
Other revenue
|
1,689
|
1,959
|
|
|
|
|
Revenue
|
11,197
|
11,652
|
(3.9)
|
1.2
|
5.5
|
2.8
|
|
|
|
|
|
|
|
|
Other growth metrics
|
|
|
|
|
|
|
Group service revenue excluding Turkey
|
9,023
|
9,344
|
(3.4)
|
2.1
|
4.1
|
2.8
|
Turkey - Service revenue
|
495
|
360
|
37.5
|
(41.8)
|
89.3
|
85.0
|
Vodafone Business - Service revenue
|
2,589
|
2,591
|
(0.1)
|
1.0
|
3.4
|
4.3
|
Germany - Vodafone Business service revenue
|
609
|
600
|
1.5
|
(0.5)
|
-
|
1.0
|
Italy - Vodafone Business service revenue
|
379
|
352
|
7.7
|
(0.2)
|
-
|
7.5
|
UK - Vodafone Business service revenue
|
531
|
517
|
2.7
|
-
|
0.5
|
3.2
|
Spain - Vodafone Business service revenue
|
276
|
280
|
(1.4)
|
0.2
|
-
|
(1.2)
|
Other Europe - Vodafone Business service revenue
|
365
|
376
|
(2.9)
|
9.2
|
(1.1)
|
5.2
|
|
|
|
|
|
|
|
|
Notes:
1. Comparatives
include the results of Vodafone Hungary and Vodafone Ghana which
were included in the Other Europe and Other Markets segments,
respectively, until their disposal. As previously reported,
Vodafone Hungary was sold in January 2023 and Vodafone Ghana was
sold in February 2023.
2. From
1 April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt from the Other Markets segment to the Vodacom
segment. This is the effective date on which the Group's reporting
structure changed to reflect the transfer of Vodafone Egypt to the
Vodacom Group. All comparatives for these two segments have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group
metrics.
Non-GAAP measures
|
|
|
|
Reported
growth
|
M&A
and
Other
|
Foreign
exchange
|
Organic
growth*
|
Quarter ended 30 June 2023
|
Q1 FY24
|
Q1 FY23
|
€m
|
€m
|
%
|
pps
|
pps
|
%
|
Service revenue
|
|
|
|
|
|
|
Germany
|
2,819
|
2,857
|
(1.3)
|
-
|
-
|
(1.3)
|
|
Mobile service revenue
|
1,240
|
1,264
|
(1.9)
|
-
|
-
|
(1.9)
|
|
Fixed service revenue
|
1,579
|
1,593
|
(0.9)
|
-
|
-
|
(0.9)
|
Italy
|
1,035
|
1,052
|
(1.6)
|
-
|
-
|
(1.6)
|
|
Mobile service revenue
|
702
|
745
|
(5.8)
|
-
|
-
|
(5.8)
|
|
Fixed service revenue
|
333
|
307
|
8.5
|
0.2
|
-
|
8.7
|
UK
|
1,401
|
1,360
|
3.0
|
-
|
2.7
|
5.7
|
|
Mobile service revenue
|
1,039
|
1,003
|
3.6
|
-
|
2.8
|
6.4
|
|
Fixed service revenue
|
362
|
357
|
1.4
|
-
|
2.3
|
3.7
|
Spain
|
871
|
898
|
(3.0)
|
-
|
-
|
(3.0)
|
Other Europe1
|
1,161
|
1,254
|
(7.4)
|
12.8
|
(1.3)
|
4.1
|
Vodacom2
|
1,426
|
1,664
|
(14.3)
|
-
|
23.3
|
9.0
|
Other Markets1,2
|
333
|
364
|
(8.5)
|
48.7
|
33.9
|
74.1
|
Common Functions
|
131
|
128
|
|
|
|
|
Eliminations
|
(67)
|
(63)
|
|
|
|
|
Total service revenue
|
9,110
|
9,514
|
(4.2)
|
3.0
|
4.9
|
3.7
|
Other revenue
|
1,630
|
1,764
|
|
|
|
|
Revenue
|
10,740
|
11,278
|
(4.8)
|
3.4
|
5.1
|
3.7
|
|
|
|
|
|
|
|
|
Other growth metrics
|
|
|
|
|
|
|
Group service revenue excluding Turkey
|
8,786
|
9,205
|
(4.6)
|
2.1
|
4.3
|
1.8
|
Turkey - Service revenue
|
333
|
316
|
5.4
|
31.4
|
37.3
|
74.1
|
Vodafone Business - Service revenue
|
2,535
|
2,558
|
(0.9)
|
1.9
|
3.5
|
4.5
|
Germany - Vodafone Business service revenue
|
596
|
593
|
0.5
|
(0.5)
|
-
|
-
|
Italy - Vodafone Business service revenue
|
375
|
343
|
9.3
|
0.1
|
-
|
9.4
|
UK - Vodafone Business service revenue
|
528
|
519
|
1.7
|
-
|
2.7
|
4.4
|
Spain - Vodafone Business service revenue
|
281
|
289
|
(2.8)
|
-
|
-
|
(2.8)
|
Other Europe - Vodafone Business service revenue
|
363
|
371
|
(2.2)
|
9.7
|
(1.1)
|
6.4
|
Notes:
1. Comparatives
include the results of Vodafone Hungary and Vodafone Ghana which
were included in the Other Europe and Other Markets segments,
respectively, until their disposal. As previously reported,
Vodafone Hungary was sold in January 2023 and Vodafone Ghana was
sold in February 2023.
2. From
1 April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt from the Other Markets segment to the Vodacom
segment. This is the effective date on which the Group's reporting
structure changed to reflect the transfer of Vodafone Egypt to the
Vodacom Group. All comparatives for these two segments have been
re-presented on the new basis of segmental reporting. There is no
impact on previously reported Group
metrics.
Non-GAAP measures
Other metrics
Non-GAAP
measure
|
Purpose
|
Definition
|
Adjusted
profit attributable to owners of the parent
|
This
metric is used in the calculation of Adjusted basic earnings per
share.
|
Adjusted
profit attributable to owners of the parent excludes restructuring
costs arising from discrete restructuring plans, amortisation of
customer bases and brand intangible assets, impairment
losses/reversals, other income and expense and mark-to-market and
foreign exchange movements, together with related tax
effects.
|
Adjusted
basic earnings per share
|
This
performance measure is used in discussions with the investor
community.
|
Adjusted
basic earnings per share is Adjusted profit attributable to owners
of the parent divided by the weighted average number of shares
outstanding. This is the same denominator used when calculating
basic earnings per share.
|
Adjusted EBITDAaL and Adjusted profit attributable to owners of the
parent
The table below reconciles Adjusted EBITDAaL and Adjusted profit
attributable to owners of the parent to their closest equivalent
GAAP measures, being Operating profit and Profit attributable to
owners of the parent, respectively.
|
|
|
|
Re-presented1
|
|
H1 FY24
|
H1 FY23
|
|
Reported
|
Adjustments
|
Adjusted
|
Reported
|
Adjustments
|
Adjusted
|
|
€m
|
€m
|
€m
|
€m
|
€m
|
€m
|
Adjusted EBITDAaL
|
6,378
|
-
|
6,378
|
7,244
|
-
|
7,244
|
Restructuring costs
|
(212)
|
212
|
-
|
(142)
|
142
|
-
|
Interest on lease liabilities
|
281
|
-
|
281
|
204
|
-
|
204
|
Loss on disposal of property, plant & equipment and intangible
assets
|
(22)
|
-
|
(22)
|
(11)
|
-
|
(11)
|
Depreciation and amortisation on owned assets2
|
(4,626)
|
303
|
(4,323)
|
(4,807)
|
250
|
(4,557)
|
Share of results of equity accounted associates and joint
ventures3
|
(51)
|
164
|
113
|
376
|
127
|
503
|
Impairment reversal
|
64
|
(64)
|
-
|
-
|
-
|
-
|
Other (expense)/income
|
(157)
|
157
|
-
|
104
|
(104)
|
-
|
Operating profit
|
1,655
|
772
|
2,427
|
2,968
|
415
|
3,383
|
Investment income
|
368
|
-
|
368
|
137
|
-
|
137
|
Financing costs4
|
(1,473)
|
231
|
(1,242)
|
(1,418)
|
340
|
(1,078)
|
Profit before taxation
|
550
|
1,003
|
1,553
|
1,687
|
755
|
2,442
|
Income tax expense5
|
(705)
|
269
|
(436)
|
(485)
|
(42)
|
(527)
|
(Loss)/profit for the financial period
|
(155)
|
1,272
|
1,117
|
1,202
|
713
|
1,915
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
- Owners of the parent
|
(346)
|
1,272
|
926
|
945
|
710
|
1,655
|
- Non-controlling interests
|
191
|
-
|
191
|
257
|
3
|
260
|
(Loss)/profit for the financial period
|
(155)
|
1,272
|
1,117
|
1,202
|
713
|
1,915
|
Notes:
1. The results for the six months
ended 30 September 2023 have been re-presented to reflect that
Indus Towers Limited is no longer reported as held for sale. There
is no impact on Adjusted EBITDAaL. However, Profit attributable to
owners of the parent has decreased by €34 million compared to
the amount previously reported. See note 4 'Assets held for
sale' in the unaudited 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 52 for an analysis of depreciation and amortisation. The
adjustment of €303 million (H1 FY23: €250 million)
relates to amortisation of customer bases and brand intangible
assets.
3. See page 51 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 51 for further analysis.
Non-GAAP measures
Adjusted basic earnings per share
The reconciliation of Adjusted basic earnings per share to the
closest equivalent GAAP measure, basic earnings per share, is
provided below.
|
|
Re-presented1
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
(Loss)/profit attributable to owners of the parent
|
(346)
|
945
|
Adjusted profit attributable to owners of the parent
|
926
|
1,655
|
|
|
|
|
Million
|
Million
|
Weighted average number of shares outstanding - Basic
|
27,033
|
28,037
|
|
|
|
|
eurocents
|
eurocents
|
Basic (loss)/earnings per share
|
(1.28)c
|
3.37c
|
Adjusted basic earnings per share
|
3.43c
|
5.90c
|
Note:
1. The results for the six months
ended 30 September 2023 have been re-presented to reflect that
Indus Towers Limited is no longer reported as held for sale. This
has resulted in a decrease in Profit attributable to owners of the
parent and Adjusted profit attributable to owners of the parent of
€41 million and €34 million, respectively.
Consequently, Basic earnings per share decreased by 0.15c compared
to 3.52c as previously reported. Adjusted basic earnings per share
decreased by 0.12c compared to 6.02c as previously reported. See
note 4 'Assets held for sale' in the unaudited condensed
consolidated financial statements for more
information.
Cash flow, funding and capital allocation metrics
Cash flow and funding
Non-GAAP measure
|
Purpose
|
Definition
|
Free
cash flow
|
Internal
performance reporting.
External
metric used by investor community.
Assists
comparability with other companies, although our metric may not be
directly comparable to similarly titled measures used by other
companies.
|
Free
cash flow is Adjusted EBITDAaL after cash flows in relation to
capital additions, working capital movements including in respect
of capital additions, disposal of property, plant and equipment and
intangible assets, integration capital additions and restructuring
costs, together with related working capital, licences and
spectrum, interest received and paid, taxation, dividends received
from associates and joint ventures, dividends paid to
non-controlling shareholders in subsidiaries, payments in respect
of lease liabilities and other.
|
Adjusted
free cash flow
|
Internal
performance reporting.
External
metric used by investor community.
Setting
director and management remuneration.
Key
external metric used to evaluate liquidity and the cash generated
by our operations.
|
Adjusted
free cash flow is Free cash flow before licences and spectrum,
restructuring costs arising from discrete restructuring plans,
integration capital additions and working capital related items,
M&A and (prior to disposal) Vantage Towers growth capital
expenditure.
Growth
capital expenditure is total capital expenditure excluding
maintenance-type expenditure.
|
Gross
debt
|
Prominent
metric used by debt rating agencies and the investor
community.
|
Non-current
borrowings and current borrowings, excluding lease liabilities,
collateral liabilities and borrowings specifically secured against
Indian assets.
|
Net
debt
|
Prominent
metric used by debt rating agencies and the investor
community.
|
Gross
debt less cash and cash equivalents, short-term investments,
derivative financial instruments excluding mark-to-market
adjustments and net collateral assets.
|
Non-GAAP measures
Cash flow and funding (continued)
The table below presents the reconciliation between Inflow from
operating activities and Free cash flow.
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
Inflow from operating activities
|
5,544
|
6,280
|
Net tax paid
|
472
|
672
|
Cash generated by operations
|
6,016
|
6,952
|
Capital additions
|
(3,365)
|
(3,541)
|
Working capital movement in respect of capital
additions
|
(804)
|
(966)
|
Disposal of property, plant and equipment and intangible
assets
|
12
|
-
|
Integration capital additions
|
(66)
|
(101)
|
Working capital movement in respect of integration capital
additions
|
(42)
|
(69)
|
Licences and spectrum
|
(173)
|
(2,181)
|
Interest received and paid1
|
(806)
|
(841)
|
Taxation
|
(472)
|
(672)
|
Dividends received from associates and joint ventures
|
75
|
463
|
Dividends paid to non-controlling shareholders in
subsidiaries
|
(167)
|
(290)
|
Payments in respect of lease liabilities
|
(2,252)
|
(2,003)
|
Other
|
93
|
4
|
Free cash flow
|
(1,951)
|
(3,245)
|
Note:
1. Includes interest on lease
liabilities of €246 million (H1 FY23: €153 million).
The table below presents the reconciliation between Borrowing,
Gross debt and Net debt.
|
|
H1 FY24
|
Year-end FY23
|
|
|
€m
|
€m
|
Borrowings
|
(65,058)
|
(66,390)
|
Lease liabilities
|
13,039
|
13,364
|
Bank borrowings secured against Indian assets
|
1,597
|
1,485
|
Collateral liabilities
|
4,431
|
4,886
|
Gross debt
|
(45,991)
|
(46,655)
|
Collateral liabilities
|
(4,431)
|
(4,886)
|
Cash and cash equivalents
|
7,148
|
11,705
|
Short-term investments
|
4,094
|
4,305
|
Collateral assets
|
649
|
239
|
Derivative financial instruments
|
3,481
|
4,702
|
Less mark-to-market gains deferred in hedge reserves
|
(1,190)
|
(2,785)
|
Net debt
|
(36,240)
|
(33,375)
|
Non-GAAP measures
Return on Capital Employed
Non-GAAP measure
|
Purpose
|
Definition
|
Return
on Capital Employed ('ROCE')
|
ROCE is
a metric used by the investor community and reflects how
efficiently we are generating profit with the capital we
deploy.
|
We
calculate ROCE by dividing Operating profit by the average of
capital employed as reported in the consolidated statement of
financial position. Capital employed includes borrowings, cash and
cash equivalents, derivative financial instruments included in
trade and other receivables/payables, short-term investments,
collateral assets, financial liabilities under put option
arrangements and equity.
|
Pre-tax
ROCE (controlled)
Post-tax
ROCE (controlled and associates/joint ventures)
|
As
above
|
We calculate pre-tax ROCE (controlled) by using Operating profit
excluding interest on lease liabilities, restructuring costs
arising from discrete restructuring plans, impairment losses, other
income and expense, the impact of hyper-inflationary adjustments in
Turkey and the share of results of equity accounted associates and
joint ventures. On a post-tax basis, the measure includes our
Adjusted share of results from associates and joint ventures and a
notional tax charge. Capital is equivalent to net operating assets
and is calculated as the average of opening and closing balances
of: property, plant and equipment (including leased assets and
lease liabilities), intangible assets (including goodwill),
operating working capital (including held for sale assets and
excluding derivative balances) and provisions, excluding the impact
of hyper-inflationary adjustments in Turkey. Other assets that do
not directly contribute to returns are excluded from this measure
and include other investments, current and deferred tax balances
and post employment benefits. On
a post-tax basis, ROCE also includes our investments in associates
and joint ventures.
|
ROCE using GAAP measures
The table below presents the calculation of ROCE using GAAP
measures as reported in the consolidated income statement and
consolidated statement of financial position.
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 the capital employed as at 30 September
2023 and 30 September 2022.
|
|
Re-presented1
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
Operating profit2
|
12,983
|
6,078
|
|
|
|
Borrowings
|
65,058
|
75,644
|
Cash and cash equivalents
|
(7,148)
|
(7,077)
|
Derivative financial instruments included in trade and other
receivables
|
(5,273)
|
(8,769)
|
Derivative financial instruments included in trade and other
payables
|
1,792
|
1,786
|
Short-term investments
|
(4,094)
|
(4,402)
|
Collateral assets
|
(649)
|
(754)
|
Financial liabilities under put option arrangements
|
493
|
486
|
Equity
|
61,562
|
57,795
|
Capital employed at end of the year
|
111,741
|
114,709
|
|
|
|
Average capital employed for the year
|
113,225
|
115,322
|
|
|
|
ROCE using GAAP measures
|
11.5%
|
5.3%
|
Notes:
1.
The results for the 12 months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Consequently, ROCE using GAAP measures
has increased by 0.1pps compared to 5.2% as previously reported.
See note 4 'Assets held for sale' in the unaudited 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 the capital employed as at 30 September
2023 and 30 September 2022.
|
|
Re-presented2
|
|
H1 FY241
|
H1 FY23
|
|
€m
|
€m
|
Operating profit
|
12,983
|
6,078
|
Interest on lease liabilities
|
(513)
|
(403)
|
Restructuring costs
|
657
|
315
|
Other income
|
(8,837)
|
(261)
|
Share of results of equity accounted associates and joint
ventures
|
(6)
|
(571)
|
Other adjustments3
|
283
|
128
|
Adjusted operating profit for calculating pre-tax ROCE
(controlled)
|
4,567
|
5,286
|
Adjusted share of results of equity accounted associates and joint
ventures used in post-tax ROCE4
|
(9)
|
575
|
Notional tax at Adjusted effective tax rate5
|
(1,268)
|
(1,615)
|
Adjusted operating profit for calculating post-tax ROCE (controlled
and associates/joint ventures)
|
3,290
|
4,246
|
|
|
|
Capital employed for calculating ROCE on a GAAP basis
|
111,741
|
114,709
|
Adjustments to exclude:
|
|
|
- Leases
|
(13,039)
|
(12,084)
|
- Deferred tax assets
|
(19,460)
|
(18,699)
|
- Deferred tax liabilities
|
728
|
697
|
- Taxation recoverable
|
(296)
|
(393)
|
- Taxation liabilities
|
453
|
722
|
- Other investments
|
(1,630)
|
(1,783)
|
- Investments in associates and joint ventures
|
(10,457)
|
(5,453)
|
- Pension assets and liabilities
|
(30)
|
(212)
|
- Other adjustments3
|
(914)
|
(854)
|
Adjusted capital employed for calculating pre-tax ROCE
(controlled)
|
67,096
|
76,650
|
Investments in associates and joint ventures
|
10,457
|
5,453
|
Adjusted capital employed for calculating post-tax ROCE (controlled
and associates/joint ventures)
|
77,553
|
82,103
|
|
|
|
Average capital employed for calculating pre-tax ROCE
(controlled)
|
71,873
|
76,865
|
Average capital employed for calculating post-tax ROCE (controlled
and associates/joint ventures)
|
79,828
|
82,436
|
|
|
|
Pre-tax ROCE (controlled)
|
6.4%
|
6.9%
|
Post-tax ROCE (controlled and associates/joint
ventures)
|
4.1%
|
5.2%
|
Notes:
1.
ROCE calculations for H1 FY24 include the results of Vantage Towers
until its disposal on 22 March 2023 and the results of Oak Holdings
1 GmbH from that date.
2.
The results for the 12 months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. Consequently, Post-tax ROCE (controlled
and associates/joint ventures) has increased by 0.1pps compared to
5.1% as previously reported. There is no impact on Pre-tax ROCE
(controlled). See note 4 'Assets held for sale' in the unaudited
condensed consolidated financial statements for more
information.
3.
Comprises adjustments to exclude hyperinflationary accounting in
Turkey.
4.
Adjusted share of results of equity accounted associates and joint
ventures used in post-tax ROCE is a non-GAAP measure and excludes
restructuring costs and other income.
5.
Includes tax for H1 FY24 at the Adjusted effective tax rate of
30.3% and tax for H2 FY23 at the Adjusted effective tax rate of
26.2%.
Non-GAAP measures
Financing and Taxation metrics
Non-GAAP measure
|
Purpose
|
Definition
|
Adjusted
net financing costs
|
This
metric is used by both management and the investor
community.
This
metric is used in the calculation of Adjusted basic earnings per
share.
|
Adjusted
net financing costs exclude mark-to-market and foreign exchange
gains/losses.
|
Adjusted
profit before taxation
|
This
metric is used in the calculation of the Adjusted effective tax
rate (see below).
|
Adjusted
profit before taxation excludes the tax effects of items excluded
from Adjusted basic earnings per share, including: impairment
losses, amortisation of customer bases and brand intangible assets,
restructuring costs arising from discrete restructuring plans,
other income and expense and mark-to-market and foreign exchange
movements.
|
Adjusted
income tax expense
|
This
metric is used in the calculation of the Adjusted effective tax
rate (see below).
|
Adjusted
income tax expense excludes the tax effects of items excluded from
Adjusted basic earnings per share, including: impairment losses,
amortisation of customer bases and brand intangible assets,
restructuring costs arising from discrete restructuring plans,
other income and expense and mark-to-market and foreign exchange
movements. It also excludes deferred tax movements relating to tax
losses in Luxembourg as well as other significant one-off
items.
|
Adjusted
effective tax rate
|
This
metric is used by both management and the investor
community.
|
Adjusted
income tax expense (see above) divided by Adjusted profit before
taxation (see above).
|
Adjusted
share of results of equity accounted associates and joint
ventures
|
This
metric is used in the calculation of Adjusted effective tax
rate.
|
Share
of results of equity accounted associates and joint ventures
excluding restructuring costs, amortisation of acquired customer
base and brand intangible assets and other income and
expense.
|
Adjusted
share of results of equity accounted associates and joint ventures
used in post-tax ROCE
|
This
metric is used in the calculation of post-tax ROCE (controlled and
associates/joint ventures).
|
Share
of results of equity accounted associates and joint ventures
excluding restructuring costs and other income and
expense.
|
Non-GAAP measures
Adjusted tax metrics
The table below reconciles Profit before taxation and Income tax
expense to Adjusted profit before taxation, Adjusted income tax
expense and Adjusted effective tax rate.
|
|
|
Re-presented1
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
Profit before taxation
|
550
|
1,687
|
Adjustments to derive Adjusted profit before tax
|
1,003
|
755
|
Adjusted profit before taxation
|
1,553
|
2,442
|
Adjusted share of results of equity accounted associates and joint
ventures
|
(113)
|
(503)
|
Adjusted profit before tax for calculating Adjusted effective tax
rate
|
1,440
|
1,939
|
|
|
|
|
Income tax expense
|
(705)
|
(485)
|
Tax on adjustments to derive Adjusted profit before
tax
|
(150)
|
(132)
|
Adjustments:
|
|
|
- UK corporate interest restriction
|
48
|
35
|
- Tax relating to hyperinflation accounting
|
121
|
55
|
- Deferred tax on use of Luxembourg losses in the
year
|
250
|
-
|
Adjusted income tax expense for calculating Adjusted tax
rate
|
(436)
|
(527)
|
Adjusted effective tax rate
|
30.3%
|
27.2%
|
Note:
1.
The results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. This has resulted in a decrease in
Adjusted profit before taxation of €34 million and an
increase of €40 million in the Adjusted share of results of
equity accounted associates and joint ventures, resulting in a
total decrease of €74 million in Adjusted profit before tax
for calculating Adjusted effective tax rate. Consequently, the
Adjusted effective tax rate increased by 1.0pps compared to 26.2%
as previously reported. See note 4 'Assets held for sale' in the
unaudited condensed consolidated financial statements for more
information.
Adjusted share of results of equity accounted associates and joint
ventures
The table below reconciles Adjusted share of results of equity
accounted associates and joint ventures to the closest GAAP
equivalent, share of results of equity accounted associates and
joint ventures.
|
|
Re-presented1
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
Share of results of equity accounted associates and joint
ventures
|
(51)
|
376
|
Restructuring costs
|
7
|
3
|
Other income
|
(16)
|
-
|
Adjusted share of results of equity accounted associates and joint
ventures used in post-tax ROCE
|
(60)
|
379
|
Amortisation of acquired customer base and brand intangible
assets
|
173
|
124
|
Adjusted share of results of equity accounted associates and joint
ventures
|
113
|
503
|
Note:
1.
The results for the six months ended 30 September 2022 have been
re-presented to reflect that Indus Towers Limited is no longer
reported as held for sale. This has resulted in an increase of
€33 million in the Adjusted share of results of equity
accounted associates and joint ventures used in post-tax ROCE and
an increase of €7 million in the Amortisation of acquired
customer base and brand intangible assets, resulting in a total
increase of €40 million in the Adjusted share of results of
equity accounted associates and joint ventures. See note 4 'Assets
held for sale' in the unaudited condensed consolidated financial
statements for more information.
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.
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
Depreciation on leased assets - included in Adjusted
EBITDAaL
|
2,157
|
2,046
|
Depreciation on leased assets - included in Restructuring
costs
|
19
|
-
|
Depreciation on leased assets
|
2,176
|
2,046
|
|
|
|
|
Depreciation on owned assets
|
2,586
|
2,869
|
Amortisation of owned intangible assets
|
2,040
|
1,938
|
Depreciation and amortisation on owned assets
|
4,626
|
4,807
|
|
|
|
|
Total depreciation and amortisation on owned and leased
assets
|
6,802
|
6,853
|
|
|
|
|
Loss on disposal of owned fixed assets
|
22
|
11
|
Loss on disposal of leased assets
|
(2)
|
(2)
|
Depreciation and amortisation - as recognised in the consolidated
income statement
|
6,822
|
6,862
|
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.
|
|
H1 FY24
|
H1 FY23
|
|
€m
|
€m
|
Capital additions
|
3,365
|
3,541
|
Integration related capital additions
|
66
|
101
|
Licence and spectrum additions
|
250
|
193
|
Additions
|
3,681
|
3,835
|
|
|
|
|
Intangible assets additions
|
1,396
|
1,316
|
Property, plant and equipment owned additions
|
2,285
|
2,519
|
Total additions
|
3,681
|
3,835
|
Definitions
Key terms are defined below. See page 40 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.
|
Churn
|
Total
gross customer disconnections in the period divided by the average
total customers in the period.
|
Common
Functions
|
Comprises
central teams and business functions.
|
Converged
customer
|
A
customer who receives fixed and mobile services (also known as
unified communications) on a single bill or who receives a discount
across both bills.
|
Depreciation
and amortisation
|
The
accounting charge that allocates the cost of tangible or intangible
assets, whether owned or leased, to the income statement over its
useful life. The measure includes the profit or loss on disposal of
property, plant and equipment, software and leased
assets.
|
Eliminations
|
Refers
to the removal of intercompany transactions to derive the
consolidated financial statements.
|
Europe
|
Comprises
the Group's European businesses and the UK.
|
Financial
services revenue
|
Financial
services revenue includes fees generated from the provision of
advanced airtime, overdraft, financing and lending facilities, as
well as merchant payments and the sale of insurance products (e.g.
device insurance, life insurance and funeral cover).
|
Fixed
service revenue
|
Service
revenue (see below) relating to the provision of fixed line and
carrier services.
|
FTTH
|
Fibre
to the home.
|
GAAP
|
Generally
Accepted Accounting Principles.
|
IFRS
|
International
Financial Reporting Standards.
|
Incoming
revenue
|
Comprises
revenue from termination rates for voice and messaging to Vodafone
customers.
|
Integration
capital additions
|
Capital
additions incurred in relation to significant changes in the
operating model, such as the integration of recently acquired
subsidiaries.
|
Internet
of Things ('IoT')
|
The
network of physical objects embedded with electronics, software,
sensors, and network connectivity, including built-in mobile SIM
cards, that enable these objects to collect data and exchange
communications with one another or a database.
|
Mobile
service revenue
|
Service
revenue (see below) relating to the provision of mobile
services.
|
MVNO
|
Companies
that provide mobile phone services under wholesale contracts with a
mobile network operator, but do not have their own licence or
spectrum or the infrastructure required to operate a
network.
|
Next
generation networks ('NGN')
|
Fibre
or cable networks typically providing high-speed
broadband.
|
Operating
expenses
|
Comprise
primarily sales and distribution costs, network and IT related
expenditure and business support costs.
|
Other
Europe
|
Other
Europe markets include Portugal, Ireland, Greece, Romania, Czech
Republic and Albania. The prior period comparative results include
Vodafone Hungary which was disposed of in January
2023.
|
Other
Markets
|
Other
Markets comprise Turkey. From 1 April 2023, the Group revised its
segmental reporting by moving Vodafone Egypt from the Other Markets
segment to the Vodacom segment. This is the effective date on which
the Group's reporting structure changed to reflect the transfer of
Vodafone Egypt to the Vodacom Group. The prior period comparative
results include Vodafone Ghana which was disposed of in February
2023.
|
Other
revenue
|
Other
revenue principally includes equipment revenue, interest income,
income from partner market arrangements and lease revenue,
including in respect of the lease out of passive tower
infrastructure.
|
Reported
growth
|
Reported
growth is based on amounts reported in euros and determined under
IFRS.
|
Revenue
|
The
total of Service revenue (see below) and Other revenue (see
above).
|
Roaming
|
Roaming
allows customers to make calls, send and receive texts and data on
our and other operators' mobile networks, usually while travelling
abroad.
|
Service
revenue
|
Service
revenue is all revenue related to the provision of ongoing services
to the Group's consumer and enterprise customers, together with
roaming revenue, revenue from incoming and outgoing network usage
by non-Vodafone customers and interconnect charges for incoming
calls.
|
SME
|
Small
and medium sized enterprises.
|
Vodafone
Business
|
Vodafone
Business supports organisations in a digital world. With Vodafone's
expertise in connectivity, our leading IoT platform and our global
scale, we deliver the results that organisations need to progress
and thrive. We support businesses of all sizes and
sectors.
|
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 quarter ended 30 September
2022 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 "H1" and "H2"
are to the six month periods ended 30 September and 31 March,
respectively. References to the "year", "financial year" or "FY24"
are to the financial year ending 31 March 2024. References to "last
year", "last financial year" or "FY23" are to the financial year
ended 31 March 2023. References to "H1 FY24" are to the six month
period ended 30 September 2023. References to "H1 FY23" are to the
six month period ended 30 September
2022.
4. Vodacom
refers to the Group's interest in Vodacom Group Limited ('Vodacom')
as well as its operations, including subsidiaries in South Africa,
Egypt, DRC, Tanzania, Mozambique and Lesotho. On 13 December 2022,
Vodafone completed the transfer of its 55% shareholding in Vodafone
Egypt to Vodacom. Vodafone Egypt has been included within the
Vodacom reporting segment from 1 April 2023.
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: expectations regarding the
Group's financial condition or results of operations and the
guidance for Adjusted EBITDaL and Adjusted free cash flow for the
financial year ending 31 March 2024; the announced agreement to
combine Vodafone UK and Three UK; the announced agreement to
dispose of Vodafone Spain; the Group's FTTH joint venture's network
rollout; changes to German TV laws; expectations for the Group's
future performance generally; the transaction to purchase Nowo
Communicatons; 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;
certain of the Group's plans and objectives, including the Group's
strategy and its emissions targets and other ESG goals,
commitments, targets and ambitions, climate-related scenarios or
pathways and methodologies it uses to assess its progress in
relation to those.
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', 'plans', 'continues', 'progress', 'further', or
'ongoing'. 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 view
technologies, products and services; evolving cyber threats to the
Group's services and confidential data; the Group's ability to
embed responses to climate-related risks into business strategy and
operations; 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 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, 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; 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; changes in statutory tax rates and
profit mix; climate change projection risk including, for example,
the evolution of climate change and its impacts, changes in the
scientific assessment of climate change impacts, transition
pathways and future risk exposure and limitations of climate
scenario forecasts; amendments to or new ESG reporting standards,
models or methodologies; changes in ESG data availability and
quality which could result in revisions to reported data going
forward; and climate scenarios and the models that analyse them
have limitations that are sensitive to key assumptions and
parameters, which are themselves subject to some
uncertainty.
A review of the reasons why actual results and
developments may differ materially from the expectations disclosed
or implied within forward-looking statements can be found in the
summary of our principal risks in the Group's Annual Report for the
year ended 31 March 2023. The Annual Report can be found on the
Vodafone Group's website (vodafone.com/ar2023).
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 2023
-End-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorised.
|
VODAFONE
GROUP
|
|
PUBLIC
LIMITED COMPANY
|
|
(Registrant)
|
|
|
|
|
Date:
November 14, 2023
|
By: /s/ M D B
|
|
Name: Maaike de Bie
|
|
Title: Group General Counsel and Company Secretary
|
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