TIDMVOD
RNS Number : 2927N
Vodafone Group Plc
25 July 2014
Interim management statement for the quarter ended 30 June
2014
25 July 2014
Highlights
-- Group service revenue declined 4.2%*; Europe -7.9%*, AMAP 4.7%*
-- Evidence of commercial improvement in Germany (-4.9%*), Italy
(-16.1%*) and UK (-3.2%*); Spain (-15.3%*) weaker on renewed
competition
-- India (10.3%*) and Turkey (3.7%*) continue to show strong
momentum; Vodacom was flat* impacted by an MTR cut in South
Africa
-- Strong progress on Project Spring: 4G footprint across
European markets up to 52%; 6.7 million 4G customers; Group data
traffic up 73% year-on-year
-- Unified communications strategy advanced further: KDG
integration commenced; completion of Ono; fibre alliances in
Ireland and Portugal announced
-- Free cash outflow on a guidance basis of GBP0.6 billion
reflecting Project Spring investment; net debt GBP14.1 billion
(GBP11.0 billion including Verizon loan notes), before Ono
consideration of GBP5.7 billion
Quarter ended Change
--------------------
30 June 2014 Reported Organic*
GBPm % %
-------------------------------------- -------------- --------- ---------
Group revenue 10,204 6.2 (4.4)
Group service revenue 9,446 6.4 (4.2)
Europe 6,450 17.2 (7.9)
Africa, Middle East and Asia Pacific
('AMAP') 2,894 (11.3) 4.7
Capital expenditure 1,867 83.4
Free cash flow (582) n/m
-------------------------------------- -------------- --------- ---------
Vittorio Colao, Chief Executive, commented:
"The year has started in line with our expectations. Through our
commercial actions and investment, our performance is beginning to
stabilise quarter-on-quarter in several of our European markets,
with customer appetite for 4G services clearly growing. We also see
very strong growth in demand for data in India. In unified
communications, we have made further good progress on our strategy,
continuing to implement our plans in several markets, and our
customer growth trends demonstrate the strength of our commercial
execution.
"Our GBP19 billion Project Spring investment programme has taken
off quickly, with capex nearly doubling year-on-year, and our 4G
coverage in Europe up 20 percentage points to 52% in the last nine
months. We are increasingly well positioned to deliver high speed
mobile and fixed data services to consumers and businesses
alike."
Note:
* All amounts in this document marked with an "*" represent
organic growth which presents performance on a comparable
basis including merger and acquisition activity and movements
in foreign exchange rates.
OPERATING REVIEW
Group overview
Group revenue was GBP10.2 billion and Group service revenue was
GBP9.4 billion. On an organic basis Group service revenue decreased
by 4.2%*, and excluding the impact of mobile termination rate
('MTR') cuts Group service revenue fell by 2.9%*.
Europe
In Europe, service revenue was down 7.9%*, or down 6.6%*
excluding the impact of MTR cuts. Although competition and
regulation continue to create a challenging operating environment,
our performance in several markets is beginning to show some signs
of stabilisation quarter-on-quarter. The improvement in both
contract mobile and fixed customer additions trends seen in the
second half of the 2014 financial year has continued into this
quarter, and we have taken further steps to advance our unified
communications strategy in Germany, Italy, Spain, Ireland and
Portugal.
In Germany, service revenue declined by 4.9%* (Q4: -5.8%*). ARPU
is stabilising quarter-on-quarter, and the base is benefiting from
strong contract net additions in the second half of the 2014
financial year. Network performance continued to recover, with a
significant reduction in dropped call rates. Kabel Deutschland
("KDG") service revenue continues to grow strongly. Integration
commenced in April as planned.
In Italy, service revenue was down 16.1%* (Q4: -18.1%*(2) ). The
slight improvement in trend reflects the impact of price rises
towards the end of the previous quarter and continued strong
enterprise customer net additions. Fixed line revenue returned to
growth and we have begun our fibre-to-the-cabinet roll-out.
In the UK, service revenue was down 3.2%* including Cable &
Wireless Worldwide ('CWW') on an organic basis for the first time
(Q4: -3.6%*, or -4.0%* including CWW). The consumer mobile business
returned to growth in the quarter, with continued good traction for
4G bundled with content packages. CWW integration continues to
proceed in line with our overall financial plan.
In Spain, service revenue was down 15.3%* (Q4: -12.6%*). The
revenue trend in mobile deteriorated, as a result of our response
to competitor activity in converged services, and a market shift
towards SIM-only and mid-tier handsets in integrated bundles. Our
fixed line business continues to show strong momentum, and the
completion of the Ono transaction will significantly strengthen our
competitive position in the market. In July we revised our fibre
agreement with Orange to target 2 million homes passed with
self-built fibre by September 2015, with wholesale access to 1
million homes passed by the Ono network granted to Orange.
Elsewhere in Europe, Hungary continued to grow strongly, the
service revenue trends in Portugal and the Netherlands improved,
and Greece and the Czech Republic were relatively stable
quarter-on-quarter.
AMAP
In AMAP, service revenue was up 4.7%*, or up 6.2%* excluding the
impact of MTR cuts. We continued to see good growth across most
markets, driven by leading network quality, increasing demand for
data and strong commercial execution.
In India, service revenue was up 10.3%* (Q4: 11.9%*). As
expected, the rate of growth slowed slightly quarter-on-quarter
after price increases a year ago. However, data revenue growth
accelerated in the quarter as 3G take-up continued to grow and we
made further investments in 3G network roll-out. We continue to
expand our M-Pesa service in India where we now have approximately
66,000 sales agents nationwide and 1.5 million registered
users.
Vodacom organic service revenue was flat* (Q4: 5.1%*). The
slowdown from the previous quarter was the result of the 50% MTR
cut introduced in South Africa in April. Price competition in South
Africa has intensified, but Vodacom has responded effectively with
targeted promotions. The international businesses continue to grow
well driven by continued customer growth, higher voice usage,
increased data usage and M-Pesa, although overall growth was
impacted by intense price competition.
In the other AMAP markets, Turkey service revenue was up 3.7%*
(Q4: 6.8%*) as strong growth in the customer base was partly offset
by an increase in competitive intensity. Egypt service revenue was
down 0.7% against a very strong prior period performance. Ghana and
Qatar both continued to grow very strongly.
4G, data and investment programme
Data growth continues to be very strong across the Group, with
higher speeds and wider coverage stimulating customer data uptake
and usage. Our two-year, GBP19 billion investment programme to
accelerate and extend Vodafone's network and service
differentiation across mobile and fixed line in our key markets has
now commenced, and will position us very well to capture this
significant data opportunity.
In Europe, our 4G network now covers 52% of the population, up
from 46% in Q4, with 4,700 4G sites deployed in the quarter. As a
result, data traffic growth in Europe has accelerated to 53%
year-on-year in Q1 from 42% in the previous quarter, stimulated by
the enhanced user experience and increasing appetite for music and
video streaming. We are supporting the 4G roll-out with a targeted,
local communications strategy focusing on network benefits and
differentiation rather than price. At the same time, we are
investing in additional 2G and 3G sites to improve voice quality
and reliability, with a further 2,400 2G and 3G sites installed
across Europe during the period.
In India, where we aim to have 95% 3G outdoor coverage in
targeted urban areas over the next two years, we have taken 3G
coverage on this footprint to 89%, with a further 2,305 sites
added. In South Africa, we added 473 4G sites and 293 3G sites in
the quarter. Around three-quarters of our sites are now connected
to our own high capacity transmission network.
Vodafone Red
Our Vodafone Red plans which offer unlimited calls, texts and
generous data allowances, are now used by 14.3 million customers,
with 2.3 million added in the quarter. These Vodafone Red plans
encourage customers to use our services more, while reducing our
exposure to out-of-bundle revenue and competing services. 61% of
mobile service revenue in Europe was in-bundle during the
quarter.
Unified communications
We have made significant progress with our unified
communications strategy during the quarter. We achieved residential
broadband net additions of approximately 190,000, with continued
growth in Germany, Italy, Spain and Portugal. Fixed line service
revenue in Europe decreased by 2.8%*, with growth in Italy and
Spain offset by declines in Germany and the UK.
The integration of KDG is now underway, creating a fully
integrated operator in Germany able to offer the full range of high
speed data services to enterprise and residential customers and
realising significant cost and capital expenditure synergies in the
process. The recent completion of the Ono acquisition will allow us
to establish a similarly strong platform in Spain. In addition, our
fibre roll-out in Italy, as well as recent announcements of fibre
deployment plans in Ireland and shared next generation network
access in Portugal, position Vodafone increasingly strongly across
its European footprint.
Enterprise
Enterprise service revenue was down 2.9%*. While we saw some
ongoing competitive pressure in our traditional national enterprise
businesses, we achieved continued strong growth in strategic growth
areas. Vodafone Global Enterprise revenue was up 1.6%*, driven by a
number of new account wins and extensions. Machine-to-machine
('M2M') revenue was up 30.7%*, driven by increased innovation and a
widening range of vertical markets.
We continue to focus on integrated offerings for enterprise
customers, with fixed line revenue now representing 24% of
enterprise service revenue. We won a number of key contracts in the
quarter utilising our full range of services for enterprise
customers, including unified communications, fixed line, mobile,
M2M and cloud & hosting services. During the quarter we
announced plans to acquire Cobra, a leading M2M provider to the
automotive and insurance industries, for EUR145 million (GBP115
million), to enhance our M2M capabilities. The acquisition is
subject to regulatory approval and is expected to complete in the
third quarter of the 2014 calendar year.
Capital expenditure, cash flow and balance sheet
Capital expenditure of GBP1.9 billion in the quarter nearly
doubled year-on-year as we began our two-year, GBP19 billion
investment programme. Guidance free cash outflow of GBP0.6 billion
in the quarter mainly reflected the significant increase in capital
expenditure. Net debt at 30 June 2014 was GBP14.1 billion (or
GBP11.0 billion taking into account the Verizon loan notes), an
increase of GBP0.4 billion from 31 March 2014, mainly reflecting
the free cash outflow during the quarter.
Summary and outlook
Trading in the first quarter was consistent with management's
expectation underlying the outlook statement for the 2015 financial
year(1) . The Group therefore confirms its outlook for the 2015
financial year.
Notes:
* All amounts in this document marked with an "*" represent
organic growth which presents performance on a comparable
basis including merger and acquisition activity and movements
in foreign exchange rates.
1 Full details on this guidance are available on page 8 of the
Group's preliminary announcement for the financial year ended
31 March 2014.
2 Italy organic service revenue growth for Q4 calculated on
a 100% ownership basis.
Europe
Revenue increased 16.5%, including a 3.9 percentage point
negative impact from foreign exchange rate movements and a 29.3
percentage point favourable impact from M&A activity. On an
organic basis service revenue declined 7.9%*, driven primarily by a
challenging operating environment in many markets, continued
competition and the impact of MTR cuts.
Revenue
Quarter ended
30 June Change
---------------- --------------------
2014 2013 Reported Organic*
GBPm GBPm % %
----------------- ------- ------- --------- ---------
Germany 2,031 1,815 11.9 (4.9)
Italy 1,064 - - (16.1)
UK 1,472 1,521 (3.2) (3.2)
Spain 706 870 (18.9) (15.3)
Other Europe 1,191 1,314 (9.4) (4.7)
Eliminations (14) (16)
Service revenue 6,450 5,504 17.2 (7.9)
----------------- ------- ------- --------- ---------
Revenue 6,851 5,881 16.5 (8.9)
----------------- ------- ------- --------- ---------
Note:
* All amounts in this document marked with an "*" represent
organic growth which presents performance on a comparable
basis including merger and acquisition activity and movements
in foreign exchange rates.
Germany
Service revenue decreased 4.9%*, but stabilised
quarter-on-quarter in local currency.
Mobile service revenue declined 5.5%* as the price reductions
from last year continued to penetrate the base. The contract
customer base continued to grow as we maintain our focus on
Vodafone Red and 4G where we had over 3.4 million customers and 1.5
million customers respectively at 30 June 2014. The roll-out of 4G
services continued with a focus on urban areas, with overall
outdoor population coverage of 70% at 30 June 2014. We made
significant further improvements to our voice and data networks
during the period.
Fixed line revenue decreased 3.2%* excluding KDG. KDG maintained
its strong growth and contributed GBP378 million to service revenue
during the quarter. The integration continued with the successful
launch of a joint product portfolio, being marketed in both
Vodafone and KDG stores under the "Zuhause Plus" name.
Italy
Service revenue decreased 16.1%* as improving trends in both
mobile and fixed line were offset by the continuing effects of last
year's summer prepaid price war penetrating the customer base and
the negative impact of MTR cuts effective from July 2013. On a
local currency basis, absolute service revenue during the quarter
was broadly in line with the previous quarter to 31 March 2014.
Mobile service revenue declined 18.9%* as ARPU decreased
following last year's significant price cuts. Although there has
been some recovery in headline prices, the market remains very
competitive. The number of enterprise customers increased further
during the quarter, but this was more than offset by a further
erosion of the consumer customer base. Vodafone Red, which had
nearly 1.5 million customers at 30 June 2014, continues to
penetrate further into the base leading to improved churn in the
contract segment. 4G services are now available in 443
municipalities and outdoor population coverage has reached 48% at
30 June 2014.
Fixed line revenue grew 1.5%* as continued broadband revenue
growth supported by approximately 25,000 net broadband customer
additions during the quarter was partly offset by declining fixed
line voice usage. Vodafone Italy now offers fibre services in 55
cities and is progressing well on its own fibre build plans.
UK
Service revenue decreased 3.2%* as consumer contract service
revenue growth was offset by continued declines in enterprise,
prepaid and fixed line.
Mobile service revenue declined 0.6%* reflecting pricing
pressures in the prepaid and enterprise segments. We delivered
strong growth in the consumer contract segment due to positive
contract customer additions and the greater penetration of Vodafone
Red plans into the customer base with continued good traction for
4G bundled with content packages, with 3.1 million customers at 30
June 2014. The roll-out of 4G services continued with overall
outdoor population coverage reaching over 40% and 0.9 million 4G
customers at 30 June 2014.
Organic fixed line revenues (which include the UK portion of CWW
for the first time) decreased 10.1%* as a result of continued price
competition and lower fixed termination rates. The sales pipeline
continues to grow, supporting future revenue trends.
Spain
Service revenue decreased 15.3%* as a result of intense
convergence price competition, macroeconomic pressure and an MTR
cut from July 2013.
Mobile service revenue declined 17.6%*, compared to 14.4%* in
Q4, as price reductions and a change in mix towards mid-tier
handsets and SIM-only tariffs led to further falls in ARPU. We are
responding to the decline in ARPU with price increases on lower
tier contract tariffs, and bundled content on higher tier tariffs.
Despite the more competitive environment, we continued to reduce
customer churn, as a result of an improved customer experience and
the continued take-up of Vodafone Red plans, with nearly 1.5
million customers at 30 June 2014. We had over 1.0 million 4G
customers at 30 June 2014 and 4G services are now available in all
Spanish provinces, with 58% population coverage.
Fixed line revenue growth remained positive at 7.3%* as we added
approximately 48,000 new customers during the quarter. We now have
more than 0.8 million homes covered by our joint fibre network with
Orange. In July, we completed the acquisition of Ono and announced
a revised agreement with Orange to build to 2 million homes in
total, while providing wholesale access to Orange to 1 million
homes passed by Ono.
Other Europe
Service revenue declined 4.7%* due to price competition, the
challenging macroeconomic environment and MTR cuts. Service revenue
declined 4.0%*, 3.2%* and 5.8%* in the Netherlands, Portugal and
Greece respectively.
In the Netherlands, we saw continued success with our Vodafone
Red plans. In Portugal, the broadband customer base and fixed line
revenues continued to grow as the fibre roll-out gained momentum in
a market moving strongly towards converged offers, while in Greece
the customer base grew due to the focus on data.
AMAP
Revenue declined 10.2% as a result of a 16.3 percentage point
adverse impact from foreign exchange rate movements, particularly
with regards to the Indian rupee, the South African rand and the
Turkish lira. On an organic basis service revenue grew 4.7%* driven
by a higher customer base, increased customer voice usage, demand
for data and strong commercial execution, partially offset by the
impact of MTR reductions.
Revenue
Quarter ended
30 June Change
---------------- --------------------
2014 2013 Reported Organic*
GBPm GBPm % %
----------------- ------- ------- --------- ---------
India 1,026 1,091 (6.0) 10.3
Vodacom 839 1,005 (16.5) -
Other AMAP 1,029 1,166 (11.7) 3.4
Service revenue 2,894 3,262 (11.3) 4.7
----------------- ------- ------- --------- ---------
Revenue 3,209 3,572 (10.2) 6.1
----------------- ------- ------- --------- ---------
Note:
* All amounts in this document marked with an "*" represent
organic growth which presents performance on a comparable
basis including merger and acquisition activity and movements
in foreign exchange rates.
India
Service revenue increased 10.3%*, driven by continued customer
growth, strong data usage and improved voice pricing. Mobile
customers increased by 3.3 million during the quarter giving a
closing customer base of 169.9 million at 30 June 2014. Data usage
grew 102% during the quarter, primarily driven by mobile internet
customer growth and a 46% increase in usage per customer. At 30
June 2014 active data customers totalled 57 million, including 10
million 3G customers and 29 million smartphone users representing
17% penetration of the customer base.
M-Pesa continues to perform well, with national coverage through
approximately 66,000 sales agents, 65% of which were in rural
areas, with 1.5 million registered customers at 30 June 2014, of
which approximately 300,000 are active.
Vodacom
Service revenue on an organic basis was flat* during the quarter
reflecting the negative impact of MTR cuts in April 2014. In South
Africa, organic service revenue decreased by 2.0%* as strong growth
in data revenues of 18.5%* driven by higher smartphone penetration
was offset by intensifying price competition and a 4.1 percentage
point negative impact of MTRs cut effective from 1 April 2014.
Vodacom's mobile operations outside South Africa delivered
service revenue growth of 8.4%* mainly from continued customer base
growth. M-Pesa continued to perform well across all of Vodacom's
mobile operations outside of South Africa, with over 6.4 million
customers actively using the service.
Other AMAP
Service revenue increased 3.4%*, with growth in Turkey, Qatar
and Ghana being partially offset by declines in Egypt and New
Zealand.
Service revenue growth in Turkey was 3.7%* as strong growth in
consumer contract and enterprise revenues were partly offset by a
7.1 percentage point negative impact from voice and SMS MTR cuts.
As at 30 June 2014 the total customer base exceeded 20 million,
with approximately 308,000 net additions in the quarter, largely
driven by contract and Vodafone Red. We also continued to drive
higher smartphone penetration.
In Egypt service revenue decreased 0.7%* as a result of a
decline in the customer base. Revenue growth of 27.3%* in Qatar
came as a result of continued net customer additions and the
success of segmented commercial offers. In Ghana, service revenue
grew 17.2%*, driven by an increase in customers and higher data
usage.
Other transactions and developments
Grupo Corporativo Ono, S.A. ('Ono')
On 17 March 2014, Vodafone agreed to acquire Ono for a total
consideration equivalent to EUR7.2 billion (GBP5.7 billion) on a
debt and cash free basis (the 'Transaction'). Ono has the largest
next-generation network in Spain and the Transaction enables
Vodafone to take advantage of the rapid increase in the adoption of
unified communications products and services in the Spanish market.
The Transaction, which received European Commission approval on 3
July 2014, completed on 23 July 2014.
India minorities
On 11 April 2014, the Group acquired the remaining 10.97% of its
Indian subsidiary, Vodafone India Limited, from Piramal Enterprises
Limited for a total cash consideration of INR 89.0 billion (GBP0.9
billion), taking its ownership interest to 100%.
Neotel Proprietary Limited ('Neotel')
On 19 May 2014 Vodacom announced its intention to acquire 100%
of Neotel, the second largest provider of fixed telecommunications
services in South Africa, for a cash consideration equivalent to an
enterprise value of R7.0 billion (GBP0.4 billion). Vodacom expects
that the combination of Neotel with its existing fibre network,
spectrum holdings and enterprise business will accelerate Vodacom's
unified communications strategy, yielding substantial cost and
capital expenditure synergies. The transaction remains subject to
the fulfilment of a number of conditions precedent including
applicable regulatory approvals (submissions have been made to both
the Independent Communications Authority of South Africa (ICASA)
and the Competition Commission of South Africa) and is expected to
close before the end of the 2015 financial year.
Cobra Automotive Technologies S.p.A ('Cobra')
On 16 June 2014, Vodafone announced its intention to acquire
Cobra, a leading provider of security and telematics solutions to
the automotive and insurance industries, through a voluntary tender
offer (the 'Tender Offer') valuing the entire fully diluted
ordinary share capital of Cobra at EUR145 million (GBP115 million).
The Tender Offer is conditional on, among other things, obtaining
appropriate anti-trust approvals, and is expected to complete in
the third quarter of the 2014 calendar year.
Vodafone Fiji Limited
On 1 July 2014, Vodafone announced that it has sold its entire
49% shareholding in Vodafone Fiji Limited to the Fiji National
Provident Fund for a total cash consideration of FJ$160m (GBP51m).
Vodafone will continue to have a presence in Fiji through a Partner
Market agreement.
India tax
Details on this matter are available under the section entitled
"Legal proceedings" on pages 164 to 166 of the Group's annual
report for the financial year ended 31 March 2014. The Group did
not carry a provision for the litigation or in respect of the
retrospective legislation at 31 March 2014 or at previous reporting
dates.
Telecom Egypt arbitration
Details on this matter are available under the section entitled
"Legal proceedings" on pages 164 to 166
of the Group's annual report for the financial year ended 31
March 2014.
ADDITIONAL INFORMATION
Service revenue - quarter ended 30 June(1, 2)
Group Europe AMAP
----------------------- ----------------------- -----------------------
2014 2013 2014 2013 2014 2013
GBPm GBPm GBPm GBPm GBPm GBPm
----------- ---------- ----------- ---------- ----------- ----------
Mobile
in-bundle 3,929 3,493 3,050 2,655 828 778
Mobile
out-of-bundle 2,731 2,979 1,290 1,238 1,437 1,739
Mobile
incoming 680 801 358 361 322 440
Fixed line 1,719 1,210 1,486 993 188 171
Other 387 391 266 257 119 134
----------- ---------- ----------- ---------- ----------- ----------
Service
revenue 9,446 8,874 6,450 5,504 2,894 3,262
----------- ---------- ----------- ---------- ----------- ----------
% change
-------------------------------------------------------------------------
Group Europe AMAP
----------------------- ----------------------- -----------------------
Reported Organic Reported Organic Reported Organic
----------- ---------- ----------- ---------- ----------- ----------
Mobile
in-bundle 12.5 4.7 14.9 0.3 6.4 26.8
Mobile
out-of-bundle (8.3) (13.5) 4.2 (23.1) (17.4) (2.7)
Mobile
incoming (15.1) (16.2) (0.8) (19.0) (26.8) (12.8)
Fixed line 42.1 0.1 49.6 (2.8) 9.9 22.7
Other (1.0) (4.5) 3.5 (9.3) (11.2) 5.4
----------- ---------- ----------- ---------- ----------- ----------
Service
revenue 6.4 (4.2) 17.2 (7.9) (11.3) 4.7
----------- ---------- ----------- ---------- ----------- ----------
Germany Italy UK(3) Spain India Vodacom
----------------------- ----------------------- ----------------------- ------------------- ------------------- --------------------
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------- ---------- ----------- ---------- ----------- ---------- --------- -------- --------- -------- --------- ---------
Mobile
in-bundle 878 918 497 - 629 613 428 493 181 154 259 259
Mobile
out-of-bundle 239 299 271 - 313 331 132 184 635 714 462 590
Mobile
incoming 66 79 76 - 89 98 28 59 148 189 50 84
Fixed line 771 425 176 - 368 410 82 80 40 6 - -
Other 77 94 44 - 73 69 36 54 22 28 68 72
----------- ---------- ----------- ---------- ----------- ---------- --------- -------- --------- -------- --------- ---------
Service
revenue 2,031 1,815 1,064 - 1,472 1,521 706 870 1,026 1,091 839 1,005
----------- ---------- ----------- ---------- ----------- ---------- --------- -------- --------- -------- --------- ---------
% change
-----------------------------------------------------------------------------------------------------------------------------------------
Germany Italy UK Spain India Vodacom
----------------------- ----------------------- ----------------------- ------------------- ------------------- --------------------
Reported Organic Reported Organic Reported Organic Reported Organic Reported Organic Reported Organic
----------- ---------- ----------- ---------- ----------- ---------- --------- -------- --------- -------- --------- ---------
Service
revenue 11.9 (4.9) - (16.1) (3.2) (3.2) (18.9) (15.3) (6.0) 10.3 (16.5) -
----------- ---------- ----------- ---------- ----------- ---------- --------- -------- --------- -------- --------- ---------
Notes:
1 The sum of the regional amounts may not be equal to Group totals due to Non-Controlled Interests
and Common Functions, and intercompany eliminations.
2 Organic growth presents performance on a comparable basis including merger and acquisition activity
and movements in foreign exchange rates.
3 The analysis of UK mobile and fixed service revenue for the quarter ended 30 June 2013 has been
restated following the integration of CWW into the UK business.
ADDITIONAL INFORMATION
Mobile customers - quarter ended 30 June 2014
(in thousands)
Net
1 April additions/ Other 30 June
Country 2014 (disconnections) movements 2014 Prepaid
---------------- -------- ------------------ ----------- -------- --------
Europe
Germany 32,305 (366) - 31,939 51.5%
Italy 27,773 (878) - 26,895 81.7%
UK 19,492 80 - 19,572 40.1%
Spain 13,466 (236) - 13,230 28.9%
---------------- -------- ------------------ ----------- -------- --------
93,036 (1,400) - 91,636 54.6%
---------------- -------- ------------------ ----------- -------- --------
Other Europe
Netherlands 5,267 (24) - 5,243 27.2%
Ireland 2,121 (34) - 2,087 56.4%
Portugal 5,569 (165) - 5,404 75.6%
Romania 8,186 (200) - 7,986 58.4%
Greece 4,899 39 - 4,938 68.1%
Czech Republic 3,236 (9) - 3,227 38.7%
Hungary 2,578 28 - 2,606 45.1%
Albania 1,954 (6) - 1,948 94.3%
Malta 302 6 - 308 82.1%
---------------- -------- ------------------ ----------- -------- --------
34,112 (365) - 33,747 57.0%
---------------- -------- ------------------ ----------- -------- --------
Europe 127,148 (1,765) - 125,383 55.3%
---------------- -------- ------------------ ----------- -------- --------
AMAP
India 166,561 3,337 - 169,898 93.5%
Vodacom(1) 65,381 3,033 - 68,414 92.7%
---------------- -------- ------------------ ----------- -------- --------
231,942 6,370 - 238,312 93.3%
---------------- -------- ------------------ ----------- -------- --------
Other AMAP
Turkey 19,754 308 - 20,062 61.2%
Egypt 41,847 (110) - 41,737 94.2%
New Zealand 2,336 (13) - 2,323 64.4%
Qatar 1,327 27 - 1,354 90.8%
Ghana 6,480 201 - 6,681 99.6%
---------------- -------- ------------------ ----------- -------- --------
71,744 413 - 72,157 84.5%
---------------- -------- ------------------ ----------- -------- --------
AMAP 303,686 6,783 - 310,469 91.2%
---------------- -------- ------------------ ----------- -------- --------
Group 430,834 5,018 - 435,852 80.9%
---------------- -------- ------------------ ----------- -------- --------
Note:
1 Vodacom refers to the Group's interests in Vodacom Group
Limited and its subsidiaries, including those located outside of
South Africa.
OTHER INFORMATION
Notes
1. Vodafone, the Vodafone Speechmark, Vodacom, M-Pesa, and
Vodafone Red are trademarks of the Vodafone Group. Other product
and company names mentioned herein may be the trademarks of their
respective owners..
2. All growth rates reflect a comparison to the quarter ended 30
June 2013 unless otherwise stated.
3. References to "the quarter" and "this quarter" are to the
quarter ended 30 June 2014 unless otherwise stated. References to
the "previous quarter" are to the quarter ended 31 March 2014
unless otherwise stated. References to "Q3" are to the quarter
ended 31 December 2013 unless otherwise stated. References to "Q4"
are to the quarter ended 31 March 2014 unless otherwise stated.
References to the "2015 financial year" or "current financial year"
are to the financial year ending 31 March 2015 and references to
the "prior financial year" and the "2014 financial year" are to the
financial year ended 31 March 2014 unless otherwise stated.
4. All amounts marked with an "*" represent organic growth which
presents performance on a comparable basis, both in terms of merger
and acquisition activity and movements in foreign exchange
rates.
5. Reported growth is based on amounts in pounds sterling as
determined under IFRS.
6. Vodacom refers to the Group's interest Vodacom Group Limited
('Vodacom') in South Africa and its subsidiaries, including its
operations in the DRC, Lesotho, Mozambique and Tanzania.
7. Quarterly historical information including service revenue,
mobile customers, churn, voice usage, messaging volumes, data
volumes, ARPU, smartphones and fixed broadband customers is
provided in a spread sheet available at vodafone.com/investor.
Forward-looking statements
This report 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, including
the Group Chief Executive's statement on the first page of this
report and the outlook for the 2015 financial year; expectations
for the Group's future performance generally, including growth and
capital expenditure; statements relating to the Project Spring
organic investment programme; expectations regarding the operating
environment and market conditions and trends, including customer
usage, competitive 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, and the launch of a number of additional
features; expectations regarding smartphone adoption generally;
expectations regarding Vodafone 2015; growth in customers and
usage; expectations regarding spectrum licence acquisitions,
including anticipated new 3G and 4G availability and the customer
uptake associated therewith; expectations regarding adjusted
operating profit, EBITDA margins, capital expenditure, free cash
flow, and
foreign exchange rate movements; expectations regarding the
integration or performance of current and future investments,
associates, joint ventures, non-controlled interests and newly
acquired businesses, including KDG, CWW, Ono, Cobra, and Neotel;
and the outcome and impact of regulatory and legal proceedings
involving Vodafone and of scheduled or potential regulatory
changes.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
"will", "anticipates", "aims", "could", "may", "should", "expects",
"believes", "intends", "plans" or "targets". By their nature,
forward-looking statements are inherently predictive, speculative
and involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements. These factors include, but are not
limited to, the following: changes in economic or political
conditions in markets served by operations of the Group that would
adversely affect the level of demand for mobile services; greater
than anticipated competitive activity, from both existing
competitors and new market entrants, which could require changes to
the Group's pricing models, lead to customer churn or make it more
difficult to acquire new customers; the impact of investment in
network capacity and the deployment of new technologies, or the
rapid obsolescence of existing technology; higher than expected
costs or capital expenditures; slower than expected customer growth
and reduced customer retention; changes in the spending patterns of
new and existing customers and the possibility that new products
and services will not be commercially accepted or perform according
to expectations; the Group's ability to expand its spectrum
position or renew or obtain necessary licences, including spectrum;
the Group's ability to achieve cost savings; the Group's ability to
execute its strategy in mobile data, enterprise and broadband and
in emerging markets; changes in foreign exchange rates, including,
particularly, the exchange rate of sterling to the euro and the US
dollar, or interest rates; the ability to realise benefits from
entering into partnerships or joint ventures and entering into
service franchising and brand licensing; unfavourable consequences
of acquisitions or disposals; changes in the regulatory framework
in which the Group operates, including possible action by
regulators in markets in which the Group operates or by the EU to
regulate rates the Group is permitted to charge; the impact of
legal or other proceedings against the Group or other companies in
the mobile telecommunications industry; loss of suppliers or
disruption of supply chains; developments in the Group's financial
condition, earnings and distributable funds and other factors that
the Board takes into account when determining levels of dividends;
the Group's ability to satisfy working capital and other
requirements through access to bank facilities, funding in the
capital markets and operations; changes in statutory tax rates or
profit mix which might impact the weighted average tax rate; and/or
changes in tax legislation or final resolution of open tax issues
which might impact the Group's tax payments or effective tax
rate.
Furthermore, 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 under
"Forward-looking statements" and "Principal risk factors and
uncertainties" in our annual report for the year ended 31 March
2014. The annual report can be found on the Group's website
(vodafone.com/investor). All subsequent written or oral
forward-looking statements attributable to the Company or any
member of the 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.
For further information:
Vodafone Group Plc
Investor Relations Media Relations
Telephone: +44 7919 990 230 www.vodafone.com/media/contact
Copyright (c) Vodafone Group 2014
- ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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