REG - Vodafone Group Plc - Vodafone Q3 FY24 Trading Update
05/02/2024 07:00
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RNS Number : 9406B Vodafone Group Plc 05 February 2024
Vodafone Group Plc ⫶ Q3 FY24 trading update
5 February 2024
Sustained revenue growth in Europe & Africa
Margherita Della Valle, Vodafone Group Chief Executive, commented:
"We maintained good service revenue momentum in the third quarter across both
Europe and Africa, supported by a further acceleration of Vodafone Business,
with our Cloud and Internet of Things services growing over 20%.
We've made good strategic progress in the first nine months of the year, with
improving customer satisfaction and three consecutive quarters of service
revenue growth in Europe. Our announced transactions in the UK and Spain are
progressing well, and we are in active discussions in Italy. We've also begun
strategic partnerships with Microsoft and Accenture to fast-track our
transformation."
Q3 performance summary Q3 FY24 Q3 FY23 Reported Organic
€m €m growth % growth % (1)
Service revenue 9,383 9,520 (1.4) 4.7*
- of which Germany 2,892 2,882 0.3 0.3*
Other revenue 1,989 2,118
Total revenue 11,372 11,638 (2.3) 4.2*
* represents organic growth. See page 2. ǀ 1. Non-GAAP measure. See page
8.
· Group service revenue growth of 4.7%* (Q2: 4.7%*), or 2.5%* (Q2:
2.8%*) excluding Turkey
· Broad-based service revenue growth with 14 out of 17 markets growing
· Germany service revenue growth of 0.3%* (Q2: 1.1%*), reflecting
Business phasing and non-recurring revenue from service providers in Q2
· Vodafone Business: service revenue growth accelerated to 5.0%* (Q2:
4.3%*) driven by strong performance in digital services
· Vodacom service revenue growth of 8.8%* (Q2: 9.0%*), with improved
trend in international markets and Egypt
· FY24 guidance(1,2) re-iterated: Adjusted EBITDAaL c.€13.3 billion and
Adjusted free cash flow of c.€3.3 billion
Notes:
1. The FY24 guidance foreign exchange rates were: €1 : GBP 0.88, €1 : ZAR
19.30, €1 : TRY 21.10, €1 : EGP 33.38.
2. Guidance for FY24 includes Adjusted EBITDAaL and Adjusted free cash flow
for Vodafone Spain for the 12 months ending 31 March 2024.
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 5 February 2024. The
webcast and supporting information can be accessed at investors.vodafone.com
Performance review
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 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 8 for more information.
Geographic performance summary
Other Other Vantage Common Elimi-
Germany UK Italy Spain Europe Vodacom(1) Markets(1,2) Towers(3) Functions nations Group
Q3 FY24
Service revenue 2,892 1,400 1,057 848 1,175 1,543 393 - 137 (62) 9,383
Other revenue 451 340 122 126 236 389 139 - 212 (26) 1,989
Total revenue (€m) 3,343 1,740 1,179 974 1,411 1,932 532 - 349 (88) 11,372
Organic service revenue growth % (4) 0.3% 5.2% (1.3)% (1.1)% 3.6% 8.8% 90.4% - 4.7%
Q3 FY23(5)
Service revenue 2,882 1,327 1,071 858 1,275 1,668 368 - 134 (63) 9,520
Other revenue 465 423 153 113 214 396 120 329 227 (322) 2,118
Total revenue (€m) 3,347 1,750 1,224 971 1,489 2,064 488 329 361 (385) 11,638
FY23(5) FY24
Organic service revenue growth %(4) Q1 Q2 H1 Q3 Q4 H2 Total Q1 Q2 H1 Q3
Germany (0.5) (1.1) (0.8) (1.8) (2.8) (2.3) (1.6) (1.3) 1.1 (0.1) 0.3
UK 6.5 6.9 6.7 5.3 3.8 4.6 5.6 5.7 5.5 5.6 5.2
Italy (2.3) (3.4) (2.8) (3.3) (2.7) (3.0) (2.9) (1.6) (1.0) (1.3) (1.3)
Spain (3.0) (6.0) (4.5) (8.7) (3.7) (6.2) (5.4) (3.0) (2.7) (2.8) (1.1)
Other Europe 2.5 2.9 2.7 2.1 3.6 2.8 2.8 4.1 3.8 3.9 3.6
Vodacom(1) 6.9 8.3 7.6 8.0 7.0 7.5 7.5 9.0 9.0 9.0 8.8
Other Markets(1,2) 32.3 39.7 36.0 48.8 54.9 51.7 43.5 74.1 85.0 79.3 90.4
Group 2.5 2.5 2.5 1.8 1.9 1.8 2.2 3.7 4.7 4.2 4.7
Downloadable performance information is available at:
investors.vodafone.com/results
Notes:
1. Total revenue, service revenue, other revenue and 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. There is no impact on previously reported
Group metrics.
2. The Other Markets segment comprises only Vodafone Turkey in FY24. The
comparative period also included Vodafone Ghana.
3. In March 2023, the Group sold its controlling interest in Vantage Towers
A.G. to a joint venture entity co-controlled with KKR and GIP.
4. Organic service revenue growth is a non-GAAP measure. See page 8 for more
information.
5. The comparative period includes 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.
Germany ⫶ Commercial trends improving
Service revenue increased by 0.3%* (Q2: 1.1%*) as the contribution from higher
broadband ARPU was partly offset by the impact of broadband customer losses
and lower regulated rates for terminating mobile calls. The lower growth in Q3
primarily reflects non-recurring revenue received from mobile service
providers in Q2 and lower IoT revenue in Q3.
Fixed service revenue increased by 1.0%* (Q2: 1.4%*) as broadband ARPU growth
was partially offset by the impact of a lower broadband and TV customer base.
During Q3, we communicated price increases to a further one million customers.
As a result, we saw further fixed broadband disconnections and our customer
base declined by 76,000 (Q2: -133,000, Q1: -121,000). Our converged customer
base increased by 45,000 to 2.4 million. Gigabit speeds are available to over
24 million households across our hybrid fibre cable network and we have
achieved strong quality and reliability results in all four major independent
network tests.
Ahead of changes to German TV laws, which take effect from July 2024 and end
the practice of bulk TV contracting in MDU apartment complexes, we have
started migrating end users to individual TV customer contracts at scale. We
currently have 8.5 million MDU TV households, generating around €800 million
in basic-TV revenue annually. Trials to date have successfully migrated 35% to
65% of these households into individual TV contracts. During Q3 our total TV
customer base, including premium TV customers, declined by 136,000.
Mobile service revenue decreased by 0.5%* (Q2: +0.7%*) reflecting a lower
total customer base and a reduction in mobile termination rates, partially
offset by higher roaming and visitor revenue. Lower quarter-on-quarter growth
reflects non-recurring revenue received from service providers in Q2 and lower
Business IoT revenue year-on-year in Q3. We added 95,000 new contract
customers in the quarter, supported by our ongoing optimisation of sales
channels and an improved performance of Vodafone's own brands. We have
achieved strong results in all four major independent mobile network tests
from 'Connect', 'CHIP', 'Computer BILD' and 'OpenSignal'.
Vodafone Business service revenue decreased by 1.9%* (Q2: +1.0%*) in Q3,
reflecting a strong prior year comparative performance in public sector and
cloud services, and lower IoT revenue. We added 1.8 million IoT connections in
the quarter, driven by strong demand from the automotive sector. In November
2023, we expanded our digital services proposition for SoHo businesses, with
Microsoft 365 and new security solutions now available to customers.
UK, Italy, Spain and Other Europe ⫶ Growing in 7 out of 9 markets
UK
Service revenue increased by 5.2%* (Q2: 5.5%*) as continued strong growth in
the Consumer and Business segments was partly offset by lower fixed wholesale
revenue.
In mobile, our contract customer base increased by 18,000 supported by good
seasonal trading. Consumer contract retention also improved by 0.8 percentage
points year-on-year. Our digital sub-brand, 'VOXI' continued to grow, with
26,000 customers added during the quarter.
In fixed, we added 39,000 broadband customers in Q3, and we now have 1.3
million broadband customers. Through our partnerships with CityFibre and
Openreach we can now reach over 14.5 million households with full fibre
broadband, more than any other provider in the UK.
Vodafone Business service revenue increased by 5.8%* (Q2: 3.2%*) during the
quarter, supported by strong growth in IoT and higher project revenue. This
follows our announcement in August 2023, that we will be providing
connectivity for Britain's smart meter network through our partnership with
Data Communications Company.
In June 2023, we announced a binding agreement to combine our UK business with
Three UK to create a sustainable, and competitive third scaled network
operator in the UK. Following the merger, which we expect to close around the
end of calendar 2024, subject to regulatory and shareholder approvals,
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 £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
(https://investors.vodafone.com/merger-of-vodafone-uk-and-three-uk)
Italy
Service revenue declined by 1.3%* (Q2: -1.0%*) as a result of continued price
pressure in the mobile value segment, partially offset by strong Business
demand for fixed line connectivity and digital services.
In mobile, our Consumer prepaid active customer base declined
quarter-on-quarter, in part reflecting repricing actions across a proportion
of our customer base. Our digital sub-brand 'ho.' continued to grow, with
36,000 net new customers, and now has 3.2 million customers. In October 2023,
we agreed an extension to our wholesale MVNO agreement with PostePay until the
end of 2028.
Our fixed line customer base decreased by 24,000, however we also added 24,000
fixed-wireless customers which are reported within our mobile customer base.
Our next generation network broadband services are now available to 23.3
million households, including 9.1 million through our own network and our
partnership with Open Fiber. This is complemented by our fixed-wireless access
services which now cover 4.3 million households via 5G FWA and 1.3 million
households via 4G FWA.
Vodafone Business continued to grow strongly at 7.5%* (Q2: 7.5%*) driven by
good demand for both our fixed connectivity and digital services, supported in
part by the business voucher programme. This initiative, which concluded in
December 2023, has been funded via the EU Recovery and Resilience Facility
('ERF') and subsidises high-speed broadband connectivity. In October 2023, we
announced that Vodafone will provide hybrid 5G Mobile Private Network
infrastructure to SNAM, one of Europe's largest natural gas transportation
companies, and in November 2023 we were awarded the public tenders for local
area networks and mobile services for public administration.
On 18 December 2023, we confirmed that we are exploring options for in-market
consolidation in Italy with several parties. There can be no certainty that
any transaction will ultimately be agreed.
Spain
On 31 October 2023, we announced that we had entered into binding agreements
with Zegona Communications plc in relation to the sale of 100% of Vodafone
Spain. On completion, which is expected to take place during the first half of
calendar 2024, we will receive €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 Operating Free Cash Flow 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
(https://investors.vodafone.com/sale-of-vodafone-spain) .
Vodafone Spain will be reported as discontinued operations in the consolidated
financial statements for the year ending 31 March 2024.
In Spain, service revenue declined due to continued price competition in the
Consumer value segment, a lower customer base and a reduction in mobile
termination rates. This was partially offset by the positive contribution from
inflation-linked price increases implemented in January 2023 and higher
Business revenue during the quarter. Our mobile contract customer base
increased by 29,000 and our broadband customer base decreased by 24,000.
Other Europe
Service revenue grew by 3.6%* (Q2: 3.8%*), with all six markets growing during
the quarter, supported by our price actions in most markets.
In Portugal, both the Consumer and Business segments continued to grow
strongly, supported by inflation-linked contractual price increases
implemented in March 2023, as well as good demand for fixed services. We added
47,000 mobile contract customers and 31,000 fixed broadband customers during
the quarter. In Ireland, service revenue increased, driven by mobile customer
base growth. In Greece, service revenue grew, reflecting good growth in our
Business fixed segment, supported by public sector demand. During the quarter,
we added 41,000 mobile contract customers.
Vodafone Business service revenue increased by 7.8%* (Q2: 5.2%*) during the
quarter, with growth in both connectivity and digital services, including IoT,
Cloud and SD-WAN solutions. Growth was supported by a higher customer base,
price increases in the SoHo and SME customer segments across all markets, and
public sector contract wins in Greece and Romania.
In September 2022, we announced that we had entered into an agreement to buy
Portugal's fourth largest converged operator, Nowo Communications, from Llorca
JVCO Limited, the owner of Masmovil Ibercom S.A. The transaction is
conditional on regulatory approval. We submitted proposed remedies which were
rejected in January 2024. We are reviewing the competition authority's
comments and exploring further options to address the authority's concerns.
Vodacom ⫶ Maintained strong Group SR momentum
Note: Organic growth rates include Egypt in all periods
Vodacom's service revenue grew by 8.8%* (Q2: 9.0%*), with growth in South
Africa, Egypt, and Vodacom's international markets.
In South Africa, service revenue growth was supported by the Consumer mobile
contract segment, which benefited from a price increase in the first quarter,
and good fixed line growth in Consumer and Business. The lower growth in Q3
was due to a strong prior year comparative, reflecting an acceleration in
customer data usage during widespread power outages. We added 58,000 contract
customers in the quarter, and now have a total base of 6.8 million. We added
2.9 million mobile prepaid customers in the quarter, supported by our Big Data
led customer value management capabilities which offer personalised bundles to
customers. Financial services revenue grew by 3.9%*, driven by good demand for
our insurance services. Our 'VodaPay' super-app continued to gain traction
with 4.8 million registered users.
In Egypt, service revenue continued to grow strongly in the high inflationary
environment, reflecting good customer base growth, increased data usage and
good demand for our financial services product, 'Vodafone Cash', which now has
7.5 million active users. During the quarter, we added 123,000 mobile contract
customers and 607,000 mobile prepaid customers, and we now have 47.8 million
customers.
In Vodacom's international markets, service revenue growth was supported by a
higher customer base, and strong M-Pesa and data revenue growth. The
reacceleration in quarterly trends was largely driven by the DRC, which is
benefitting from accelerated network investment. M-Pesa revenue continued to
grow strongly and now represents 27.4% of service revenue. Our mobile customer
base now stands at 53.7 million and 62.3% of active customers use our data
services.
Turkey
Service revenue growth in Turkey was driven by continued customer base
management and ongoing repricing actions to reflect the high inflationary
environment. Despite a material devaluation in the currency, service revenue
also grew in euro terms during the quarter. We maintained our good commercial
momentum, adding 352,000 mobile contract customers during the quarter,
including migrations from prepaid customers.
Hyperinflationary accounting in Turkey
During the quarter, service revenue in Turkey increased by 90.4%* (Q2: 85.0%*)
due to ongoing repricing actions to reflect inflation. Turkey was designated
as a hyperinflationary economy on 1 April 2022 in line with IAS 29 'Financial
Reporting in Hyperinflationary Economies'. Organic growth metrics exclude the
impact of the hyperinflation adjustment in Turkey in the quarter.
Group service revenue growth excluding Turkey was 2.5%* (Q2: 2.8%*).
Additional resources
Topic Link
Social Contract investors.vodafone.com/social-contract
(https://investors.vodafone.com/social-contract)
Digital services & outstanding experience investors.vodafone.com/digital-services
(https://investors.vodafone.com/digital-services)
Leading gigabit networks investors.vodafone.com/vtbriefing (https://investors.vodafone.com/vtbriefing)
Vodafone Business investors.vodafone.com/vbbriefing (https://investors.vodafone.com/vbbriefing)
Vantage Towers vantagetowers.com (https://www.vantagetowers.com/)
Vodacom vodacom.com (https://www.vodacom.com/)
ESG Reporting Suite
Board conversations investors.vodafone.com/videos
(https://investors.vodafone.com/video-tags?id=246)
ESG Addendum investors.vodafone.com/esgaddendum
(https://investors.vodafone.com/esgaddendum)
ESG A-Z investors.vodafone.com/ (https://investors.vodafone.com/esga-z) esga
(https://investors.vodafone.com/esga-z) -z
(https://investors.vodafone.com/esga-z)
TCFD investors.vodafone (https://investors.vodafone.com/tcfd) .com/
(https://investors.vodafone.com/tcfd) tcfd
(https://investors.vodafone.com/tcfd)
SASB investors (https://investors.vodafone.com/sasb) .vodafone.com/
(https://investors.vodafone.com/sasb) sasb
(https://investors.vodafone.com/sasb)
Non-GAAP measures
In the discussion of the Group's reported operating results, non-GAAP measures
are presented to provide readers with additional financial information that is
regularly reviewed by management. This additional information presented is not
uniformly defined by all companies including those in the Group's industry.
Accordingly, it may not be comparable with similarly titled measures and
disclosures by other companies. Additionally, certain information presented is
derived from amounts calculated in accordance with IFRS but is not itself a
measure defined under GAAP. Such measures should not be viewed in isolation or
as an alternative to the equivalent GAAP measure. The non-GAAP measures
discussed in this document are listed below.
Non-GAAP measure Defined on page Closest equivalent GAAP measure Reconciled on page
Performance metrics
Organic revenue growth Page 8 Revenue Pages 9 and 10
Organic service revenue growth Page 8 Service revenue Pages 9 and 10
Organic mobile service revenue growth Page 8 Service revenue Pages 9 and 10
Organic fixed service revenue growth Page 8 Service revenue Pages 9 and 10
Organic Group service revenue growth excluding Turkey Page 8 Service revenue Pages 9 and 10
Organic Vodafone Business service revenue growth Page 8 Service revenue Pages 9 and 10
Organic financial services revenue growth in South Africa Page 8 Service revenue Page 9
Definition and use of organic growth measures
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 metrics, as follows:
- Revenue
- Service revenue;
- Mobile service revenue;
- Fixed service revenue;
- Group service revenue excluding Turkey;
- 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.
Reported growth M&A and Other Foreign exchange Organic growth*
Quarter ended 31 December 2023 Q3 FY24 Q3 FY23
€m €m % pps pps %
Service revenue
Germany 2,892 2,882 0.3 - - 0.3
Mobile service revenue 1,272 1,279 (0.5) - - (0.5)
Fixed service revenue 1,620 1,603 1.1 (0.1) - 1.0
UK 1,400 1,327 5.5 - (0.3) 5.2
Mobile service revenue 1,034 977 5.8 - (0.4) 5.4
Fixed service revenue 366 350 4.6 - - 4.6
Italy 1,057 1,071 (1.3) - - (1.3)
Mobile service revenue 714 750 (4.8) - - (4.8)
Fixed service revenue 343 321 6.9 (0.1) - 6.8
Spain 848 858 (1.2) 0.1 - (1.1)
Other Europe(1) 1,175 1,275 (7.8) 12.4 (1.0) 3.6
Vodacom(2) 1,543 1,668 (7.5) - 16.3 8.8
Other Markets(1,2,3) 393 368 6.8 19.5 64.1 90.4
Common Functions 137 134
Eliminations (62) (63)
Total service revenue 9,383 9,520 (1.4) 2.2 3.9 4.7
Other revenue 1,989 2,118
Revenue 11,372 11,638 (2.3) 2.5 4.0 4.2
Other growth metrics
Group service revenue excluding Turkey 8,996 9,193 (2.1) 2.1 2.5 2.5
Turkey - Service revenue 393 334 17.7 (10.7) 83.4 90.4
Vodafone Business - Service revenue 2,624 2,602 0.8 1.9 2.3 5.0
Germany - Vodafone Business service revenue 612 629 (2.7) 0.8 - (1.9)
UK - Vodafone Business service revenue 540 508 6.3 - (0.5) 5.8
Italy - Vodafone Business service revenue 389 363 7.2 0.3 - 7.5
Spain - Vodafone Business service revenue 292 285 2.5 (0.3) - 2.2
Other Europe - Vodafone Business service revenue 375 380 (1.3) 9.7 (0.6) 7.8
South Africa - Financial services revenue 40 45 (11.1) - 15.0 3.9
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.
3. The Other Markets segment comprises only Vodafone Turkey in FY24.
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
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
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
Spain 860 884 (2.7) - - (2.7)
Other Europe(1) 1,205 1,298 (7.2) 12.1 (1.1) 3.8
Vodacom(2) 1,498 1,758 (14.8) - 23.8 9.0
Other Markets(1,2,3) 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
UK - Vodafone Business service revenue 531 517 2.7 - 0.5 3.2
Italy - Vodafone Business service revenue 379 352 7.7 (0.2) - 7.5
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.
3. The Other Markets segment comprises only Vodafone Turkey in FY24.
Definitions
Key terms are defined below.
Term Definition
Adjusted EBITDAaL Adjusted EBITDAaL, which is a non-GAAP measure, 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 free cash flow ('Adjusted FCF') Adjusted free cash flow, which is a non-GAAP measure, 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 Vantage Towers growth capital expenditure.
Africa Comprises the Vodacom Group and business in Egypt.
ARPU Average revenue per user, defined as customer revenue and incoming revenue
divided by average customers.
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.
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.
FWA Fixed Wireless Access.
GAAP Generally Accepted Accounting Principles.
IFRS International Financial Reporting Standards.
Internet of Things ('IoT') The network of physical objects embedded with electronics, software, sensors,
and network connectivity, including built-in mobile SIM cards, that enables
these objects to collect data and exchange communications with one another or
a database.
MDU Multi-Dwelling Unit.
Mobile service revenue Service revenue (see below) relating to the provision of mobile services.
Other Europe Other Europe comprises 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 comprises 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 (defined below) and Other revenue (defined
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 Business customers, together with roaming revenue,
revenue from incoming and outgoing network usage by non-Vodafone customers and
interconnect charges for incoming calls.
SD-WAN Software-Defined Wide Area Network.
SME Small and Medium-sized Enterprises.
SoHo Small office / Home office
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 31 December
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, respectively. References to "H1"
and "H2" are to the six month periods ended 30 September and 31 March,
respectively. References to the "last year", "last financial year" or "FY23"
are to the financial year ended 31 March 2023. References to "FY24" are to the
financial year ending 31 March 2024.
4. Vodacom refers to the Group's interest in Vodacom Group Limited
('Vodacom') as well as its operations, including subsidiaries in South Africa,
Egypt, DRC, Tanzania, Mozambique and Lesotho.
5. This document contains references to our and our affiliates' websites.
Information on any website is not incorporated into this update and should not
be considered part of this update.
Forward-looking statements and other matters
This document contains 'forward-looking statements' within the meaning of the
US Private Securities Litigation Reform Act of 1995 with respect to the
Group's financial condition, results of operations and businesses and certain
of the Group's plans and objectives. In particular, such forward-looking
statements include, but are not limited to, statements with respect to:
expectations regarding the Group's financial condition or results of
operations and the guidance for Adjusted EBITDAaL and Adjusted free cash flow
for the financial year ending 31 March 2024; the announced agreement to
combine Vodafone UK and Three UK; the announced agreement to dispose of
Vodafone Spain; changes to German TV laws and the migration of users to
individual TV customer contracts; expectations for the Group's future
performance generally; the transaction to purchase Nowo Communicatons; the
timing for the provision of hybrid 5G Mobile Private Network infrastructure to
SNAM; the Group's strategic partnership with Microsoft; the digital
transformation of the Group's business customers; the Group's partnership with
Data Communications Company in the UK; expectations regarding the operating
environment and market conditions and trends, including customer usage,
competitive position and macroeconomic pressures, price trends and
opportunities in specific geographic markets; intentions and expectations
regarding the development, launch and expansion of products, services and
technologies, either introduced by Vodafone or by Vodafone in conjunction with
third parties or by third parties independently; expectations regarding the
integration or performance of current and future investments, associates,
joint ventures, non-controlled interests and newly acquired businesses;
certain of the Group's plans and objectives, including the Group's
strategy.
Forward-looking statements are sometimes but not always identified by their
use of a date in the future or such words as 'will', 'may', 'expects',
'plans', '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 and the Group's strategic
partnership with Microsoft; acquisitions and divestments of Group businesses
and assets and the pursuit of new, unexpected strategic opportunities; the
Group's ability to integrate acquired business or assets; the extent of any
future write-downs or impairment charges on the Group's assets, or
restructuring charges incurred as a result of an acquisition or disposition;
developments in the Group's financial condition, earnings and distributable
funds and other factors that the Board takes into account in determining the
level of dividends; the Group's ability to satisfy working capital
requirements; changes in foreign exchange rates; changes in the regulatory
framework in which the Group operates; the impact of legal or other
proceedings against the Group or other companies in the communications
industry; and changes in statutory tax rates and profit mix, including the
disposal of Vodafone Spain.
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
2024
-End-
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