REG - Vodafone Group Plc - FY25 Preliminary Results
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RNS Number : 2975J Vodafone Group Plc 20 May 2025
Vodafone Group Plc
FY25 Preliminary Results
20 May 2025
Results in line with expectations and growth outlook
"Since I set out my plans to transform Vodafone two years ago, Vodafone has
changed. We have reshaped Europe, we are seeing the positive impact of our
drive for customer satisfaction in all our markets - most noticeably in the UK
and Germany - and we have delivered strong operational improvements across the
business. Clearly there is much more to do, but this period of transition has
repositioned Vodafone for multi-year growth.
Looking ahead, we expect to see broad-based momentum across Europe and Africa,
and for Germany to return to top-line growth during this year. This is
reflected in our guidance for profit and cash flow growth for the year ahead."
Margherita Della Valle
Group Chief Executive
Financial highlights (unaudited)
€13.3 billion cash proceeds New €2.0 billion Achieved 4.5 eurocents
Spain, Italy & Vantage disposals Buyback programme FY25 financial guidance Dividends per share
- Total revenue: Increased by 2.0% to €37.4 billion (FY24: €36.7
billion), with strong service revenue growth partially offset by foreign
exchange movements.
- Service revenue: On a reported basis grew by 2.8% to €30.8 billion
(FY24: €29.9 billion) and on an organic basis increased 5.1%, with an
anticipated slowdown in Germany more than offset by growth across the rest of
Europe, Africa and Türkiye.
- Germany: Declined by 5.0% in FY25, primarily due to the impact of the
MDU TV law change. Excluding this impact, service revenue in Germany declined
by 2.0% due to a lower fixed line customer base and higher competitive
intensity in the mobile market.
- UK: Organic service revenue increased by 1.9%, with strong commercial
momentum in Consumer supported by our investment in customer experience.
- Other Europe & Türkiye: Organic service revenue growth in Other
Europe of 2.1% and strong service revenue growth in Türkiye, increasing by
83.4% on an organic basis and by 45.2% in euro terms(1).
- Africa: Organic growth remained strong during the year at 11.3%,
supported by growth in South Africa and a very strong performance in Egypt.
- Business: Organic service revenue grew by 4.0% during the year, with
an accelerating trend.
- Adjusted EBITDAaL: On an organic basis increased by 2.5% to €10.9
billion (FY24: €11.0 billion), with a decline in Germany offset by good
performance across the rest of Europe, Africa and Türkiye.
- Operating loss/profit: We reported a loss of €0.4 billion (FY24:
profit of €3.7 billion), due to non-cash impairment charges for Germany and
Romania totalling €4.5 billion.
- Shareholder returns: The final €0.5 billion tranche from the initial
€2.0 billion buyback programme completed on 19 May 2025, with a new €2.0
billion buyback programme launched today with an initial tranche of €0.5
billion. Total dividends per share are 4.5 eurocents in FY25 (FY24: 9.0
eurocents). The capital returned to shareholders in FY25 totalled €3.7
billion.
- FY25 guidance achieved: Adjusted EBITDAaL of €11.0 billion and
Adjusted free cash flow of €2.5 billion on a guidance basis.
Strategic highlights
- Over the past two years, Vodafone has changed. We have reshaped our
operating footprint, reset our capital structure, whilst simplifying our
operations and improving customer experience.
- In reshaping our operating footprint, we have completed the sale of
Vodafone Spain and Vodafone Italy, and we expect the merger with Three UK to
complete in the first half of 2025. Within our new portfolio, our growth
markets represent 67% of Group Adjusted free cash flow, with our turnaround
market, Germany, generating 33%.
- Within all markets, we continue to make progress across our priorities
of Customers, Simplicity and Growth. We have improved customer satisfaction
across our markets, with both UK and Germany achieving their best ever results
and the UK now leading in the market.
- Whilst we still have much more to do to reach the full potential of
our businesses, we are now entering a phase of medium-term, sustainable
Adjusted free cash flow growth, as evidenced already in our guidance for
FY26.
Note:
1. Excluding the impact of hyperinflationary
accounting adjustments.
For more information, please contact:
Investor Relations: Investors.vodafone.com ir@vodafone.co.uk Media Relations: Vodafone.com/media/contact GroupMedia@vodafone.com
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14
2FN, England. Registered in England No. 1833679
Awebcast Q&A session will be held at 10:00 GMT on 20 May 2025. The
webcast and supporting information can be accessed at Investors.vodafone.com
Strategic Review ⫶ Vodafone has changed
Vodafone has changed
Over the past two years, Vodafone has changed. We have:
- Reshaped our operating footprint focused on growing telco markets with
strong positions and local scale. We have completed the sale of Vodafone
Spain and Vodafone Italy and the merger with Three UK is completing in the
first half of 2025. We have also made progress in simplifying our
non-controlled assets held in our new Investments portfolio.
- Reset our capital structure maintaining a strong balance sheet,
disciplined capital investment, rebased dividend and executing a €4.0
billion share buyback programme.
- Improved customer satisfaction across our markets, with both UK and
Germany achieving their best ever results and the UK now leading in the
market.
- Simplified our operations with a leaner HQ, commercial decisions
delegated to our markets, competitive commercial shared operations and 10,000
role reductions actioned.
- Grown digital services which are now c.10% of our Group service
revenue, with B2B digital services up 26.1% over the last two years and
financial services customers reaching 88 million. We have also continued to
innovate in core connectivity and in January 2025, we successfully completed
the world's first video call through a satellite to a normal mobile phone.
Financially, we have delivered our transformation and the MDU TV transition in
line with the Adjusted free cash flow outlook we shared in May 2023(1), with
over €2.5 billion reported Adjusted free cash flow for both FY24 and FY25.
Vodafone will grow
Whilst we still have much more to do to reach the full potential of our
businesses, we are now entering a phase of medium-term, sustainable Adjusted
free cash flow growth, as evidenced already in our guidance for FY26.
Our growth portfolio in Europe & Africa
- The majority of our portfolio (67% of Group Adjusted free cash
flow(2)) now benefits from the unique combination of a solid growth track
record, strong structural market position and a significant forward-looking
growth potential with clear execution plans.
- Within Europe, we have a material growth opportunity in the UK. We
will now have leading assets in mobile (customer base and spectrum), the
opportunity to accelerate fixed line and convergence as the fastest growing
challenger, and clear line of sight to £700 million annual cost synergies
from our merger integration.
- Within our Other Europe segment, we have scaled assets with strong
brands in mostly three-player markets. We have the opportunity to drive
further consolidation (such as in Romania), as well as establish a leadership
position in fast growing B2B segments, more than offsetting competitive
pressures. In Türkiye, we continue to build on our successful execution with
advanced digital and e-commerce opportunities, as well as a flourishing
sovereign data centre market.
- In Africa, we have leadership positions across all of our markets, and
we have recently upgraded our medium-term growth guidance. We are ideally
positioned to drive broad-based growth opportunities across core connectivity
(through data consumption and coverage expansion), financial services (through
penetration and service innovation), and B2B digital services.
- Importantly, in our emerging markets we have now established a track
record of growing revenue ahead of inflation and costs below inflation,
delivering medium-term euro denominated Adjusted free cash flow growth.
Germany turnaround
- In Germany (33% of Group Adjusted free cash flow(2)), we operate at
scale in the largest European market with a strong brand.
- In the past, our performance was impacted by the combination of
underinvestment in the quality of our services and, more recently, the MDU TV
law change.
- Over the last two years we have started transforming the business to
drive operational excellence and we will now see continued improvement in our
financial performance as we progress towards earning our fair share of market
growth.
- Having stabilised our customer base, the core of our transformation
will be building on the step-change of our NPS to achieve customer experience
excellence, supported by our ability to offer our customers the largest
gigabit footprint in the country.
A more detailed summary of our transformation progress and focus areas for
FY26 and beyond is outlined in an accompanying presentation and video Q&A
available here: investors.vodafone.com/results
(https://investors.vodafone.com/results) .
Note:
1. FY24 Adjusted free cash flow guidance excluding the
financial results of Vodafone Spain and Vodafone Italy, which have been
reported as discontinued operations.
2. Group FY25 Adjusted free cash flow on a pro forma
basis including the impact of the merger with 3UK in the UK; based on
operating free cash flow net of taxation, dividends received from associates
and joint ventures, and dividends paid to non-controlling shareholders in
subsidiaries.
Financial Review ⫶ Results in line with expectations
Financial results (unaudited)
- Total revenue: Increased by 2.0% to €37.4 billion (FY24: €36.7
billion) as strong service revenue growth was partially offset by adverse
foreign exchange movements.
- Service revenue: Increased by 5.1% on an organic basis, and by 2.8% on
a reported basis to €30.8 billion (FY24: €29.9 billion). An anticipated
slowdown in Germany was more than offset by growth across the rest of Europe,
Africa and Türkiye. Vodafone Business continued to grow, by 4.0% during the
year, supported by strong demand for digital services.
- Adjusted EBITDAaL: Increased by 2.5% on an organic basis, supported by
service revenue growth. Adjusted EBITDAaL in Germany declined 12.6%, including
a 7.5 percentage point impact related to the MDU TV law change, offset by good
performance across the rest of Europe, Africa and Türkiye.
- Operating loss/profit: Reversed to a loss of €0.4 billion (FY24:
profit of €3.7 billion), due to non-cash impairment charges for Germany and
Romania totalling €4.5 billion. See note 2 'Impairment review' in the
unaudited condensed consolidated financial statements for more information.
- Earnings per share: Basic loss per share from continuing operations
was 15.86 eurocents in FY25, compared to earnings per share of 4.45 eurocents
in the prior year, the decrease primarily due to impairment charges in Germany
and Romania. Adjusted basic earnings per share was 7.87 eurocents compared to
7.47 eurocents in the prior year.
- Discontinued operations: The results of Vodafone Spain and Vodafone
Italy are reported as discontinued operations and are therefore excluded from
continuing operations and the Group's segment reporting. The disposals
completed on 31 May 2024 and 31 December 2024, respectively. See note 3
'Discontinued operations and disposals' in the unaudited condensed
consolidated financial statements for more information.
FY25(1) FY24 Reported
€m €m change %
Revenue 37,448 36,717 2.0
- Service revenue 30,758 29,912 2.8
- Other revenue 6,690 6,805
Adjusted EBITDAaL(2,3) 10,932 11,019 (0.8)
Restructuring costs (164) (703)
Interest on lease liabilities(4) 488 440
Loss on disposal of property, plant and equipment and intangible assets (25) (34)
Depreciation and amortisation of owned assets (7,569) (7,397)
Share of results of equity accounted associates and joint ventures (123) (96)
Impairment (charge)/reversal (4,515) 64
Other income 565 372
Operating (loss)/profit (411) 3,665 (111.2)
Investment income 864 581
Financing costs (1,931) (2,626)
(Loss)/profit before taxation (1,478) 1,620
Income tax expense (2,246) (50)
(Loss)/profit for the financial year - Continuing operations (3,724) 1,570
Loss for the financial year - Discontinued operations (22) (65)
(Loss)/profit for the financial year (3,746) 1,505
Attributable to:
- Owners of the parent (4,169) 1,140
- Non-controlling interests 423 365
(Loss)/profit for the financial year (3,746) 1,505
Basic (loss)/earnings per share - Continuing operations (15.86)c 4.45c
Basic (loss)/earnings per share - Total Group (15.94)c 4.21c
Adjusted basic earnings per share(2) 7.87c 7.47c
Further information is available in a spreadsheet at
investors.vodafone.com/results
Notes:
1. The FY25 results reflect average foreign exchange rates of €1:£0.84,
€1:INR 90.79, €1:ZAR 19.58, €1:TRY 36.71 and €1:EGP 52.65.
2. Adjusted EBITDAaL and Adjusted basic earnings per share are non-GAAP
measures. See page 36 for more information.
3. Includes depreciation on leased assets of €3,205 million (FY24:
€3,003 million).
4. Reversal of interest on lease liabilities included within Adjusted
EBITDAaL under the Group's definition of that metric, for re-presentation in
financing costs.
Cash flow, funding & dividend
- Cash from operating activities: Decreased 7.2% to €15.4 billion
reflecting lower inflows from discontinued operations.
- Adjusted free cash flow: An inflow of €2.5 billion versus an inflow
of €2.6 billion in the prior year. The €52 million decline reflects
slightly lower Adjusted EBITDAaL and higher capital additions following higher
revenue growth in Africa and Türkiye, as well as a core network software
licence of €300 million, which is offset in working capital.
- Net debt: Decreased to €22.4 billion (€33.2 billion as at 31 March
2024), primarily driven by the proceeds from the sale of Vodafone Spain for
€4.1 billion and Vodafone Italy for €7.9 billion, as well as the 10% stake
in Oak Holdings for €1.3 billion, offset by equity dividends of €1.8
billion and the share buyback of €1.9 billion.
- Current liquidity: Cash and cash equivalents and short-term
investments totalled €16.3 billion (€9.4 billion as at 31 March 2024).
This includes €1.3 billion of net collateral which has been posted to
Vodafone from counterparties as a result of positive mark-to-market movements
on derivative instruments (€1.9 billion as at 31 March 2024).
- Shareholder returns: Total dividends per share are 4.5 eurocents
(FY24: 9.0 eurocents) including a final dividend per share of 2.25 eurocents.
The ex-dividend date for the final dividend is 5 June 2025 for ordinary
shareholders and 6 June 2025 for ADR holders, the record date is 6 June 2025
and the dividend is payable on 1 August 2025. The capital returned to
shareholders in FY25 totalled €3.7 billion.
FY25 FY24 Reported
Cash flow and funding €m €m change %
Inflow from operating activities 15,373 16,557 (7.2)
Inflow/(outflow) from investing activities 4,759 (6,122) 177.7
Outflow from financing activities (15,278) (15,855) 3.6
Net cash inflow/(outflow) 4,854 (5,420) 189.6
Cash and cash equivalents at the beginning of the financial year 6,114 11,628 (47.4)
Exchange loss on cash and cash equivalents (75) (94) 20.2
Cash and cash equivalents at the end of the financial year 10,893 6,114
Closing borrowings less cash and cash equivalents (excl. Vodafone Spain and (42,142) (50,804) 17.0
Vodafone Italy)
Closing borrowings less cash and cash equivalents (incl. Vodafone Spain and (42,142) (54,168) 22.2
Vodafone Italy)
FY25 FY24 Reported
€m €m change %
Adjusted free cash flow(1,2) 2,548 2,600 (2.0)
Licences and spectrum (421) (454)
Restructuring costs including working capital movements (246) (254)
Integration capital additions (31) (81)
Other adjustments - (28)
Free cash flow(1) 1,850 1,783 3.8
Closing net debt (excl. Vodafone Spain and Vodafone Italy)(1) (22,397) (33,242) 32.6
Closing net debt (incl. Vodafone Spain and Vodafone Italy)(1) (22,397) (33,349) 32.8
Notes:
1. Adjusted free cash flow, Free cash flow and Net debt are non-GAAP measures.
See page 36 for more information.
2. Discontinued operations generated an inflow of €40 million for the year
ended 31 March 2025 (FY24: €722 million inflow), in addition to the reported
total from continuing operations.
Outlook & capital allocation
In May 2024, we set out guidance for FY25 for Group Adjusted EBITDAaL and
Adjusted free cash flow. For FY25, we reported Adjusted EBITDAaL and Adjusted
free cash flow of €10.9 billion and €2.5 billion. The FY25 outcome, as
reported, reflects the foreign exchange rate movements versus those used for
the basis of guidance and the impact of Türkiye hyperinflation accounting,
which in aggregate, reduced Adjusted EBITDAaL by €0.1 billion. The table
below compares the guidance given and our actual performance.
The current macroeconomic climate presents significant uncertainties,
particularly on trade and foreign exchange rates, which may impact our
financial performance in the year ahead. Based on the current prevailing
assessments of the macroeconomic outlook, Adjusted EBITDAaL is expected to be
€11.0-€11.3 billion and Adjusted free cash flow to be €2.6-€2.8
billion, as outlined below. For FY26, as we continue our turnaround in
Germany, we are also providing additional guidance for Europe and expect
Adjusted EBITDAaL to be €7.2-€7.4 billion. For further information please
refer to the accompanying presentation available here:
investors.vodafone.com/performance/annual-reporting
(https://investors.vodafone.com/performance/annual-reporting) .
€billion Adjusted EBITDAaL(1) Adjusted FCF(1,2)
FY25 guidance c.11.0 at least 2.4
FY25 outcome - guidance basis(3,4) 11.0 2.5
Impact of exchange rates & Türkiye hyperinflation accounting (0.1) -
FY25 actual 10.9 2.5
Impact of exchange rates (0.3) (0.1)
Remove impact of Türkiye hyperinflation accounting 0.2 -
FY25 re-based(4,5) 10.8 2.4
Growth 0.2-0.5 0.2-0.4
FY26 guidance (ex. UK merger)(4,6) 11.0-11.3 2.6-2.8
Pro-forma full year FY26 UK merger impact 0.4 (0.2)
Notes:
1. Adjusted EBITDAaL and Adjusted free cash flow are non-GAAP measures. See
page 36 for more information.
2. Adjusted free cash flow is Free cash flow before licences and spectrum,
restructuring costs arising from discrete restructuring plans, integration
capital additions and working capital related items, and M&A.
3. The FY25 outcome on guidance basis is derived by applying FY25 guidance
foreign exchange rates. The FY25 guidance foreign exchange rates were €1:
GBP 0.86; €1: ZAR 20.58; €1: TRY 34.98; €1: EGP 51.75.
4. Excluding the impact of hyperinflationary accounting in Türkiye.
5. The FY25 re-based outcome is derived by applying FY26 guidance foreign
exchange rates.
6. The FY26 guidance reflect the following foreign exchange rates: €1: GBP
0.85; €1: ZAR 20.59; €1: TRY 43.42; €1: EGP 56.74. The guidance assumes
no material change to the structure of the Group.
Capital allocation
In March 2024, we conducted a broad capital allocation review, considering the
Group's strategy within its reshaped footprint.
- Investment: Following an extensive review of our capital investment
requirements, the current capital intensity will be broadly maintained at a
market level, which will allow for appropriate investment in networks and
growth opportunities. Capital additions in FY25 include an extraordinary core
network software licence of €300 million for the next 5 years (with no cash
impact in FY25), as well as upfront network investment in Germany in relation
to the 1&1 national roaming agreement.
- Leverage: A new leverage policy of 2.25x - 2.75x Net Debt to Adjusted
EBITDAaL was adopted in 2024 and we target to operate within the bottom half
of this range. The leverage policy supports a solid investment grade credit
rating and positions Vodafone to continue to invest for growth over the
long-term.
- Shareholder returns (dividends): Following the right-sizing of the
portfolio as a result of the sale of Vodafone Spain and Vodafone Italy, the
Board determined to adopt a new rebased dividend from FY25 onwards. The Board
has declared total dividends of 4.5 eurocents per share for FY25 (FY24: 9.0
eurocents) with an ambition to grow it over time.
- Shareholder returns (share buybacks): During the year, the Board
approved a capital return through share buybacks of up to €2.0 billion of
the proceeds from the sale of Vodafone Spain. The final tranche of this
buyback programme completed on 19 May 2025, with 2.4 billion shares
repurchased for €2.0 billion since March 2024. A new share buyback programme
of up to €2.0 billion of the proceeds from the sale of Vodafone Italy is
starting, with the first €500 million tranche commencing today. Total
capital returns to shareholders in FY25 were €3.7 billion.
Segment performance
Vodafone Spain and Vodafone Italy are reported as discontinued operations in
accordance with International Financial Reporting Standards ('IFRS').
Accordingly, Vodafone Spain and Vodafone Italy are excluded from the results
of continuing operations and are instead presented as a single amount as a
loss after tax from discontinued operations in the Group's Consolidated income
statement. Discontinued operations are also excluded from the Group's segment
reporting. The disposals of Vodafone Spain and Vodafone Italy completed on 31
May 2024 and 31 December 2024, respectively.
Geographic performance summary
Segment results Total revenue Service revenue Adjusted EBITDAaL(1) Adjusted EBITDAaL margin(1) Capital additions
FY25 FY24 FY25 FY24 FY25 FY24 FY25 FY24 FY25 FY24
€m €m €m €m €m €m % % €m €m
Germany 12,180 12,957 10,876 11,453 4,384 5,017 36.0 38.7 2,482 2,515
UK 7,069 6,837 5,887 5,631 1,558 1,408 22.0 20.6 897 866
Other Europe(2) 5,694 5,504 4,805 4,722 1,510 1,516 26.5 27.5 856 845
Türkiye 3,086 2,362 2,484 1,746 842 510 27.3 21.6 447 319
Africa 7,791 7,420 6,172 5,951 2,593 2,539 33.3 34.2 1,038 1,005
Common Functions(3) 1,817 1,864 663 559 45 29 1,142 781
Eliminations (189) (227) (129) (150) - - - -
Group 37,448 36,717 30,758 29,912 10,932 11,019 29.2 30.0 6,862 6,331
Downloadable performance information is available at:
investors.vodafone.com/results
Segment service revenue growth FY24 FY25
Q4 H2 Total Q1 Q2 H1 Q3 Q4 H2 Total
% % % % % % % % % %
Germany 0.6 0.5 0.2 (1.5) (6.2) (3.9) (6.4) (6.0) (6.2) (5.0)
UK 6.8 6.2 5.1 2.0 2.9 2.4 7.6 5.7 6.7 4.5
Other Europe(2) 0.3 (4.0) (5.7) 1.6 2.1 1.9 2.2 1.1 1.7 1.8
Türkiye 15.6 11.7 9.6 54.7 18.8 33.2 97.5 15.2 50.4 42.3
Africa 1.2 (3.4) (9.2) 1.6 0.3 0.9 4.1 8.8 6.4 3.7
Group 2.9 0.7 (1.3) 3.2 0.2 1.7 5.6 2.3 4.0 2.8
Segment organic service revenue growth(1) FY24 FY25
Q4 H2 Total Q1 Q2 H1 Q3 Q4 H2 Total
% % % % % % % % % %
Germany 0.6 0.5 0.2 (1.5) (6.2) (3.9) (6.4) (6.0) (6.2) (5.0)
UK 3.6 4.4 5.0 - 1.2 0.6 3.3 3.1 3.2 1.9
Other Europe(2) 5.5 4.6 4.2 2.3 2.6 2.5 2.6 0.8 1.7 2.1
Türkiye 105.6 97.8 88.5 91.9 89.1 90.3 83.4 73.2 78.1 83.4
Africa 10.0 9.4 9.2 10.0 9.7 9.9 11.6 13.5 12.6 11.3
Group 7.1 6.7 6.3 5.4 4.2 4.8 5.2 5.4 5.3 5.1
Group profitability FY24 FY25
Q4 H2 Total Q1 Q2 H1 Q3 Q4 H2 Total
Operating profit/(loss) €m 556 1,808 3,665 1,545 837 2,382 1,022 (3,815) (2,793) (411)
Adjusted EBITDAaL(1) €m 2,797 5,592 11,019 2,681 2,730 5,411 2,828 2,693 5,521 10,932
Adjusted EBITDAaL margin(1) % 29.8 29.8 30.0 29.7 29.5 29.6 28.8 28.8 28.8 29.2
Organic Adjusted EBITDAaL growth(1) % 1.2 2.2 5.1 2.5 3.8 2.2 0.3 1.3 2.5
Notes:
1. Organic service revenue growth, Group Adjusted EBITDAaL and Group Adjusted
EBITDAaL margin are non-GAAP measures. See page 36 for more information.
2. Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
3. Capital additions in FY25 includes software arrangements managed centrally
on behalf of the Group.
Germany ⫶ Turnaround continuing through challenging market conditions
35% €12.2bn (5.0%)
of Group service revenue Total revenue Organic service revenue growth
40% €4.4bn (12.6%)
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
FY25 FY24 Reported Organic
€m €m change % change(1)%
Total revenue 12,180 12,957 (6.0)
- Service revenue 10,876 11,453 (5.0) (5.0)
- Other revenue 1,304 1,504
Adjusted EBITDAaL 4,384 5,017 (12.6) (12.6)
Adjusted EBITDAaL margin 36.0% 38.7%
Note:
1. Organic growth is a non-GAAP measure. See page 36 for more information.
Growth
Total revenue decreased by 6.0% to €12.2 billion as a result of lower
service revenue and equipment revenue. As anticipated, service revenue
declined by 5.0% (Q3: -6.4%; Q4: -6.0%), primarily due to a 3.0 percentage
point negative impact (Q3: -3.8 percentage points; Q4: -3.3 percentage points)
from the end of bulk TV contracting in multi dwelling units ('MDU'), which
came into full effect from July 2024, as well as a lower broadband customer
base following the price increases in the prior year. The small improvement in
quarterly trends was driven by the lower impact of the TV law change and
higher wholesale service revenue, partially offset by lower mobile ARPU.
Fixed service revenue declined by 8.1% (Q3: -10.7%; Q4: -9.7%) due to the
cumulative impact of TV and broadband customer losses. The MDU transition had
a 5.5 percentage point impact (Q3: -6.8 percentage points; Q4: -5.9 percentage
points) on fixed service revenue growth. Excluding this impact, Q4 trends were
broadly stable. Mobile service revenue declined by 1.2% (Q3: -1.0%; Q4: -1.2%)
as ARPU pressure, due to higher competitive intensity in the market and lower
mobile termination rates, was only partially offset by higher wholesale
revenue. 1&1 began migrating their customers onto our network in the
second half of the year as a part of our long-term national roaming agreement
and we continue to expect the migration to reach a full run-rate during H2
FY26. Vodafone Business service revenue declined by 2.3% (Q3: -3.0%; Q4:
-2.8%) as price pressure in the mobile segment, in particular from SoHo
customers and large corporates optimising spend, as well as lower roaming
revenue, was only partially offset by good growth in digital services. Digital
services revenue continued to grow strongly, supported by strong demand for
our Cloud services which grew by 15.1% in FY25. In March 2025, we announced
the launch of our new Cyber Security Centre in Dusseldorf which aims to
support SMEs through monitoring and resolving cyber security threats.
Adjusted EBITDAaL declined by 12.6%, primarily due to a 7.5 percentage point
impact related to the MDU transition (H1: -7.0 percentage points; H2: -8.0
percentage points). Excluding this impact, the decline in Adjusted EBITDAaL
was largely driven by lower service revenue and increased investment in the
customer experience, our brand and Vodafone Business as we have chosen to
prioritise investment to support the turnaround of Vodafone Germany, as well
as higher customer costs in the more intense competitive environment. A 2.4
percentage point benefit from lower energy costs was offset by higher
inflation across the cost base. The Adjusted EBITDAaL margin was 2.7
percentage points lower year-on-year at 36.0%.
Customers
Our broadband customer base declined by 102,000 in FY25, including the loss of
43,000 customers on our gigabit-capable network. During the year, customer
additions on our gigabit-capable broadband footprint gradually improved and,
as we had anticipated, in the second half of the year we stabilised our
gigabit customer base. This was supported by the improved customer experience,
as we have achieved the lowest ever share of detractors in our base. We are
now the largest provider of fixed line gigabit connectivity in Germany,
supported by our wholesale agreements with Deutsche Telekom and Deutsche
Glasfaser. We can now market gigabit speeds to almost 75% of German homes with
5 million fibre households beyond our own cable footprint of 25 million
households.
During the year, we completed the migration of our MDU TV customer base
following the change in TV law that came into effect in July 2024. By the end
of March 2025, we had retained 4.2 million households under new commercial
terms, which is in line with our initial expectation that we would retain
around 50% of the 8.5 million MDU TV households.
Despite higher competitive intensity in the mobile market, our Consumer mobile
contract customer base increased by 90,000. Our increased focus on higher
value branded and direct sales channels was partially offset by the
anticipated loss of low-margin customers through reseller channels and 65,000
net disconnections from business accounts, partially driven by some large
contract tenders in the prior year. We added a further 6.4 million IoT
connections, driven by demand from the automotive sector.
UK ⫶ Strong customer experience & Adj. EBITDAaL performance
19% €7.1bn 1.9%
of Group service revenue Total revenue Organic service revenue growth
14% €1.6bn 7.9%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
FY25 FY24 Reported Organic
€m €m change % change(1)%
Total revenue 7,069 6,837 3.4
- Service revenue 5,887 5,631 4.5 1.9
- Other revenue 1,182 1,206
Adjusted EBITDAaL 1,558 1,408 10.7 7.9
Adjusted EBITDAaL margin 22.0% 20.6%
Note:
1. Organic growth is a non-GAAP measure. See page 36 for more information.
Growth
Total revenue increased by 3.4% to €7.1 billion due to service revenue
growth and the appreciation of GBP:EUR. Service revenue increased by 4.5% (Q3:
7.6%; Q4: 5.7%) due to foreign exchange movements and organic growth in
service revenue which increased by 1.9% (Q3: 3.3%; Q4: 3.1%), as growth in
Consumer was offset by a decline in Business.
Mobile service revenue grew by 2.9% (Q3: 6.0%, Q4: 4.4%), as broadly stable
organic mobile service revenue of 0.3% (Q3: 1.8%, Q4: 1.8%) was supported by
the appreciation of GBP:EUR. The organic performance was primarily driven by
Consumer customer base growth and the delivery of project milestones in
Business. This was partially offset by the significantly lower level of
inflation-linked price rises compared to the prior year and the ongoing
dilution of the back book from front book pricing in mobile. Fixed service
revenue grew by 9.2% (Q3: 12.3%, Q4: 8.8%) and organic growth in fixed service
revenue was 6.5% (Q3 7.6%, Q4: 6.4%). Growth was supported by foreign exchange
movements, continued growth in our customer base and ARPU growth in Consumer.
The slowdown in quarterly trends was driven by Business due to some managed
services contract losses.
Vodafone Business service revenue increased by 1.6% (Q3: 3.7%, Q4: 3.7%) and
organic growth in Vodafone Business service revenue declined by 0.9% (Q3:
-0.4%, Q4: 1.3%). Growth in fixed due to strong commercial performance, and
business demand for our digital services and project work, was offset by a
decline in mobile, primarily driven by lower inflation-linked price increases
and ARPU pressure. The improvement in quarterly growth trends was driven by
project activity.
Adjusted EBITDAaL increased by 10.7% in the period, and on an organic basis,
Adjusted EBITDAaL increased by 7.9%. The increase in Adjusted EBITDAaL was
primarily driven by service revenue growth, a 2.7 percentage point benefit
from lower energy costs and other cost efficiencies. The Adjusted EBITDAaL
margin improved by 1.4 percentage points year-on-year to 22.0%.
Customers
We have delivered significant improvements in customer experience this year
and now have a market leading NPS position and lowest ever share of detractors
in our base. This is reflected in Ofcom mobile complaints, which are down 30%
year-on-year. These achievements supported our record level customer loyalty,
and an increase in our mobile Consumer contract customer base of 117,000. This
was partially offset by large low-value contract disconnections in Business
and a reclassification of part of the mobile customer base to IoT, with our
total contract customer base increasing by 7,000 in FY25.
In fixed, we continue to be one of the fastest growing broadband providers in
the UK and our customer base increased by 227,000 during the year. This was
supported by the launch of the new 'One Touch Switching' service in September
2024, making it even easier for customers to join us. We now cover 19.4
million households with gigabit speeds, and in July, we announced that we now
offer faster speeds of up to 2.2Gbps in more locations than any other
provider.
Portfolio
In June 2023, we announced a binding agreement to combine our UK business with
Three UK to create a sustainable and competitive third scaled network operator
in the UK. In December 2024, the UK's Competition and Markets Authority
('CMA') approved the combination of Vodafone and Three in the UK. Following
the merger, which we expect to complete in the first half of 2025, Vodafone
and CK Hutchison will own 51% and 49% of the combined business, respectively.
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 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/sites/vodafone-ir/files/2023-06/merger-of-vodafone-uk-and-three-uk-13-june-2023-vodafone.pdf)
Other Europe(1) ⫶ Continued service revenue growth
16% €5.7bn 2.1%
of Group service revenue Total revenue Organic service revenue growth
14% €1.5bn 0.0%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
FY25 FY24 Reported Organic
€m €m change % change(2)%
Total revenue 5,694 5,504 3.5
- Service revenue 4,805 4,722 1.8 2.1
- Other revenue 889 782
Adjusted EBITDAaL 1,510 1,516 (0.4) -
Adjusted EBITDAaL margin 26.5% 27.5%
Notes:
1. Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
2. Organic growth is a non-GAAP measure. See page 36 for more information.
Growth
Total revenue grew by 3.5% to €5.7 billion as higher service and equipment
revenue was partially offset by the depreciation of local currencies versus
the euro. Service revenue increased by 1.8% (Q3: 2.2%, Q4: 1.1%) as adverse
foreign exchange movements were offset by organic growth in service revenue of
2.1% (Q3: 2.6%, Q4: 0.8%), driven by a higher contract customer base in mobile
and broadband, and by price actions in most markets, partly offset by lower
mobile termination rates. The slowdown in quarterly trends was due to the
exceptionally high growth in Q4 the prior year driven by public sector
projects.
In Portugal, both our Consumer and Business segments continued to perform well
during the year. In November 2024 we launched our new second brand, Amigo, to
compete effectively across all segments of the market following the launch of
a fourth player. In Ireland, service revenue grew due to higher broadband
customer base supported by improved customer loyalty, partially offset by
lower mobile termination rates. Service revenue in Greece increased,
particularly due to growth in the public sector and a higher mobile contract
customer base.
Vodafone Business service revenue increased by 3.9% (Q3: 5.3%, Q4: 1.5%), as
organic growth in Vodafone Business service revenue of 4.4% (Q3: 5.8%, Q4:
1.2%) was offset by adverse foreign exchange movements. Organic growth was
mainly driven by digital services, as well as public sector project work in
Portugal, Greece and Romania.
Adjusted EBITDAaL declined by 0.4% in the period and was stable on an organic
basis, as service revenue growth and ongoing cost control was offset by a
deferral of income recognition relating to certain Business contracts and a
one-off provision. The Adjusted EBITDAaL margin decreased by 1.0 percentage
points year-on-year to 26.5%.
Customers
We won 462,000 new mobile contract customers across our six markets, mainly
driven by Portugal and Greece. In Portugal, we won 170,000 new contract
customers in mobile and 23,000 in fixed broadband. In Greece, the mobile
contract base grew by 149,000, though fixed broadband customers declined by
17,000. In Ireland, our mobile contract customer base increased by 18,000 and
the broadband customer base by 22,000. Through our fixed wholesale network
access partnerships, including our fibre joint venture, SIRO, we now cover 1.7
million households in Ireland with FTTH.
Portfolio
In October 2024, we announced that, along with Digi Romania, we have signed a
memorandum of understanding with Hellenic Telecommunications in relation to a
potential acquisition of separate parts of its subsidiary Telekom Romania. The
discussions are at an advanced stage with the regulatory approval process
ongoing.
Türkiye ⫶ Strong growth in real terms and on a euro basis
8% €3.1bn 83.4%
of Group service revenue Total revenue Organic service revenue growth
8% €0.8bn 110.5%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
FY25 FY24 Reported Organic
€m €m change % change(1)%
Total revenue 3,086 2,362 30.7
- Service revenue 2,484 1,746 42.3 83.4
- Other revenue 602 616
Adjusted EBITDAaL 842 510 65.1 110.5
Adjusted EBITDAaL margin 27.3% 21.6%
Note:
1. Organic growth is a non-GAAP measure. See page 36 for more information.
Hyperinflationary accounting in Türkiye
Türkiye 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 unaudited condensed consolidated financial
statements for further information.
Organic growth metrics exclude the impact of the hyperinflation adjustment and
foreign exchange translation in Türkiye. See page 37 for more information.
Growth
Total revenue increased by 30.7% to €3.1 billion, with service revenue
growth partly offset by depreciation of the local currency versus the euro.
Service revenue increased by 83.4% (Q3: 83.4%, Q4: 73.2%) on an organic basis.
Service revenue growth in euro terms was 42.3% (Q3: 97.5%, Q4: 15.2%) as
reported under IAS 29. Excluding the impact of hyperinflationary accounting
adjustments, service revenue increased by 45.2% in euro terms (Q3: 53.1%; Q4:
52.3%). Growth in Türkiye was primarily driven by ongoing price actions,
value accretive base management and continued customer base growth, partially
offset by adverse foreign exchange movements.
Vodafone Business service revenue increased by 107.1% (Q3: 102.8%, Q4: 105.1%)
on an organic basis in FY25, with growth supported by business demand for our
digital services, as well as inflationary mobile price actions. In euro terms,
Business service revenue increased by 60.9% (Q3: 117.0%, Q4: 38.0%) as
reported under IAS 29.
Adjusted EBITDAaL increased by 110.5% on an organic basis, supported by
service revenue growth, ongoing digitalisation and our continued focus on cost
efficiency. Adjusted EBITDAaL continued to grow in euro terms and increased by
65.1% during the year. The Adjusted EBITDAaL margin increased by 5.7
percentage points year-on-year (6.7 percentage points on an organic basis) to
27.3%.
Customers
We won 952,000 new mobile contract customers during the year, including
migrations of prepaid customers.
Africa ⫶ Accelerating growth supporting upgraded mid-term guidance
20% €7.8bn 11.3%
of Group service revenue Total revenue Organic service revenue growth
24% €2.6bn 10.2%
of Group Adjusted EBITDAaL Adjusted EBITDAaL Organic Adjusted EBITDAaL growth
FY25 FY24 Reported Organic
€m €m change % change(1)%
Total revenue 7,791 7,420 5.0
- Service revenue 6,172 5,951 3.7 11.3
- Other revenue 1,619 1,469
Adjusted EBITDAaL 2,593 2,539 2.1 10.2
Adjusted EBITDAaL margin 33.3% 34.2%
Note:
1. Organic growth is a non-GAAP measure. See page 36 for more information.
Growth
Total revenue increased by 5.0% to €7.8 billion as higher service and
equipment revenue was partially offset by the depreciation of the Egyptian
pound versus the euro. Service revenue increased by 3.7% (Q3: 4.1%, Q4: 8.8%)
and organic growth in service revenue was 11.3% (Q3: 11.6%, Q4: 13.5%) with
growth in South Africa, Egypt and all of Vodacom's international markets,
apart from Mozambique. The improvement in quarterly trends reflect an
acceleration in growth across all Vodacom segments.
In South Africa, service revenue growth was supported by good demand for fixed
connectivity, an acceleration in the Consumer prepaid segment and strong
growth in the mobile contract segment, which benefited from price increases.
Financial services revenue grew by 12.1% to €176 million, supported by
growth in our insurance services.
Service revenue in Egypt grew well above inflation during the year and
accelerated in Q4. The performance was supported by price actions, sustained
customer base growth and demand for data. Our financial services product,
'Vodafone Cash' revenue increased by 18.8% to €113.7 million and now
represents 8.0% of Egypt's service revenue.
In Vodacom's international markets, service revenue growth was supported by a
higher customer base and strong M-Pesa and data revenue growth. M-Pesa revenue
grew by 10.0% to €427.9 million, and now represents 27.6% of service
revenue.
Vodacom Business service revenue grew by 5.4% (Q3: 6.6%; Q4: 9.6%) and organic
growth in Vodacom Business service revenue was 10.0% (Q3: 10.8%; Q4: 11.5%),
with South Africa supported by strong demand for digital services and fixed
connectivity.
Adjusted EBITDAaL increased by 2.1% as the depreciation of local currencies
versus the euro was more than offset by organic growth. On an organic basis,
adjusted EBITDAaL increased by 10.2% due to service revenue growth, cost
initiatives and the base effect of the Egyptian pound devaluation in the prior
year. The Adjusted EBITDAaL margin decreased by 0.9 percentage points
year-on-year (-0.2 percentage points on an organic basis) to 33.3%.
Customers
In South Africa, we won 152,000 new contract customers in FY25, and now have a
mobile contract base of 7.0 million. Across our active customer base, 78.9% of
our mobile customers use data services. Our 'VodaPay' super-app continued to
gain traction with 11.9 million registered users.
In Egypt, we won 656,000 new contract customers and 2.5 million prepaid mobile
customers during the year, and we now have 51.5 million customers. 'Vodafone
Cash' reached 11.4 million active users with 3.2 million users added during
the year.
In Vodacom's international markets, we won 5.9 million new mobile customers in
FY25, and our mobile customer base is now 60.0 million, with 67.3% of active
customers using our data services. Our M-Pesa customer base now totals 25.2
million.
Investor Briefing
Vodacom Group hosted an investor briefing in February 2025, which encompassed
a series of presentations and showcases covering the Vodacom Group's
medium-term strategy and the key growth opportunities across its markets and
products. As part of this update, Vodacom communicated an ambition to
accelerate Group EBITDA growth into double-digit. This represents an upgrade
from the existing medium-term target framework of high single-digit EBITDA
growth.
Further information on our operations in Africa can be accessed here:
vodacom.com (https://vodacom.com) .
Vodafone Investments
Associates and joint ventures FY25 FY24
€m €m
Vantage Towers (Oak Holdings 1 GmbH) (74) (85)
VodafoneZiggo Group Holding B.V. (125) (177)
Safaricom Limited 201 159
Indus Towers Limited 55 140
Other(1) (including TPG Telecom Limited) (180) (133)
Share of results of equity accounted associates and joint ventures (123) (96)
Note:
1. The Group's investment in Vodafone Idea Limited ('VIL') was reduced to
€nil in the year ended 31 March 2020 and the Group has not recorded any
profit or loss in respect of its share of VIL's results since that date.
Vantage Towers - 44.7% ownership
In March 2023, we announced the completion of Oak Holdings GmbH, our
co-control partnership for Vantage Towers with a consortium of long-term
infrastructure investors led by Global Infrastructure Partners and KKR. We
received initial net proceeds of €4.9 billion in March 2023, followed by a
further €500 million in July 2023 and €1.3 billion in August 2024, taking
total net proceeds to €6.6 billion and the Consortium's ownership in Oak
Holdings GmbH to 50%. Our effective stake in Vantage Towers is 44.7%. During
the year, total revenue increased by 6.9% to €1.2 billion, supported by
2,020 net new tenancies and 839 new macro sites. As a result, the tenancy
ratio increased to 1.53x (31 March 2024: 1.50x). Vodafone's share of results
in the period reflects the amortisation of intangible assets arising from the
completion of the co-control partnership for Vantage Towers. During the year,
Vantage Towers distributed €307 million in dividends to Vodafone.
VodafoneZiggo Joint Venture (Netherlands) - 50.0% ownership
The results of VodafoneZiggo are prepared under US GAAP, which is broadly
consistent with Vodafone's IFRS basis of reporting. Total revenue decreased
1.1% to €4.1 billion, as a decline in the fixed customer base was only
partially offset by contractual price increases. In FY25, VodafoneZiggo's
mobile contract customer base increased by 14,000 driven by growth in the
Consumer segment. VodafoneZiggo's broadband customer base declined by 105,000
customers due to the competitive price environment. VodafoneZiggo offers
gigabit speeds to 7.6 million homes, providing nationwide coverage. During the
year, VodafoneZiggo successfully acquired a 100 MHz spectrum license in the
3.5 GHz band. Vodafone's share of net loss for the year decreased, driven by
higher gains on derivative financial instruments and tax, partially offset by
lower operating income. During the year, Vodafone received €63 million in
dividends and €51 million in interest payments from the joint venture.
Safaricom Associate (Kenya) - 27.8% ownership
Safaricom service revenue grew by 26.3% to €2.7 billion, driven by organic
growth of 11.2% and favourable foreign exchange movements of the Kenyan
shilling versus the euro. Vodafone's higher share of results was due to a
strong result in Kenya. During the period, Vodafone received €136 million in
dividends from Safaricom.
TPG Telecom Limited Joint Venture (Australia) - 25.1% ownership
TPG Telecom Limited ('TPG') is a fully integrated telecommunications operator
in Australia and is listed on the Australian stock exchange. The Group owns an
equivalent economic interest of 25.1%, via an 11% direct stake in TPG and a
14% indirect stake, held through a 50:50 joint venture with CK Hutchison.
During the year, the Group received €24 million in dividends from its direct
stake in TPG. The Group provides guarantees amounting to $1.0 billion and
€0.6 billion (2024: $1.0 billion and €0.6 billion) in relation to its 50%
share in a multicurrency loan facility held by the joint venture. In October
2024, TPG announced the sale of its fixed network infrastructure assets and
enterprise, government and wholesale fixed telecommunications services
business for AU$5.25 billion. The transaction is subject to regulatory
approval and other customary conditions precedent.
Vodafone Idea Limited Joint Venture (India) - 24.4% ownership
After undertaking equity fund-raisings and allotments to vendors since March
2024, the Group's shareholding in Vodafone Idea Limited has reduced to 24.4%.
See note 5 'Contingent liabilities and legal proceedings' in the unaudited
condensed consolidated financial statements for more information.
On 30 March 2025, Vodafone Idea announced that the government had agreed to
convert US$4.3 billion of its outstanding spectrum dues to equity. The Group's
shareholding in Vodafone Idea Limited was subsequently diluted to 16.1% in
April 2025.
Indus Towers Limited (India)
The Group disposed of its investment in Indus Towers Limited in two tranches
during June and December 2024. See note 5 'Contingent liabilities and legal
proceedings' in the unaudited condensed consolidated financial statements for
more information.
Net financing costs
FY25 FY24 Reported
€m €m change %
Investment income 864 581
Financing costs (1,931) (2,626)
Net financing costs (1,067) (2,045) 47.8
Adjustments for:
Mark-to-market (gains)/losses (2) 97
Foreign exchange losses 1 173
Fair value gains on Other Investments through profit and loss (247) -
Adjusted net financing costs(1) (1,315) (1,775) 25.9
Note:
1. Adjusted net financing costs is a non-GAAP measure. See page 36 for more
information.
Net financing costs decreased by €978 million and include a gain of €253
million on certain bonds bought back prior to their maturity dates; a
revaluation gain of €247 million from Other investments classified at fair
value through profit and mark-to-market and foreign exchange gains in the
current year, combined with lower interest paid on loans and collateral
balances.
Adjusted net financing costs decreased by €460 million, mainly as a result
of the gain of €253 million from the early redemption of the bonds bought
back in the period as well as lower interest costs mainly due to repayment of
the borrowings secured against the Group's shareholdings in Indus Towers and
Vodafone Idea.
Taxation
FY25 FY24 Reported
% % change pps
Effective tax rate (152.0%) 3.1% (155.1)
Adjusted effective tax rate(1) 25.3% 24.5% 0.8
Note:
1. Adjusted effective tax rate is a non-GAAP measure. See page 36 for more
information.
The Group's Effective tax rate ('ETR') for the year ended 31 March 2025 was
(152.0)% (FY24: 3.1%).
The negative ETR is driven by the €4,515 million impairments of Germany and
Romania that are permanently non-deductible for tax. Excluding these the ETR
would be positive 74.0%. This rate is high due to one-off items including a
charge of €718 million on remeasurement of the Luxembourg deferred tax asset
following a 1% corporate tax rate reduction, a €185 million tax charge on
the settlement of the VISPL tax cases in India, a €164 million tax charge
arising on the €26 million net gain on the disposal of a 10% stake in Oak
Holdings GmbH, a net €128 million tax charge as an effect of hyper-inflation
tax and accounting adjustments in Türkiye, offset by a net €(53)m credit in
relation to the disposal of Indus Towers and settlement of the secondary
pledge.
The Group's Adjusted ETR ('AETR') for the year ended 31 March 2025 was 25.3%
(FY24: 24.5%). This eliminates the above stated significant one-off items,
as well as the €423 million deferred tax charge for utilisation of
recognised tax losses in Luxembourg.
The BEPS Pillar Two Minimum Tax legislation was enacted in July 2023 in the UK
with effect from 2024. The Group has applied the temporary exception under IAS
12 in relation to the accounting for deferred taxes arising from the
implementation of the Pillar Two rules. The tax charge for the year ended 31
March 2025 includes a current tax charge of €7 million relating to Pillar 2
income taxes.
Earnings per share
Reported
FY25 FY24 change
eurocents eurocents eurocents
Basic (loss)/earnings per share - Continuing operations (15.86)c 4.45c (20.31)c
Basic (loss)/earnings per share - Total Group (15.94)c 4.21c (20.15)c
Adjusted basic earnings per share(1) 7.87c 7.47c 0.40c
Note:
1. Adjusted basic earnings per share is a non-GAAP measure. See page 36 for
more information.
Basic loss per share from continuing operations was 15.86 eurocents, compared
to earnings per share of 4.45 eurocents in FY24. The decrease was primarily
due to impairment losses in respect of Germany and Romania, together with a
higher income tax expense, which outweighed lower net financing costs.
Adjusted basic earnings per share was 7.87 eurocents, compared to 7.47
eurocents in FY24. The increase was primarily due to higher adjusted earnings,
primarily from lower adjusted net financing costs, together with a lower
number of shares outstanding resulting from the share buyback programme.
Cash flow & funding
Analysis of cash flow
FY25 FY24 Reported
€m €m change %
Inflow from operating activities 15,373 16,557 (7.2)
Inflow/(outflow) from investing activities 4,759 (6,122) 177.7
Outflow from financing activities (15,278) (15,855) 3.6
Net cash inflow/(outflow) 4,854 (5,420) 189.6
Cash and cash equivalents at the beginning of the financial year 6,114 11,628
Exchange loss on cash and cash equivalents (75) (94)
Cash and cash equivalents at the end of the financial year 10,893 6,114
Cash inflow from operating activities decreased to €15,373 million,
primarily due to lower inflows from discontinued operations.
Inflow from investing activities increased by €10,881 million to €4,759
million, primarily driven by the disposals of Vodafone Spain and Vodafone
Italy and the proceeds received from the disposal of 10% of Oak Holdings 1
GmBH (€1,336 million) and the disposal of 18% of Indus Towers Limited
(€1,684 million). The Group disposed of Vodafone Spain to Zegona
Communications plc ('Zegona') for total cash consideration of €4,069 million
(subject to closing accounts adjustments), of which €3,669 million is
included in this line, and Vodafone Italy to Swisscom AG ('Swisscom') for
total cash consideration of €7,885 million (after closing accounts
adjustments), of which €7,707 million is included in this line. The
remaining €400 million and €178 million respectively relates to the future
use of the Vodafone brand by Zegona and Swisscom, and to certain procurement
services to be provided by the Group to Zegona and is included in Inflow from
operating activities. This was offset by a higher outflow in relation to the
purchase of investments.
Outflows from financing activities decreased by €577 million to €15,278
million, as lower net cash outflows in respect of borrowings, dividends and
discontinued operations were partly offset by higher interest paid arising
from the repayment of borrowings secured against Indian assets and higher
payments in respect of the purchase of treasury shares.
Analysis of cash flow (continued)
FY25 FY24 Reported
€m €m change %
Adjusted EBITDAaL(1) 10,932 11,019 (0.8)
Capital additions(2) (6,862) (6,331)
Working capital(3) 53 (309)
Disposal of property, plant and equipment and intangible assets 9 14
Integration capital additions (31) (81)
Restructuring costs including working capital movements(4) (246) (254)
Licences and spectrum (421) (454)
Interest received and paid(5) (1,147) (1,279)
Taxation (728) (724)
Dividends received from associates and joint ventures 530 442
Dividends paid to non-controlling shareholders in subsidiaries (249) (260)
Other 10 -
Free cash flow(1) 1,850 1,783 3.8
Acquisitions and disposals 13,917 (346)
Equity dividends paid (1,787) (2,430)
Share buybacks (1,868) -
Foreign exchange (loss)/gain (182) (64)
Other movements in net debt(6) (1,085) 1,065
Net debt decrease/(increase)(1) 10,845 8
Opening net debt(1) (33,242) (33,250)
Closing net debt(1) (22,397) (33,242) 32.6
Net debt of Vodafone Spain and Vodafone Italy(1) - (107)
Closing net debt incl. Vodafone Spain and Vodafone Italy(1) (22,397) (33,349) 32.8
Free cash flow(1) 1,850 1,783
Adjustments:
- Licences and spectrum 421 454
- Restructuring costs including working capital movements(4) 246 254
- Integration capital additions 31 81
- Other adjustments - 28
Adjusted free cash flow(1) 2,548 2,600
Notes:
1. Adjusted EBITDAaL, Free cash flow, Adjusted free cash flow and Net debt are
non-GAAP measures. See page 36 for more information.
2. See page 49 for an analysis of tangible and intangible additions in the
year.
3. Includes the impact of €148 million of Trade payables for which the Group
has extended payment terms from 30 to 90 days through the use of reverse
factoring at 31 March 2025 (31 March 2024: €nil).
4. Includes working capital in respect of integration capital additions.
5. Interest received and paid excludes €451 million outflow (FY24: €406
million) in relation to the cash portion of interest on lease liabilities
included within Adjusted EBITDAaL.
6. Other movements in net debt for FY25 includes a net outflow from
discontinued operations of €120 million (FY24: €455 million inflow) and
the repayment of borrowings secured against Indian assets of €1,794 million
(including €547 million of accrued interest) following the disposal of the
Group's interest in Indus Towers, offset by payments from Swisscom and Zegona
in respect of the future use of the Vodafone brand of €491 million and
€328 million in respect of proceeds from the disposal of the Group's
residual 3% interest in Indus Towers, which was classified as an Other
investment. The amount for FY24 includes mark-to-market losses recognised in
the income statement of €97 million and €185 million for the repayment of
debt in relation to licences and spectrum.
Acquisitions and disposals includes the disposal of 10% of Oak Holdings 1 GmbH
(€1,336 million) and the disposal of 18% of Indus Towers Limited (€1,684
million). Additionally, the Group disposed of Vodafone Spain to Zegona
Communications plc ('Zegona') for total cash consideration of €4,069 million
(subject to closing accounts adjustments), of which €3,669 million is
included in this line, and Vodafone Italy to Swisscom AG ('Swisscom') for
total cash consideration of €7,885 million (after closing accounts
adjustments), of which €7,707 million is included in this line. The
remaining €400 million and €178 million respectively relates to the future
use of the Vodafone brand by Zegona and Swisscom and to certain procurement
services to be provided by the Group to Zegona.
Adjusted free cash flow was an inflow of €2,548 million in the period,
representing a decline of €52 million compared to the comparative period.
Borrowings and cash position
Re-presented(1)
FY25 FY24 Reported
€m €m change %
Non-current borrowings (46,096) (49,259)
Current borrowings (7,047) (7,728)
Borrowings (53,143) (56,987)
Cash and cash equivalents 11,001 6,183
Borrowings less cash and cash equivalents (42,142) (50,804) 17.0
Note:
1. On 1 April 2024, the Group adopted amendments to
IAS 1 'Presentation of Financial Statements' which has impacted the
classification of certain bonds between current borrowings and non-current
borrowings. See note 1 'Basis of preparation' for more information.
Borrowings principally includes bonds of €36,402 million (31 March 2024:
€40,743 million), lease liabilities of €10,826 million (31 March 2024:
€9,672 million), cash collateral liabilities of €2,357 million (31 March
2024: €2,628 million) and €nil (31 March 2024: €1,720 million) of bank
borrowings that are secured against the Group's shareholdings in Indus Towers
and Vodafone Idea.
The decrease in borrowings of €3,844 million was primarily driven by the
repayment of the bank borrowings that are secured against the Group's
shareholdings in Indus Towers and Vodafone Idea assets of €1,794 million,
repayment of bonds of €7,408 million and a net reduction in collateral
liabilities of €271 million, partially offset by the issue of new bonds of
€3,358 million, an increase in lease liabilities of €1,154 million and an
increase in bank loans and other borrowings of €1,335 million.
Funding position
FY25 FY24 Reported
€m €m change %
Bonds (36,402) (40,743)
Bank loans (1,213) (767)
Other borrowings including spectrum (2,345) (1,457)
Gross debt(1) (39,960) (42,967) 7.0
Cash and cash equivalents 11,001 6,183
Non-current investments in sovereign securities 913 -
Short-term investments(2) 5,280 3,225
Derivative financial instruments(3) 1,716 2,204
Net collateral liabilities(4) (1,347) (1,887)
Net debt(1) (22,397) (33,242) 32.6
Notes:
1. Gross debt and Net debt are non-GAAP measures. See page 36 for more
information.
2. Short-term investments include €2,139 million (31 March 2024: €1,201
million) of highly liquid government and government-backed securities and
managed investment funds of €3,141 million (31 March 2024: €2,024 million)
that are in highly rated and liquid money market investments with liquidity of
up to 90 days.
3. Derivative financial instruments exclude derivative movements in cash flow
hedging reserves of €574 million gain (31 March 2024: €498 million gain).
4. Collateral arrangements on derivative financial instruments result in cash
being held as security. This is repayable when derivatives are settled and is
therefore deducted from liquidity.
Net debt decreased by €10,845 million to €22,397 million. This was driven
by cash proceeds from acquisitions and disposals (€13,917 million) and a
free cash inflow of €1,850 million, partially offset by equity dividends of
€1,787 million, share buybacks of €1,868 million and €1,794 million in
relation to the repayment of borrowings secured against Indian assets.
Other funding considerations include:
FY25 FY24
€m €m
Lease liabilities (10,826) (9,672)
Pension fund liabilities (187) (181)
Guarantees over loan issued by Australia joint venture (1,479) (1,479)
Equity characteristic of 50% attributed by credit rating agencies to 'Hybrid 4,081 4,497
bonds' included in net debt, EUR swapped value of €8,162 million (€8,993
million as at 31 March 2024)
The Group's borrowings, which mainly include certain bonds that have been
designated in hedge relationships, are carried at €899 million (2024:
€1,229 million) higher than their euro equivalent redemption value. In
addition, where bonds are issued in currencies other than euros, 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 would
decrease the euro equivalent redemption value of the bonds by €1,132 million
(2024: €1,559 million).
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 year ended 31 March 2025 was -0.4%
(FY24: 3.4%), impacted by impairment losses in respect of Germany and Romania
and a higher income tax expense, which outweighed lower net financing cost.
The table below presents adjusted ROCE metrics.
FY25 FY24 Reported
% % Change pps
Pre-tax ROCE (controlled)(1) 7.0% 7.2% (0.2)
Post-tax ROCE (controlled and associates/joint ventures)(1) 4.4% 4.4% -
Note:
1. ROCE is calculated by dividing Operating profit by the average of capital
employed as reported in the consolidated statement of financial position.
Pre-tax ROCE (controlled) and Post-tax ROCE (controlled and associates/joint
ventures) are non-GAAP measures. See page 36 for more information.
Funding facilities
As at 31 March 2025, the Group had undrawn revolving credit facilities of
€7.8 billion comprising euro and US dollar revolving credit facilities of
€4.1 billion and US$4.0 billion (€3.7 billion) which mature in 2030 and
2028 respectively. Both committed revolving credit facilities support US and
euro commercial paper programmes of up to US$15 billion (€13.9 billion) and
€10 billion respectively.
Post employment benefits
As at 31 March 2025, the Group's net surplus of scheme assets over scheme
liabilities was €55 million (€76 million net surplus as at 31 March
2024).
Dividends
Dividends will continue to be declared in euros, aligning the Group's
shareholder returns with the primary currency in which we generate free cash
flow, and paid in euros, pounds sterling and US dollars. The foreign exchange
rate at which future dividends declared in euros will be converted into pounds
sterling and US dollars will be calculated based on the average World Markets
Company benchmark rates over the five business days during the week prior to
the payment of the dividend.
The Board is recommending total dividends per share of 4.5 eurocents for the
year. This includes a final dividend of 2.25 eurocents compared to 4.5
eurocents in the prior year.
The ex-dividend date for the final dividend is 5 June 2025 for ordinary
shareholders and 6 June 2025 for ADR holders, the record date is 6 June 2025
and the dividend is payable on 1 August 2025.
Shareholders may elect to receive their dividend in either eurocents or GBP
and the last day for election will be 11 July 2025. A Dividend Reinvestment
Plan ('DRIP') is provided by Equiniti Financial Services Limited. The DRIP
enables the Company's shareholders to elect to have their cash dividend
payments used to purchase the Company's shares. The last date to receive
elections to join the DRIP is 11 July 2025. More information can be found at
www.shareview.co.uk/info/drip
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Furldefense.com%2Fv3%2F__http%3A%2Fwww.shareview.co.uk%2Finfo%2Fdrip__%3B!!JUyETn1neQ!9U_3F94LE9h427CQXO9NKKcm4KE2XeJRwc6jI7sUk2SZZqrEc8DenhZhclOzlOWM4-2YWVWx94zk5dLK6onDjX1vK0VLgg%24&data=05%7C02%7CBen.Forman%40vodafone.com%7C4d53a2500a7e4c09ca4708dd3fb6bbc0%7C68283f3b84874c86adb3a5228f18b893%7C0%7C0%7C638736776267618567%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=B8LwhWdfn9PqMTlrvZ7ZGoRsfoecZ7qor9auztw75Dg%3D&reserved=0)
and vodafone.com/dividends
Other significant developments
Board changes
Simon Dingemans was appointed as a Non-Executive Director, effective 1 January
2025.
On 2 April 2025, the Group announced the following Board changes which will
take effect after the conclusion of the 2025 Annual General Meeting ('2025
AGM'):
- Anne-Françoise Nesmes will be appointed as a Non-Executive Director
and join the Audit and Risk Committee and ESG Committee, subject to
shareholder approval;
- David Nish will not seek re-election at the 2025 AGM and will retire
as a Board member, Senior Independent Director and Chair of the Audit and Risk
Committee;
- Simon Segars will be appointed Senior Independent Director and will
also join the Nominations and Governance Committee;
- Simon Dingemans will be appointed as Chair of the Audit and Risk
Committee and member of the Remuneration Committee;
- Michel Demaré will cease to be a member of the Nominations and
Governance Committee;
- Christine Ramon will cease to be a member of the ESG Committee and
will join the Remuneration Committee; and
- Delphine Ernotte Cunci will cease to be a member of the Remuneration
Committee and will join the Nominations and Governance Committee.
On 7 May 2025, the Group announced that Luka Mucic will step down as Group
Chief Financial Officer no later than early 2026.
Executive Committee changes
Marika Auramo was appointed CEO of Vodafone Business and a member of the
Executive Committee, effective 1 July 2024.
Aldo Bisio stepped down as CEO of Vodafone Italy and a member of the Executive
Committee on 15 November 2024.
On 7 February 2025, the Group announced that Guillaume Boutin will join in May
2025 as CEO Vodafone Investments & Strategy and a member of the Executive
Committee. Guillaume will succeed Serpil Timuray who has decided to leave
Vodafone at the end of June 2025.
Portfolio update
Vodafone Spain
On 31 May 2024, the Group announced that it had completed the sale of Vodafone
Holdings Europe, S.L.U. ('Vodafone Spain') to Zegona Communications plc for
€4.1 billion in cash (subject to closing accounts adjustments) and €0.9
billion in the form of redeemable preference shares.
Indus Towers
On 19 June 2024, the Group announced that it had sold an 18% stake in Indus
Towers Limited ('Indus') through an accelerated book-building offering
('placing'). The placing raised INR 153.0 billion (€1.7 billion) in gross
proceeds. Following the placing, the Group held a 3.1% shareholding in Indus.
On 10 January 2025, it was announced that this remaining stake had been sold.
Vantage Towers
On 22 July 2024, the Group announced the sale of a further 10% stake in Oak
Holdings GmbH ('Oak Holdings), the partnership that co-controls Vantage Towers
for €1.3 billion. Oak Holdings owns 89.3% of Vantage Towers and the Group's
effective ownership is 44.7% following the transaction.
Vodafone UK
On 5 December 2024, the UK's Competition and Markets Authority ('CMA')
announced its approval of the combination of Vodafone and Three in the UK. The
merger is expected to formally complete during the first half of 2025.
Vodafone Italy
On 2 January 2025, the Group announced that it had completed the sale of its
Italian operations ('Vodafone Italy') to Swisscom AG ('Swisscom') for total
cash consideration of €7.9 billion (after closing accounts adjustments). As
part of the transaction, the Group and Swisscom have entered into an agreement
whereby Vodafone will continue to provide certain services to Vodafone Italy
for a period of up to five years post deal completion.
Unaudited condensed consolidated financial statements
Consolidated income statement
2025 2024
Note €m €m
Revenue 37,448 36,717
Cost of sales (24,929) (24,459)
Gross profit 12,519 12,258
Selling and distribution expenses (2,934) (2,674)
Administrative expenses (5,447) (5,768)
Net credit losses on financial assets (476) (491)
Share of results of equity accounted associates and joint ventures (123) (96)
Impairment (charge)/reversal 2 (4,515) 64
Other income 565 372
Operating (loss)/profit (411) 3,665
Investment income 864 581
Financing costs (1,931) (2,626)
(Loss)/profit before taxation (1,478) 1,620
Income tax expense (2,246) (50)
(Loss)/profit for the financial year - Continuing operations (3,724) 1,570
Loss for the financial year - Discontinued operations 3 (22) (65)
(Loss)/profit for the financial year (3,746) 1,505
Attributable to:
- Owners of the parent (4,169) 1,140
- Non-controlling interests 423 365
(Loss)/profit for the financial year (3,746) 1,505
(Loss)/earnings per share - Continuing operations
- Basic (15.86)c 4.45c
(Loss)/earnings per share - Total Group
- Basic (15.94)c 4.21c
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of comprehensive expense
2025 2024
€m €m
(Loss)/profit for the financial year (3,746) 1,505
Other comprehensive income/(expense):
Items that may be reclassified to the income statement in subsequent years:
Foreign exchange translation differences, net of tax 321 (440)
Foreign exchange translation differences transferred to the income statement 115 23
Other, net of tax(1) 36 (1,748)
Total items that may be reclassified to the income statement in subsequent 472 (2,165)
years
Items that will not be reclassified to the income statement in subsequent
years:
Fair value gains on equity instruments classified as other investments, net of 116 -
tax
Net actuarial (losses)/gains on defined benefit pension schemes, net of tax 1 (58)
Total items that will not be reclassified to the income statement in 117 (58)
subsequent years
Other comprehensive income/(expense) 589 (2,223)
Total comprehensive expense for the financial year (3,157) (718)
Attributable to:
- Owners of the parent (3,485) (920)
- Non-controlling interests 328 202
Total comprehensive expense for the financial year (3,157) (718)
Note:
1. Principally includes the impact of the Group's cash flow hedges recognised
in other comprehensive income during the period.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of financial position
Re-presented(1)
31 March 31 March
2025 2024
€m €m
Non-current assets
Goodwill 20,514 24,956
Other intangible assets 12,924 13,896
Property, plant and equipment 30,712 28,499
Investments in associates and joint ventures 6,892 10,032
Other investments 3,153 1,006
Deferred tax assets 19,033 20,177
Post employment benefits 242 257
Trade and other receivables 6,431 5,967
99,901 104,790
Current assets
Inventory 617 568
Taxation recoverable 174 76
Trade and other receivables 9,404 8,594
Other investments 7,424 5,092
Cash and cash equivalents 11,001 6,183
28,620 20,513
Assets held for sale - 19,047
Total assets 128,521 144,350
Equity
Called up share capital 4,319 4,797
Additional paid-in capital 149,834 149,253
Treasury shares (6,791) (7,645)
Accumulated losses (123,503) (114,641)
Accumulated other comprehensive income 28,886 28,202
Total attributable to owners of the parent 52,745 59,966
Non-controlling interests 1,171 1,032
Total equity 53,916 60,998
Non-current liabilities
Borrowings 46,096 49,259
Share of net liabilities in joint ventures and associates 96 -
Deferred tax liabilities 798 699
Post employment benefits 187 181
Provisions 1,430 1,615
Non-debt liabilities in respect of written put options 97 -
Trade and other payables 3,147 2,328
51,851 54,082
Current liabilities
Borrowings 7,047 7,728
Taxation liabilities 578 393
Provisions 1,066 833
Trade and other payables 14,063 13,398
22,754 22,352
Liabilities held for sale - 6,918
Total equity and liabilities 128,521 144,350
Note:
1. On 1 April 2024, the Group adopted amendments to IAS 1 'Presentation of
Financial Statements' which has impacted the classification of certain bonds
between current borrowings and non-current borrowings. See note 1 'Basis of
preparation' for more information.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of changes in equity
Share Additional Treasury Accumulated Equity attributable to the owners Non- Total equity
capital paid-in shares comprehensive controlling
capital(1) losses(2) interests
€m €m €m €m €m €m €m
1 April 2023 4,797 149,145 (7,719) (82,824) 63,399 1,084 64,483
Issue or reissue of shares - - 74 (72) 2 - 2
Share-based payments - 108 - - 108 7 115
Transactions with non-controlling interests in subsidiaries - - - (26) (26) (5) (31)
Share of equity-accounted entities changes in equity - - - (164) (164) - (164)
Comprehensive (expense)/income - - - (920) (920) 202 (718)
Dividends - - - (2,433) (2,433) (256) (2,689)
31 March 2024 4,797 149,253 (7,645) (86,439) 59,966 1,032 60,998
1 April 2024 4,797 149,253 (7,645) (86,439) 59,966 1,032 60,998
Issue or reissue of shares - - 84 (81) 3 - 3
Share-based payments - 103 - - 103 7 110
Transactions with non-controlling interests in subsidiaries - - - (47) (47) 50 3
Comprehensive income - - - (3,485) (3,485) 328 (3,157)
Dividends - - - (1,795) (1,795) (246) (2,041)
Purchase of treasury shares - - (2,000) - (2,000) - (2,000)
Cancellation of shares (478) 478 2,770 (2,770) - - -
31 March 2025 4,319 149,834 (6,791) (94,617) 52,745 1,171 53,916
Notes:
1. Includes share premium, capital reserve, capital redemption reserve, merger
reserve and share-based payment reserve. The merger reserve was derived from
acquisitions made prior to 31 March 2004 and subsequently allocated to
additional paid-in capital on adoption of IFRS.
2. Includes accumulated losses and accumulated other comprehensive income.
The accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
Consolidated statement of cash flows
2025 2024
€m €m
Inflow from operating activities 15,373 16,557
Cash flows from investing activities
Purchase of interests in subsidiaries, net of cash acquired (9) -
Purchase of interests in associates and joint ventures (321) (75)
Purchase of intangible assets (2,375) (2,641)
Purchase of property, plant and equipment (4,324) (4,219)
Purchase of investments (3,499) (1,233)
Disposal of interests in subsidiaries, net of cash disposed 11,221 (67)
Disposal of interests in associates and joint ventures 3,021 500
Disposal of property, plant and equipment and intangible assets 9 15
Disposal of investments 737 1,931
Dividends received from associates and joint ventures 530 442
Interest received 556 542
Cash outflows from discontinued operations (787) (1,317)
Inflow/(outflow) from investing activities 4,759 (6,122)
Cash flows from financing activities
Proceeds from issue of long-term borrowings 4,680 1,533
Repayment of borrowings (12,963) (8,970)
Net movement in short-term borrowings 78 (1,636)
Net movement in derivatives 404 144
Interest paid (2,705) (2,227)
Payments for settlement of written put options - (493)
Purchase of treasury shares (1,868) -
Issue of ordinary share capital and reissue of treasury shares 3 3
Equity dividends paid (1,787) (2,430)
Dividends paid to non-controlling shareholders in subsidiaries (249) (260)
Other transactions with non-controlling shareholders in subsidiaries 8 (16)
Cash outflows from discontinued operations (879) (1,503)
Outflow from financing activities (15,278) (15,855)
Net cash inflow/(outflow) 4,854 (5,420)
Cash and cash equivalents at the beginning of the financial year(1) 6,114 11,628
Exchange loss on cash and cash equivalents (75) (94)
Cash and cash equivalents at the end of the financial year(1) 10,893 6,114
Note:
1. Comprises cash and cash equivalents as presented in the consolidated
statement of financial position of €11,001 million (€6,183 million as at
31 March 2024), together with overdrafts of €108 million (€111 million as
at 31 March 2024) and €Nil million (€42 million as at 31 March 2024) 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
These unaudited condensed consolidated financial statements of Vodafone Group
Plc and its subsidiaries apply the same accounting policies, presentation and
methods of calculation as those followed in the preparation of the Group's
consolidated financial statements for the year ended 31 March 2024, except as
disclosed below, which were prepared in accordance with UK-adopted
International Accounting Standards ('IAS'), with International Financial
Reporting Standards ('IFRS') as issued by the International Accounting
Standards Board ('IASB') and with the requirements of the UK Companies Act
2006.
Ernst & Young LLP has consented to the release of this Preliminary
Announcement. The financial information presented in the unaudited condensed
consolidated financial statements does not constitute statutory accounts
within the meaning of section 434(3) of the Companies Act 2006 ('the Act').
Statutory accounts for the year ended 31 March 2024 were published in
Vodafone's Annual Report and a copy was delivered to the Registrar of
Companies for England and Wales. The auditor's report on those accounts was
unqualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain a statement under sections 498(2) or 498(3) of the Act. A separate
announcement will be made in accordance with Disclosure and Transparency Rules
(DTR) 6.3 when the Annual Report for the year ended 31 March 2025 are made
available on the Company's website, which is expected to be in June 2025.
The preparation of the preliminary results requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the end of
the reporting period, and the reported amounts of revenue and expenses during
the period. Actual results could vary from these estimates. These estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is
revised if the revisions affects only that period or in the period of the
revision and future periods if the revision affects both current and future
periods.
Going concern
The Group has €10.9 billion of cash and cash equivalents as at 31 March 2025
which, together with undrawn revolving credit facilities of €7.8 billion,
cover all of the Group's reasonably expected cash requirements over the going
concern period. The Directors have reviewed trading and liquidity forecasts
for the Group, which were based on current trading conditions, and considered
a variety of scenarios. In addition to the liquidity forecasts prepared, the
Directors considered the availability of the Group's revolving credit
facilities which were undrawn as at 31 March 2025. As a result of the
assessment performed, the Directors have concluded that the Group is able to
continue in operation for the period of at least 12 months from the date of
approving the consolidated financial statements and that it is appropriate to
continue to adopt the going concern basis in preparing the unaudited condensed
consolidated financial statements.
New accounting pronouncements adopted
On 1 April 2024, the Group adopted certain new accounting policies where
necessary to comply with amendments to IFRS. Further details are provided in
the Group's Annual Report for the year ended 31 March 2024. One of the
amendments impacts these unaudited condensed consolidated financial statements
and is explained below.
Amendments to IAS 1 'Presentation of Financial Statements'
The Group classified balances relating to certain bonds as current liabilities
if it was the Group's intention to exercise options to redeem them within 12
months of the reporting date. Following the adoption of the IAS 1 amendments
on 1 April 2024, bonds that are repayable in more than 12 months are
classified as non-current liabilities regardless of any intention to redeem
the bonds early. The impact of adopting the amendments on the consolidated
statement of financial position at 31 March 2024 is a €931 million reduction
to the value of bonds presented within current borrowings which have been
re-presented as bonds within non-current borrowings.
Notes to the unaudited condensed consolidated financial statements
2 Impairment review
The Group performs its annual impairment test for goodwill and indefinite
lived intangible assets at 31 March and when there is an indicator of
impairment of an asset. At each reporting period date, judgement is exercised
by management in determining whether any internal or external sources of
information observed are indicative that the carrying amount of any of the
Group's cash generating units is not recoverable.
If the recoverable amount of the cash-generating unit is less than the
carrying amount of the unit, the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit pro-rata on the basis of the carrying amount of each
asset in the unit. Impairment losses recognised for goodwill are not
reversible in subsequent periods.
For the year ended 31 March 2025, the Group recorded impairment charges of
€4,350 million and €165 million with respect to the Group's investments in
Germany and Romania. The impairment charges reflect management's latest
assessment of likely trading and economic conditions in the five-year business
plan.
The impairment charge in relation to Vodafone Germany has primarily arisen
from the impacts of a significantly lower EBITDAaL performance in the year
ended 31 March 2025 and lower medium term EBITDAaL growth expectations, on our
determination of value in use. The key driver of both changes is materially
higher competitive intensity, in the mobile market in the current year
compared to FY24, impacting our expectations of future cash generation.
The table below shows the key assumptions used in the value in use
calculations of Germany and Romania.
Assumptions used in value in use calculation
Germany Romania
% %
Pre-tax discount rate 7.8 11.0
Long-term growth rate 1.2 2.5
Projected adjusted EBITDAaL CAGR(1) 1.3 1.5
Projected capital expenditure(2) 17.6 - 20.7 9.2 - 11.0
For the Group's operations in Germany and Romania management has prepared the
following sensitivity analysis to the base case recoverable amount less
carrying value for changes in pre-tax discount rate and projected adjusted
EBITDAaL CAGR(1) assumptions. The associated impact of the change in each key
assumption does not consider any consequential impact on other assumptions
used in the impairment review.
Recoverable amount less carrying value
Germany Romania
€bn €bn
Base case recoverable amount less carrying value (4.4) (0.2)
Change in pre-tax discount rate
- Decrease by 0.5 pps (1.7) (0.1)
- Increase by 0.5 pps (6.6) (0.2)
Change in project adjusted EBITDAaL CAGR(1)
- Decrease by 2.0 pps (7.6) (0.2)
- Increase by 2.0 pps (0.8) (0.1)
Notes:
1. Projected adjusted EBITDAaL CAGR is expressed as the compound annual growth
rates in the initial five years for all cash-generating units of the plans
used for impairment testing.
2. Projected capital expenditure, which excludes licences and spectrum, is
expressed as capital expenditure as a percentage of revenue in the initial
five years for all cash-generating units of the plans used for impairment
testing.
Notes to the unaudited condensed consolidated financial statements
2 Impairment review (continued)
Year ended 31 March 2024
For the year ended 31 March 2024, no impairments were recognised for any
cash-generating units within the Group's continuing operations. The Group
recognised a reversal of the 31 March 2023 impairment of £64 million in the
consolidated income statement within operating profit relating to our
investment in Indus Towers.
The table below shows the key assumptions used in the value in use calculation
for Germany.
Assumptions used in value in use calculation
Germany
%
Pre-tax discount rate 8.3
Long-term growth rate 1.0
Projected adjusted EBITDAaL CAGR(1) 2.4
Projected capital expenditure(2) 17.4 - 19.9
The estimated recoverable amount of the Group's operations in Germany exceeded
the carrying value by €2.3 billion. If the assumptions used in the
impairment review were changed to a greater extent than as presented in the
following table, the changes would, in isolation, lead to an impairment loss
being recognised for the year ended 31 March 2024.
Change required for carrying value to equal recoverable amount
Germany
pps
Pre-tax discount rate 0.5
Long-term growth rate (0.4)
Projected adjusted EBITDAaL CAGR(1) (1.2)
Projected capital expenditure(2) 3.9
Notes:
1. Projected adjusted EBITDAaL CAGR is expressed as the compound annual growth
rates in the initial five years for all cash-generating units of the plans
used for impairment testing.
2. Projected capital expenditure, which excludes licences and spectrum, is
expressed as capital expenditure as a percentage of revenue in the initial
five years for all cash-generating units of the plans used for impairment
testing.
Notes to the unaudited condensed consolidated financial statements
3 Discontinued operations and disposals
The Group classifies non-current assets and liabilities within disposal groups
('assets') as held for sale if the assets are available immediately for sale
in their present condition, management is committed to a plan to sell the
assets under usual terms, it is highly probable that their carrying amounts
will be recovered principally through a sale transaction rather than through
continuing use and the sale is expected to be completed within one year from
the date of the initial classification.
Assets and liabilities classified as held for sale are presented separately as
current items in the consolidated statement of financial position and are
measured at the lower of their carrying amount and fair value less costs to
sell. Property, plant and equipment and intangible assets are not depreciated
or amortised once classified as held for sale. Similarly, equity accounting
ceases for associates and joint ventures held for sale.
Where operations constitute a separately reportable segment and have been
disposed of, or are classified as held for sale, the Group classifies such
operations as discontinued.
Discontinued operations are excluded from the results of continuing operations
and are presented as a single amount as profit or loss after tax from
discontinued operations in the consolidated income statement. Discontinued
operations are also excluded from segment reporting. All other notes to the
unaudited condensed consolidated financial statements include amounts for
continuing operations, unless indicated otherwise.
Transactions between the Group's continuing and discontinued operations are
eliminated in full in the Consolidated income statement. To the extent that
the Group considers that the commercial relationships with discontinued
operations will continue post-disposal, transactions are reflected within
continuing operations with an opposite charge or credit reflected within the
results of discontinued operations resulting in a net nil impact on the
Group's profit for the financial year for the years presented.
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
disposal of 100% of Vodafone Holdings Europe, S.L.U. ('Vodafone Spain'). The
disposal completed on 31 May 2024 and resulted in a loss on disposal of €148
million.
Disposal of Vodafone Italy
On 15 March 2024, the Group announced that it had entered into a binding
agreement with Swisscom AG ('Swisscom') in relation to the disposal of 100% of
Vodafone Italia S.p.A. ('Vodafone Italy'). The disposal completed on 31
December 2024 and resulted in a loss on disposal of €1,133 million.
Discontinued operations
The results of Vodafone Spain and Vodafone Italy were reported as discontinued
operations in the prior year ended 31 March 2024 and through to the date of
disposal during the year ended 31 March 2025. The assets and liabilities of
both were presented as held for sale in the consolidated statement of
financial position in the prior year.
A summary of the results of these discontinued operations is below.
2025 2024
€m €m
Profit/(loss) for the financial year - Discontinued operations
Vodafone Spain(1) 53 (5)
Vodafone Italy(2) (75) (60)
Total (22) (65)
Loss per share - Discontinued operations
- Basic (0.08)c (0.24)c
- Diluted (0.08)c (0.24)c
Notes:
1. The results for Vodafone Spain are for the two months to 31 May 2024 when
the sale concluded.
2. The results for Vodafone Italy are for the nine months to 31 December 2024
when the sale concluded.
Notes to the unaudited condensed consolidated financial statements
3 Discontinued operations and disposals (continued)
Segment analysis of discontinued operations
Vodafone Spain 2025 2024
€m €m
Revenue 603 3,773
Cost of sales (321) (2,593)
Gross profit 282 1,180
Selling and distribution expenses (27) (259)
Administrative expenses (34) (435)
Net credit losses on financial assets (15) (120)
Operating profit 206 366
Investment income 3 29
Financing costs (8) (56)
Profit before taxation 201 339
Income tax credit - 1
Profit after tax of discontinued operations 201 340
After tax loss on the re-measurement of disposal group - (345)
Loss on sale of disposal group (148) -
Profit/(loss) for the financial year from discontinued operations 53 (5)
Total comprehensive income/(expense) for the financial year from discontinued
operations
Attributable to owners of the parent 53 (5)
Vodafone Italy 2025 2024
€m €m
Revenue 3,356 4,579
Cost of sales (1,293) (3,438)
Gross profit 2,063 1,141
Selling and distribution expenses (160) (244)
Administrative expenses (356) (760)
Net credit losses on financial assets (36) (51)
Operating profit 1,511 86
Financing costs (66) (86)
Profit before taxation 1,445 -
Income tax (expense)/credit (387) 23
Profit after tax of discontinued operations 1,058 23
After tax loss on the re-measurement of disposal group - (83)
Loss on sale of disposal group (1,133) -
Loss for the financial year from discontinued operations (75) (60)
Total comprehensive expense for the financial year from discontinued
operations
Attributable to owners of the parent (72) (71)
Notes to the unaudited condensed consolidated financial statements
3 Discontinued operations and disposals (continued)
Assets held for sale
There are no assets and liabilities held for sale at 31 March 2025.
Assets and liabilities held for sale at 31 March 2024 comprised Vodafone Spain
and Vodafone Italy. The relevant assets and liabilities are detailed in the
table below.
Vodafone Vodafone
Spain Italy Total
€m €m €m
Non-current assets
Goodwill - 2,398 2,398
Other intangible assets 987 3,331 4,318
Property, plant and equipment 4,957 4,307 9,264
Other investments 2 - 2
Deferred tax assets - 461 461
Trade and other receivables 223 167 390
6,169 10,664 16,833
Current assets
Inventory 39 134 173
Taxation recoverable - 77 77
Trade and other receivables 805 1,117 1,922
Cash and cash equivalents 13 29 42
857 1,357 2,214
Assets held for sale 7,026 12,021 19,047
Non-current liabilities
Borrowings 878 1,509 2,387
Deferred tax liabilities 3 - 3
Post employment benefits - 45 45
Provisions 158 115 273
Trade and other payables 43 120 163
1,082 1,789 2,871
Current liabilities
Borrowings 346 673 1,019
Taxation liabilities - 12 12
Provisions 23 67 90
Trade and other payables 1,203 1,723 2,926
1,572 2,475 4,047
Liabilities held for sale 2,654 4,264 6,918
Notes to the unaudited condensed consolidated financial statements
4 Dividends
2025 2024
€m €m
Declared during the financial year
Final dividend for the year ended 31 March 2024: 4.50 eurocents per share 1,212 1,215
(2023: 4.50 eurocents per share)
Interim dividend for the year ended 31 March 2025: 2.25 eurocents per share 583 1,218
(2024: 4.50 eurocents per share)
1,795 2,433
Proposed after the end of the year and not recognised as a liability
Final dividend for the year ended 31 March 2025: 2.25 eurocents per share 558 1,219
(2024: 4.50 eurocents per share)
5 Contingent liabilities and legal proceedings
Vodafone Idea
As part of the agreement to merge Vodafone India and Idea Cellular in 2017,
the parties agreed a mechanism for payments between the Group and Vodafone
Idea Limited ('VIL') pursuant to the difference between the crystallisation of
certain identified contingent liabilities in relation to legal, regulatory,
tax and other matters, and refunds relating to Vodafone India and Idea
Cellular. Cash payments or cash receipts relating to these matters must have
been made or received by VIL before any amount becomes due from or owed to the
Group. Any future payments by the Group to VIL as a result of this agreement
would only be made after satisfaction of this and other contractual
conditions. The Group's maximum potential exposure under this mechanism is
capped at INR 64 billion (€695 million).
The final liability calculation date under the CLAM is 30 June 2025 and no
further cash payments are considered probable from the Group as at 31 March
2025.
The carrying value of the Group's investment in VIL is €nil and the Group is
recording no further share of losses in respect of VIL. The Group's potential
exposure to liabilities within VIL is capped by the mechanism described above;
consequently, contingent liabilities arising from litigation in India
concerning the operations of Vodafone India are not reported.
Indus Towers
Under the terms of the Indus and Bharti Infratel merger in November 2020, a
security package was agreed for the benefit of the newly created merged
entity, Indus Towers, which could be invoked in the event that VIL was unable
to make payments to Indus Towers for the use of towers space. The remaining
element of the security package at 31 March 2024 was a secondary pledge over
the shares owned by Vodafone Group in Indus Towers, ranking behind Vodafone's
existing lenders for the outstanding bank borrowings of €1.7 billion as at
31 March 2024 secured against Indian assets ('the bank borrowings'), with a
maximum liability cap of INR 42.5 billion (€472 million). In the event of
non-payment of relevant liabilities by VIL, Indus Towers had recourse to any
secondary pledged shares, after repayment of the bank borrowings in full, up
to the value of the liability cap.
The Group disposed of its investment in Indus Towers in two tranches during
June and December 2024. Following the sales the bank borrowings were fully
repaid and, in January 2025, surplus proceeds of INR 19.1 billion (€207
million) were invested in newly issued VIL equity, which VIL immediately used
to partially settle outstanding MSA obligations to Indus Towers resulting in
the release of the secondary pledge.
Notes to the unaudited condensed consolidated financial statements
5 Contingent liabilities and legal proceedings (continued)
Legal proceedings
The Group is currently involved in a number of legal proceedings, including
inquiries from, or discussions with, government authorities that are
incidental to its operations.
Legal proceedings where the Group considers that the likelihood of material
future outflows of cash or other resources is more than remote are disclosed
below. Where the Group assesses that it is probable that the outcome of legal
proceedings will result in a financial outflow, and a reliable estimate can be
made of the amount of that obligation, a provision is recognised for these
amounts.
In all cases, determining the probability of successfully defending a claim
against the Group involves the application of judgement as the outcome is
inherently uncertain. The determination of the value of any future outflows of
cash or other resources, and the timing of such outflows, involves the use of
estimates. The costs incurred in complex legal proceedings, regardless of
outcome, can be significant.
The Group is not involved in any material proceedings in which any of the
Group's Directors, members of senior management or affiliates are either a
party adverse to the Group or have a material interest adverse to the Group.
Tax cases
VISPL tax claims
Vodafone India Services Private Limited ('VISPL') has outstanding tax disputes
with the Indian tax authorities predominantly relating to Vodafone's
acquisition of Hutchison Essar (later renamed as Vodafone India Limited)
covering five assessment years between 2008-09 and 2014-15. The total value of
the tax authority claims for those assessment years as at 31 March 2024 was
approximately €468 million plus interest, and penalties of up to 300% of the
principal.
VISPL is taking part in a tax amnesty scheme to resolve these tax disputes. As
part of this scheme, in February 2025, VISPL made a payment of €130 million
to the Indian tax authorities for assessment year 2008-09. For the other
assessment years, once multiple tax credits, offsets and all tax technical
issues have been resolved for the different assessment years, we anticipate
VISPL will obtain a net repayment of €13 million. The amnesty gives rise to
an income statement tax charge of €185 million due to tax deposits
previously held as recoverable assets being written-off.
Netherlands tax case
Vodafone Europe BV ('VEBV') received assessments totalling €267 million in
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. 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
subsequently appealed the District Court's judgement before the Court of
Appeal of The Hague where the appeal hearing was held in February 2025. A
decision is expected during summer 2025.
The Group continues to believe it has robust defences but has recorded a
provision of €26 million for tax and accrued interest reflecting the July
2023 judgement and the Group's current view of the probable financial outflow
required to fully resolve the issue.
Notes to the unaudited condensed consolidated financial statements
5 Contingent liabilities and legal proceedings (continued)
Other cases in the Group
Germany: price increase class action
In November 2023, the Verbraucherzentrale Bundesverband (Federation of German
Consumer Organisations) initiated a class action against Vodafone Germany in
the Hamm Higher Regional Court. Vodafone Germany implemented price increases
of €5 per month for fixed lines services in 2023 in response to higher
costs. The claim alleges that terms regarding price increases in the consumer
contracts entered into by Vodafone Germany's customers up until August 2023
are invalid under German civil law and seeks reimbursement of the additional
charges plus interest. Customers must enter their details onto the register of
collective actions on the Federal Office of Justice website in order to
participate in the claim. The register opened in April 2024 and as at 31 March
2025, approximately 99,200 customers had registered. Vodafone Germany filed
its defence in August 2024 and a hearing will take place on 3 December 2025.
Whilst the Group intends to defend the claim, it is not able to determine the
likelihood or estimate the amount of any possible financial loss at this stage
of the proceedings.
Germany: claims regarding transfer of data to credit agencies
Individual consumers are bringing claims against Vodafone Germany and/or the
other national network operators alleging that information was passed to
credit agencies up to February 2024 about contracts for mobile services
without consumer consent. The claims seek damages of up to €5,000 per
contract for GDPR (General Data Protection Regulation) infringement. As at 28
March 2025, Vodafone Germany had been notified of 534 claims filed in various
regional courts. Out of 314 court judgements issued so far, Vodafone Germany
has been successful in all but seven claims in which damages in the range of
€100 - €400 were awarded to the consumer. The other national network
operators are facing similar claims.
The Group's position is that the transfer of data about the existence of a
consumer contract (and not about payments in relation to the contract) to
credit agencies is standard practice and justified for the purposes of fraud
prevention. However, given the consumer claims, Vodafone Germany has stopped
this activity.
Although the total potential number of claims and financial losses is
uncertain, the Group believes it has valid defences and that no present
obligation exists based on all available evidence.
Germany: investigation by federal data protection authority
In 2021, the BfDI (Federal Commissioner for Data Protection and Freedom of
Information) started an investigation into potential breaches of the GDPR in
relation to the systems used by Vodafone Germany's sales partners to manage
customer data.
The investigation is in the process of being settled between Vodafone Germany
and the BfDI.
A provision immaterial to the financial statements has been recorded.
Germany: investigation by competition authority regarding 1&1
In December 2021 1&1 entered into an agreement with Vantage Towers for the
provision of infrastructure for antenna sites. Vantage Towers sub-contracted
certain aspects of the delivery under the agreement to Vodafone Germany.
In March 2023, Vodafone Germany and Vodafone Group (together 'Vodafone') were
informed that 1&1 had submitted a complaint to the Bundeskartellamt
('BkA'), the competition authority in Germany, alleging infringements of
competition law. Following the start of a formal investigation in June 2023,
the BkA issued a Statement of Objections on 11 April 2025 with its view that
the delayed provision by Vodafone and Vantage Towers of the contractually
agreed tower locations acted as an obstacle to 1&1's market entry and an
abuse of dominance. Vodafone's response to the Statement of Objections will
be submitted to the BkA on 11 June 2025.
Vodafone is currently unable to estimate any possible loss but, while the
outcome is uncertain, the Group believes it has valid defences and that it is
probable no present obligation exists.
Notes to the unaudited condensed consolidated financial statements
5 Contingent liabilities and legal proceedings (continued)
Italy: Iliad v Vodafone Italy
In July 2019, Iliad filed a claim for €500 million against Vodafone Italy in
the Civil Court of Milan. The claim alleges anti-competitive behaviour in
relation to customer portability and certain advertising campaigns by Vodafone
Italy. The main hearing on the merits of the claim took place on 8 June 2021.
On 17 April 2023, the Civil Court issued a judgement in Vodafone Italy's
favour and rejected Iliad's claim for damages in full. Iliad filed an appeal
before the Court of Appeal of Milan in June 2023. The appeal process is
ongoing and a hearing will take place on 25 June 2025 for final arguments.
Following the divestment of Vodafone Italy, this claim is subject to an
indemnity provided by the Group to Swisscom. The Group is currently unable to
estimate any possible loss in this claim in the event of an adverse judgement
on appeal but, while the outcome is uncertain, the Group believes that
Vodafone Italy has valid defences and that it is probable that no present
obligation exists.
Greece: Papistas Holdings SA, Mobile Trade Stores (formerly Papistas SA) and
Athanasios and Loukia Papistas v Vodafone Greece
In October 2019, Mr. and Mrs. Papistas, and companies owned or controlled by
them, filed several claims against Vodafone Greece with a total value of
approximately €330 million for purported damage caused by the alleged abuse
of dominance and wrongful termination of a franchise arrangement with a
Papistas company. Lawsuits which the Papistas claimants had previously brought
against Vodafone Greece, including one also citing Vodafone Group Plc and
certain Directors and officers of Vodafone as defendants, were either
withdrawn or left dormant. Vodafone Greece filed a counter claim and all
claims were heard in February 2020. All of the Papistas claims were rejected
by the Athens Court of First Instance because the stamp duty payments required
to have the merits of the case considered had not been made. Vodafone
Greece's counter claim was also rejected. The Papistas claimants and Vodafone
Greece each filed appeals. Following hearings in February and May 2023, the
Court of Appeal dismissed both of the appeals, in the case of the Papistas
claimants because the stamp duty payments had again not been made. Whether the
Papistas claimants will appeal the judgement is unknown as at the date of this
report. There was a further hearing in February 2025 about one aspect of the
appeal proceedings and the decision of the Court of Appeal is awaited.
Vodafone is continuing vigorously to defend the claims and based on the
progress of the litigation so far the Group believes that it is highly
unlikely that there will be an adverse ruling for the Group. On this basis,
the Group does not expect the outcome of these claims to have a material
financial impact.
UK: Phones 4U in Administration v Vodafone Limited, Vodafone Group Plc and
Others
In December 2018, the administrators of former UK indirect seller, Phones 4U,
sued the three main UK mobile network operators ('MNOs'), including Vodafone,
and their parent companies in the English High Court. The administrators
alleged collusion between the MNOs to withdraw their business from Phones 4U
thereby causing its collapse. The judge ordered that there should be a split
trial between liability and damages. The first trial on liability took place
from May to July 2022. On 10 November 2023, the High Court issued a judgement
in Vodafone's favour and rejected Phones 4U's allegations that the defendants
were in breach of competition law, consistent with Vodafone's previously
stated position that a present obligation does not exist. Phones 4U has been
granted permission to appeal the judgement from the Court of Appeal. The
appeal hearing is scheduled for 19 - 23 May 2025.
The Group is vigorously defending the appeal and is not able to estimate any
possible loss in the event of an adverse judgement on appeal.
South Africa: Kenneth Makate v Vodacom (Pty) Limited
Mr Kenneth Makate, a former employee of Vodacom Pty Limited ('Vodacom South
Africa'), started legal proceedings in 2008 claiming compensation for a
business idea that led to the development of a service known as 'Please Call
Me' ('PCM'). In July 2014, the Gauteng High Court ('the High Court') ruled
that Mr Makate had proven the existence of a contract, but that Vodacom South
Africa was not bound by that contract because the responsible director did not
have authority to enter into such an agreement on Vodacom South Africa's
behalf. The High Court and Supreme Court of Appeal ('the SCA') turned down Mr
Makate's application for leave to appeal in December 2014 and March 2015,
respectively.
Notes to the unaudited condensed consolidated financial statements
5 Contingent liabilities and legal proceedings (continued)
In April 2016, the Constitutional Court of South Africa ('the Constitutional
Court') granted leave to appeal and upheld Mr Makate's appeal. It found that
Vodacom South Africa is bound by an agreement and ordered the parties to
negotiate, in good faith, and agree a reasonable compensation amount payable
to Mr Makate or, in the event of a deadlock, for the matter to be referred to
Vodacom Group's Chief Executive Officer ('the CEO') for determination. Mr
Makate's application for the aforementioned order to be varied from the
determination of an amount to a compensation model based on a share of revenue
was dismissed by the Constitutional Court. In accordance with the
Constitutional Court order, and after negotiations failed, the CEO issued his
determination on 9 January 2019. However, the CEO's award of R47million (€2
million) was rejected by Mr Makate, who subsequently brought an application in
the High Court for the review of the CEO's determination and award.
The High Court, in a judgement delivered on 8 February 2022, set aside the
CEO's determination and ordered him to reassess the amount employing a set of
criteria which would have resulted in the payment of a higher compensation
amount, for the benefit of Mr Makate, than that determined by the CEO. Vodacom
South Africa appealed against the judgement and the order of the High Court to
the SCA. The SCA heard the appeal on 9 May 2023 and its judgement was handed
down on 6 February 2024. A majority of three judges, with a minority of two
judges dissenting, dismissed the appeal and ruled that Mr Makate is entitled
to be paid 5% - 7.5% of the total revenue of the PCM product from March 2001
to the date of the judgement, plus interest.
On 27 February 2024, Vodacom South Africa applied for leave to appeal the
judgement and order of the SCA to the Constitutional Court, resulting in the
suspension of the operation of the judgement and order of the SCA. On 26
August 2024, the Constitutional Court issued a directive that it would hear
Vodacom South Africa's application for leave to appeal in tandem with its
appeal against the SCA judgement and order. The matter was heard on 21
November 2024 and Vodacom South Africa awaits a decision from the
Constitutional Court.
Vodacom South Africa is challenging the SCA's judgement and order on various
grounds including, but not limited to, the SCA ignoring the evidence placed
before it on the computation of the quantum of compensation payable to Mr
Makate, as well as the SCA issuing orders that are incapable of implementation
and enforcement.
The CEO's determination in 2019 amounted to R47 million (€2 million). The
minority judgement of the SCA raised Mr Makate's compensation to an amount
payable of R186 million (€10 million). The value of the compensation amount
for Mr Makate, as per the SCA's majority judgement and order, would at a
minimum be R29 billion (€1.5 billion). Mr Makate, in his recent submissions
to the Constitutional Court, has stated that his request is for compensation
in the capital amount of R9.4 billion (€473 million), plus interest from 18
January 2019. Consequently, the range of the possible compensation outcomes in
this matter is very wide.
The amount ultimately payable to Mr Makate is uncertain and will depend on the
success of Vodacom South Africa's appeal to the Constitutional Court against
the judgement and order of the SCA, on the merits of the case. The Group is
continuing to challenge the level of compensation payable to Mr Makate and a
provision immaterial to the financial statements has been recorded.
UK: Mr Justin Gutmann v Vodafone Limited and Vodafone Group Plc
In November 2023, Mr Gutmann issued claims in the Competition Appeal Tribunal
('CAT') seeking permission, as a proposed class representative, to bring
collective proceedings on an opt-out basis against the four UK mobile network
operators ('MNOs') and, in the case of Vodafone Limited and EE Limited, their
respective parent companies. Vodafone Group Plc and Vodafone Limited are named
defendants to one of the claims with an alleged value of £1.4 billion
(approximately €1.7 billion), including interest. It is alleged that
Vodafone and the other MNOs used their alleged market dominance to overcharge
customers after the expiry of the minimum terms of certain mobile contracts
(referred to as a 'loyalty penalty'). A hearing took place before the CAT from
31 March to 2 April 2025 to determine Mr Gutmann's application for
certification of the class and Vodafone's application for strike out of
certain parts of the claim based on limitation. The decision is expected later
this year.
Taking into account all available evidence at this stage, the Group's
assessment is that the allegations are without merit and it intends to defend
the claim. The Group is currently unable to estimate any possible loss in
regards to this issue but, while the outcome is uncertain, the Group believes
it is probable that no present obligation exists.
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 37 Revenue Pages 38, 40 and 41
Organic service revenue growth Page 37 Service revenue Pages 38, 40 and 41
Organic mobile service revenue growth Page 37 Service revenue Pages 38, 40 and 41
Organic fixed service revenue growth Page 37 Service revenue Pages 38, 40 and 41
Organic Vodafone Business service revenue growth Page 37 Service revenue Pages 38, 40 and 41
Organic financial services revenue growth in South Africa Page 37 Service revenue Page 38
M-Pesa revenue Page 37 Service revenue Page 38
Service revenue growth in Türkiye excluding the impact of the Page 37 Service revenue Pages 38, 40 and 41
hyperinflationary adjustments
Group Adjusted EBITDAaL Page 37 Operating profit Page 3
Organic Adjusted EBITDAaL growth Page 37 Not applicable Page 39
Other metrics
Adjusted profit attributable to owners of the parent Page 42 Profit attributable to owners of the parent Page 42
Adjusted basic earnings per share Page 42 Basic earnings per share Page 43
Cash flow, funding and capital allocation metrics
Free cash flow Page 43 Inflow from operating activities Page 44
Adjusted free cash flow Page 43 Inflow from operating activities Pages 15 and 44
Gross debt Page 43 Borrowings Page 44
Net debt Page 43 Borrowings less cash and cash equivalents Page 44
Pre-tax ROCE (controlled) Page 45 ROCE calculated using GAAP measures Pages 45 and 46
Post-tax ROCE (controlled and associates/joint ventures) Page 45 ROCE calculated using GAAP measures Pages 45 and 46
Financing and Taxation metrics
Adjusted net financing costs Page 47 Net financing costs Page 13
Adjusted profit before taxation Page 47 Profit before taxation Page 48
Adjusted income tax expense Page 47 Income tax expense Page 48
Adjusted effective tax rate Page 47 Income tax expense Page 48
Adjusted share of results of equity accounted associates and joint ventures Page 47 Share of results of equity accounted associates and joint ventures Page 48
Adjusted share of results of equity accounted associates and joint ventures Page 47 Share of results of equity accounted associates and joint ventures Page 48
used in post-tax ROCE
Non-GAAP measures
Performance metrics
Non-GAAP measure Purpose Definition
Adjusted EBITDAaL Adjusted EBITDAaL is used in conjunction with financial measures such as Adjusted EBITDAaL is operating profit after depreciation on lease-related
operating profit to assess our operating performance and profitability. right of use assets and interest on lease liabilities but excluding
depreciation, amortisation and gains/losses on disposal of owned assets and
It is a key external metric used by the investor community to assess excluding share of results of equity accounted associates and joint ventures,
performance of our operations. impairment losses/reversals, restructuring costs arising from discrete
restructuring plans, other income and expense and significant items that are
It is our segment performance measure in accordance with IFRS 8 (Operating not considered by management to be reflective of the underlying performance of
Segments). the Group.
Adjusted EBITDAaL margin
Adjusted EBITDAaL margin is Adjusted EBITDAaL divided by Revenue.
Organic growth
Organic growth presents performance on a comparable basis, excluding the
impact of foreign exchange rates, mergers and acquisitions, the
hyperinflationary adjustments in Türkiye and other adjustments to improve the
comparability of results between periods.
Organic growth is calculated for revenue and profitability metrics, as
follows:
- Revenue;
- Service revenue;
- Mobile service revenue;
- Fixed service revenue;
- Vodafone Business service revenue;
- Financial services revenue in South Africa;
- M-Pesa revenue;
- Adjusted EBITDAaL; and
- Adjusted EBITDAaL margin.
Whilst organic growth is not intended to be a substitute for reported growth,
nor is it superior to reported growth, we believe that the measure provides
useful and necessary information to investors and other interested parties for
the following reasons:
- It provides additional information on underlying growth of the
business without the effect of certain factors unrelated to its operating
performance;
- It is used for internal performance analysis; and
- It facilitates comparability of underlying growth with other
companies (although the term 'organic' is not a defined term under GAAP and
may not, therefore, be comparable with similarly-titled measures reported by
other companies).
We have not provided a comparative in respect of organic growth rates as the
current rates describe the change between the beginning and end of the current
period, with such changes being explained by the commentary in this document.
If comparatives were provided, significant sections of the commentary for
prior periods would also need to be included, reducing the usefulness and
transparency of this document.
Service revenue growth in Türkiye excluding the impact of the
hyperinflationary adjustments
This growth metric presents performance in Türkiye excluding the
hyperinflationary adjustments recorded in the Group's consolidated financial
statements in accordance with IAS 29 'Financial Reporting in Hyperinflationary
Economies'.
Non-GAAP measures
Year ended 31 March 2025
Reported growth M&A and Other Foreign exchange Organic growth
FY25 FY24
€m €m % pps pps %
Service revenue
Germany 10,876 11,453 (5.0) - - (5.0)
Mobile service revenue 4,998 5,059 (1.2) - - (1.2)
Fixed service revenue 5,878 6,394 (8.1) - - (8.1)
UK 5,887 5,631 4.5 - (2.6) 1.9
Mobile service revenue 4,261 4,142 2.9 - (2.6) 0.3
Fixed service revenue 1,626 1,489 9.2 - (2.7) 6.5
Other Europe 4,805 4,722 1.8 - 0.3 2.1
Türkiye(1) 2,484 1,746 42.3 16.5 24.6 83.4
Africa 6,172 5,951 3.7 - 7.6 11.3
Common Functions 663 559
Eliminations (129) (150)
Total service revenue 30,758 29,912 2.8 0.4 1.9 5.1
Other revenue 6,690 6,805
Revenue 37,448 36,717 2.0 0.4 1.6 4.0
Other growth metrics
Vodafone Business ('VB') - Service revenue 8,003 7,735 3.5 0.1 0.4 4.0
Germany - VB service revenue 2,366 2,422 (2.3) - - (2.3)
UK - VB service revenue 2,179 2,144 1.6 - (2.5) (0.9)
Other Europe - VB service revenue 1,561 1,502 3.9 - 0.5 4.4
Türkiye - VB service revenue 375 233 60.9 18.6 27.6 107.1
Africa - Vodacom Business service revenue 1,126 1,068 5.4 - 4.6 10.0
South Africa - Financial services revenue 176 157 12.1 - (4.2) 7.9
Vodacom International M-Pesa 428 389 10.0 - 1.3 11.3
Egypt - Vodafone Cash revenue 114 96 18.8 - 61.3 80.1
Note:
1. Reported service revenue growth in Türkiye of 42.3% includes -2.9pps in
relation to the application of IAS 29 'Financial Reporting in
Hyperinflationary Economies'. Growth in Türkiye excluding the impact of these
hyperinflationary adjustments was 45.2%.
Non-GAAP measures
Year ended 31 March 2025
Reported growth M&A and Other Foreign exchange Organic growth
FY25 FY24
€m €m % pps pps %
Adjusted EBITDAaL
Germany 4,384 5,017 (12.6) - - (12.6)
UK 1,558 1,408 10.7 - (2.8) 7.9
Other Europe 1,510 1,516 (0.4) - 0.4 -
Türkiye 842 510 65.1 16.7 28.7 110.5
Africa 2,593 2,539 2.1 - 8.1 10.2
Common Functions 45 29
Eliminations - -
Group 10,932 11,019 (0.8) 1.1 2.2 2.5
Percentage point change in Adjusted EBITDAaL margin
Germany 36.0% 38.7% (2.7) - - (2.7)
UK 22.0% 20.6% 1.4 - - 1.4
Other Europe 26.5% 27.5% (1.0) - - (1.0)
Türkiye 27.3% 21.6% 5.7 1.0 - 6.7
Africa 33.3% 34.2% (0.9) - 0.7 (0.2)
Group 29.2% 30.0% (0.8) 0.2 0.2 (0.4)
Non-GAAP measures
Quarter ended 31 March 2025
Reported growth M&A and Other Foreign exchange Organic growth
Q4 FY25 Q4 FY24
€m €m % pps pps %
Service revenue
Germany 2,670 2,839 (6.0) - - (6.0)
Mobile service revenue 1,242 1,257 (1.2) - - (1.2)
Fixed service revenue 1,428 1,582 (9.7) - - (9.7)
UK 1,489 1,409 5.7 - (2.6) 3.1
Mobile service revenue 1,057 1,012 4.4 - (2.6) 1.8
Fixed service revenue 432 397 8.8 - (2.4) 6.4
Other Europe 1,194 1,181 1.1 - (0.3) 0.8
Türkiye(1) 605 525 15.2 22.1 35.9 73.2
Africa 1,614 1,484 8.8 - 4.7 13.5
Common Functions 176 140
Eliminations (28) (32)
Total service revenue 7,720 7,546 2.3 1.0 2.1 5.4
Other revenue 1,641 1,842
Revenue 9,361 9,388 (0.3) 1.0 2.1 2.8
Other growth metrics
Vodafone Business ('VB') - Service revenue 2,062 1,979 4.2 0.6 0.3 5.1
Germany - VB service revenue 588 605 (2.8) - - (2.8)
UK - VB service revenue 565 545 3.7 - (2.4) 1.3
Other Europe - VB service revenue 405 399 1.5 - (0.3) 1.2
Türkiye - VB service revenue 98 71 38.0 23.8 43.3 105.1
Africa - Vodacom Business service revenue 296 270 9.6 - 1.9 11.5
Adjusted EBITDAaL 2,693 2,797 (3.7) 1.8 2.2 0.3
Note:
1. Reported service revenue growth in Türkiye of 15.2% includes -37.3pps in
relation to the application of IAS 29 'Financial Reporting in
Hyperinflationary Economies'. Growth in Türkiye excluding the impact of these
hyperinflationary adjustments was 52.5%.
Non-GAAP measures
Quarter ended 31 December 2024
Reported growth M&A and Other Foreign exchange Organic growth
Q3 FY25 Q3 FY24
€m €m % pps pps %
Service revenue
Germany 2,706 2,892 (6.4) - - (6.4)
Mobile service revenue 1,259 1,272 (1.0) - - (1.0)
Fixed service revenue 1,447 1,620 (10.7) - - (10.7)
UK 1,507 1,400 7.6 - (4.3) 3.3
Mobile service revenue 1,096 1,034 6.0 - (4.2) 1.8
Fixed service revenue 411 366 12.3 - (4.7) 7.6
Other Europe 1,201 1,175 2.2 - 0.4 2.6
Türkiye(1) 776 393 97.5 13.7 (27.8) 83.4
Africa 1,607 1,543 4.1 - 7.5 11.6
Common Functions 165 137
Eliminations (33) (35)
Total service revenue 7,929 7,505 5.6 (0.2) (0.2) 5.2
Other revenue 1,882 1,841
Revenue 9,811 9,346 5.0 (0.1) (0.8) 4.1
Other growth metrics
Vodafone Business ('VB') - Service revenue 2,051 1,943 5.6 (0.2) (1.1) 4.3
Germany - VB service revenue 594 612 (3.0) - - (3.0)
UK - VB service revenue 560 540 3.7 - (4.1) (0.4)
Other Europe - VB service revenue 395 375 5.3 - 0.5 5.8
Türkiye - VB service revenue 115 53 117.0 15.4 (29.6) 102.8
Africa - Vodacom Business service revenue 289 271 6.6 - 4.2 10.8
Adjusted EBITDAaL 2,828 2,795 1.2 (1.2) 2.2 2.2
Note:
1. Reported service revenue growth in Türkiye of 97.5% includes 44.4pps in
relation to the application of IAS 29 'Financial Reporting in
Hyperinflationary Economies'. Growth in Türkiye excluding the impact of these
hyperinflationary adjustments was 53.1%.
Non-GAAP measures
Other metrics
Non-GAAP measure Purpose Definition
Adjusted profit attributable to owners of the parent This metric is used in the calculation of Adjusted basic earnings per share. Adjusted profit attributable to owners of the parent excludes restructuring
costs arising from discrete restructuring plans, amortisation of customer
bases and brand intangible assets, impairment losses/reversals, other income
and expense, mark-to-market and foreign exchange movements and fair value
movements on Other investments through profit and loss, together with related
tax effects.
Adjusted basic earnings per share This performance measure is used in discussions with the investor community. Adjusted basic earnings per share is Adjusted profit attributable to owners of
the parent divided by the weighted average number of shares outstanding. This
is the same denominator used when calculating basic earnings per share.
Adjusted EBITDAaL and Adjusted profit attributable to owners of the parent
The table below reconciles Adjusted EBITDAaL and Adjusted profit attributable
to owners of the parent to their closest equivalent GAAP measures, being
Operating profit and Profit attributable to owners of the parent,
respectively.
FY25 FY24
Reported Adjustments Adjusted Reported Adjustments Adjusted
€m €m €m €m €m €m
Adjusted EBITDAaL 10,932 - 10,932 11,019 - 11,019
Restructuring costs (164) 164 - (703) 703 -
Interest on lease liabilities 488 - 488 440 - 440
Loss on disposal of property, plant & equipment and intangible assets (25) - (25) (34) - (34)
Depreciation and amortisation on owned assets(1) (7,569) 605 (6,964) (7,397) 606 (6,791)
Share of results of equity accounted associates and joint ventures(2) (123) 276 153 (96) 323 227
Impairment (charge)/reversal (4,515) 4,515 - 64 (64) -
Other income 565 (565) - 372 (372) -
Operating (loss)/profit (411) 4,995 4,584 3,665 1,196 4,861
Investment income 864 (247) 617 581 - 581
Financing costs(3) (1,931) (1) (1,932) (2,626) 270 (2,356)
(Loss)/profit before taxation (1,478) 4,747 3,269 1,620 1,466 3,086
Income tax expense(4) (2,246) 1,458 (788) (50) (650) (700)
(Loss)/profit for the financial year - Continuing operations (3,724) 6,205 2,481 1,570 816 2,386
Loss for the financial year - Discontinued operations (22) 22 - (65) 65 -
(Loss)/profit for the financial year (3,746) 6,227 2,481 1,505 881 2,386
(Loss)/profit attributable to:
- Owners of the parent (Continuing) (4,147) 6,205 2,058 1,205 816 2,021
- Owners of the parent (Total Group) (4,169) 6,227 2,058 1,140 881 2,021
- Non-controlling interests 423 - 423 365 - 365
(Loss)/profit for the financial year (3,746) 6,227 2,481 1,505 881 2,386
Notes:
1. Depreciation and amortisation on owned assets
excludes depreciation on leased assets and loss on disposal of leased assets
included within Adjusted EBITDAaL. See page 49 for an analysis of depreciation
and amortisation. The adjustment of €605 million (FY24: €606 million)
relates to amortisation of customer bases and brand intangible assets.
2. See page 48 for a breakdown of the adjustments to
Share of results of equity accounted associates and joint ventures to derive
Adjusted share of results of equity accounted associates and joint ventures.
3. See 'Net financing costs' on page 13 for further
analysis.
4. See 'Adjusted tax metrics' on page 48 for further
analysis.
Non-GAAP measures
Adjusted basic earnings per share
The reconciliation of Adjusted basic earnings per share to the closest
equivalent GAAP measure, Basic earnings per share, is provided below.
FY25 FY24
€m €m
(Loss)/profit attributable to owners of the parent (4,169) 1,140
Adjusted profit attributable to owners of the parent 2,058 2,021
Million Million
Weighted average number of shares outstanding - Basic 26,149 27,056
eurocents eurocents
Basic (loss)/earnings per share (15.94)c 4.21c
Adjusted basic earnings per share 7.87c 7.47c
Cash flow, funding and capital allocation metrics
Non-GAAP measure Purpose Definition
Free cash flow Internal performance reporting. Free cash flow is Adjusted EBITDAaL after cash flows in relation to capital
additions, working capital movements including in respect of capital
External metric used by the investor community. additions, disposal of property, plant and equipment and intangible assets,
integration capital additions and restructuring costs, together with related
Assists comparability with other companies, although our metric may not be working capital, licences and spectrum, interest received and paid (excluding
directly comparable to similarly titled measures used by other companies. interest on bank borrowings secured against Indian assets), taxation,
dividends received from associates and joint ventures, dividends paid to
non-controlling shareholders in subsidiaries, payments in respect of lease
liabilities and other.
Adjusted free cash flow Internal performance reporting. Adjusted free cash flow is Free cash flow before licences and spectrum,
restructuring costs arising from discrete restructuring plans, integration
External metric used by the investor community. capital additions and working capital related items and M&A.
Setting director and management remuneration.
Key external metric used to evaluate liquidity and the cash generated by our
operations.
Gross debt Prominent metric used by debt rating agencies and the investor community. Non-current borrowings and current borrowings, excluding lease liabilities,
collateral liabilities and borrowings specifically secured against Indian
assets.
Net debt Prominent metric used by debt rating agencies and the investor community. Gross debt less cash and cash equivalents, short-term investments, non-current
investments in sovereign securities, derivative financial instruments
excluding mark-to-market adjustments and net collateral assets.
Non-GAAP measures
Cash flow and funding
The table below presents the reconciliation between Inflow from operating
activities and Free cash flow.
FY25 FY24
€m €m
Inflow from operating activities 15,373 16,557
Net tax paid 901 724
Cashflows from discontinued operations (1,657) (3,296)
Cash generated by operations 14,617 13,985
Capital additions (6,862) (6,331)
Working capital movement in respect of capital additions 404 (141)
Disposal of property, plant and equipment and intangible assets 9 14
Integration capital additions (31) (81)
Working capital movement in respect of integration capital additions 8 (37)
Licences and spectrum (421) (454)
Interest received and paid(1) (1,598) (1,685)
Taxation (728) (724)
Dividends received from associates and joint ventures 530 442
Dividends paid to non-controlling shareholders in subsidiaries (249) (260)
Payments in respect of lease liabilities (3,288) (3,135)
Payment for the future use of the Vodafone brand in Italy and Spain (491) -
Other (50) 190
Free cash flow 1,850 1,783
Note:
1. Includes interest on lease liabilities of €451
million (FY24: €406 million), excluding discontinued operations.
The table below presents the reconciliation between Borrowings, Gross debt and
Net debt.
Year-end Year-end
FY25 FY24
€m €m
Borrowings (53,143) (56,987)
Lease liabilities 10,826 9,672
Bank borrowings secured against Indian assets - 1,720
Collateral liabilities 2,357 2,628
Gross debt (39,960) (42,967)
Collateral liabilities (2,357) (2,628)
Cash and cash equivalents 11,001 6,183
Non-current investments in sovereign securities 913 -
Short-term investments 5,280 3,225
Collateral assets 1,010 741
Derivative financial instruments 2,291 2,702
Less mark-to-market gains deferred in hedge reserves (575) (498)
Net debt (22,397) (33,242)
Non-GAAP measures
Return on Capital Employed
Non-GAAP measure Purpose Definition
Return on Capital Employed ('ROCE') ROCE is a metric used by the investor community and reflects how efficiently We calculate ROCE by dividing Operating profit by the average of capital
we are generating profit with the capital we deploy. employed as reported in the consolidated statement of financial position.
Capital employed includes borrowings, cash and cash equivalents, derivative
financial instruments included in trade and other receivables/payables,
short-term investments, non-current investments in sovereign securities,
collateral assets, financial liabilities under put option arrangements and
equity.
Pre-tax ROCE (controlled) As above. We calculate pre-tax ROCE (controlled) by using Operating profit excluding
interest on lease liabilities, restructuring costs arising from discrete
restructuring plans, impairment losses/reversals, other income and expense,
the impact of hyperinflationary adjustments and the share of results of equity
Post-tax ROCE (controlled and associates/joint ventures) accounted associates and joint ventures. On a post-tax basis, the measure
includes our Adjusted share of results from associates and joint ventures and
a notional tax charge. Capital is equivalent to net operating assets and is
based on the average of month end capital employed balances during the period
of: property, plant and equipment (including leased assets and lease
liabilities), intangible assets (including goodwill), operating working
capital (including held for sale assets and excluding derivative balances) and
provisions, excluding the impact of hyperinflationary adjustments. Other
assets that do not directly contribute to returns are excluded from this
measure and include other investments, current and deferred tax balances and
post employment benefits. On a post-tax basis, ROCE also includes our
investments in associates and joint ventures.
ROCE using GAAP measures
The table below presents the calculation of ROCE using GAAP measures as
reported in the consolidated income statement and consolidated statement of
financial position.
FY25 FY24
€m €m
Operating (loss)/profit(1) (411) 3,665
Borrowings 53,143 56,987
Cash and cash equivalents (11,001) (6,183)
Derivative financial instruments included in trade and other receivables (4,197) (4,226)
Derivative financial instruments included in trade and other payables 1,906 1,524
Non-current investments in sovereign securities (913) -
Short-term investments (5,280) (3,225)
Collateral assets (1,010) (741)
Financial liabilities under put option arrangements 97 -
Equity 53,916 60,998
Capital employed at end of the year 86,661 105,134
Average capital employed for the year 95,898 107,771
ROCE using GAAP measures (0.4)% 3.4%
Note:
1. Operating (loss)/profit includes Other income 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.
FY25 FY24
€m €m
Operating (loss)/profit (411) 3,665
Interest on lease liabilities (488) (440)
Restructuring costs 164 703
Other income (565) (372)
Share of results of equity accounted associates and joint ventures 123 96
Impairment charge/(reversal) 4,515 (64)
Other adjustments(1) 399 296
Adjusted operating profit for calculating pre-tax ROCE (controlled) 3,737 3,884
Adjusted share of results of equity accounted associates and joint ventures (159) (116)
used in post-tax ROCE(2)
Notional tax at Adjusted effective tax rate(3) (905) (923)
Adjusted operating profit for calculating post-tax ROCE (controlled and 2,673 2,845
associates/joint ventures)
Capital employed for calculating ROCE on a GAAP basis 86,661 105,134
Adjustments to exclude:
- Leases (10,826) (9,672)
- Deferred tax assets (19,033) (20,177)
- Deferred tax liabilities 798 699
- Taxation recoverable (174) (76)
- Taxation liabilities 578 393
- Other investments (2,660) (1,543)
- Associates and joint ventures (6,796) (10,032)
- Pension assets and liabilities (55) (76)
- Removal of capital employed related to discontinued operations - (12,129)
- Other adjustments(1) (1,193) (1,009)
Adjusted capital employed for calculating pre-tax ROCE (controlled) 47,300 51,512
Associates and joint ventures 6,796 10,032
Adjusted capital employed for calculating post-tax ROCE (controlled and 54,096 61,544
associates/joint ventures)
Average capital employed for calculating pre-tax ROCE (controlled) 53,146 53,831
Average capital employed for calculating post-tax ROCE (controlled and 61,030 64,381
associates/joint ventures)
Pre-tax ROCE (controlled) 7.0% 7.2%
Post-tax ROCE (controlled and associates/joint ventures) 4.4% 4.4%
Notes:
1. Comprises adjustments to exclude hyperinflationary accounting in Türkiye.
2. 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.
3. Includes tax at the Adjusted effective tax rate of 25.3% (FY24: 24.5%).
Non-GAAP measures
Financing and Taxation metrics
Non-GAAP measure Purpose Definition
Adjusted net financing costs This metric is used by both management and the investor community. Adjusted net financing costs exclude mark-to-market and foreign exchange
gains/losses, together with fair value movements on Other investments through
This metric is used in the calculation of Adjusted basic earnings per share. profit and loss.
Adjusted profit before taxation This metric is used in the calculation of the Adjusted effective tax rate (see Adjusted profit before taxation excludes the tax effects of items excluded
below). from Adjusted basic earnings per share, including: impairment
losses/reversals, amortisation of customer bases and brand intangible assets,
restructuring costs arising from discrete restructuring plans, other income
and expense, mark-to-market and foreign exchange movements and fair value
movements on Other investments through profit and loss.
Adjusted income tax expense This metric is used in the calculation of the Adjusted effective tax rate (see Adjusted income tax expense excludes the tax effects of items excluded from
below). Adjusted basic earnings per share, including: impairment losses/reversals,
amortisation of customer bases and brand intangible assets, restructuring
costs arising from discrete restructuring plans, other income and expense,
mark-to-market and foreign exchange movements and fair value movements on
Other investments through profit and loss. It also excludes deferred tax
movements relating to tax losses in Luxembourg as well as other significant
one-off items.
Adjusted effective tax rate This metric is used by both management and the investor community. Adjusted income tax expense (see above) divided by Adjusted profit before
taxation (see above).
Adjusted share of results of equity accounted associates and joint ventures This metric is used in the calculation of Adjusted effective tax rate. Share of results of equity accounted associates and joint ventures excluding
restructuring costs, amortisation of acquired customer base and brand
intangible assets and other income and expense.
Adjusted share of results of equity accounted associates and joint ventures This metric is used in the calculation of post-tax ROCE (controlled and Share of results of equity accounted associates and joint ventures excluding
used in post-tax ROCE associates/joint ventures). restructuring costs and other income and expense.
Non-GAAP measures
Adjusted tax metrics
The table below reconciles Profit before taxation and Income tax expense to
Adjusted profit before taxation, Adjusted income tax expense and Adjusted
effective tax rate.
FY25 FY24
€m €m
(Loss)/profit before taxation (1,478) 1,620
Adjustments to derive Adjusted profit before tax 4,747 1,466
Adjusted profit before taxation 3,269 3,086
Adjusted share of results of equity accounted associates and joint ventures (153) (227)
Adjusted profit before tax for calculating Adjusted effective tax rate 3,116 2,859
Income tax expense (2,246) (50)
Tax on adjustments to derive Adjusted profit before tax 8 (342)
Adjustments:
- Deferred tax on use of Luxembourg losses in the year 423 598
- UK corporate interest restriction 16 78
- Tax relating to inflation-related adjustments in Türkiye 146 35
- Deferred tax on rate change in Luxembourg 718 -
- Settlement of the VISPL tax cases 185 -
- Other (38) -
- Deferred tax on recognition of Luxembourg losses in the year - (1,019)
Adjusted income tax expense for calculating Adjusted tax rate (788) (700)
Adjusted effective tax rate 25.3% 24.5%
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.
FY25 FY24
€m €m
Share of results of equity accounted associates and joint ventures (123) (96)
Restructuring costs 21 7
Other income (57) (27)
Adjusted share of results of equity accounted associates and joint ventures (159) (116)
used in post-tax ROCE
Amortisation of acquired customer base and brand intangible assets 312 343
Adjusted share of results of equity accounted associates and joint ventures 153 227
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.
FY25 FY24
€m €m
Depreciation on leased assets - included in Adjusted EBITDAaL 3,205 3,003
Depreciation on leased assets - included in Restructuring costs 30 14
Depreciation on leased assets 3,235 3,017
Depreciation on owned assets 3,874 3,882
Amortisation of owned intangible assets 3,695 3,515
Depreciation and amortisation on owned assets 7,569 7,397
Total depreciation and amortisation on owned and leased assets 10,804 10,414
Loss on disposal of owned fixed assets 25 34
Loss on disposal of leased assets (12) -
Depreciation and amortisation - as recognised in the consolidated income 10,817 10,448
statement
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.
FY25 FY24
€m €m
Capital additions 6,862 6,331
Integration related capital additions 31 81
Licence and spectrum additions 236 283
Additions 7,129 6,695
Intangible asset additions 2,655 2,622
Property, plant and equipment owned additions 4,474 4,073
Total additions 7,129 6,695
Definitions
Key terms are defined below. See page 36 for the location of definitions for
non-GAAP measures.
Term Definition
Africa Comprises the Vodacom Group.
ARPU Average revenue per user, defined as customer revenue and incoming revenue
divided by average customers.
Capital additions Comprises the purchase of property, plant and equipment and intangible assets,
other than licence and spectrum payments and integration capital expenditure.
Common Functions Comprises central teams and business functions.
Depreciation and amortisation The accounting charge that allocates the cost of tangible or intangible
assets, whether owned or leased, to the income statement over its useful life.
The measure includes the profit or loss on disposal of property, plant and
equipment, software and leased assets.
Eliminations Refers to the removal of intercompany transactions to derive the consolidated
financial statements.
Europe Comprises the Group's European businesses and the UK.
Financial services revenue Financial services revenue includes fees generated from the provision of
advanced airtime, overdraft, financing and lending facilities, as well as
merchant payments and the sale of insurance products (e.g. device insurance,
life insurance and funeral cover).
Fixed service revenue Service revenue (see below) relating to the provision of fixed line and
carrier services.
FTTH Fibre to the home.
GAAP Generally Accepted Accounting Principles.
IFRS International Financial Reporting Standards.
Incoming revenue Comprises revenue from termination rates for voice and messaging to Vodafone
customers.
Indian assets Comprises the Group's investments in Indus Towers Limited and Vodafone Idea
Limited.
Integration capital additions Capital additions incurred in relation to significant changes in the operating
model, such as the integration of recently acquired subsidiaries.
Internet of Things ('IoT') The network of physical objects embedded with electronics, software, sensors,
and network connectivity, including built-in mobile SIM cards, that enable
these objects to collect data and exchange communications with one another or
a database.
MDU Multi Dwelling Units.
Mobile service revenue Service revenue (see below) relating to the provision of mobile services.
NPS Net Promoter Score.
Operating expenses Comprise primarily sales and distribution costs, network and IT related
expenditure and business support costs.
Other Europe Other Europe markets comprise Portugal, Ireland, Greece, Romania, Czech
Republic and Albania.
Other revenue Other revenue principally includes equipment revenue, interest income, income
from partner market arrangements and lease revenue, including in respect of
the lease out of passive tower infrastructure.
Reported growth Reported growth is based on amounts reported in euros and determined under
IFRS.
Revenue The total of Service revenue (see below) and Other revenue (see above).
Roaming Roaming allows customers to make calls, send and receive texts and data on our
and other operators' mobile networks, usually while travelling abroad.
Service revenue Service revenue is all revenue related to the provision of ongoing services to
the Group's consumer and enterprise customers, together with roaming revenue,
revenue from incoming and outgoing network usage by non-Vodafone customers and
interconnect charges for incoming calls.
Vodafone Business Vodafone Business supports organisations in a digital world. With Vodafone's
expertise in connectivity, our leading IoT platform and our global scale, we
deliver the results that organisations need to progress and thrive. We support
businesses of all sizes and sectors.
Notes
1. References to Vodafone are to Vodafone Group Plc and references to
Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise
stated. Vodafone, the Vodafone Speech Mark Devices, Vodacom and
everyone.connected are trademarks owned by Vodafone. 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 31 March
2024 unless otherwise stated.
3. References to "Q1", "Q2", "Q3" and "Q4" are to the three months ended
30 June, 30 September, 31 December and 31 March. References to the "year",
"financial year" or "FY25" are to the financial year ended 31 March 2025.
References to "last year", "last financial year" or "FY24" are to the
financial year ended 31 March 2024. References to "H1 FY25" are to the six
month period ended 30 September 2024. References to "H1 FY24" are to the six
month period ended 30 September 2023.
4. Vodacom refers to the Group's interest in Vodacom Group Limited
('Vodacom') as well as its operations, including subsidiaries in South Africa,
Egypt, DRC, Tanzania, Mozambique and Lesotho.
5. This document contains references to our and our affiliates' websites.
Information on any website is not incorporated into this update and should not
be considered part of this update.
Forward-looking statements and other matters
This document contains 'forward-looking statements' within the meaning of the
US Private Securities Litigation Reform Act of 1995 with respect to the
Group's financial condition, results of operations and businesses and certain
of the Group's plans and objectives. In particular, such forward-looking
statements include, but are not limited to, statements with respect to: the
Group's portfolio transformation plan; expectations regarding the Group's
financial condition or results of operations and the guidance for Adjusted
EBITDAaL and Adjusted free cash flow for the financial year ending 31 March
2026; completion of the merger of Vodafone UK and Three UK; the mobile network
sharing agreement with Virgin Media O2; the announced potential acquisition of
Telekom Romania; changes to German TV laws and the migration of users to
individual TV customer contracts; expectations for the Group's future
performance generally; the Group's share buyback programme; expectations
regarding the operating environment and market conditions and trends,
including customer usage, competitive position and macroeconomic pressures,
price trends and opportunities in specific geographic markets; intentions and
expectations regarding the development, launch and expansion of products,
services and technologies, either introduced by Vodafone or by Vodafone in
conjunction with third parties or by third parties independently; expectations
regarding the integration or performance of current and future investments,
associates, joint ventures, non-controlled interests and newly acquired
businesses; the impact of regulatory and legal proceedings involving the Group
and of scheduled or potential regulatory changes; certain of the Group's plans
and objectives, including the Group's strategy.
Forward-looking statements are sometimes but not always identified by their
use of a date in the future or such words as 'will', 'may', 'expects',
'believes', 'continue', 'plans', 'further', 'ongoing', 'progress', 'targets'
or 'could'. By their nature, forward-looking statements are inherently
predictive, speculative and involve risk and uncertainty because they relate
to events and depend on circumstances that will occur in the future. There are
a number of factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to the following:
general economic and political conditions in the jurisdictions in which the
Group operates and changes to the associated legal, regulatory and tax
environments; increased competition; levels of investment in network capacity
and the Group's ability to deploy new technologies, products and services,
including artificial intelligence; the Group's ability to optimise its
portfolio in line with its business transformation plan; evolving cyber
threats to the Group's services and confidential data; rapid changes to
existing products and services and the inability of new products and services
to perform in accordance with expectations; the ability of the Group to
integrate new technologies, products and services with existing networks,
technologies, products and services; the Group's ability to generate and grow
revenue; slower than expected impact of new or existing products, services or
technologies on the Group's future revenue, cost structure and capital
expenditure outlays; slower than expected customer growth, reduced customer
retention, reductions or changes in customer spending and increased pricing
pressure; the Group's ability to extend and expand its spectrum resources, to
support ongoing growth in customer demand for mobile data services; the
Group's ability to secure the timely delivery of high-quality products from
suppliers; loss of suppliers, disruption of supply chains, shortages and
greater than anticipated prices of new mobile handsets; changes in the costs
to the Group of, or the rates the Group may charge for, terminations and
roaming minutes; the impact of a failure or significant interruption to the
Group's telecommunications, data centres, networks, IT systems or data
protection systems; the Group's ability to realise expected benefits from
acquisitions, partnerships, joint ventures, associates, franchises, brand
licences, platform sharing or other arrangements with third parties, including
the combination of Vodafone's UK business with Three UK, the mobile network
sharing agreement with Virgin Media O2 and the Group's strategic partnerships
with Microsoft and Google; 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 disposal;
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.
A review of the reasons why actual results and developments may differ
materially from the expectations disclosed or implied within forward-looking
statements can be found in the summary of our principal risks in the Group's
Annual Report for the year ended 31 March 2024 and under "Risk factors" and
"Forward-looking statements and other matters" in the Vodafone Group Plc H1
Results for the six months ended 30 September 2024. The Annual Report can be
found on the Vodafone Group's website (investors.vodafone.com/results
(http://investors.vodafone.com/results) ). All subsequent written or oral
forward-looking statements attributable to Vodafone or any member of the
Vodafone Group or any persons acting on their behalf are expressly qualified
in their entirety by the factors referred to above. No assurances can be given
that the forward-looking statements in this document will be realised. Subject
to compliance with applicable law and regulations, Vodafone does not intend to
update these forward-looking statements and does not undertake any obligation
to do so.
Copyright © Vodafone Group 2025
-End-
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