REG - Vodafone Group Plc - Half-year Report <Origin Href="QuoteRef">VOD.L</Origin> - Part 6
14/11/2017 07:06
- Part 6: For the preceding part double click ID:nRSN3828We
7,624 8,129 (6.2) 6.2 1.7 1.7
Germany - Service revenue excluding the impact of regulation 2,493 2,479 0.6 1.4 - 2.0
Germany - Mobile service revenue excluding the impact of regulation 1,492 1,510 (1.2) 2.2 - 1.0
UK - Service revenue excluding the impact of regulation and handset financing 1,564 1,758 (11.0) 1.6 8.2 (1.2)
UK - Mobile service revenue excluding the impact of regulation and handset financing 1,207 1,353 (10.8) 2.0 8.4 (0.4)
Spain - Service revenue excluding the impact of handset financing 1,143 1,128 1.3 1.7 - 3.0
India - Revenue 1,387 1,519 (8.7) - (5.6) (14.3)
India - Service revenue 1,385 1,510 (8.3) 0.1 (5.7) (13.9)
ADDITIONAL INFORMATION
Regional results for the six months ended 30 September1
Revenue Adjusted EBITDA Adjusted operatingprofit Capital additions Operating freecash flow
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Em Em Em Em Em Em Em Em Em Em
Europe
Germany 5,277 5,265 1,929 1,788 500 298 768 880 799 445
Italy 3,107 3,006 1,200 1,104 564 474 315 307 833 385
UK 3,515 3,575 930 674 121 (170) 366 438 134 (73)
Spain 2,512 2,496 751 692 132 108 427 322 310 14
Other Europe
Netherlands2 - 909 - 316 21 295 - 121 - 47
Portugal 513 494 188 172 39 28 81 113 100 6
Greece 440 432 145 130 56 48 62 59 7 24
Other 1,506 1,477 440 422 139 131 150 227 161 53
Eliminations (7) (8) - - - - - - - -
Other Europe 2,452 3,304 773 1,040 255 502 293 520 268 130
Eliminations (88) (103) - - - - - - - -
Europe 16,775 17,543 5,583 5,298 1,572 1,212 2,169 2,467 2,344 901
AMAP
Vodacom 2,799 2,464 1,063 952 722 642 356 350 439 478
Other AMAP
Turkey 1,437 1,611 327 335 131 113 154 184 (362) (438)
Egypt 475 796 214 356 145 205 98 104 146 223
Other 989 1,016 249 249 159 100 115 114 121 99
Eliminations (1) (1) - - - - - - - -
Other AMAP 2,900 3,422 790 940 435 418 367 402 (95) (116)
Eliminations - - - - - - - - - -
AMAP 5,699 5,886 1,853 1,892 1,157 1,060 723 752 344 362
Other 675 664 (51) (100) (101) (149) 371 307 (786) (567)
Eliminations (74) (42) - - - - - - - -
Group 23,075 24,051 7,385 7,090 2,628 2,123 3,263 3,526 1,902 696
India 2,610 3,015 557 892 544 223 394 447 214 438
Notes:
1. The results for the half year ended 30 September 2016 have been restated to exclude the results of Vodafone India which
has been classified as discontinued operations for Group reporting purposes following the agreement to combine with Idea
Cellular.
2. Vodafone Netherlands results up to 31 December 2016, after which it was merged with Ziggo to form VodafoneZiggo, a 50:50
joint venture, the results of which are included in Other Europe.
Service revenue - quarter ended 30 September1
Group and Regions Group Europe AMAP
Restated Restated Restated
2017 2016 2017 2016 2017 2016
Em Em Em Em Em Em
Mobile customer revenue 6,709 7,307 4,847 5,264 1,851 2,043
Mobile incoming revenue 511 611 344 395 169 215
Other service revenue 582 603 392 406 112 95
Mobile service revenue 7,802 8,521 5,583 6,065 2,132 2,353
Fixed service revenue 2,508 2,516 2,166 2,125 241 240
Service revenue 10,310 11,037 7,749 8,190 2,373 2,593
Other revenue 1,291 1,149 727 638 445 445
Revenue 11,601 12,186 8,476 8,828 2,818 3,038
Growth
Reported Organic* Reported Organic* Reported Organic*
% % % % % %
Revenue (4.8) 2.7 (4.0) 2.4 (7.2) 7.0
Service revenue (6.6) 1.3 (5.4) 0.8 (8.5) 6.2
Operating Companies Germany Italy UK
Restated Restated Restated
2017 2016 2017 2016 2017 2016
Em Em Em Em Em Em
Mobile customer revenue 1,361 1,338 952 955 1,016 1,117
Mobile incoming revenue 53 71 84 89 75 83
Other service revenue 140 136 73 76 79 81
Mobile service revenue 1,554 1,545 1,109 1,120 1,170 1,281
Fixed service revenue 1,015 985 245 218 340 362
Service revenue 2,569 2,530 1,354 1,338 1,510 1,643
Other revenue 114 150 207 195 246 90
Revenue 2,683 2,680 1,561 1,533 1,756 1,733
Growth
Reported Organic* Reported Organic* Reported Organic*
% % % % % %
Revenue 0.1 0.2 1.8 2.1 1.3 8.4
Service revenue 1.5 1.6 1.2 1.5 (8.1) (3.0)
Discontinued operations:
Spain Vodacom India
Restated Restated Restated
2017 2016 2017 2016 2017 2016
Em Em Em Em Em Em
Mobile customer revenue 694 691 978 948 879 1,208
Mobile incoming revenue 41 37 40 53 216 164
Other service revenue 63 63 62 52 39 53
Mobile service revenue 798 791 1,080 1,053 1,134 1,425
Fixed service revenue 385 354 53 39 82 70
Service revenue 1,183 1,145 1,133 1,092 1,216 1,495
Other revenue 93 106 242 197 7 1
Revenue 1,276 1,251 1,375 1,289 1,223 1,496
Growth
Reported Organic* Reported Organic* Reported Organic*
% % % % % %
Revenue 2.0 2.5 6.7 6.2 (18.2) (17.4)
Service revenue 3.3 3.9 3.8 3.4 (18.7) (17.8)
Notes:
* All amounts in this document marked with an "*" represent organic growth which presents performance on a comparable
basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. Organic growth is an
alternative performance measures. See "Alternative performance measures" on page 42 for further details and reconciliations
to the respective closest equivalent GAAP measure.
1. The results for the half year ended 30 September 2016 have been restated to exclude the results of Vodafone India which
has been classified as discontinued operations for Group reporting purposes following the agreement to combine with Idea
Cellular.
Reconciliation of adjusted earnings
Reported Discontinuedoperations Adjustments1 Adjusted
Six months ended 30 September 2017 Em Em Em Em
Operating profit 2,008 - 77 2,085
Amortisation of acquired customer base and brand intangible assets - - 543 543
Non-operating income and expense (1) - 1 -
Net financing costs 152 - (407) (255)
Profit before taxation 2,159 - 214 2,373
Income tax expense (579) - 90 (489)
Profit for the financial period continuing operations 1,580 - 304 1,884
Loss for the financial period from discontinued operations (345) 345 - -
Profit for the financial period 1,235 345 304 1,884
Attributable to:
- Owners of the parent 1,131 345 297 1,773
- Non-controlling interests 104 - 7 111
Basic earnings per share 4.03c 6.32c
Note:
1. See page 18 for further details.
Reported Discontinued operations Adjustments2 Adjusted
Six months ended 30 September 2016 restated1 Em Em Em Em
Operating profit 1,515 - 93 1,608
Amortisation of acquired customer base and brand intangible assets - - 515 515
Non-operating income and expense - - - -
Net financing costs (123) - (328) (451)
Profit before taxation 1,392 - 280 1,672
Income tax expense (1,114) - 714 (400)
Profit for the financial period continuing operations 278 - 994 1,272
Loss for the financial period from discontinued operations (5,281) 5,281 - -
Loss/(profit) for the financial period (5,003) 5,281 994 1,272
Attributable to:
- Owners of the parent (5,129) 5,281 986 1,138
- Non-controlling interests 126 - 8 134
Basic (loss)/earnings per share (18.38c) 4.08c
Notes:
1. The results for the half year ended 30 September 2016 have been restated to exclude the results of Vodafone India which
has been classified as discontinued operations for Group reporting purposes following the agreement to combine with Idea
Cellular.
2. See page 18 for further details.
OTHER INFORMATION
Definition of terms
Term Definition
Adjusted EBIT Operating profit excluding share of results in associates and joint ventures, impairment losses, amortisation of customer bases and brand intangible assets restructuring costs arising from discrete restructuring plans and other income and expense. The
Group's definition of adjusted EBIT may not be comparable with similarly titled measures and disclosures by other companies.
Adjusted EBITDA Operating profit excluding share of results in associates and joint ventures, depreciation and amortisation, gains/losses on the disposal of fixed assets, impairment losses, restructuring costs arising from discrete restructuring plans and other income and
expense. The Group's definition of adjusted EBITDA may not be comparable with similarly titled measures and disclosures by other companies.
Adjusted operating profit Group adjusted operating profit excludes impairment losses, restructuring costs, amortisation of customer bases and brand intangible assets and other income and expense.
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.
Converged customer A customer who receives both fixed and mobile services (also known as unified communications) on a single bill or who receives a discount across both bills.
Customer costs Includes acquisition costs, retention costs and expenses related to ongoing commissions.
Depreciation and other amortisation The accounting charge that allocates the cost of a tangible or intangible asset to the income statement over its useful life. This measure includes the profit or loss on disposal of property, plant and equipment and computer software.
Direct costs Direct costs include interconnect costs and other direct costs of providing services.
Enterprise The Group's customer segment for businesses.
Fixed service revenue Service revenue relating to provision of fixed line ('fixed') and carrier services.
Free cash flow (pre-spectrum) Operating free cash flow after cash flows in relation to taxation, interest, dividends received from associates and investments and dividends paid to non-controlling shareholders in subsidiaries, but before restructuring and licence and spectrum payments.
Free cash flow Operating free cash flow after cash flows in relation to taxation, interest, dividends received from associates and investments, dividends paid to non-controlling shareholders in subsidiaries, restructuring payments and licence and spectrum payments. Free
cash flow has been redefined during the period to include restructuring and licence and spectrum payments to ensure greater comparability with similarly titled measures and disclosures by other companies.
Incoming revenue Comprises revenue from termination rates for voice and messaging to Vodafone customers.
Internet of Things ('IoT') The network of physical objects embedded with electronics, software, sensors, and network connectivity, including built-in mobile SIM cards, that enables these objects to collect data and exchange communications with one another or a database.
Mobile customer revenue Represents revenue from mobile customers from bundles that include a specified number of minutes, messages or megabytes of data that can be used for no additional charge ('in-bundle') and revenues from minutes, messages or megabytes of data which are in
excess of the amount included in customer bundles ('out-of-bundle'). Mobile in-bundle and out-of-bundle revenues, previously disclosed separately, are now combined to simplify the presentation of the Group's results.
Mobile service revenue Service revenue relating to the provision of mobile services.
Net debt Long-term borrowings, short-term borrowings and mark-to-market adjustments on financing instruments less cash and cash equivalents.
Next generation networks ('NGN') Fibre or cable networks typically providing high-speed broadband over 30Mbps.
Operating expenses Operating expenses comprise primarily sales and distribution costs, network and IT related expenditure and business support costs.
Operating free cash flow Cash generated from operations after cash payments for capital additions (excludes capital licence and spectrum payments) and cash receipts from the disposal of intangible assets and property, plant and equipment, but before restructuring costs.
Organic growth An alternative performance measurewhich presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. See "Alternative performance measures" on page 42 for further details.
Other revenue Other revenue includes revenue from connection fees and equipment sales.
Regulation Impact of industry specific law and regulations covering telecommunication services. The impact of regulation on service revenue in European markets comprises the effect of changes in European mobile termination rates and changes in out-of-bundle roaming
revenues less the increase in visitor revenues.
Reported growth Reported growth is based on amounts reported in euros as determined under IFRS.
Restructuring costs Costs incurred by the Group following the implementation of discrete restructuring plans to improve overall efficiency.
RGUs Revenue Generating Units describes number of fixed line services taken by subscribers.
Roaming Impact of European roaming, defined as the increase in visitor revenues less the increase in roaming costs and the decline in out-of-bundle roaming revenues.
Service revenue Service revenue comprises all revenue related to the provision of ongoing services including, but not limited to, monthly access charges, airtime usage, roaming, incoming and outgoing network usage by non-Vodafone customers and interconnect charges for
incoming calls. See "Alternative performance measures" on page 42 for further details.
VGE Vodafone Global Enterprise (VGE), which serves the Group's biggest multi-national customers.
For definitions of other terms please refer to pages 218 to 220 of the Group's annual report for the financial year ended 31 March 2017.
Copies of this document are available from the Company's registered office at Vodafone House, The Connection, Newbury,
Berkshire, RG14 2FN. The half-year results will be available on the Vodafone Group Plc website, vodafone.com/investor, from
14 November 2017.
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 Portrait, the Vodafone Speechmark, Vodacom, Vodafone One and M-Pesa, are trademarks of the Vodafone Group. The Vodafone Rhombus is a registered design of the Vodafone Group. Other product and company names mentioned herein may be the trademarks of their respective owners.
2. All growth rates reflect a comparison to the six months ended 30 September 2016 unless otherwise stated.
3. References to "Q1" and "Q2" are to the quarters ended 30 June 2017 and 30 September 2017, respectively, unless otherwise stated. References to "half year", "first half" or "H1" are to the six months ended 30 September 2017 unless otherwise stated. References to the "year", "financial year" or "2018 financial year" are to the financial year ending 31 March 2018 and references to the "last year" or "last financial year" are to the financial year ended 31 March 2017 unless otherwise stated.
4. All amounts marked with an "*" represent "organic growth", which presents performance on a comparable basis, both in terms of merger and acquisition activity as well as in terms of movements in foreign exchange rates.
5. Vodacom refers to the Group's interest in Vodacom Group Limited ('Vodacom') in South Africa as well as its subsidiaries, including its operations in the DRC, Lesotho, Mozambique and Tanzania.
6. The financial results for India have been derived from our consolidated financial results and this may differ from Vodafone India's financial statements prepared under Indian GAAP, Indian Accounting Standards or IFRS.
7. Quarterly historical information, including information for service revenue, mobile customers, mobile churn, mobile data usage, mobile ARPU and certain fixed line and convergence metrics, is provided in a spread sheet available at vodafone.com/investor.
8. This trading update contains references to our website. Information on our website is not incorporated into this update and should not be considered part of this update. We have included any website as an inactive textual reference only.
Forward-looking statements
This report contains "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of
1995 with respect to the Group's financial condition, results of operations and businesses and certain of the Group's plans
and objectives.
In particular, such forward-looking statements include, but are not limited to, statements with respect to: expectations
regarding the Group's financial condition or results of operations, including the Group Chief Executive's statement and
financial review of the half year on pages 2 to 5 of this report and the guidance for adjusted EBITDA and free cash flow
for the 2018 financial year (and the related underlying assumptions) on page 6; expectations for the Group's future
performance generally, including growth and capital expenditure; expectations regarding the operating environment and
market conditions and trends, including customer usage, competitive position and macroeconomic pressures, spectrum auctions
and awards, 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 including the rollout of TV in the United Kingdom;
expectations regarding free cash flow, foreign exchange rate movements and tax rates; expectations regarding the
integration or performance of current and future investments, associates, joint ventures, non-controlled interests and
newly acquired businesses; expectations regarding MTR rates in the jurisdictions in which Vodafone operates; expectations
regarding Vodafone India, the outcome and impact of regulatory and legal proceedings involving Vodafone and of scheduled or
potential legislative and regulatory changes, including approvals, reviews and consultations.
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as
"will", "anticipates", "aims", "could", "may", "should", "expects", "believes", "intends", "plans" ,"prepares" or "targets"
(including in their negative form or other variations). 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 may
or may not 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 of 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; 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; a lower 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
expand its spectrum position, win 3G and 4G allocations and realise expected synergies and benefits associated with 3G and
4G; the Group's ability to secure the timely delivery of high-quality products from suppliers; loss of suppliers,
disruption of supply chains and greater than anticipated prices of new mobile handsets; changes in the costs to the Group
of, or the rates the Group my charge for, terminations and roaming minutes; the impact of a failure or significant
interruption to the Group's telecommunications, networks, IT systems or data protection systems; the Group's ability to
realise expected benefits from acquisitions, partnerships, joint ventures, franchises, brand licences, platform sharing or
other arrangements with third parties; acquisitions and divestments of Group businesses and assets and the pursuit of new,
unexpected strategic opportunities; the Group's ability to integrate acquired business or assets; the extent of any future
write-downs or impairment charges on the Group's assets, or restructuring charges incurred as a result of an acquisition or
disposition; a 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.
Furthermore, a review of the reasons why actual results and developments may differ materially from the expectations
disclosed or implied within forward-looking statements can be found under "Forward-looking statements" and "Principal risk
factors and uncertainties" in the Group's annual report for the financial year ended 31 March 2017. The annual report can
be found on the Group's website (vodafone.com/investor). All subsequent written or oral forward-looking statements
attributable to the Company or any member of the Group or any persons acting on their behalf are expressly qualified in
their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in this
document will be realised. Subject to compliance with applicable law and regulations, Vodafone does not intend to update
these forward-looking statements and does not undertake any obligation to do so.
For further information:
Vodafone Group Plc
Investor Relations Media Relations
Telephone: +44 7919 990 230 www.vodafone.com/media/contact
Copyright © Vodafone Group 2017
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