REG - Vodafone Group Plc - Vodafone Q1 FY24 Trading Update
24/07/2023 07:00
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RNS Number : 8753G Vodafone Group Plc 24 July 2023
Vodafone Group Plc ⫶ Q1 FY24 trading update
24 July 2023
Broad-based growth improvement
Margherita Della Valle, Group Chief Executive, commented:
"As we progress our plans to transform Vodafone, we have achieved a better
service revenue performance across almost all of our markets. We have
delivered particularly strong trading in our Business segment and returned to
service revenue growth in Europe.
Looking ahead, we have taken the first steps of our action plan focused on
customers, simplicity and growth, but we have much more still to do."
Q1 performance summary Q1 FY24 Q1 FY23 Reported Organic
€m €m growth % growth % (1)
Service revenue 9,110 9,514 (4.2) 3.7*
- of which Germany 2,819 2,857 (1.3) (1.3)*
Other revenue 1,630 1,764
Total revenue 10,740 11,278 (4.8) 3.7*
* represents organic growth. See page 2. ǀ 1. Non-GAAP measure. See page
6.
· Group service revenue growth of 3.7%* (Q4: 1.9%*), or 1.8%* (Q4:
0.5%*) excluding Turkey
· Broad-based service revenue improvement across almost all European
markets
· Germany service revenue improved to -1.3%* (Q4: -2.8%*), supported by
broadband price increases
· Vodafone Business: service revenue growth accelerated to 4.5%* (Q4:
2.9%*) driven by a strong performance in digital services
· Africa: Vodacom service revenue growth 9.0%* (Q4: 7.0%*), improved
trend in South Africa, strong growth in Egypt
· FY24 guidance(1) re-iterated: Adjusted EBITDAaL c.€13.3 billion and
Adjusted free cash flow of c.€3.3 billion
Note:
1. The FY24 guidance foreign exchange rates were: €1 : GBP 0.88, €1 : ZAR
19.30, €1 : TRY 21.10, €1 : EGP 33.38.
For more information, please contact:
Investor
Relations
Media Relations
Investors.vodafone.com
Vodafone.com/media/contact
ir@vodafone.co.uk
GroupMedia@vodafone.com
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14
2FN, England. Registered in England No. 1833679
A webcast Q&A session will be held at 09:00 BST on 24 July 2023. The
webcast and supporting information can be accessed at investors.vodafone.com
Performance review ⫶ Broad-based growth improvement
Organic growth
All amounts marked with an '*' in this document represent organic growth which
presents performance on a comparable basis, excluding the impact of foreign
exchange rates, mergers and acquisitions, the hyperinflation adjustment in
Turkey and other adjustments to improve the comparability of results between
periods. Organic growth figures are non-GAAP measures. See non-GAAP measures
on page 6 for more information.
Change to segmental reporting
From 1 April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt from the Other Markets segment to the Vodacom segment. This is
the effective date on which the Group's reporting structure changed to reflect
the transfer of Vodafone Egypt to the Vodacom Group. All comparatives for
these two segments have been re-presented on the new basis of segmental
reporting. There is no impact on previously reported Group metrics.
Geographic performance summary
Other Other Vantage Common Elimi-
Germany Italy UK Spain Europe Vodacom(1) Markets(1) Towers(2) Functions nations Group
Q1 FY24
Service revenue 2,819 1,035 1,401 871 1,161 1,426 333 - 131 (67) 9,110
Other revenue 328 103 283 94 171 331 123 - 224 (27) 1,630
Total revenue (€m) 3,147 1,138 1,684 965 1,332 1,757 456 - 355 (94) 10,740
Organic service revenue growth % (3) (1.3)% (1.6)% 5.7% (3.0)% 4.1% 9.0% 74.1% - 3.7%
Q1 FY23(4)
Service revenue 2,857 1,052 1,360 898 1,254 1,664 364 - 128 (63) 9,514
Other revenue 414 114 308 90 162 377 87 325 207 (320) 1,764
Total revenue (€m) 3,271 1,166 1,668 988 1,416 2,041 451 325 335 (383) 11,278
FY23(4) FY24
Organic service revenue growth %(3) Q1 Q2 H1 Q3 Q4 H2 Total Q1
Germany (0.5) (1.1) (0.8) (1.8) (2.8) (2.3) (1.6) (1.3)
Italy (2.3) (3.4) (2.8) (3.3) (2.7) (3.0) (2.9) (1.6)
UK 6.5 6.9 6.7 5.3 3.8 4.6 5.6 5.7
Spain (3.0) (6.0) (4.5) (8.7) (3.7) (6.2) (5.4) (3.0)
Other Europe 2.5 2.9 2.7 2.1 3.6 2.8 2.8 4.1
Vodacom(1) 6.9 8.3 7.6 8.0 7.0 7.5 7.5 9.0
Other Markets(1) 32.3 39.7 36.0 48.8 54.9 51.7 43.5 74.1
Group 2.5 2.5 2.5 1.8 1.9 1.8 2.2 3.7
Downloadable performance information is available at:
investors.vodafone.com/results
Notes:
1. Total revenue, service revenue, other revenue and organic service revenue
growth metrics for FY23 have been re-presented for the Other Markets and
Vodacom segments to reflect the move of Vodafone Egypt from the Other Markets
segment to the Vodacom segment. There is no impact on previously reported
Group metrics.
2. In March 2023, the Group sold its controlling interest in Vantage Towers
A.G. to a joint venture entity co-controlled with KKR and GIP.
3. Organic service revenue growth is a non-GAAP measure. See page 6 for more
information.
4. The comparative period includes the results of Vodafone Hungary and
Vodafone Ghana which were included in the Other Europe and Other Markets
segments, respectively, until their disposal. As previously reported, Vodafone
Hungary was sold in January 2023 and Vodafone Ghana was sold in February
2023.
Germany ⫶ Commercial actions supporting a gradual recovery in top-line
trends
Service revenue declined by 1.3%* (Q4: -2.8%*) primarily reflecting the
cumulative impact of customer losses over the past 18 months, partially offset
by higher broadband ARPU. The improvement in quarterly trends includes the
initial benefit of broadband price increases, which started to take effect
from May 2023.
Fixed service revenue declined by 0.9%* (Q4: -2.1%*) driven by a lower
broadband and TV customer base, partially offset by higher broadband ARPU.
During Q1, we began the phased implementation of a broadband price increase
across our customer base. This supported service revenues but impacted our
commercial performance, as expected, with net cable customer disconnections of
70,000 and 51,000 DSL losses. The performance of our gigabit fixed network has
continued to improve, with strong results in three independent network tests
from Connect, CHIP and Computer BILD.
Our TV customer base declined by 120,000, and our consumer converged customer
base remained broadly stable at 2.3 million. Preparations for the change to
German TV laws in July 2024 continue to progress.
Mobile service revenue declined by 1.9%* (Q4: -3.7%*) driven by a lower mobile
customer base and ARPU, as well as mobile termination rate cuts. The
improvement in quarterly trends primarily reflected a tough prior year
comparison in Q4 FY23. We added 24,000 contract customers in the quarter,
supported by an improved Vodafone branded performance. We also added a further
2.2 million IoT connections. As part of our ongoing commercial repositioning,
in June we refreshed our 'FamilyCard' plans to be fully flexible relative to
the main tariff.
Italy, UK, Spain and Other Europe ⫶ Broad-based improvement
Italy
Service revenue declined by 1.6%* (Q4: -2.7%*) as a result of continued price
pressure in the Consumer mobile value segment, partially offset by strong
growth in Business fixed and new digital services. The improvement in
quarterly trends was driven by an acceleration in Business growth and
stabilisation of our mobile prepaid customer base.
In mobile, our Consumer prepaid active customer base was stable
quarter-on-quarter. Our second brand 'ho.' has continued to grow, with 63,000
net additions, and now has 3.1 million customers.
Our fixed line customer base decreased by 19,000, however this was partially
offset by 11,000 fixed-wireless additions which are reported within mobile.
Business demand for new digital services is accelerating, and connectivity was
further supported by the Business voucher programme, an initiative related to
the EU Recovery and Resilience Facility that subsidises high-speed broadband.
Our next generation network ('NGN') broadband services are now available to
23.8 million households, including 9.1 million through our own network and our
partnership with Open Fiber. In addition, our 5G fixed-wireless services now
cover 3.6 million households, complementing our 4G fixed-wireless access
products which reach an additional 1.7 million households.
UK
Service revenue increased by 5.7%* (Q4: 3.8%*) with strong growth in Consumer,
supported by annual price increases and a higher customer base, as well as
continued good growth in Business, partly offset by lower wholesale revenue.
Contractual price increases took effect from April 2023, driving an
improvement in quarterly trends.
In mobile, our contract customer base declined by 66,000 in Q1 due to the
disconnection of zero-value SIMs provided to businesses during the COVID
pandemic. Excluding these, our mobile contract customer base was broadly
stable, despite implementing annual contractual price increases. Consumer
contract churn remained broadly stable year-on-year.
In fixed, we added 42,000 broadband customers in Q1, and we now have 1.3
million customers. Through our partnerships with CityFibre and Openreach we
can now reach over 12 million households with full fibre broadband, more than
any other provider in the UK.
In June 2023, we announced that we had entered into a binding agreement to
combine our UK business with Three UK to create a sustainable, and competitive
third scaled network operator in the UK. Following the merger, which we expect
to close before the end of calendar 2024, Vodafone will own 51% of the
combined business and CK Hutchison 49%. This combination will provide
customers with greater choice and more value, drive greater competition, and
enable increased investment with a clear £11 billion plan to create one of
Europe's most advanced standalone 5G networks. Full details of the transaction
can be found here: investors.vodafone.com/merger-of-vodafone-uk-and-three-uk
(https://investors.vodafone.com/merger-of-vodafone-uk-and-three-uk)
Spain
Service revenue declined by 3.0%* (Q4: -3.7%*) due to a lower customer base
and continued price competition in the Consumer value segment, partially
offset by price increases. The sequential improvement in trends reflects a
full quarter benefit from price increases implemented in Q4 FY23.
In Q1, our mobile contract customer base declined by 87,000 and our broadband
base by 65,000. This was in part due to a higher level of customer churn
following our CPI-linked price increase. At the beginning of Q1, we also
closed 15% of our retail stores and chose not to renew several sales
dealership channels in order to increase our distribution efficiency. Our
customer net addition trends have improved again since the start of June.
Other Europe
Service revenue grew by 4.1%* (Q4: 3.6%*) with good growth in all markets
apart from Greece. This was supported by price actions in 5 out of 6 markets.
In Portugal, both Consumer and Business segments continued to perform well
with a further acceleration in service revenue trends, supported by CPI-linked
contractual price increases implemented in March. In Greece, service revenue
trends slowed following the delayed implementation of planned price increases,
and strong public sector growth in Business during Q4 FY23. However, our
mobile contract customer base continued to grow, with 44,000 additions in the
quarter. In Ireland, our performance in both Consumer and Business improved,
supported by price increases in April.
Vodacom ⫶ Reacceleration in South Africa, strong growth in Egypt
Note: Organic growth rates now include Egypt in all periods
Vodacom's service revenue grew by 9.0%* (Q4: 7.0%*), supported by growth in
South Africa, Egypt, and Vodacom's International markets. The acceleration in
quarterly trends was largely driven by South Africa, reflecting an improved
performance in Vodacom Business following a tough prior year comparative in Q4
FY23.
In South Africa, service revenue growth was supported by strong growth in
mobile Consumer contract, which benefitted from price increases, and a
resilient prepaid ARPU despite ongoing macro-economic pressures. We added
46,000 contract customers in the quarter, and now have a total base of 6.7
million. In prepaid ARPU increased by 6.9% supported by strong data demand,
and we added 74,000 prepaid customers to reach a total base of 41.7 million.
Financial services revenue grew by 15.5%* supported by strong insurance
growth. Our super-app, VodaPay, continues to gain good traction with more than
3.7 million registered users.
In Egypt, service revenue continued to grow strongly reflecting good customer
base growth, increased data usage and good momentum on Vodafone Cash. We now
have 46.2 million customers, an increase of 5.5% year-on-year, and ARPU growth
was 19%.
Service revenue growth in Vodacom's International markets was supported by a
higher customer base, strong M-Pesa and data revenue growth. M-Pesa revenue
grew by 14.7% driven by customer growth, new service adoption and the
reduction of mobile money levies in Tanzania. Our mobile customer base now
stands at 51.7 million having added 1.5 million customers in the quarter.
Turkey
Service revenue growth in Turkey was driven by ongoing repricing actions to
reflect high inflation, continued customer base growth, and higher mobile data
revenue. We maintained our good commercial momentum, adding 384,000 mobile
contract customers during the quarter, including migrations from prepaid
customers.
Hyperinflationary accounting in Turkey
Turkey was designated as a hyperinflationary economy on 1 April 2022 in line
with IAS 29 'Financial Reporting in Hyperinflationary Economies'. During the
quarter, service revenue in Turkey increased by 74.1%* (Q4: 58.3%*) due to
ongoing repricing actions to reflect inflation. Organic growth metrics exclude
the impact of the hyperinflation adjustment in Turkey in the quarter. Group
service revenue growth excluding Turkey was 1.8%* (Q4: 0.5%*).
Additional resources
Topic Link
Social Contract investors.vodafone.com/social-contract
(https://investors.vodafone.com/social-contract)
Digital services & outstanding experience investors.vodafone.com/digital-services
(https://investors.vodafone.com/digital-services)
Leading gigabit networks investors.vodafone.com/vtbriefing (https://investors.vodafone.com/vtbriefing)
Vodafone Business investors.vodafone.com/vbbriefing (https://investors.vodafone.com/vbbriefing)
Vantage Towers vantagetowers.com (https://www.vantagetowers.com/)
Vodacom vodacom.com (https://www.vodacom.com/)
ESG Reporting Suite
Board conversations investors.vodafone.com/videos
(https://investors.vodafone.com/video-tags?id=246)
ESG Addendum investors.vodafone.com/esgaddendum
(https://investors.vodafone.com/esgaddendum)
ESG A-Z investors.vodafone.com/ (https://investors.vodafone.com/esga-z) esga
(https://investors.vodafone.com/esga-z) -z
(https://investors.vodafone.com/esga-z)
TCFD investors.vodafone (https://investors.vodafone.com/tcfd) .com/
(https://investors.vodafone.com/tcfd) tcfd
(https://investors.vodafone.com/tcfd)
SASB investors (https://investors.vodafone.com/sasb) .vodafone.com/
(https://investors.vodafone.com/sasb) sasb
(https://investors.vodafone.com/sasb)
Non-GAAP measures
In the discussion of the Group's reported operating results, non-GAAP measures
are presented to provide readers with additional financial information that is
regularly reviewed by management. This additional information presented is not
uniformly defined by all companies including those in the Group's industry.
Accordingly, it may not be comparable with similarly titled measures and
disclosures by other companies. Additionally, certain information presented is
derived from amounts calculated in accordance with IFRS but is not itself a
measure defined under GAAP. Such measures should not be viewed in isolation or
as an alternative to the equivalent GAAP measure. The non-GAAP measures
discussed in this document are listed below.
Non-GAAP measure Defined on page Closest equivalent GAAP measure Reconciled on page
Performance metrics
Organic revenue growth Page 6 Revenue Page 7
Organic service revenue growth Page 6 Service revenue Page 7
Organic mobile service revenue growth Page 6 Service revenue Page 7
Organic fixed service revenue growth Page 6 Service revenue Page 7
Organic Group service revenue growth excluding Turkey Page 6 Service revenue Page 7
Organic Vodafone Business service revenue growth Page 6 Service revenue Page 7
Organic financial services revenue growth in South Africa Page 6 Service revenue Page 7
Definition and use of organic growth measures
All amounts marked with an '*' in this document represent organic growth which
presents performance on a comparable basis, excluding the impact of foreign
exchange rates, mergers and acquisitions, the hyperinflation adjustments in
Turkey and other adjustments to improve the comparability of results between
periods.
Organic growth is calculated for revenue metrics, as follows:
- Revenue
- Service revenue;
- Group service revenue excluding Turkey;
- Mobile service revenue;
- Fixed service revenue;
- Vodafone Business service revenue; and
- Financial services revenue in South Africa.
Whilst organic growth is not intended to be a substitute for reported growth,
nor is it superior to reported growth, we believe that the measure provides
useful and necessary information to investors and other interested parties for
the following reasons:
- It provides additional information on underlying growth of the
business without the effect of certain factors unrelated to its operating
performance;
- It is used for internal performance analysis; and
- It facilitates comparability of underlying growth with other companies
(although the term "organic" is not a defined term under GAAP and may not,
therefore, be comparable with similarly titled measures reported by other
companies).
We have not provided a comparative in respect of organic growth rates as the
current rates describe the change between the beginning and end of the current
period, with such changes being explained by the commentary in this document.
If comparatives were provided, significant sections of the commentary for
prior periods would also need to be included, reducing the usefulness and
transparency of this document.
Reported growth M&A and Other Foreign exchange Organic growth*
Quarter ended 30 June 2023 Q1 FY24 Q1 FY23
€m €m % pps pps %
Service revenue
Germany 2,819 2,857 (1.3) - - (1.3)
Mobile service revenue 1,240 1,264 (1.9) - - (1.9)
Fixed service revenue 1,579 1,593 (0.9) - - (0.9)
Italy 1,035 1,052 (1.6) - - (1.6)
Mobile service revenue 702 745 (5.8) - - (5.8)
Fixed service revenue 333 307 8.5 0.2 - 8.7
UK 1,401 1,360 3.0 - 2.7 5.7
Mobile service revenue 1,039 1,003 3.6 - 2.8 6.4
Fixed service revenue 362 357 1.4 - 2.3 3.7
Spain 871 898 (3.0) - - (3.0)
Other Europe(1) 1,161 1,254 (7.4) 12.8 (1.3) 4.1
Vodacom(2) 1,426 1,664 (14.3) - 23.3 9.0
Other Markets(1,2) 333 364 (8.5) 48.7 33.9 74.1
Common Functions 131 128
Eliminations (67) (63)
Total service revenue 9,110 9,514 (4.2) 3.0 4.9 3.7
Other revenue 1,630 1,764
Revenue 10,740 11,278 (4.8) 3.4 5.1 3.7
Other growth metrics
Group service revenue excluding Turkey 8,786 9,205 (4.6) 2.1 4.3 1.8
Vodafone Turkey - Service revenue 333 316 5.4 31.4 37.3 74.1
Vodafone Business - Service revenue 2,535 2,558 (0.9) 1.9 3.5 4.5
South Africa - Financial services revenue 38 40 (5.0) - 20.5 15.5
Reported growth M&A and Other Foreign exchange Organic growth*
Quarter ended 31 March 2023 Q4 FY23 Q4 FY22
€m €m % pps pps %
Service revenue
Germany 2,821 2,903 (2.8) - - (2.8)
Mobile service revenue 1,235 1,282 (3.7) - - (3.7)
Fixed service revenue 1,586 1,621 (2.2) 0.1 - (2.1)
Italy 1,055 1,085 (2.8) 0.1 - (2.7)
Mobile service revenue 715 758 (5.7) 0.3 - (5.4)
Fixed service revenue 340 327 4.0 (0.4) - 3.6
UK 1,319 1,341 (1.6) - 5.4 3.8
Mobile service revenue 948 972 (2.5) - 5.3 2.8
Fixed service revenue 371 369 0.5 - 5.8 6.3
Spain 874 908 (3.7) - - (3.7)
Other Europe(1) 1,178 1,242 (5.2) 8.6 0.2 3.6
Vodacom(2) 1,466 1,650 (11.2) - 18.2 7.0
Other Markets(1,2) 454 343 32.4 (23.4) 45.9 54.9
Common Functions 128 134
Eliminations (53) (60)
Total service revenue 9,242 9,546 (3.2) 0.4 4.7 1.9
Other revenue 1,896 1,861
Revenue 11,138 11,407 (2.4) 0.3 4.7 2.6
Other growth metrics
Group service revenue excluding Turkey 8,821 9,262 (4.8) 1.2 4.1 0.5
Vodafone Turkey - Service revenue 430 290 48.3 (33.5) 43.5 58.3
Vodafone Business - Service revenue 2,582 2,626 (1.7) 1.0 3.6 2.9
South Africa - Financial services revenue 40 40 - - 14.2 14.2
Notes:
1. Comparatives include the results of Vodafone Hungary and Vodafone Ghana
which were included in the Other Europe and Other Markets segments,
respectively, until their disposal. As previously reported, Vodafone Hungary
was sold in January 2023 and Vodafone Ghana was sold in February 2023.
2. From 1 April 2023, the Group revised its segmental reporting by moving
Vodafone Egypt from the Other Markets segment to the Vodacom segment. This is
the effective date on which the Group's reporting structure changed to reflect
the transfer of Vodafone Egypt to the Vodacom Group. All comparatives for
these two segments have been re-presented on the new basis of segmental
reporting. There is no impact on previously reported Group metrics.
Definitions
Key terms are defined below.
Term Definition
Adjusted EBITDAaL Adjusted EBITDAaL, which is a non-GAAP measure, is operating profit after
depreciation on lease-related right of use assets and interest on leases but
excluding depreciation, amortisation and gains/losses on disposal of owned
assets and excluding share of results of equity accounted associates and joint
ventures, impairment losses, restructuring costs arising from discrete
restructuring plans, other income and expense and significant items that are
not considered by management to be reflective of the underlying performance of
the Group.
Adjusted free cash flow ('Adjusted FCF') Adjusted free cash flow, which is a non-GAAP measure, is Free cash flow before
licences and spectrum, restructuring costs arising from discrete restructuring
plans, integration capital additions and working capital related items,
M&A and Vantage Towers growth capital expenditure.
Africa Comprises the Vodacom Group and business in Egypt.
ARPU Average revenue per user, defined as customer revenue and incoming revenue
divided by average customers.
Churn Total gross customer disconnections in the period divided by the average total
customers in the period.
Common Functions Comprises central teams and business functions.
Converged customer A customer who receives fixed and mobile services (also known as unified
communications) on a single bill or who receives a discount across both bills.
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.
GAAP Generally Accepted Accounting Principles.
IFRS International Financial Reporting Standards.
Internet of Things ('IoT') The network of physical objects embedded with electronics, software, sensors,
and network connectivity, including built-in mobile SIM cards, that enables
these objects to collect data and exchange communications with one another or
a database.
Mobile service revenue Service revenue (see below) relating to the provision of mobile services.
Other Europe Other Europe comprises Portugal, Ireland, Greece, Romania, Czech Republic and
Albania. The prior period comparative results include Vodafone Hungary which
was disposed of in January 2023.
Other Markets Other Markets comprises Turkey. From 1 April 2023, the Group revised its
segmental reporting by moving Vodafone Egypt from the Other Markets segment to
the Vodacom segment. This is the effective date on which the Group's reporting
structure changed to reflect the transfer of Vodafone Egypt to the Vodacom
Group. The prior period comparative results include Vodafone Ghana which was
disposed of in February 2023.
Other revenue Other revenue principally includes equipment revenue, interest income, income
from partner market arrangements and lease revenue, including in respect of
the lease out of passive tower infrastructure.
Reported growth Reported growth is based on amounts reported in euros and determined under
IFRS.
Revenue The total of Service revenue (defined below) and Other revenue (defined
above).
Roaming Roaming: allows customers to make calls, send and receive texts and data on
our and other operators' mobile networks, usually while travelling abroad.
Service revenue Service revenue is all revenue related to the provision of ongoing services to
the Group's Consumer and Business customers, together with roaming revenue,
revenue from incoming and outgoing network usage by non-Vodafone customers and
interconnect charges for incoming calls.
Vodafone Business Vodafone Business supports organisations in a digital world. With Vodafone's
expertise in connectivity, our leading IoT platform and our global scale, we
deliver the results that organisations need to progress and thrive. We support
businesses of all sizes and sectors.
Notes
1. References to Vodafone are to Vodafone Group Plc and references to
Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise
stated. Vodafone, the Vodafone Speech Mark Devices, Vodacom and Together we
can are trade marks owned by Vodafone. Other product and company names
mentioned herein may be the trade marks of their respective owners.
2. All growth rates reflect a comparison to the quarter ended 30 June 2022
unless otherwise stated.
3. References to "Q1", "Q2", "Q3" and "Q4" are to the three months ended 30
June, 30 September, 31 December and 31 March, respectively. References to "H1"
and "H2" are to the six month periods ended 30 September and 31 March,
respectively. References to the "last year", "last financial year" or "FY23"
are to the financial year ended 31 March 2023. References to "FY24" are to the
financial year ending 31 March 2024.
4. Vodacom refers to the Group's interest in Vodacom Group Limited
('Vodacom') as well as its operations, including subsidiaries in South Africa,
Egypt, DRC, Tanzania, Mozambique and Lesotho. From 1 April 2023, the Group
revised its segmental reporting by moving Vodafone Egypt from the Other
Markets segment to the Vodacom segment. This is the effective date on which
the Group's reporting structure changed to reflect the transfer of Vodafone
Egypt to the Vodacom Group. All comparatives for these two segments have been
re-presented on the new basis of segmental reporting.
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 and the guidance for Adjusted EBITDAaL and
Adjusted free cash flow for the financial year ended 31 March 2024, results of
operations and businesses, the information regarding the announced agreement
to combine Vodafone UK and Three UK and certain of the Group's plans and
objectives, including the Vodafone Group's strategy and its emissions targets
and other ESG goals, commitments, targets and ambitions, climate-related
scenarios or pathways and methodologies it uses to assess its progress in
relation to those.
Forward-looking statements are sometimes but not always identified by their
use of a date in the future or such words as 'will', 'may', 'should',
'expects', 'believes', 'intends', 'plans', 'estimates', 'continues',
'progress', 'ongoing', 'accelerate' or 'targets'. By their nature,
forward-looking statements are inherently predictive, speculative and involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forward-looking statements. These factors include, but are
not limited to the following: general economic and political conditions in the
jurisdictions in which the Group operates and changes to the associated legal,
regulatory and tax environments; increased competition; levels of investment
in network capacity and the Group's ability to deploy view technologies,
products and services; evolving cyber threats to the Group's services and
confidential data; the Group's ability to embed responses to climate-related
risks into business strategy and operations; rapid changes to existing
products and services and the inability of new products and services to
perform in accordance with expectations; the ability of the Group to integrate
new technologies, products and services with existing networks, technologies,
products and services; the Group's ability to generate and grow revenue;
slower than expected impact of new or existing products, services or
technologies on the Group's future revenue, cost structure and capital
expenditure outlays; slower than expected customer growth, reduced customer
retention, reductions or changes in customer spending and increased pricing
pressure; the Group's ability to extend and expand its spectrum resources, to
support ongoing growth in customer demand for mobile data services; the
Group's ability to secure the timely delivery of high-quality products from
suppliers; loss of suppliers, disruption of supply chains and greater than
anticipated prices of new mobile handsets; changes in the costs to the Group
of, or the rates the Group may charge for, terminations and roaming minutes;
the impact of a failure or significant interruption to the Group's
telecommunications, networks, IT systems or data protection systems; the
Group's ability to realise expected benefits from acquisitions, partnerships,
joint ventures, associates, franchises, brand licences, platform sharing or
other arrangements with third parties, including the signed agreement to
combine Vodafone's UK business with Three UK; acquisitions and divestments of
Group businesses and assets and the pursuit of new, unexpected strategic
opportunities; the Group's ability to integrate acquired business or assets;
the extent of any future write-downs or impairment charges on the Group's
assets, or restructuring charges incurred as a result of an acquisition or
disposition; developments in the Group's financial condition, earnings and
distributable funds and other factors that the Board takes into account in
determining the level of dividends; the Group's ability to satisfy working
capital requirements; changes in foreign exchange rates; changes in the
regulatory framework in which the Group operates; the impact of legal or other
proceedings against the Group or other companies in the communications
industry; changes in statutory tax rates and profit mix; climate change
projection risk including, for example, the evolution of climate change and
its impacts, changes in the scientific assessment of climate change impacts,
transition pathways and future risk exposure and limitations of climate
scenario forecasts; amendments to or new ESG reporting standards, models or
methodologies; changes in ESG data availability and quality which could result
in revisions to reported data going forward; and climate scenarios and the
models that analyse them have limitations that are sensitive to key
assumptions and parameters, which are themselves subject to some uncertainty.
A review of the reasons why actual results and developments may differ
materially from the expectations disclosed or implied within forward-looking
statements can be found in the summary of our principal risks in the Group's
Annual Report for the year ended 31 March 2023. The Annual Report can be found
on the Vodafone Group's website (vodafone.com/ar2023). All subsequent written
or oral forward-looking statements attributable to Vodafone or any member of
the Vodafone Group or any persons acting on their behalf are expressly
qualified in their entirety by the factors referred to above. No assurances
can be given that the forward-looking statements in this document will be
realised. Subject to compliance with applicable law and regulations, Vodafone
does not intend to update these forward-looking statements and does not
undertake any obligation to do so.
Copyright © Vodafone Group 2023
-End-
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