TIDMVOD
RNS Number : 6532V
Vodafone Group Plc
25 July 2018
Trading update for the quarter ended 30 June 2018
25 July 2018
IFRS 15 was adopted on 1 April 2018 for our statutory reporting,
without restating prior year figures. This report shows our
performance on both an IFRS 15 and an IAS 18 basis for comparative
purposes.
Highlights
-- Group total revenue of EUR10.9 billion (IFRS 15 basis),
down 4.9% reflecting the adoption of IFRS 15 and FX headwinds
-- Q1 organic service revenue grew 0.3%* on an IAS 18 basis,
or 1.1%* based on IFRS 15 (which is not impacted by the
drag from UK handset financing)
-- Europe declined by 1.3%* (IAS 18), but grew 0.5%* excluding
drags from regulation and UK handset financing
-- AMAP grew 7.0%* (IAS 18), with growth that was faster than
local inflation in South Africa, Turkey and Egypt
-- India declined by 22.3%* (IAS 18) due to price competition
and MTR cuts, but was down only 1.4% compared to Q4
-- Growth engines supporting solid commercial momentum: Mobile
data traffic grew 57%; 196,000 broadband net adds, and a
record 289,000(1) converged net adds; Enterprise grew 0.9%*,
or 2.0%* excluding regulation
-- Guidance reiterated: underlying(2) organic adjusted EBITDA
growth of 1-5%, FCF pre-spectrum of at least EUR5.2 billion
Quarter ended 30 June
----------------------------------------
2018 2017 Statutory
IFRS 15 IAS 18 Growth
EURm EURm %
-------------------------------------- -------- ------- ---------- ---------
Group revenue 10,910 11,474 (4.9)
Europe 7,966 8,299 (4.0)
Africa, Middle East & Asia
Pacific ('AMAP') 2,652 2,881 (7.9)
Growth
---------------------
2018 2017 IAS 18 IFRS 15
IAS 18 IAS 18 Organic* Organic*
Alternative performance measures(3) EURm EURm % %
-------------------------------------- -------- ------- ---------- ---------
Group service revenue 9,850 10,282 0.3 1.1
Europe 7,494 7,624 (1.3) (0.4)
AMAP 2,223 2,430 7.0 7.2
Vittorio Colao, Group Chief Executive, commented:
"The Group's organic service revenue growth slowed during the
first quarter, in line with expectations. The majority of our
operations performed well, with ongoing momentum in Germany,
further underlying recovery in the UK and continued good growth in
AMAP, all of which helped to offset increased competition in Italy
and Spain. Our commercial performance was solid, with further
broadband market share gains in Europe, a record number of
customers adopting our converged propositions, and the continued
success of our world-leading IoT platform. In India, where
competition remains intense, we have now received conditional
approval from the Department of Telecoms for the merger of Vodafone
India and Idea Cellular, which we aim to close before the end of
August, allowing us to unlock substantial synergies. The Group's
overall performance (including good progress in reducing absolute
operating costs for the third year running) provides us with the
confidence to reiterate our outlook for the year".
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 measure. See "Alternative performance measures" on page
9 for further details and reconciliations to the respective closest
equivalent GAAP measure.
1. Converged net additions are shown excluding the first time
inclusion in Germany of prepaid mobile customers with fixed
products.
2. Organic adjusted EBITDA growth excluding the impact of
settlements and UK handset financing.
3. Alternative performance measures are non-GAAP measures that
are presented to provide readers with additional financial
information that is regularly reviewed by management and should not
be viewed in isolation or as an alternative to the equivalent GAAP
measure. See "Alternative performance measures" on page 9 for more
information and reconciliations to the closest respective
equivalent GAAP measure and "Definition of terms" on page 13 for
further details.
OPERATING REVIEW
On 20 March 2017 we announced an agreement to merge Vodafone
India with Idea Cellular ('Idea') in India. As a result, Vodafone
India is now excluded from Group figures, unless stated
otherwise.
Strategic progress
During Q1, we continued to make good progress in our strategic
'growth engines' of mobile data, fixed/convergence, and
Enterprise.
Mobile data
Data traffic grew 57% during Q1 (Europe: 56%, AMAP: 58%).
Additionally, Indian data traffic quadrupled following a steep
decline in data prices. This largely reflected increased smartphone
usage as data allowances expand, with customers now using 3.3GB on
average each month (Europe 2.8GB, AMAP 2.3GB, India 4.6GB). Our
network investments have created a strong platform to capture this
data demand, and we continue to have the leading or co-leading
network NPS scores in 14 out of 20 markets including India.
Across the majority of our European markets our 'more-for-more'
commercial propositions as well as personalised offers utilising
advanced data analytics supported mobile revenue growth. However,
contract ARPU remained under pressure primarily as a result of a
mix shift towards SIM-only and multi-SIM family contracts and the
introduction of EU Roam Like At Home regulation in June 2017,
together with increased competition in certain markets. In AMAP
data revenues are growing strongly, supported by the relative
scarcity of fixed Internet access and low data penetration.
Fixed & Convergence
During the next five years around 50 million additional
households are expected to adopt NGN broadband within Vodafone's
European footprint. We view this shift to NGN as a window of
opportunity to capture substantial profitable market share. Gaining
scale in fixed also allows us to drive convergence across our
combined fixed and mobile customer base, lowering churn. We have a
flexible and capital efficient strategy which combines
build/co-build, strategic partnering, wholesale and acquisition
options. This approach allows us to continually improve our fixed
access position. We have created Europe's largest NGN footprint
covering 109 million households, of which 36 million households are
'on-net' (including VodafoneZiggo) and 7 million households are
reached via strategic partnerships, where we enjoy superior
economic terms compared to regulated prices. Pro-forma for the
announced acquisition of Liberty Global's cable assets in Germany
and CEE, as of the end of Q1 we would reach approximately 115
million households, with 54 million 'on-net' (including
VodafoneZiggo).
During Q1 we added 128,000 new broadband customers in Europe (Q1
17/18: 237,000), a slower pace than in recent quarters due to
customer losses in Spain and competitor promotions in Germany.
However, our NGN customer base grew by 351,000 (Q1 17/18 384,000),
and our converged customer base grew by a record 289,000(1)
customers (Q1 17/18: 119,000). This drove sustained European fixed
service revenue growth of 4.0%* in Q1.
In total, including VodafoneZiggo the Group now has 19.9 million
broadband customers, of which 13.6 million take a high speed
service over fibre or cable, 13.8 million TV customers and 6.0
million consumer converged customers (representing 34% of the
consumer broadband base, up 7 percentage points year-on-year).
Fixed now contributes 25.6% of Group service revenues (29.9% in
Europe).
Enterprise
Services to businesses comprise 30.0% of our Group service
revenue. Our relationships with business customers are expanding
from traditional mobile voice and data services to embrace total
communications, IoT, Cloud & Hosting and IP-VPN provision.
These new areas offer both market growth and market share
opportunities for us.
In Q1, our Enterprise business grew service revenues by 0.9%*
(Q4: 1.5%*), or by 2.0%* (Q4: 2.1%*) excluding the impact of
regulation. This growth was supported by our unique global network
and product set and by the contribution from emerging market
growth. These factors allowed us to offset continued pricing
pressure in European mobile and roaming declines. Growth in IoT
continued (Q1: 12.6%*), primarily driven by the increase in
connections (+32% year-on year).
Outlook(2)
Trading during the first quarter was in-line with management's
expectations underlying the outlook statement for the 2019
financial year. The Group therefore confirms its expectation that
organic adjusted EBITDA (excluding settlements and UK handset
financing) will grow by 1-5%, with free cash flow generation
(pre-spectrum) of at least EUR5.2 billion. Guidance is set on an
IAS 18 basis, however IFRS 15 is not expected to have a material
impact on the Group's organic adjusted EBITDA growth (on a guidance
basis), and will have no impact on free cash flow.
Group(3)
Quarter ended 30 June
------------------------------------------------
Growth
--------------------
2018 2018 2017 IAS 18 IFRS 15
IFRS 15 IAS 18 IAS 18 Organic* Organic*
EURm EURm EURm % %
----------------------- -------- ------- ------- --------- ---------
Service revenue
Europe 6,964 7,494 7,624 (1.3) (0.4)
AMAP 2,132 2,223 2,430 7.0 7.2
Other 163 163 247
Eliminations (30) (30) (19)
------------------------ -------- ------- ------- --------- ---------
Total service revenue 9,229 9,850 10,282 0.3 1.1
Other revenue 1,681 1,379 1,192
------------------------ -------- ------- ------- --------- ---------
Revenue 10,910 11,229 11,474 1.5 1.6
------------------------ -------- ------- ------- --------- ---------
Following the adoption of IFRS 15 "Revenue from Contracts with
Customers" on 1 April 2018, the Group's statutory results for the
quarter ended 30 June 2018 are on an IFRS 15 basis, whereas the
statutory results for the quarter ended 30 June 2017 are on an IAS
18 basis as previously reported, with any comparison between the
two bases of reporting not being meaningful. As a result, the
discussion of our operating results in the Operating Review is
primarily on an IAS 18 basis for all periods presented. See
"Alternative performance measures" on page 9 for more information
and reconciliations to the closest respective equivalent GAAP
measures.
On an IAS 18 basis, Group total revenue was EUR11.2 billion and
Group service revenue was EUR9.9 billion. Total revenue declined
2.1%, including a 2.8 percentage point negative impact from foreign
exchange rate movements and a 0.8 percentage point adverse impact
from the disposal of Vodafone Qatar. On an organic basis, service
revenue increased 0.3%* (Q4: 2.4%* or 1.4%* excluding a legal
settlement in Germany), reflecting strong growth in AMAP, which was
mitigated by a decline in Europe driven by the drag from UK handset
financing and EU roaming regulation. Excluding these factors Europe
grew by 0.5%*.
On an IFRS 15 basis, Group total revenue was EUR10.9 billion and
Group service revenue was EUR9.2 billion. The lower level of
revenues compared to the IAS 18 basis primarily reflects the
netting of certain components of dealer commissions from service
revenues. In addition, service revenue is lower under IFRS 15
because the proportion of ARPU which relates to the recovery of
handset subsidies over time on an IAS 18 basis is now recognised up
front within other revenue, which is correspondingly higher. On an
organic basis, service revenue growth was 1.1%*, higher than on the
IAS 18 basis primarily due to the elimination of the drag from UK
handset financing. At an individual country level, the impact of
IFRS15 varies depending on factors such as the quantum of handset
subsidies and dealer commissions; in general, organic service
revenue growth rates are not materially different from the IAS18
basis, with the exception of the UK, where the significant drag
from handset financing is eliminated.
Europe(3)
Quarter ended 30 Quarter ended 30
June 2018 June 2017
Service revenue
(IAS 18) (IAS 18) growth
---------------------------- ---------------------------- --------------------
IAS IFRS
Service Other Service Other 18 15
revenue revenue Revenue revenue revenue Revenue Organic* Organic*
EURm EURm EURm EURm EURm EURm % %
-------- ------- -------- -------- -------- -------- -------- -------- --------- ---------
Germany 2,550 118 2,668 2,493 101 2,594 2.4 2.1
Italy 1,231 200 1,431 1,319 227 1,546 (6.5) (6.7)
UK 1,459 236 1,695 1,564 195 1,759 (4.9) 0.3
Spain 1,114 101 1,215 1,143 93 1,236 (2.2) (1.7)
Other Europe 1,166 82 1,248 1,135 61 1,196 2.6 3.3
Eliminations (26) (2) (28) (30) (2) (32)
-------- -------- -------- -------- -------- -------- --------- ---------
Total 7,494 735 8,229 7,624 675 8,299 (1.3) (0.4)
-------- -------- -------- -------- -------- -------- --------- ---------
Reported revenue decreased 0.8% for the quarter, with a 0.3
percentage point negative impact from foreign exchange movements.
On an organic basis, service revenue growth declined by 1.3%* (Q4:
+ 1.8%*) or 0.5%* (Q4: +1.7%*) excluding regulation, UK handset
financing as well as a legal settlement in Germany in Q4. The
slowdown in underlying quarterly trends largely reflected the delay
of our planned price adjustment in Italy to offset the shift from
28-day to monthly billing and the commercial actions taken to
reposition our offers in Spain.
Germany
Service revenue grew 2.4%* (Q4: 1.8%* excluding the benefit of a
one-off legal settlement). This improvement in quarterly trends was
driven by strong contract customer base growth in mobile and a
lower year-on-year drag from MVNO revenues.
Mobile service revenue grew 1.7%* (Q4: 0.3%*) driven by a higher
contract customer base. We added 258,000 contract customers in the
quarter (Q4: 212,000) supported by lower churn. Contract ARPU
declined 3.5%, however it grew excluding the mix shift towards
SIM-only, multi-SIM family contracts and convergence. We retained
our market leading position in Consumer NPS, and our 4G coverage is
now 92% with the ability to offer 500Mbps to over 40 cities. We are
currently piloting 1Gbps services in 4 cities.
Fixed service revenue grew by 3.4%* (Q4: 4.2%* excluding the
legal settlement) driven by customer base growth. We added 46,000
broadband customers in the quarter (Q4: 79,000), a slower pace than
in prior quarters due to competitor promotions. We maintained good
momentum in convergence, supported by our GigaKombi proposition and
the inclusion of prepaid mobile customers with fixed products for
the first time, and added 406,000 converged customers. In total our
consumer converged customer base is now 1.1 million. Our Gigabit
investment plan is progressing well, and by the end of the year we
plan to have rolled out DOCSIS 3.1 to 8 million households,
providing the capability to deliver gigabit speeds.
Italy
Service revenue declined 6.5%* (Q4: grew 0.7%*). This slowdown
in quarterly trends was primarily due to the delay of our planned
price adjustment to offset the shift from 28-day to monthly billing
in order to comply with the requirements of the antitrust
authorities, and the lapping of price increases in the prior year.
We subsequently implemented new price plans for prepaid customers
in May, and for postpaid customers in June.
Mobile service revenue declined 9.5%* (Q4: -1.5%*) driven by the
delay in repricing (which dragged on growth by 3.2 percentage
points) and intense competition. Promotional activity in the
prepaid segment remained high, driven by 'below-the-line' offers.
Competition increased towards the end of the quarter following the
launch of a new entrant in late May. As a result, mobile market
number portability ('MNP') volumes were 17% higher
quarter-on-quarter. In June, we launched a new secondary brand to
specifically address the needs of customers in the value segment of
the market. During the quarter we maintained our market leading
network and NPS positions in consumer, supported by the success of
the 'Vodafone Happy' loyalty programme.
Fixed line service revenue grew 7.1%* (Q4: 11.1%*) with the
slowdown in quarterly trends reflecting the delay in repricing. Our
commercial momentum remained strong, having added 61,000 broadband
households (Q4: 100,000), and in total we now serve 2.6 million
customers. Through our owned NGN footprint and our strategic
partnership with Open Fiber, we now cover 5.5 million households.
During the quarter we also added 63,000 converged customers, taking
our total converged customer base to 806,000.
UK
Service revenue declined 4.9%* (Q4: -3.4%*), impacted by the
drag from handset financing which weighed on organic service
revenue by 5.4 percentage points (Q4: 4.4 percentage points).
Excluding the impact of handset financing and regulation our
underlying performance continued to improve (Q1: +1.8%*, Q4:
+1.4%*). This was driven by growth in consumer mobile and fixed
line, as well as the stabilisation of enterprise fixed, and
reflects the substantial operational improvements and commercial
actions taken over the past year.
Mobile service revenue declined 7.9%* (Q4: -5.7%*), but grew
0.8%* (Q4: 0.7%*) excluding handset financing and regulation. This
underlying growth was supported by an RPI-linked price increase
(effective from 1 April) and a higher contract customer base,
partially offset by lower MVNO revenue. Our commercial momentum
accelerated in the quarter with 77,000 contract customers added
(Q4: 6,000) excluding Talkmobile, our low-end mobile brand which is
being phased out. This was supported by our low contract churn rate
of 14.0% (Q4: 15.9%) and our best ever consumer net promoter
scores.
Fixed service revenue grew 5.3%* (Q4: 3.6%) driven by continued
strong momentum in consumer broadband and the stabilisation of
Enterprise revenues. Following 52,000 consumer broadband net
additions in the quarter, in total we now serve 435,000 broadband
customers. In Enterprise, our commercial performance improved
reflecting increased sales in our local enterprise segment.
Spain
Service revenue declined 2.2%* (Q4: 1.0%*). The slowdown in
quarterly trends reflected the commercial actions taken in May in
order to improve the competitiveness of our offers, particularly in
the value segment, which more than offset the benefit of price
increases in prior periods and a higher customer base compared to a
year ago.
Competition in the market remained high during Q1, resulting in
a 25-30% increase in market portability volumes across both mobile
and fixed, which was reflected in a significant increase in our
churn rates. Having implemented new commercial actions, our
commercial performance began to improve. We grew our mobile
contract base by 141,000, an improvement compared to the prior
quarter, however our fixed and TV customer bases declined by 49,000
and 32,000. Vodafone One, our fully integrated fixed, mobile and TV
service, reached 2.5 million households by the end of the quarter,
up 66,000 year-on-year.
We maintained our market leading NPS position in consumer, and
further improved our market leading network position with 4G
coverage of 96% and an NGN footprint covering 20.9 million
households (of which 10.3 million are on-net). Going forward,
unless football rights are available on profitable terms, we intend
to focus our content strategy on premium movies and TV series.
Other Europe
Service revenue grew 2.6%* (Q4: 3.3%*). In Ireland, service
revenue grew 1.7%* (Q4: 4.3%*), with the slowdown in quarterly
trends reflecting a lower rate of growth in Enterprise fixed. In
Portugal, service revenue grew 3.6%* (Q4: 3.1%*), driven by
continued customer base growth in fixed line. Greece service
revenue grew 2.1%* (Q4: 3.3%*) with the quarter-on-quarter slowdown
reflecting the lapping of fixed line price increases in the prior
year.
VodafoneZiggo Joint Venture
VodafoneZiggo will report calendar Q2 results on 8 August
2018.
AMAP(3)
Quarter ended 30 Quarter ended 30
June 2018 June 2017
Service revenue
(IAS 18) (IAS 18) growth
---------------------------- ---------------------------- --------------------
IAS IFRS
Service Other Service Other 18 15
revenue revenue Revenue revenue revenue Revenue Organic* Organic*
EURm EURm EURm EURm EURm EURm % %
------- ------ -------- -------- -------- -------- -------- -------- --------- ---------
Vodacom 1,182 248 1,430 1,177 247 1,424 5.1 5.2
Other AMAP 1,041 237 1,278 1,253 204 1,457 9.4 9.6
Total 2,223 485 2,708 2,430 451 2,881 7.0 7.2
-------- -------- -------- -------- -------- -------- --------- ---------
Revenue in AMAP decreased 6.0%, with strong organic growth
offset by a 10.5 percentage point negative impact from foreign
exchange movements, particularly with regards to the Turkish lira,
and a 5.1 percentage point adverse impact from the disposal of
Vodafone Qatar. On an organic basis service revenue grew 7.0%* (Q4:
7.8%*) driven by continued strong commercial momentum and data
growth in South Africa, Turkey, and Egypt.
Vodacom
Vodacom Group service revenue grew 5.1%* (Q4: 5.8%*), supported
by strong customer additions and data growth in South Africa, as
well as growing demand for data and M-Pesa transactions in
Vodacom's International operations.
In South Africa, service revenue grew 4.9%* (Q4: 5.2%*). This
was supported by continued strong customer base growth in prepaid
and an improved performance in Enterprise. We added 1.6 million
prepaid customers in the quarter, taking our total prepaid customer
base to 46.4 million, an increase of 5.3% year-on-year.
Data revenue grew by 9.4%* (Q4: 13.1%*) and now represents 44%
of total service revenue. We continued to drive data bundle
adoption, which provides customers with a worry-free experience by
reducing their exposure to out-of-bundle charges. Our successful
pricing strategy has lowered the effective price per megabyte by
17% while driving a 32% increase in data bundle sales. In total we
now have 20.2 million data customers, of which 8.1 million are on
4G, up 46% year-on-year. Voice revenue declined 2.6%*, an
improvement on the prior year, as the success of our personalised
voice bundle strategy through our 'Just 4 You' platform mitigated a
10% reduction in the effective rate per minute. We maintained our
market leading NPS and network positions, with 4G coverage now
reaching 82%.
Vodacom's International operations outside of South Africa,
which represent 23% of Vodacom Group service revenue, grew 9.4%*
(Q4: 11.1%*). This was driven by strong growth in Mozambique and
Lesotho, and sustained growth in the DRC and Tanzania.
Other AMAP
Service revenue grew 9.4%* (Q4: 10.2%*) with strong local
currency growth in Turkey and Egypt. This growth excludes the
contribution of Vodafone Qatar in all periods, following the sale
of our stake in March 2018.
In Turkey, service revenue grew 14.0%* (Q4: 14.3%*) supported by
good growth in consumer contract and data revenue. Egypt service
revenue grew 16.7%* (Q4: 18.7%*) driven by rising data penetration
and usage.
India(3)
On 20 March 2017, Vodafone announced an agreement to combine its
subsidiary, Vodafone India (excluding its 42% stake in Indus
Towers), with Idea Cellular. The combined company will be jointly
controlled by Vodafone and the Aditya Birla Group. Vodafone India
has been classified as discontinued operations for Group reporting
purposes.
Quarter ended 30 Quarter ended 30
June 2018 June 2017
Service revenue
(IAS 18) (IAS 18) growth
---------------------------- ---------------------------- --------------------
IAS IFRS
Service Other Service Other 18 15
revenue revenue Revenue revenue revenue Revenue Organic* Organic*
EURm EURm EURm EURm EURm EURm % %
---- ---- -------- -------- -------- -------- -------- -------- --------- ---------
India 955 4 959 1,385 2 1,387 (22.3) (22.3)
-------- -------- -------- -------- -------- -------- --------- ---------
Service revenue declined by 22.3%* (Q4: -21.2%*) reflecting cuts
to both domestic and international MTRs in prior quarters and
intense ongoing price competition between the market leader and the
new entrant. Excluding the impact of MTR cuts, service revenue
declined by 9.6%* (Q4: -9.4%*); on a sequential basis, local
currency revenue excluding MTRs declined 0.2% quarter-on-quarter
(Q4: -1.6%), as prepaid bundle prices remained broadly stable
during the quarter.
We retained our market leading NPS position, supported by
focused investments in our leadership circles, with 4,900 4G sites
added during the quarter. Consequently, we continued to retain our
high value customers albeit at lower price levels, with contract
ARPU declining by 20% and prepaid ARPU by 28% in the quarter. This
pricing pressure was mitigated as customers consolidated spending
onto a single-SIM following the increased penetration of
'unlimited' offers, which have now been adopted by 29% of our
prepaid customer base. Our total customer base declined by 3.0
million quarter-on-quarter, reflecting the 'SIM consolidation'
trend across the market, and now totals 219.7 million. The number
of data users has continued to increase; we now have 77 million
data users of which 30.9 million are 4G.
In July we received conditional regulatory approval from the
Department of Telecoms (DoT) for the merger of Vodafone India with
Idea Cellular. On behalf of the future merged entity, Idea has
subsequently paid spectrum liberalisation fees of EUR0.5 billion,
and has also provided a bank guarantee to cover certain disputed
demands, which are the subject of ongoing court cases. Our target
is to close the merger before the end of August, enabling us to
make a fast start on capturing substantial cost synergies.
We are also making good progress in securing the necessary
regulatory approvals for the announced merger of Indus Towers
Limited into Bharti Infratel Limited. In July we received approval
from the Competition Commission and from SEBI, and we expect the
merger to close before the end of March 2019.
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 measure. See "Alternative performance measures" on page
9 for further details and reconciliations to the respective closest
equivalent GAAP measure.
1. Converged net additions are shown excluding the first time
inclusion of Germany of prepaid mobile customers with fixed
products
2. Full details on this guidance are available on page 6 of the
Group's year end results announcement for the year ended 31 March
2018.
3. The Operating Review discussion is primarily performed on an
IAS 18 basis. 2018 information on an IAS 18 basis and percentage
movements on an IAS 18 basis are alternative performance measures.
See "Alternative performance measures" on page 9 for more
information and reconciliations to the closest respective
equivalent GAAP measure and "Definition of terms" on page 13 for
further details.
ADDITIONAL INFORMATION
Revenue - quarter ended 30 June(1)
Group and Regions Group Europe AMAP
2018 2017 2018 2017 2018 2017
EURm EURm EURm EURm EURm EURm
------- ------- ------ ------ ------- ------
IAS 18 basis
------- ------- ------ ------ ------- ------
Mobile customer
revenue 6,352 6,699 4,597 4,789 1,749 1,906
Mobile incoming
revenue 465 525 334 353 150 173
Other service
revenue 513 504 322 321 94 97
------- ------- ------ ------ ------- ------
Mobile service
revenue 7,330 7,728 5,253 5,463 1,993 2,176
Fixed service
revenue 2,520 2,554 2,241 2,161 230 254
------- ------- ------ ------ ------- ------
Service revenue 9,850 10,282 7,494 7,624 2,223 2,430
Other revenue 1,379 1,192 735 675 485 451
------- ------- ------ ------ ------- ------
Revenue 11,229 11,474 8,229 8,299 2,708 2,881
------- ------- ------ ------ ------- ------
IFRS 15 basis
------- ------- ------ ------ ------- ------
Service revenue 9,229 9,581 6,964 7,016 2,132 2,336
Other revenue 1,681 1,563 1,002 1,013 520 486
------- ------- ------ ------ ------- ------
Revenue 10,910 11,144 7,966 8,029 2,652 2,822
------- ------- ------ ------ ------- ------
Operating Companies Germany Italy UK
---------------- -------------- ---------------
2018 2017 2018 2017 2018 2017
EURm EURm EURm EURm EURm EURm
------- ------- ------ ------ ------- ------
IAS 18 basis
------- ------- ------ ------ ------- ------
Mobile customer
revenue 1,340 1,322 833 938 953 1,054
Mobile incoming
revenue 51 53 89 88 70 77
Other service
revenue 124 117 52 53 67 76
------- ------- ------ ------ ------- ------
Mobile service
revenue 1,515 1,492 974 1,079 1,090 1,207
Fixed service
revenue 1,035 1,001 257 240 369 357
------- ------- ------ ------ ------- ------
Service revenue 2,550 2,493 1,231 1,319 1,459 1,564
Other revenue 118 101 200 227 236 195
------- ------- ------ ------ ------- ------
Revenue 2,668 2,594 1,431 1,546 1,695 1,759
------- ------- ------ ------ ------- ------
IFRS 15 basis
------- ------- ------ ------ ------- ------
Service revenue 2,292 2,249 1,245 1,336 1,256 1,279
Other revenue 274 243 180 212 294 313
------- ------- ------ ------ ------- ------
Revenue 2,566 2,492 1,425 1,548 1,550 1,592
------- ------- ------ ------ ------- ------
Discontinued
operations:
Spain Vodacom India
---------------- -------------- ---------------
2018 2017 2018 2017 2018 2017
EURm EURm EURm EURm EURm EURm
------- ------- ------ ------ ------- ------
IAS 18 basis
------- ------- ------ ------ ------- ------
Mobile customer
revenue 658 675 1,020 1,018 710 1,035
Mobile incoming
revenue 32 42 42 40 137 219
Other service
revenue 37 43 60 59 38 49
------- ------- ------ ------ ------- ------
Mobile service
revenue 727 760 1,122 1,117 885 1,303
Fixed service
revenue 387 383 60 60 70 82
------- ------- ------ ------ ------- ------
Service revenue 1,114 1,143 1,182 1,177 955 1,385
Other revenue 101 93 248 247 4 2
------- ------- ------ ------ ------- ------
Revenue 1,215 1,236 1,430 1,424 959 1,387
------- ------- ------ ------ ------- ------
IFRS 15 basis
------- ------- ------ ------ ------- ------
Service revenue 1,094 1,116 1,113 1,108 953 1,383
Other revenue 112 119 258 256 6 4
------- ------- ------ ------ ------- ------
Revenue 1,206 1,235 1,371 1,364 959 1,387
------- ------- ------ ------ ------- ------
Note:
1. The revenue information above is presented on an IAS 18 basis
and an IFRS 15 basis for all periods. 2018 information on an IAS 18
basis and 2017 information on an IFRS 15 basis are alternative
performance measures. See "Alternative performance measures" on
page 9 for more information and reconciliations to the closest
respective equivalent GAAP measure and "Definition of terms" on
page 13 for further details.
ALTERNATIVE PERFORMANCE MEASURES
In the discussion of the Group's reported operating results,
alternative performance measures are presented to provide readers
with additional financial information that is regularly reviewed by
management. However, 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 an expressly permitted GAAP
measure. Such measures should not be viewed in isolation or as an
alternative to the equivalent GAAP measure.
Further information on the use of alternative performance
measures is outlined on pages 207 to 217 of the Group's annual
report for the financial year ended 31 March 2018.
IAS 18 basis and IFRS 15 basis
Following the adoption of IFRS 15 "Revenue from Contracts with
Customers" on 1 April 2018, the Group's statutory results for the
quarter ended 30 June 2018 are on an IFRS 15 basis, whereas the
statutory results for the quarter ended 30 June 2017 are on an IAS
18 basis as previously reported, with any comparison between the
two bases of reporting not being meaningful. As a result, the
discussion of our operating results in the Operating Review is
primarily performed on an IAS 18 basis for all periods
presented.
We believe that the IAS 18 basis metrics for the quarter ended
30 June 2018, which are not intended to be a substitute for, or
superior to, our reported metrics on an IFRS 15 basis, provide
useful information to allow comparable growth rates to be
calculated. A reconciliation of service revenue and revenue to the
statutory IFRS 15 basis for the quarter ended 30 June 2018 is set
out on pages 10 and 12 respectively.
In addition, to assist investors and other interested parties in
understanding the impact of IFRS 15 on the Group's results, page 12
includes pro forma results for the quarter ended 30 June 2017 on an
IFRS 15 basis, and associated IFRS 15 growth and organic growths
and a reconciliation to the statutory IAS 18 basis for the quarter
ended 30 June 2017.
Further information on the impact of adopting IFRS 15 is
outlined on pages 111 to 112 of the Group's annual report for the
financial year ended 31 March 2018.
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, interconnect charges for incoming
calls and, with effect from 1 April 2018, excludes international
wholesale voice transit revenues. We believe that it is both useful
and necessary to report this measure for the following reasons:
-- it is used for internal performance reporting;
-- it is used in setting director and management remuneration;
and
-- it is useful in connection with discussion with the investment
analyst community.
A reconciliation of reported service revenue to the respective
closest equivalent GAAP measure, revenue, is provided where used in
the Operating Review on pages 3 to 7.
Organic growth
All amounts in this document marked with an "*" represent
"organic growth", which presents performance on a comparable basis
in terms of merger and acquisition activity and foreign exchange
rates. Whilst organic growth is neither intended to be a substitute
for reported growth, nor is it superior to reported growth, we
believe that these measures provide 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 IFRS and may not, therefore, be comparable with
similarly titled measures reported by other companies).
The Group's organic growth rates for all periods exclude the
results of Vodafone India (excluding its 42% stake in Indus
Towers), which are now reported in discontinued operations, and the
results of Vodafone Qatar following its disposal in the 2018
financial year. In addition, operating segment organic service
revenue growth rates for all quarters have been amended to exclude
the impact of changes to intercompany interconnect rates and the
impact of excluding international wholesale voice transit revenues
from service revenue with effect from 1 April 2018.
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 news release. If comparatives
were provided, significant sections of the commentary from the news
release for prior periods would also need to be included, reducing
the usefulness and transparency of this document.
Reconciliations of organic growth to reported growth on an IAS
18 basis are shown in the tables below.
IAS 18 basis
-------------------------------------------------------------
Other
activity Foreign
(including exchange/ IAS 18
2018 2017 IAS 18 M&A) other Organic*
EURm EURm % pps pps %
---------------------------- ------- ------- ------- ----------- ---------- ---------
Quarter ended 30 June
Service revenue
Germany 2,550 2,493 2.3 0.1 - 2.4
------- ------- ------- ----------- ---------- ---------
Mobile service revenue 1,515 1,492 1.5 0.2 - 1.7
Fixed service revenue 1,035 1,001 3.4 - - 3.4
---------------------------- ------- ------- ------- ----------- ---------- ---------
Italy 1,231 1,319 (6.7) 0.1 0.1 (6.5)
------- ------- ------- ----------- ---------- ---------
Mobile service revenue 974 1,079 (9.7) 0.2 - (9.5)
Fixed service revenue 257 240 7.1 - - 7.1
---------------------------- ------- ------- ------- ----------- ---------- ---------
UK 1,459 1,564 (6.7) - 1.8 (4.9)
------- ------- ------- ----------- ---------- ---------
Mobile service revenue 1,090 1,207 (9.7) 0.1 1.7 (7.9)
Fixed service revenue 369 357 3.4 - 1.9 5.3
---------------------------- ------- ------- ------- ----------- ---------- ---------
Spain 1,114 1,143 (2.5) 0.3 - (2.2)
Other Europe 1,166 1,135 2.7 0.3 (0.4) 2.6
------- ------- ------- ----------- ---------- ---------
Ireland 239 235 1.7 0.2 (0.2) 1.7
Portugal 239 232 3.0 0.3 0.3 3.6
Greece 203 200 1.5 0.4 0.2 2.1
---------------------------- ------- ------- ------- ----------- ---------- ---------
Eliminations (26) (30)
------- ------- ------- ----------- ---------- ---------
Europe 7,494 7,624 (1.7) 0.1 0.3 (1.3)
----------------------------- ------- ------- ------- ----------- ---------- ---------
Europe mobile 5,253 5,463 (3.8) - 0.3 (3.5)
Europe fixed 2,241 2,161 3.7 - 0.3 4.0
---------------------------- ------- ------- ------- ----------- ---------- ---------
Vodacom 1,182 1,177 0.4 - 4.7 5.1
------- ------- ------- ----------- ---------- ---------
South Africa 913 903 1.1 - 3.8 4.9
International operations 267 263 1.5 - 7.9 9.4
---------------------------- ------- ------- ------- ----------- ---------- ---------
Other AMAP 1,041 1,253 (16.9) 11.5 14.8 9.4
------- ------- ------- ----------- ---------- ---------
Turkey 476 554 (14.1) 0.3 27.8 14.0
Egypt 249 228 9.2 - 7.5 16.7
---------------------------- ------- ------- ------- ----------- ---------- ---------
AMAP 2,223 2,430 (8.5) 5.4 10.1 7.0
----------------------------- ------- ------- ------- ----------- ---------- ---------
Other 163 247 - - - -
Eliminations (30) (19)
----------------------------- ------- ------- ------- ----------- ---------- ---------
Total service revenue 9,850 10,282 (4.2) 1.9 2.6 0.3
Other revenue 1,379 1,192
----------------------------- ------- ------- ------- ----------- ---------- ---------
Revenue (IAS 18 basis) 11,229 11,474 (2.1) 0.8 2.8 1.5
----------------------------- ------- ------- ------- ----------- ---------- ---------
Impact of adoption of
IFRS 15 (319)
----------------------------- -------
Revenue (IFRS 15 basis) 10,910
----------------------------- -------
Other growth metrics
Group - Enterprise service
revenue 2,953 3,004 (1.7) 0.7 1.9 0.9
Group IOT revenue 197 183 7.7 3.7 1.2 12.6
South Africa - Data
revenue 402 382 5.2 - 4.2 9.4
South Africa - Voice
revenue 357 381 (6.3) - 3.7 (2.6)
India - Revenue 959 1,387 (30.9) - 8.8 (22.1)
India - Service revenue 955 1,385 (31.0) - 8.7 (22.3)
Excluding the impact
of regulation and UK
handset financing:
Group - Enterprise
service revenue 2,953 3,004 (1.7) 1.8 1.9 2.0
Europe - Service revenue 7,494 7,624 (1.7) 1.9 0.3 0.5
UK - Service revenue 1,459 1,564 (6.7) 6.8 1.8 1.9
UK - Mobile service
revenue 1,090 1,207 (9.7) 8.8 1.7 0.8
India - Service revenue 955 1,385 (31.0) 12.7 8.7 (9.6)
---------------------------- ------- ------- ------- ----------- ---------- ---------
IAS 18 basis
-------------------------------------------------------------
Other
activity Foreign
(including exchange/ IAS 18
2018 2017 IAS 18 M&A) other Organic*
EURm EURm % pps pps %
---------------------------- ------- ------- ------- ----------- ---------- ---------
Quarter ended 31 March
Service revenue
Germany 2,636 2,492 5.8 0.1 - 5.9
------- ------- ------- ----------- ---------- ---------
Mobile service revenue 1,501 1,500 0.1 0.2 - 0.3
Fixed service revenue 1,135 992 14.4 - - 14.4
---------------------------- ------- ------- ------- ----------- ---------- ---------
Italy 1,305 1,298 0.5 0.2 - 0.7
------- ------- ------- ----------- ---------- ---------
Mobile service revenue 1,051 1,069 (1.7) 0.2 - (1.5)
Fixed service revenue 254 229 10.9 - 0.2 11.1
---------------------------- ------- ------- ------- ----------- ---------- ---------
UK 1,524 1,624 (6.2) 0.1 2.7 (3.4)
------- ------- ------- ----------- ---------- ---------
Mobile service revenue 1,114 1,218 (8.5) 0.2 2.6 (5.7)
Fixed service revenue 410 406 1.0 - 2.6 3.6
---------------------------- ------- ------- ------- ----------- ---------- ---------
Spain 1,117 1,109 0.7 0.3 - 1.0
Other Europe 1,144 1,102 3.8 0.2 (0.7) 3.3
------- ------- ------- ----------- ---------- ---------
Ireland 244 235 3.8 0.3 0.2 4.3
Portugal 232 226 2.7 0.3 0.1 3.1
Greece 195 189 3.2 0.1 - 3.3
---------------------------- ------- ------- ------- ----------- ---------- ---------
Eliminations (35) (32)
------- ------- ------- ----------- ---------- ---------
Europe 7,691 7,593 1.3 - 0.5 1.8
----------------------------- ------- ------- ------- ----------- ---------- ---------
Europe mobile 5,305 5,412 (2.0) - 0.5 (1.5)
Europe fixed 2,386 2,181 9.4 - 0.5 9.9
---------------------------- ------- ------- ------- ----------- ---------- ---------
Vodacom 1,197 1,198 (0.1) - 5.9 5.8
------- ------- ------- ----------- ---------- ---------
South Africa 946 937 1.0 (0.1) 4.3 5.2
International operations 251 252 (0.4) - 11.5 11.1
---------------------------- ------- ------- ------- ----------- ---------- ---------
Other AMAP 1,163 1,239 (6.1) 1.0 15.3 10.2
------- ------- ------- ----------- ---------- ---------
Turkey 505 526 (4.0) - 18.3 14.3
Egypt 232 224 3.6 - 15.1 18.7
---------------------------- ------- ------- ------- ----------- ---------- ---------
AMAP 2,360 2,437 (3.2) 0.3 10.7 7.8
----------------------------- ------- ------- ------- ----------- ---------- ---------
Other 292 314 - - - -
Eliminations (58) (23)
----------------------------- ------- ------- ------- ----------- ---------- ---------
Total service revenue 10,285 10,321 (0.3) - 2.7 2.4
Other revenue 1,414 1,020
----------------------------- ------- ------- ------- ----------- ---------- ---------
Revenue 11,699 11,341 3.2 (0.9) 2.9 5.2
----------------------------- ------- ------- ------- ----------- ---------- ---------
Other growth metrics
Group - Enterprise service
revenue 3,054 3,071 (0.6) (0.1) 2.2 1.5
Group IOT revenue 203 184 10.3 - 1.5 11.8
South Africa - Data
revenue 411 380 8.2 - 4.9 13.1
South Africa - Voice
revenue 368 406 (9.4) - 4.0 (5.4)
India - Revenue 993 1,385 (28.2) - 7.9 (20.4)
India - Service revenue 979 1,379 (29.0) - 7.8 (21.2)
Excluding the impact
of legal settlement:
Group - Service revenue 10,285 10,321 (0.3) (1.0) 2.7 1.4
Europe - Service revenue 7,691 7,593 1.3 - (0.9) 0.4
Germany - Service
revenue 2,636 2,492 5.8 (4.0) - 1.8
Germany - Fixed service
revenue 1,135 992 14.4 (10.2) - 4.2
Excluding the impact
of regulation, German
legal settlement and
UK handset financing:
Group - Enterprise
service revenue 3,054 3,071 (0.6) 0.5 2.2 2.1
Europe - Service revenue 7,691 7,593 1.3 (0.1) 0.5 1.7
UK - Service revenue 1,524 1,624 (6.2) 4.9 2.7 1.4
UK - Mobile service
revenue 1,114 1,218 (8.5) 6.6 2.6 0.7
India - Service revenue 979 1,379 (29.0) 11.8 7.8 (9.4)
---------------------------- ------- ------- ------- ----------- ---------- ---------
IAS 18 basis
-------------------------------------------------------------
Other
activity Foreign
(including exchange/ IAS 18
2018 2017 IAS 18 M&A) other Organic*
EURm EURm % pps pps %
----------------------- ------- ------- ------- ----------- ---------- ---------
Quarter ended 30 June
Revenue
Germany 2,668 2,594 2.9 0.1 (0.1) 2.9
Italy 1,431 1,546 (7.4) 0.2 (0.1) (7.3)
UK 1,695 1,759 (3.6) 0.1 1.8 (1.7)
Spain 1,215 1,236 (1.7) 0.2 - (1.5)
Other Europe 1,248 1,196 4.3 0.3 (0.3) 4.3
Eliminations (28) (32)
------- ------- ------- ----------- ---------- ---------
Europe 8,229 8,299 (0.8) - 0.3 (0.5)
------------------------ ------- ------- ------- ----------- ---------- ---------
Vodacom 1,430 1,424 0.4 - 4.5 4.9
Other AMAP 1,278 1,457 (12.3) 11.2 16.4 15.3
AMAP 2,708 2,881 (6.0) 5.1 10.5 9.6
------------------------ ------- ------- ------- ----------- ---------- ---------
Other 368 313
Eliminations (76) (19)
------------------------ ------- ------- ------- ----------- ---------- ---------
Group (IAS 18 basis) 11,229 11,474 (2.1) 0.8 2.8 1.5
------------------------ ------- ------- ------- ----------- ---------- ---------
Impact of adoption of
IFRS 15 (319)
------------------------ -------
Group (IFRS 15 basis) 10,910
------------------------ -------
Reconciliations of organic growth to reported growth on an IFRS
15 basis are shown in the tables below.
IFRS 15 basis
-------------------------------------------------------------
Other
activity Foreign
IFRS
(including exchange/ 15
IFRS
2018 2017 15 M&A) other Organic*
EURm EURm % pps pps %
------------------------- ------- ------- ------- ----------- ---------- ---------
Quarter ended 30 June
Service revenue
Germany 2,292 2,249 1.9 0.1 - 2.0
Italy 1,245 1,336 (6.8) 0.1 - (6.7)
UK 1,256 1,279 (1.8) 0.1 2.0 0.3
Spain 1,094 1,116 (2.0) 0.3 - (1.7)
Other Europe 1,103 1,066 3.5 0.3 (0.5) 3.3
Eliminations (26) (30)
------- ------- ------- ----------- ---------- ---------
Europe 6,964 7,016 (0.7) - 0.3 (0.4)
-------------------------- ------- ------- ------- ----------- ---------- ---------
Vodacom 1,113 1,108 0.5 - 4.7 5.2
Other AMAP 1,019 1,228 (17.0) 11.8 14.8 9.6
AMAP 2,132 2,336 (8.7) 5.7 10.2 7.2
-------------------------- ------- ------- ------- ----------- ---------- ---------
Other 163 247
Eliminations (30) (18)
-------------------------- ------- ------- ------- ----------- ---------- ---------
Total service revenue 9,229 9,581 (3.7) 2.1 2.7 1.1
Other revenue 1,681 1,563
-------------------------- ------- ------- ------- ----------- ---------- ---------
Revenue (IFRS 15 basis) 10,910 11,144 (2.1) 0.8 2.9 1.6
------- ------- ------- ----------- ---------- ---------
Impact of adoption of
IFRS 15 330
------- -------
Revenue (IAS 18 basis) 11,474
-------------------------- ------- -------
Other growth metrics
India - Service Revenue 953 1,383 (31.1) - 8.8 (22.3)
India - Revenue 959 1,387 (30.9) - 8.8 (22.1)
-------------------------- ------- ------- ------- ----------- ---------- ---------
OTHER INFORMATION
Definition of terms
Term Definition
------------------- -------------------------------------------------------
ARPU Average revenue per user, defined as customer
revenue and incoming revenue divided by average
customers.
------------------- -------------------------------------------------------
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.
------------------- -------------------------------------------------------
Enterprise The Group's customer segment for businesses.
------------------- -------------------------------------------------------
Fixed service Service revenue relating to provision of fixed
revenue line ('fixed') and carrier services.
------------------- -------------------------------------------------------
IAS 18 International Accounting Standard 18 "Revenue".
The pre-existing revenue accounting standard
that applied to the Group's statutory results
for all reporting periods up to and including
the quarter ended 31 March 2018.
------------------- -------------------------------------------------------
IFRS 15 International Financial Reporting Standard 15
"Revenue from Contracts with Customers". The
new accounting standard adopted by the Group
on 1 April 2018 and applied to the Group's statutory
results for the quarter ended 30 June 2018.
------------------- -------------------------------------------------------
Incoming revenue Comprises revenue from termination rates for
voice and messaging to Vodafone customers.
------------------- -------------------------------------------------------
Internet of Things The network of physical objects embedded with
('IoT') 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 Represents revenue from mobile customers from
revenue 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 Service revenue relating to the provision of
revenue mobile services.
------------------- -------------------------------------------------------
Next generation Fibre or cable networks typically providing
networks ('NGN') high-speed broadband over 30Mbps.
------------------- -------------------------------------------------------
Organic growth An alternative performance measure which 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 9 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.
------------------- -------------------------------------------------------
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, interconnect
charges for incoming calls and, with effect
from 1 April 2018, excludes international wholesale
voice transit revenues. See "Alternative performance
measures" on page 9 for further details.
------------------- -------------------------------------------------------
For further definitions please refer to pages 222 to 224 of the
Group's Annual Report for the year ended 31 March 2018.
Notes
1. All figures in this trading update are unaudited.
2. 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, Vodafone Broken Speechmark Outline,
Vodacom, Vodafone One, The future is exciting. Ready? and
M-Pesa, are trademarks of the Vodafone Group. Other product
and company names mentioned herein may be the trademarks
of their respective owners.
3. All growth rates reflect a comparison to the quarter ended
30 June 2017 unless otherwise stated.
4. References to "Q4" and "Q1" are to the quarters ended 31
March 2018 and 30 June 2018, respectively, unless otherwise
stated. References to the "year", "financial year" or "2019
financial year" are to the financial year ending 31 March
2019 and references to the "last year" or "last financial
year" are to the financial year ended 31 March 2018 unless
otherwise stated.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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 confirmation of the Group's guidance for the 2019 financial
year, expectations for the Group's future performance generally;
expectations regarding the operating environment and market
conditions and trends; intentions and expectations regarding the
development, launch and expansion of products, services and
technologies; growth in customers and usage; expectations regarding
spectrum licence acquisitions; expectations regarding adjusted
EBITDA, capital additions, free cash flow, and foreign exchange
rate movements; and expectations regarding the integration or
performance of current and future investments, associates, joint
ventures, non-controlled interests and newly acquired
businesses.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
"sustain", "continue", "stabilise", "ongoing", "will", "expects",
or "targets" (including in their negative form). 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: external cyber attacks, insider
threats or supplier breaches; changes in economic or political
conditions in markets served by operations of the Group and changes
to the associated legal, regulatory and tax environments; increased
competition; increased disintermediation; the impact of investment
in network capacity and the deployment of 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 expectation; the ability of the Group to
integrate new technologies, products and services with existing
networks, technologies, products and services; the Group's ability
to grow and generate 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; the
Group's ability to expand its spectrum position or renew or obtain
necessary licences and realise expected synergies and associated
benefits; 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; changes in foreign exchange rates, as well as changes in
interest rates; the Group's ability to realise benefits from
entering into acquisitions, partnerships or joint ventures and
entering into service franchising, brand licensing and 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 businesses 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; the impact of legal or other proceedings against the
Group or other companies in the mobile telecommunications industry;
higher than expected costs or capital expenditures; slower than
expected customer growth and reduced customer retention; changes in
the spending patterns of new and existing customers; the Group's
ability to execute its strategy in fibre deployment, network
expansion, new product and service roll-outs, mobile data,
Enterprise and broadband and in emerging markets; changes in
foreign exchange rates, as well as changes in interest rates;
changes in the regulatory framework in which the Group operates;
developments in the Group's financial condition, earnings and
distributable funds and other factors that the Board takes into
account when determining levels of dividends; the Group's ability
to satisfy working capital and other requirements; and/or changes
in statutory tax rates or 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 "Risk management" in the Group's
Annual Report for the year ended 31 March 2018. 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, to any member of the Group or to any persons acting
on their behalf are expressly qualified in their entirety by the
factors referred to above. No assurances can be given that the
forward-looking statements in this document will be realised.
Subject to compliance with applicable law and regulations, Vodafone
does not intend to update these forward-looking statements and does
not undertake any obligation to do so.
For further information:
Vodafone Group Plc
Investor Relations Media Relations
Telephone: +44 7919 990 230 www.vodafone.com/media/contact
Copyright (c) Vodafone Group 2018
- ends -
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTFMGZNMDMGRZZ
(END) Dow Jones Newswires
July 25, 2018 02:01 ET (06:01 GMT)
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