TIDMVOD
RNS Number : 5245T
Vodafone Group Plc
25 July 2022
Vodafone Group Plc Q1 FY23 trading update
25 July 2022
Continued growth in both Europe and Africa, performance in line
with expectations
-- Group service revenue growth of 2.5%* (Q4: 2.0%*)
-- Germany service revenue declined by 0.5%* (Q4: 0.8%*),
largely reflecting the impact of the new Telecommunications Act
-- Europe growth supported by growth acceleration in the UK
Q1 performance summary Q1 FY23 Q1 FY22 Reported Organic
-------------------------------
growth growth
EURm EURm % % (1)
------------------------------ --------- --------- ---------- ---------
Service revenue 9,514 9,390 1.3 2.5
- of which Germany 2,857 2,872 (0.5) (0.5)
Other revenue 1,764 1,711
--------- --------- ---------- ---------
Total revenue 11,278 11,101 1.6 2.7
=============================== ========= ========= ========== =========
1. Organic growth is a non-GAAP measure. All amounts marked in the
commentary with an '*' represent organic growth. See page 8.
-- Europe Consumer contract mobile ARPU grew by 0.7%
year-on-year. We added 215,000 mobile contract customers and lost
72,000 broadband customers in the quarter
-- Vodafone Business service revenue growth of 1.7%*, supported
by higher roaming and digital services revenue
-- Growth in Africa supported by data revenue and financial
services growth, as our M-Pesa customer base grew to almost 50
million in the quarter
-- Service revenue in Turkey increased to 35.8%*, driven by
higher inflation, impacting Group service revenue growth by an
additional 0.3pp. Group service revenue growth excluding Turkey was
1.6%* (Q4: 1.4%*)
-- On track to deliver FY23 guidance with Adjusted EBITDAaL
expected to be between EUR15.0 - EUR15.5 billion and Adjusted FCF
of c.EUR5.3 billion
Nick Read, Group Chief Executive, commented:
"We have executed in line with our expectations, delivered
another quarter of growth in both Europe and Africa, and seen an
acceleration in business growth. Whilst we are not immune to the
current macroeconomic challenges, we're on track to deliver
financial results for the year in line with our guidance.
Our near-term focus on our operational and portfolio priorities
remains unchanged. We've made good progress towards stabilising our
commercial performance in Germany, and we continue to actively
pursue opportunities with Vantage Towers and to strengthen our
market positions in Europe."
For more information, please contact:
Investor Relations Media Relations
Investors.vodafone.com Vodafone.com/media/contact
ir@vodafone.co.uk GroupMedia@vodafone.com
Registered Office: Vodafone House, The Connection, Newbury,
Berkshire RG14 2FN, England. Registered in England No. 1833679
A webcast Q&A session will be held at 10:00 BST on 25 July
2022. The webcast and supporting information can be accessed at
investors.vodafone.com
Operating review A new generation connectivity & digital services provider
Our vision is to become a new generation connectivity and
digital services provider for Europe and Africa, enabling an
inclusive and sustainable digital society. We continue to make
progress on the next phase of our strategy, which focuses on
driving shareholder returns through growth. This is being delivered
through three customer commitments and three enabling strategies,
all of which work together towards realising our vision.
Customer commitments Enabling strategies
================================================= =====================================================
* Best connectivity products and services * Simplified and most efficient operator
* Leading innovation in digital services * Social contract shaping the digital society
* Leading gigabit networks
* Outstanding digital experiences
Units Q1 FY23 Q1 FY22
=============================================== ========== ======= =================
Customer commitments
Best connectivity products & services
Europe mobile contract customers(1) million 66.5 65.6
Europe broadband customers(1) million 25.5 25.6
Europe Consumer converged customers(1) million 9.2 8.0
Europe mobile contract customer churn % 13.0 13.0
Africa mobile customers(2) million 185.7 181.6
Africa data users(2) million 88.0 87.2
Business service revenue growth* % 1.7 2.7
Leading innovation in digital services
Europe TV subscribers(1) million 21.8 22.3
IoT SIM connections million 159.0 129.8
Africa M-Pesa customers(3) million 49.7 47.6
Africa M-Pesa transaction volume(3) billion 5.7 4.5
Outstanding digital experiences
Digital channel sales mix(4) % 24 23
End-to-end TOBi completion rate(5 6) % 45 40
Enabling strategies
Leading gigabit networks
5G available in European cities(1) # 318 243
Europe on-net gigabit capable connections(1) million 49.5 44.6
Europe on-net NGN broadband penetration(1) % 30 30
Simplified & most efficient operator
Europe markets where 3G switched off(1) # 4 3
================================================= ======== ======= =================
1. Including VodafoneZiggo | 2. Africa including Safaricom | 3.
Africa excluding Egypt, including Safaricom | 4. Based on Germany,
Italy, UK, Spain only | 5. Group excluding Egypt | 6. Defined as
percentage of total customer contacts resolved without human
interaction through TOBi
Further detailed information on our strategy can be found
through the following links:
Resource Link
============================== =======================================
Second phase of strategy vodafone.com/ar2022
Digital services & outstanding investors.vodafone.com/digital-services
experience
Leading gigabit networks investors.vodafone.com/vtbriefing
Vodafone Business investors.vodafone.com/vbbriefing
Vantage Towers vantagetowers.com
Our purpose We connect for a better future
We believe that Vodafone has a significant role to play in
contributing to the societies in which we operate, and we want to
enable an inclusive and sustainable digital society. We continue to
make progress against our purpose strategy and provided a full
update on our progress in our recently published FY22 Annual Report
and supplementary materials.
More information can be found here: investors.vodafone.com
Spirit Beat
Spirit Beat is our bi-annual employee survey that measures
progress on how people experience our culture 'Vodafone Spirit',
engagement, and connection to our purpose.
The results from the latest survey in April show our employee
engagement index remained high at 72 (2021: 73) and 92% of
employees feel that their daily work contributes significantly to
Vodafone's purpose 'We connect for a better future'. We are
encouraged to see an increase to 71% of employees experiencing
their managers acting on Spirit Beat (2021: 64%). Teams with
managers embracing and taking action had a higher Spirit Index
(+10pt) and engagement score (+10pt). Following our global
standards for new hybrid ways of working, the survey shows that
those who are hybrid-working score higher in 'Get it done,
together' behaviours.
Circular Economy
Digitalisation is key to saving energy, using natural resources
more efficiently and creating a circular economy. We recognise that
to build a circular economy we need to tackle not only our network
waste, but also device waste.
In line with our circular economy plan, announced in February
2022, to help extend the life of mobile phones and increase the
reuse and responsible recycling of handsets; Vodafone Germany
launched it's 'One For One' initiative tackling e-waste, committing
to recycle one mobile phone for every mobile phone sold to a
private customer.
Reporting
We report against a number of voluntary reporting frameworks to
help stakeholders understand our sustainable business performance.
We have published our second standalone Task Force on
Climate-related Financial Disclosures ('TCFD') report, responses to
Sustainability Accounting Standards Board ('SASB') Standards and
published our ESG Addendum, a comprehensive spreadsheet that
includes data on environmental, social and governance ('ESG')
topics.
Our ESG Reporting can be found here:
investors.vodafone.com/ESG
Performance review Sustained growth in both Europe and
Africa
-- Group revenue increased by 1.6%, supported by service revenue growth in Europe and Africa
-- Group service revenue growth of 2.5%*, with growth across Consumer and Business segments
-- Good service revenue trend impacted by 0.5%* decline in
Germany, offset by acceleration in the UK
-- Service revenue in Turkey increased to 35.8%*, driven by
higher inflation, impacting Group service revenue growth by an
additional 0.3pp. Group service revenue growth excluding Turkey was
1.6%* (Q4: 1.4%*).
-- On track to deliver FY23 guidance with Adjusted EBITDAaL
expected to be between EUR15.0 - EUR15.5 billion and Adjusted FCF
of c.EUR5.3 billion
Organic growth
All amounts marked with an '*' in the commentary 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 in Q1 FY23
and other adjustments to improve the comparability of results
between periods. Organic growth figures are non-GAAP measures. See
non-GAAP measures on page 8 for more information.
Geographic performance summary
Other Other Vantage Common Elimi-
Germany Italy UK Spain Europe Vodacom Markets Towers Functions nations Group
============== ======= ====== ===== ====== ====== ======= ======= ======= ========= ======= ======
Q1 FY23
Service
revenue 2,857 1,052 1,360 898 1,254 1,214 814 - 128 (63) 9,514
Other revenue 414 114 308 90 162 366 98 325 207 (320) 1,764
------- ------ ----- ------ ------ ------- ------- ------- --------- ------- ------
Total revenue
( EUR m) 3,271 1,166 1,668 988 1,416 1,580 912 325 335 (383) 11,278
------- ------ ----- ------ ------ ------- ------- ------- --------- ------- ------
Organic
service
revenue
growth (%)(1) (0.5)% (2.3)% 6.5% (3.0)% 2.5% 2.9% 24.7% - 2.5%
Q1 FY22
Service
revenue 2,872 1,076 1,256 925 1,228 1,126 829 - 125 (47) 9,390
Other revenue 340 166 296 105 156 338 91 303 220 (304) 1,711
------- ------ ----- ------ ------ ------- ------- ------- --------- ------- ------
Total revenue
(EURm) 3,212 1,242 1,552 1,030 1,384 1,464 920 303 345 (351) 11,101
============== ======= ====== ===== ====== ====== ======= ======= ======= ========= ======= ======
FY22 FY23
----------------------------------------------------------- -----------------
Organic service revenue
growth %(1) Q1 Q2 H1 Q3 Q4 H2 Total Q1
=============================== ===== ====== ====== ======= ======= ======= ========= =================
Germany 1.4 1.0 1.2 1.1 0.8 1.0 1.1 (0.5)
Italy (3.6) (1.4) (2.5) (1.3) (0.8) (1.0) (1.8) (2.3)
UK 2.5 0.6 1.2 0.9 2.0 1.4 1.3 6.5
Spain 0.8 (1.9) (0.6) (1.6) (5.1) (3.4) (2.0) (3.0)
Other Europe 4.2 2.4 3.3 2.9 2.7 2.8 3.0 2.5
Vodacom 7.9 3.1 5.4 4.4 3.1 3.7 4.6 2.9
Other Markets 18.4 19.7 19.1 19.8 19.8 19.8 19.4 24.7
Vantage Towers - - - - - - - -
----- ------ ------ ------- ------- ------- --------- -----------------
Group 3.3 2.4 2.8 2.7 2.0 2.3 2.6 2.5
=============================== ===== ====== ====== ======= ======= ======= ========= =================
Downloadable performance information is available at:
https://investors.vodafone.com/reports-information/results-reports-presentations
Note:
1. Organic service revenue growth is a non-GAAP measure. See page 8 for more information.
Germany Commercial momentum gradually recovering in line with expectations
Service revenue declined by 0.5%* (Q4: 0.8%*), primarily
reflecting broadband and TV customer losses in H2 FY22, related to
the impact of new sector legislation. Retail service revenue was
broadly stable at -0.1%* (Q4: 1.2%*).
Fixed service revenue declined by 1.6%* (Q4: -0.4%*), driven by
the lower broadband and TV customer base, as a result of specific
operational challenges related to the implementation of policies to
comply with the new Telecommunications Act, which came into effect
in December 2021. Our cable broadband customer base declined by a
further 34,000, and we lost 30,000 DSL broadband customers in the
quarter. As expected, the scale of customer losses has reduced from
Q4 FY22, following remedial activity with both our IT systems and
customer journeys, and the gradual unwind of churn related to the
Telecommunications Act. Half of our cable broadband customers now
subscribe to speeds of at least 250Mbps, and Gigabit speeds are
available to 24.0 million households across our hybrid fibre cable
network.
Our converged customer base remained broadly stable at 2.4
million Consumer converged accounts. Our TV customer base declined
by 79,000 reflecting the impact of the new sector legislation.
Mobile service revenue increased by 0.8%* (Q4: 2.4%*). We added
6,000 contract customers in the quarter, with continued good demand
from the public sector partially offset by Consumer disconnections
related to the new Telecommunications Act. We added a further 2.7
million IoT connections in the quarter, supported by strong demand
from the automotive sector.
Italy, UK, Spain and Other Europe Similar trends
quarter-on-quarter, growth acceleration in the UK
Italy
Service revenue declined by 2.3%* (Q4: -0.8%*) as a result of
continued promotional intensity in the mobile value segment. The
slowdown in quarterly trends reflected higher than usual wholesale
MVNO revenue in Q4 FY22, partially offset by good Business
demand.
In mobile, market mobile number portability ('MNP') volumes
remained stable. Our second brand 'ho.' continued to grow, with
65,000 net additions, and now has 2.9 million customers.
Our fixed line broadband customer base remained broadly stable
at over 3.0 million, declining by 18,000 in the quarter. We also
added 11,000 fixed-wireless access customers in the quarter, which
are included in our mobile customer base. Our Consumer converged
customer base is 1.3 million and 53% of our broadband customer base
is converged.
Our next generation network (NGN) broadband services are now
available to 25.9 million households, including 9.2 million through
our own network and our partnership with Open Fiber. We also cover
over 3 million households and businesses with fixed-wireless
access, offering speeds of up to 100Mbps.
UK
Service revenue increased by 6.5%* (Q4: 2.0%*), driven by
contractual annual price increases, customer base growth, higher
MVNO revenue, and higher roaming and visitor revenue. The
quarter-on-quarter improvement was further supported by Business
service revenue trends.
In mobile, we added 18,000 contract customers in the quarter as
we focused on implementing price actions across our customer base
and Consumer retail plans. Our customer consideration rate remained
strong, and we did not see a material impact on customer churn. Our
digital prepaid sub-brand 'Voxi' also continued to grow, with
21,000 customers added in the quarter. Our digital mix improved to
36% of total sales in the quarter.
In fixed, our broadband customer base increased by 22,000 in the
quarter, and we now have 1.1 million customers. Over half of our
broadband customers are converged. In November 2021, we announced
the expansion of our long-term strategic partnership agreement with
CityFibre, which in conjunction with our existing partnership with
Openreach, now enables us to reach over 8 million households with
full fibre broadband, more than any other provider in the UK.
Spain
Service revenue declined by 3.0%* (Q4: -5.1%*) driven by
continued promotional activity in the value segment, and a
reduction in mobile termination rates, partially offset by
seasonally higher visitor revenue.
In mobile, we added 38,000 contract customers in the quarter.
Mobile contract churn significantly reduced, by 2.5 percentage
points year-on-year to 17.6%, reflecting our continued focus on
improving customer loyalty. Our second brand, 'Lowi', added 84,000
customers during the quarter and now has a total customer base of
1.6 million. Our broadband customer base declined by 30,000 and our
TV customer base remained stable in the quarter.
In June 2022, we launched a new product portfolio, focusing on
simplified and more transparent tariff plans to further improve
customer loyalty.
We continue to see good demand for our Business products,
including a significant number of registration requests to the
digital toolkit platform. Over 8,000 Business customers have
already registered on the platform, with Vodafone being the
orchestrator of their access to digital services. The platform was
launched in March 2022 by the Spanish government to deliver EU
recovery funding initiatives for small and medium sized
enterprises.
Other Europe
Service revenue increased by 2.5%* (Q4: 2.7%*), with good growth
in both mobile and fixed. An improved performance in the majority
of our markets was partially offset by a decline in Romania and
Albania.
In Portugal, we maintained our good commercial momentum, and we
added 46,000 mobile contract customers and 12,000 fixed broadband
customers in the quarter. In Ireland, service revenue growth was
driven by strong commercial momentum, and also supported by
contractual price increases in the Consumer segment. Our mobile
contract customer base increased by 14,000. In Greece, we added
32,000 mobile contract customers, including migrations from prepaid
customers. Contract customer loyalty rates improved, with churn
down by 0.7 percentage points year-on-year to 8.9%.
Vodacom Growth in South Africa, and strong data demand in international markets
Vodacom's service revenue grew by 2.9%* (Q4: 3.1%*) with growth
in both South Africa and Vodacom's international markets.
In South Africa, service revenue growth was supported by
contract price increases implemented from 1 April, and growth in
new services such as IoT. This was partially offset by a temporary
delay in social grants impacting consumer discretionary spending.
We added 50,000 mobile contract customers in the quarter, supported
by our more-for-more 'Vodafone Red' proposition, and 68.3% of our
mobile customer base now uses data services. Financial Services
revenue in South Africa grew by 4.6%* to EUR39.5 million,
reflecting strong demand for our insurance services. Our VodaPay
'super-app' launched in October 2021, and has reached 1.9 million
registered users.
In Vodacom's international markets, service revenue growth was
supported by strong growth in data revenue. This was partially
offset by the impact of mobile money levies in Tanzania introduced
during Q2 FY22, but which the Government has further reduced from
July 2022. M-Pesa revenue as a share of service revenue increased
by 0.1 percentage points to 23.8%. Over 59% of Vodacom's
international customer base is now using data services.
In November 2021, Vodacom Group announced it had entered into an
agreement to acquire Vodafone Egypt from Vodafone for a total
consideration of EUR2.4 billion. As a result, Vodafone Group's
ownership in Vodacom Group will increase from 60.5% to 65.1%. The
transaction is subject to Egyptian regulatory approval.
Further information on our operations in Africa can be accessed
here: vodacom.com .
Other Markets Turkey, Egypt and Ghana
Service revenue growth remained broadly stable at 24.7%* (Q4:
19.8%*) as a result of strong customer base and ARPU growth, and
higher contribution from Turkey, impacted by accelerating
inflation. Reported service revenue decreased by 1.8%, as higher
service revenue was offset by the depreciation of the Turkish lira
versus the euro.
Service revenue growth in Turkey was due to the acceleration of
inflationary price increases, and customer base growth. We
maintained our good commercial momentum, with 418,000 mobile
contract net additions in the quarter, including migrations from
prepaid customers. Customer loyalty rates continued to improve,
with contract churn down by 2.6 percentage points year-on-year to
12.6%.
Service revenue in Egypt continued to grow, reflecting strong
customer base growth and increased data usage. During the quarter,
we added 1.1 million prepaid mobile customers.
Hyperinflationary accounting in Turkey
Service revenue in Turkey increased to 35.8%* in Q1 FY23, driven
by higher inflation, impacting Group service revenue growth by
0.3pp. Organic growth metrics exclude the impact of the
hyperinflation adjustment in Q1 FY23 in Turkey. Group service
revenue growth excluding Turkey was 1.6%* (Q4: 1.4%*).
As anticipated and explained in the Group's reporting for the
year ended 31 March 2022, Turkey now meets the requirements to be
designated as a hyperinflationary economy under IAS 29 'Financial
Reporting in Hyperinflationary Economies'. The Group has therefore
applied hyperinflationary accounting, as specified in IAS 29, for
amounts reported by Vodafone Turkey for the period commencing 1
April 2022.
Consequently, revenue amounts presented for Turkey for the
quarter ended 30 June 2022 are measured based on their present
value equivalent as at 30 June 2022 using an inflation index
multiplier before translation to euros at the reporting date
exchange rate. The inflationary adjustments to the Group's revenue
and service revenue for the quarter ended 30 June 2022 increased by
EUR1 million each. Previously reported comparative consolidated
financial information for Turkey has not been re-presented.
Vantage Towers Delivering on our plan
Total revenue increased to EUR325 million, and 340 new tenancies
were added during the period, bringing the tenancy ratio to 1.44x.
Vantage Towers reached a number of new partnership agreements with
customers during the quarter. Vantage Towers reported its results
on 21 July 2022. Further information on Vantage Towers can be
accessed here: vantagetowers.com .
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 Closest equivalent Reconciled
on page GAAP measure on page
-------------------------------- --------- ------------------- -----------
Performance metrics
-------------------------------- --------- ------------------- -----------
Organic revenue growth Page 8 Revenue Page 9
-------------------------------- --------- ------------------- -----------
Organic service revenue growth Page 8 Service revenue Page 9
-------------------------------- --------- ------------------- -----------
Organic mobile service revenue Page 8 Service revenue Page 9
growth
-------------------------------- --------- ------------------- -----------
Organic fixed service revenue Page 8 Service revenue Page 9
growth
-------------------------------- --------- ------------------- -----------
Organic Group service revenue Page 8 Service revenue Page 9
growth excluding Turkey
-------------------------------- --------- ------------------- -----------
Organic Vodafone Business Page 8 Service revenue Page 9
service revenue growth
-------------------------------- --------- ------------------- -----------
Organic financial services Page 8 Service revenue Page 9
revenue growth in South Africa
-------------------------------- --------- ------------------- -----------
Organic retail service revenue Page 8 Service revenue Page 9
growth in Germany
-------------------------------- --------- ------------------- -----------
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 adjustment in Turkey in Q1 FY23
and other adjustments to improve the comparability of results
between periods.
Organic growth is calculated for revenue metrics, as
follows:
- Revenue
- Service revenue;
- Mobile service revenue;
- Fixed service revenue;
- Group service revenue excluding Turkey;
- Vodafone Business service revenue;
- Financial services revenue in South Africa; and
- Retail service revenue in Germany.
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.
Quarter ended 30 June 2022
Reported M&A and Foreign Organic
Q1 FY23 Q1 FY22 growth Other exchange growth*
EURm EURm % pps pps %
---------------------------------- ------- ------- -------- ------- --------- --------
Service revenue
Germany 2,857 2,872 (0.5) - - (0.5)
------- ------- -------- ------- --------- --------
Mobile service revenue 1,264 1,254 0.8 - - 0.8
Fixed service revenue 1,593 1,618 (1.5) (0.1) - (1.6)
---------------------------------- ------- ------- -------- ------- --------- --------
Italy 1,052 1,076 (2.2) (0.1) - (2.3)
------- ------- -------- ------- --------- --------
Mobile service revenue 745 782 (4.7) - - (4.7)
Fixed service revenue 307 294 4.4 (0.2) - 4.2
---------------------------------- ------- ------- -------- ------- --------- --------
UK 1,360 1,256 8.3 - (1.8) 6.5
------- ------- -------- ------- --------- --------
Mobile service revenue 1,003 895 12.1 - (1.8) 10.3
Fixed service revenue 357 361 (1.1) - (1.6) (2.7)
---------------------------------- ------- ------- -------- ------- --------- --------
Spain 898 925 (2.9) (0.1) - (3.0)
Other Europe 1,254 1,228 2.1 - 0.4 2.5
Vodacom 1,214 1,126 7.8 - (4.9) 2.9
Other Markets 814 829 (1.8) (0.1) 26.6 24.7
Vantage Towers - - - - --
Common Functions 128 125
Eliminations (63) (47)
----------------------------------- ------- ------- -------- ------- --------- --------
Total service revenue 9,514 9,390 1.3 - 1.2 2.5
Other revenue 1,764 1,711
----------------------------------- ------- ------- -------- ------- --------- --------
Revenue 11,278 11,101 1.6 - 1.1 2.7
----------------------------------- ------- ------- -------- ------- --------- --------
Other growth metrics
Group service revenue excluding
Turkey 9,205 9,011 2.2 - (0.6) 1.6
Vodafone Business - Service
revenue 2,558 2,542 0.6 0.7 0.4 1.7
South Africa - Financial services
revenue 40 33 21.2 - (16.6) 4.6
Germany - Retail service revenue 2,798 2,800 (0.1) - - (0.1)
----------------------------------- ------- ------- -------- ------- --------- --------
Quarter ended 31 March 2022
Reported M&A and Foreign Organic
Q4 FY22 Q4 FY21 growth Other exchange growth*
EURm EURm % pps pps%
---------------------------------- ------- ------- -------- ------- --------- -------
Service revenue
Germany 2,903 2,885 0.6 0.2 - 0.8
------- ------- -------- ------- --------- --------
Mobile service revenue 1,282 1,274 0.6 1.8 - 2.4
Fixed service revenue 1,621 1,611 0.6 (1.0) - (0.4)
---------------------------------- ------- ------- -------- ------- --------- --------
Italy 1,085 1,084 0.1 (0.9) - (0.8)
------- ------- -------- ------- --------- --------
Mobile service revenue 758 788 (3.8) 0.7 - (3.1)
Fixed service revenue 327 296 10.5 (5.2) - 5.3
---------------------------------- ------- ------- -------- ------- --------- --------
UK 1,341 1,231 8.9 (2.3) (4.6) 2.0
------- ------- -------- ------- --------- --------
Mobile service revenue 972 880 10.5 - (4.6) 5.9
Fixed service revenue 369 351 5.1 (7.3) (4.8) (7.0)
---------------------------------- ------- ------- -------- ------- --------- --------
Spain 908 951 (4.5) (0.6) - (5.1)
Other Europe 1,242 1,233 0.7 2.6 (0.6) 2.7
Vodacom 1,192 1,078 10.6 (0.1) (7.4) 3.1
Other Markets 801 827 (3.1) (0.1) 23.0 19.8
Vantage Towers - - - - --
Common Functions 134 136
Eliminations (60) (59)
----------------------------------- ------- ------- -------- ------- --------- --------
Total service revenue 9,546 9,366 1.9 (0.1) 0.2 2.0
Other revenue 1,861 1,815
----------------------------------- ------- ------- -------- ------- --------- --------
Revenue 11,407 11,181 2.0 (0.1) 0.2 2.1
----------------------------------- ------- ------- -------- ------- --------- --------
Other growth metrics
Group service revenue excluding
Turkey 9,262 8,966 3.3 (0.1) (1.8) 1.4
Germany - Retail service revenue 2,841 2,812 1.0 0.2 - 1.2
----------------------------------- ------- ------- -------- ------- --------- --------
Definitions
Key terms are defined below. See page 8 for the location of
definitions for non-GAAP measures.
Term Definition
Adjusted EBITDAaL Adjusted EBITDAaL 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 Adjusted free cash flow is Free cash flow before licences
cash flow and spectrum, restructuring costs arising from discrete
('Adjusted restructuring plans, integration capital additions and
FCF') working capital related items, M&A and Vantage Towers
growth capital expenditure.
------------------------------------------------------------------
Africa Comprises the Vodacom Group and businesses in Egypt and
Ghana.
------------------------------------------------------------------
ARPU Average revenue per user, defined as customer revenue
and incoming revenue divided by average customers.
------------------------------------------------------------------
Capital additions Comprises the purchase of property, plant and equipment
and intangible assets, other than licence and spectrum
payments and integration capital expenditure.
------------------------------------------------------------------
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.
------------------------------------------------------------------
Net Promoter Net Promotor Score is a widely used customer loyalty
Score ('NPS') and satisfaction measurement.
------------------------------------------------------------------
Converged A customer who receives fixed and mobile services (also
customer known as unified communications) on a single bill or
who receives a discount across both bills.
------------------------------------------------------------------
Depreciation The accounting charge that allocates the cost of tangible
and amortisation or intangible assets, whether owned or leased, to the
income statement over its useful life. The measure includes
the profit or loss on disposal of property, plant and
equipment, software and right-of-use assets.
------------------------------------------------------------------
Eliminations Refers to the removal of intercompany transactions to
derive the consolidated financial statements.
------------------------------------------------------------------
Europe Comprises the Group's European businesses and the UK.
------------------------------------------------------------------
Financial Financial services revenue includes fees generated from
services revenue 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 Service revenue (see below) relating to the provision
revenue of fixed line and carrier services.
------------------------------------------------------------------
GAAP Generally Accepted Accounting Principles.
------------------------------------------------------------------
IFRS International Financial Reporting Standards.
------------------------------------------------------------------
Incoming revenue Comprises revenue from termination rates for voice and
messaging to Vodafone customers.
------------------------------------------------------------------
Integration Capital expenditure incurred in relation to significant
capital expenditure changes in the operating model, such as the integration
of recently acquired subsidiaries.
------------------------------------------------------------------
Internet of The network of physical objects embedded with electronics,
Things ('IoT') 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 Service revenue (see below) relating to the provision
revenue of mobile services.
------------------------------------------------------------------
MVNO Mobile Virtual Network Operator: companies that provide
mobile phone services under wholesale contracts with
a mobile network operator, but do not have their own
licence or spectrum or the infrastructure required to
operate a network.
------------------------------------------------------------------
Next generation Fibre or cable networks typically providing high-speed
networks ('NGN') broadband over 30Mbps.
------------------------------------------------------------------
Other Europe Other Europe markets include Portugal, Ireland, Greece,
Romania, Czech Republic, Hungary and Albania.
------------------------------------------------------------------
Other Markets Other Markets comprise Turkey, Egypt and Ghana.
------------------------------------------------------------------
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.
------------------------------------------------------------------
Retail service Retail service revenue comprises service revenue (see
revenue below) excluding Mobile Virtual Network Operator ('MVNO')
and Fixed Virtual Network Operator ('FVNO') wholesale
revenue.
------------------------------------------------------------------
Revenue The total of Service revenue (defined below) and Other
revenue (defined above).
------------------------------------------------------------------
Roaming and Roaming: allows customers to make calls, send and receive
Visitor texts and data on our and other operators' mobile networks,
usually while travelling abroad. Visitor: revenue received
from other operators or markets when their customers
roam on one of our markets' networks.
------------------------------------------------------------------
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 is part of the Group and partners with
businesses of every size to provide a range of business-related
services.
------------------------------------------------------------------
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. Vantage Towers is a trade mark owned by Vantage Towers
A.G. 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 2021 unless otherwise stated.
3. References to "Q4" and "Q1" are to the three months ended 31
March 2022 and 30 June 2022, respectively, unless otherwise stated.
References to the "year", "financial year" or "FY23" are to the
financial year ending 31 March 2023. References to the "last year",
"last financial year" or "FY22" are to the financial year ended 31
March 2022 unless otherwise stated.
4. Vodacom refers to the Group's interest in Vodacom Group
Limited ('Vodacom') as well as its operations, including
subsidiaries in South Africa, DRC, Tanzania, Mozambique and
Lesotho.
5. Quarterly historical information is provided in a spreadsheet available at https://investors.vodafone.com/reports-information/results-reports-presentations
6. 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 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 and the
guidance for Adjusted EBITDAaL and Adjusted free cash flow for the
financial year ending 31 March 2023; the Group's sustainable
business strategy and 2025 targets; the sale of Vodafone Egypt;
expectations for the Group's future performance generally;
expectations regarding the operating environment and market
conditions and trends, including customer usage, competitive
position and macroeconomic pressures, price trends and
opportunities in specific geographic markets; intentions and
expectations regarding the development, launch and expansion of
products, services and technologies, either introduced by Vodafone
or by Vodafone in conjunction with third parties or by third
parties independently; expectations regarding the Group's
environmental targets, 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
"will", "anticipates", "may", "should", "expects", "believes",
"intends", "plans" or "targets" (including in their negative form
or other variations). By their nature, forward-looking statements
are inherently predictive, speculative and involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements. These factors include, but are not
limited to, the following: external cyber-attacks, insider threats
or supplier breaches; general economic and political conditions
including as a consequence of the COVID-19 pandemic, of the
jurisdictions in which the Group operates, including as a result of
Brexit, and changes to the associated legal, regulatory and tax
environments; increased competition; increased disintermediation;
levels of investment in network capacity and the Group's ability to
deploy new technologies, products and services; infrastructure
competitiveness; rapid changes to existing products and services
and the inability of new products and services to perform in
accordance with expectations; the ability of the Group to integrate
new technologies, products and services with existing networks,
technologies, products and services; the Group's ability to
generate and grow revenue; a lower than expected impact of new
or existing products, services or technologies on the Group's
future revenue, cost structure and capital expenditure outlays;
slower than expected customer growth, reduced customer retention,
reductions or changes in customer spending and increased pricing
pressure; the Group's ability to extend and expand its spectrum
position 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 my charge for, terminations and roaming minutes; the impact
of a failure or significant interruption to the Group's
telecommunications, networks, IT systems or data protection
systems; the Group's ability to realise expected benefits from
acquisitions, partnerships, joint ventures, franchises, brand
licences, platform sharing or other arrangements with third parties
or portfolio transformation; acquisitions and divestment of Group
businesses and assets and the pursuit of new, unexpected strategic
opportunities; the Group's ability to integrate acquired business
or assets; the extent of any future write-downs or impairment
charges on the Group's assets, or restructuring charges incurred as
a result of an acquisition or disposition; a developments in the
Group's financial condition, earnings and distributable funds and
other factors that the Board takes into account in determining the
level of dividends; the Group's ability to satisfy working capital
requirements; changes in foreign exchange rates; changes in the
regulatory framework in which the Group operates; the impact of
legal or other proceedings against the Group or other companies in
the communications industry and changes in statutory tax rates and
profit mix.
Furthermore, a review of the reasons why actual results and
developments may differ materially from the expectations disclosed
or implied within forward-looking statements can be found under
"Forward-looking statements" and "Principal risk factors and
uncertainties" in the Group's Annual Report for the financial year
ended 31 March 2022. The Annual Report can be found on the Group's
website (https://investors.vodafone.com/reports-information). All
subsequent written or oral forward-looking statements attributable
to the Company or any member of the Group or any persons acting on
their behalf are expressly qualified in their entirety by the
factors referred to above. No assurances can be given that the
forward-looking statements in this document will be realised. Any
forward-looking statements are made of the date of this
presentation. 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 (c) Vodafone Group 2022
-End-
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July 25, 2022 02:00 ET (06:00 GMT)
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