In the financial year ended 31 March 2024, in accordance with International Financial Reporting Standards ('IFRS'), we updated our financial reporting to recognise that Vodafone Spain and Vodafone Italy are discontinued operations. The results of discontinued operations are excluded from the Group's segment reporting.

Geographic performance summary

Note:

1. The results for the quarter ended 30 June 2023 have been re-presented to report the results of Vodafone Spain and Vodafone Italy as discontinued operations. The disposal of Vodafone Spain completed on 31 May 2024.   

Note:

1. Non-GAAP measure. See page 7 for more information. 

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Note:

1. Non-GAAP measure. See page 7 for more information. 

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Note:

1. Non-GAAP measure. See page 7 for more information.   

Growth

Total revenue decreased by 1.7% driven by lower service revenue and equipment sales.

Service revenue declined by 1.5% (Q4: +0.6%) as the cumulative impact of broadband and TV customer losses and lower regulated rates for terminating mobile calls, was partly offset by higher broadband ARPU. The quarter-on-quarter slowdown was primarily driven by the lapping of prior year price increases and Business performance. It also included a -1.2 percentage point impact (Q4: -0.9 percentage points) from the end to bulk TV contracting in Multi Dwelling Units ('MDUs').

Fixed service revenue decreased by 2.0% (Q4: -0.2%), as the impact of a lower broadband and TV customer base was only partly offset by broadband ARPU growth. The MDU transition had a -2.1 percentage point impact (Q4: -1.7 percentage points) on fixed service revenue growth in Q1. Excluding this impact, the quarter-on-quarter slowdown was primarily driven by lower broadband ARPU growth following the introduction of price increases in the same period last year.

Mobile service revenue declined by 0.8% (Q4: +1.8%), as the phasing of Business project revenue, including IoT, a reduction in Consumer ARPU growth due to greater promotional competition in Consumer low-end segment, and mobile termination rate cuts, were partly offset by a higher contract customer base.

Vodafone Business service revenue decreased by 1.7% (Q4: +1.0%) as good demand for fixed services, including cloud and security, was offset primarily by the phasing of project work, including IoT, as well as lower mobile ARPU from large corporate contract renewals.

Customers

In 2024, our market-leading broadband network quality position has once again been recognised in the latest independent network test results from Connect, CHIP and ComputerBild. However, the impact of broadband price increases last year continued to affect our commercial performance, with our broadband customer base declining by 55,000 in Q1 (Q4: -62,000), including the loss of 32,000 customers on our gigabit-capable network.

Ahead of changes to German TV laws, which took effect in July 2024, and changes to the practice of bulk TV contracting in MDUs, we have continued to migrate end users to new contracts at scale. We continue to expect to retain around 50% of the 8.5 million MDU TV households. By the end of June 2024, we had actively retained 2.6 million (Q4: 1.9 million) households. Our total TV customer base declined by 0.7 million during the quarter due to the MDU transition.

Our Consumer mobile contract customer base declined by 9,000 in Q1, as our increased focus on higher value branded and direct sales channels was offset by the anticipated loss of low-margin customers through resellers' channels. In addition, we saw 30,000 corporate account losses in Business due to some large contract tenders in the prior year. We added a further 2.0 million IoT connections, driven by continued demand from the automotive sector. Following our announced long-term national roaming agreement with 1&1, we have started technical user testing in anticipation of the customer migration.

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Note:

1. Non-GAAP measure. See page 7 for more information.   

Growth

Total revenue increased by 0.3% as higher service revenue and an appreciation of the pound sterling against the euro were offset by lower equipment revenue.

Service revenue increased by 2.0% (Q4: +6.8%). Organic service revenue growth was stable in Q1 (Q4: +3.6%) as growth in the Consumer segment was offset by a decline in Business. Lower growth in the quarter was driven by the lower inflation-linked price rises and the ongoing dilution of the back book from front book pricing in mobile.

Vodafone Business service revenue declined by 1.1% (Q4: +2.6%). Organic growth in Vodafone Business service revenue decreased by 3.0% (Q4: -0.5%), as growth in fixed was offset by a decline in mobile, primarily driven by lower inflation-linked price increases.  

Customers

In mobile, our Consumer contract customer base increased by 22,000 in the quarter. However, this was offset by large low-value contract disconnections in Business, resulting in our total contract customer base declining by 29,000 in Q1. Our digital prepaid sub-brand 'VOXI' continued to grow, with 17,000 customers added during the quarter.

In fixed, we continue to be one of the fastest growing broadband providers in the UK and our customer base increased by 44,000 in Q1. In July, we announced that we now offer the fastest speeds in more locations across the UK than any other major provider, covering 16.2 million households. We also provide the UK's fastest WiFi technology throughout the home with our Pro II broadband product.

Merger of Vodafone UK and Three UK

In June 2023, we announced a binding agreement to combine our UK business with Three UK to create a sustainable, and competitive third scaled network operator in the UK. Following the merger, which we expect to close around the end of the 2024 calendar year, Vodafone and CK Hutchison will own 51% and 49% of the combined business, respectively. Full details of the transaction can be found here: investors.vodafone.com/merger-of-vodafone-uk-and-three-uk.

In July 2024, we announced a new mobile network sharing agreement with Virgin Media O2 that extends the current agreement for more than a decade. Subject to the approval of the merger with Three UK, this new agreement will also support the enlarged network of the combined business, providing significant network improvements and giving customers more choice, better quality and greater coverage across the UK.

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Note:

1. Non-GAAP measure. See page 7 for more information.

Growth

Total revenue increased by 3.8%, due to higher service and equipment revenue.

Service revenue grew by 1.6% (Q4: +0.3%). Organic service revenue increased by 2.3% (Q4: +5.5%), supported by price actions in most markets, partly offset by lower mobile termination rates. The lower growth rate in the quarter reflected the phasing of Business project revenue, as well as a lower inflation-linked price increases in most markets. 

In Portugal, our Consumer and Business segments continued to perform well, also supported by our price actions. Service revenue in Ireland was impacted by lower mobile termination rates and lower Business fixed revenue, partially offset by a higher customer base in mobile and broadband. Service revenue in Greece increased, supported by annual contractual price increases and Business demand.

Vodafone Business service revenue increased by 2.5% (Q4: +8.1%). Organic growth in Vodafone Business service revenue was 3.3% (Q4: +12.2%), supported by digital services. The lower growth rate in Q1 was driven by higher project revenue in FY24.

Customers

Our good commercial momentum continued as we added 121,000 mobile contract and 12,000 broadband customers in Q1.

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Note:

1. Non-GAAP measure. See page 7 for more information.

Growth          

Total revenue increased by 45.6% to €0.7 billion, with strong service revenue growth partly offset by a significant devaluation of the local currency.

Despite currency devaluation, service revenue continued to grow in euro terms. Organic growth in service revenue in Turkey was 91.9% (Q4: +105.6%), driven by ongoing repricing actions to reflect the high inflationary environment and value accretive base management activities.

Vodafone Business service revenue increased by 71.1% (Q4: +20.3%). Organic growth in Vodafone Business service revenue was 112.6% (Q4: +102.2%), driven by digital services.

Customers

We maintained our good commercial momentum, adding 69,000 mobile contract customers during the quarter, including migrations from prepaid customers.

Hyperinflationary accounting in Turkey

Turkey was designated as a hyperinflationary economy on 1 April 2022 in line with IAS 29 'Financial Reporting in Hyperinflationary Economies'. Organic growth metrics exclude the impact of the hyperinflation adjustment and foreign exchange translation in Turkey. 

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Note:

1. Non-GAAP measure. See page 7 for more information.

Growth

Total revenue increased by 3.2% to €1.8 billion due to higher service and equipment revenue.

Service revenue increased by 1.6% (Q4: +1.2%). Organic growth in service revenue grew by 10.0% (Q4: +10.0%) supported by price increases in South Africa and continued strong growth in Egypt.

In South Africa, service revenue growth was supported by Consumer mobile, with growth accelerating as a result of prepaid price increases in the quarter, and good fixed line growth in Consumer and Business. Service revenue in Egypt grew strongly and remained above inflation in Q1. The growth in Egypt was supported by strong data growth, successful commercial campaigns, price increases implemented in the prior quarter and strong growth in our financial services product, 'Vodafone Cash'. In Vodacom's international markets, service revenue growth was supported by a higher customer base and strong M-Pesa and data demand. M-Pesa revenue grew by 11.0% on an organic basis, representing 26.9% of service revenue.

Vodacom Business service revenue grew by 2.3% (Q4: -0.4%). Organic growth in Vodacom Business service revenue increased by 8.4% (Q4: 7.8%), as good trading momentum in South Africa was supported by strong demand for digital services as well as mobile price increases.

Customers

In South Africa, we added 53,000 mobile contract customers in Q1. Across our active customer base, 77.9% now use data services. Our 'VodaPay' super-app continued to gain traction with 6.9 million registered users.

In Egypt, we added 137,000 contract customers and 0.6 million prepaid mobile customers in Q1. 'Vodafone Cash' now has 8.7 million active users with 0.5 million users added during the quarter.

In Vodacom's international markets, we added 0.9 million mobile customers with good growth in data customers supported by our innovative and new prepaid handset financing model. Our mobile customer base is now 55.1 million, with 66.8% of active customers using our data services. Our M-Pesa customer base now totals 22.2 million.

Further information on our operations in Africa can be accessed here: vodacom.com.

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 measures

Performance metrics

Organic growth

Organic growth presents performance on a comparable basis, excluding the impact of foreign exchange rates, mergers and acquisitions, the hyperinflation adjustment in Turkey and other adjustments to improve the comparability of results between periods.

Organic growth is calculated for revenue and profitability metrics, as follows:

-     Revenue;

-     Service revenue;

-     Mobile service revenue;

-     Fixed service revenue;

-     Vodafone Business service revenue;

-     M-Pesa revenue;

-     Group Adjusted EBITDAaL; and

-     Group Adjusted EBITDAaL margin

Whilst organic growth is not intended to be a substitute for reported growth, nor is it superior to reported growth, we believe that the measure provides useful and necessary information to investors and other interested parties for the following reasons:

-  It provides additional information on underlying growth of the business without the effect of certain factors unrelated to its operating performance;

-   It is used for internal performance analysis; and

-  It facilitates comparability of underlying growth with other companies (although the term 'organic' is not a defined term under GAAP and may not, therefore, be comparable with similarly-titled measures reported by other companies).

We have not provided a comparative in respect of organic growth rates as the current rates describe the change between the beginning and end of the current period, with such changes being explained by the commentary in this document. If comparatives were provided, significant sections of the commentary for prior periods would also need to be included, reducing the usefulness and transparency of this document.

Non-GAAP measures

Note:

1. The results for the quarter ended 30 June 2023 have been re-presented to report the results of Vodafone Spain and Vodafone Italy as discontinued operations. The disposal of Vodafone Spain completed on 31 May 2024.    

Non-GAAP measures

Notes:

1. The comparative period includes the results of Vodafone Hungary which, as previously reported, was sold in January 2023.

2. The comparative period includes the results of Vodafone Ghana which, as previously reported, was sold in February 2023.  

Non-GAAP measures

The table below provides the reconciliations of: (i) Group Adjusted EBITDAaL to Group Operating profit which is the closest equivalent GAAP measure, and (ii) Reported growth in Group Adjusted EBITDAaL to organic growth in Group Adjusted EBITDAaL.  

Definitions

Key terms are defined below. See page 7 for the location of definitions for non-GAAP measures.

1.  References to Vodafone are to Vodafone Group Plc and references to Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise stated. Vodafone, the Vodafone Speech Mark Devices, Vodacom and Together we can are trade marks owned by Vodafone. Other product and company names mentioned herein may be the trade marks of their respective owners.

2.  All growth rates reflect a comparison to the quarter ended 30 June 2023 unless otherwise stated.

3.  References to "Q1", "Q2", "Q3" and "Q4" are to the three months ended 30 June, 30 September, 31 December and 31 March. References to the "year", "financial year" or "FY25" are to the financial year ending 31 March 2025. References to "last year", "last financial year" or "FY24" are to the financial year ended 31 March 2024.

4.  Vodacom refers to the Group's interest in Vodacom Group Limited ('Vodacom') as well as its operations, including subsidiaries in South Africa, Egypt, DRC, Tanzania, Mozambique and Lesotho. 

5.  This document contains references to our and our affiliates' websites. Information on any website is not incorporated into this update and should not be considered part of this update.

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This document contains 'forward-looking statements' within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Group's financial condition, results of operations and businesses and certain of the Group's plans and objectives. In particular, such forward-looking statements include, but are not limited to, statements with respect to: the Group's portfolio transformation plan; expectations regarding the Group's financial condition or results of operations and the guidance for Adjusted EBITDAaL and Adjusted free cash flow for the financial year ending 31 March 2025; the announced agreement to combine Vodafone UK and Three UK; the mobile network sharing agreement with Virgin Media O2; the announced agreement to dispose of Vodafone Italy;  changes to German TV laws and the migration of users to individual TV customer contracts; expectations for the Group's future performance generally; the Group's share buyback programme; expectations regarding the operating environment and market conditions and trends, including customer usage, competitive position and macroeconomic pressures, price trends and opportunities in specific geographic markets; intentions and expectations regarding the development, launch and expansion of products, services and technologies, either introduced by Vodafone or by Vodafone in conjunction with third parties or by third parties independently; expectations regarding the integration or performance of current and future investments, associates, joint ventures, non-controlled interests and newly acquired businesses; the impact of regulatory and legal proceedings involving the Group and of scheduled or potential regulatory changes; certain of the Group's plans and objectives, including the Group's strategy.

Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as 'will', 'may', 'expects', 'believes', 'continue', 'intends', 'plans', 'further', 'ongoing', 'anticipates', or 'could'. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to the following: general economic and political conditions in the jurisdictions in which the Group operates and changes to the associated legal, regulatory and tax environments; increased competition; levels of investment in network capacity and the Group's ability to deploy new technologies, products and services, including artificial intelligence; the Group's ability to optimise its portfolio in line with its business transformation plan; evolving cyber threats to the Group's services and confidential data; rapid changes to existing products and services and the inability of new products and services to perform in accordance with expectations; the ability of the Group to integrate new technologies, products and services with existing networks, technologies, products and services; the Group's ability to generate and grow revenue; slower than expected impact of new or existing products, services or technologies on the Group's future revenue, cost structure and capital expenditure outlays; slower than expected customer growth, reduced customer retention, reductions or changes in customer spending and increased pricing pressure; the Group's ability to extend and expand its spectrum resources, to support ongoing growth in customer demand for mobile data services; the Group's ability to secure the timely delivery of high-quality products from suppliers; loss of suppliers, disruption of supply chains, shortages and greater than anticipated prices of new mobile handsets; changes in the costs to the Group of, or the rates the Group may charge for, terminations and roaming minutes; the impact of a failure or significant interruption to the Group's telecommunications, data centres, networks, IT systems or data protection systems; the Group's ability to realise expected benefits from acquisitions, partnerships, joint ventures, associates, franchises, brand licences, platform sharing or other arrangements with third parties, including the signed agreement to combine Vodafone's UK business with Three UK, the mobile network sharing agreement with Virgin Media O2 and the Group's strategic partnership with Microsoft; acquisitions and divestments of Group businesses and assets and the pursuit of new, unexpected strategic opportunities; the Group's ability to integrate acquired business or assets; the extent of any future write-downs or impairment charges on the Group's assets, or restructuring charges incurred as a result of an acquisition or disposition; developments in the Group's financial condition, earnings and distributable funds and other factors that the Board takes into account in determining the level of dividends; the Group's ability to satisfy working capital requirements; changes in foreign exchange rates; changes in the regulatory framework in which the Group operates; the impact of legal or other proceedings against the Group or other companies in the communications industry; and changes in statutory tax rates and profit mix, including the disposal of Vodafone Italy.

A review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found in the summary of our principal risks in the Group's Annual Report for the year ended 31 March 2024. The Annual Report can be found on the Vodafone Group's website (http://investors.vodafone.com/results). All subsequent written or oral forward-looking statements attributable to Vodafone or any member of the Vodafone Group or any persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in this document will be realised. Subject to compliance with applicable law and regulations, Vodafone does not intend to update these forward-looking statements and does not undertake any obligation to do so.

Copyright © Vodafone Group 2024  

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