Vodafone Group Plc
Annual Report 2024
Contents
Strategic report
1 | S FY24 highlights |
2 | S About Vodafone |
3 | S Operating in a rapidly changing industry |
4 | S Business model |
6 | S Key performance indicators |
- Chair's message
- Chief Executive's statement and strategic roadmap
- Mega trends
- Stakeholder engagement
- Our people strategy
- Our financial performance
32 S Purpose, sustainability and responsible business
Welcome to our 2024 Annual Report
We continue to use a simplified digital-first approach to our reporting, reflecting how we operate as a business. We provide summaries at the start of each key section, denoted by an S .
New shape of the Group
Following the announced sale of Vodafone Spain and Vodafone Italy as part of right-sizing our portfolio for growth, both businesses are now treated as discontinued operations, and therefore excluded from Group results for continuing operations. Prior periods have also been re-stated to reflect the new shape of the Group.
Environmental, Social and Governance ('ESG') reporting
This year we have incorporated both our full cyber security and climate-related risk reporting into the Annual Report. We also report against a number of voluntary reporting frameworks to help our stakeholders understand our sustainable business performance. Disclosures prepared in accordance with the Global Reporting Initiative ('GRI') and Sustainability Accounting Standards Board ('SASB') guidance can be found in our ESG Addendum and on our website. Our website also includes a wide range of reports which can be found on the links below.
34 | Our purpose | |
35 | - | Empowering People |
38 | - | Protecting the Planet |
43 | Contribution to Sustainable Development Goals | |
44 | Maintaining Trust | |
45 | - | Protecting data |
51 | - | Protecting people |
53 | - | Business integrity |
55 | Non-financial information | |
57 | Risk management |
Corporate website vodafone.com
ESG Addendum investors.vodafone.com/esgaddendum
SASB disclosure investors.vodafone.com/sasb
A-Z of ESG disclosures investors.vodafone.com/esga-z
Investor Relations website investors.vodafone.com
ESG Addendum Methodology document investors.vodafone.com/esgmethodology
Cyber security factsheet investors.vodafone.com/cyber
ESG ratings investors.vodafone.com/esg-ratings
63 | - | Long-term viability statement |
64 | - | Climate-related risk |
Governance
70 S Governance at a glance
72 | Chair's governance statement |
74 | Our governance structure |
75 | Division of responsibilities |
76 | Our Board |
References
Our Annual Report has been designed for easy navigation. We have cross-referenced relevant material and included the below navigation icons. Online content can be accessed by clicking links on the digital version, copying the website address into an internet browser, or scanning the QR code on a mobile device.
Read more | Click to see related | Click or scan to watch related | |
page reference | content online | video content online | |
79 | Our Executive Committee |
80 | Our Company purpose, values and culture |
81 | Board activities and principal decisions |
84 | Board effectiveness |
86 | Nominations and Governance Committee |
89 | Audit and Risk Committee |
95 | Technology Committee |
96 | ESG Committee |
98 | Remuneration Committee |
100 Remuneration Policy
- Annual Report on Remuneration
- US listing requirements
- Directors' report
Financials
- Reporting on our financial performance
- Directors' statement of responsibility
- Auditor's report
- Consolidated financial statements and notes
- Company financial statements and notes
Watch our video content
Our performance
FY24 update:
Margherita Della Valle, Chief Executive, Luka Mucic, Chief Financial Officer
Purpose pillars
Digital inclusion | Net zero |
Our governance
Our digital investor briefings
Vodafone | Digital services & | Vodafone | Social contract | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business | experiences | Technology |
Responsible business
Data privacy | Cyber security | Human rights | Responsible | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
taxation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other information
- Non-GAAPmeasures
- Shareholder information
- History and development
- Regulation
- Form 20-F cross reference guide
- Forward-lookingstatements
- Definition of terms
Jean-François van | David Nish, | Amparo Moraleda, | Simon Segars, | Luka Mucic, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Boxmeer, Chair | Senior Independent | Chair of the | Chair of the Technology | Chief Financial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director | ESG Committee | Committee | Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deborah Kerr, | Stephen Carter, | Delphine Ernotte Cunci, | Christine Ramon, | Hatem Dowidar, |
Non-Executive | Non-Executive | Non-Executive | Non-Executive | Non-Executive |
Director | Director | Director | Director | Director |
This document is the Group's UK Annual Report and is not the Group's Annual Report on Form 20-F that will be filed separately with the US SEC at a later date.
This report contains references to Vodafone's website, and other supporting disclosures located thereon such as videos, our ESG Addendum and Methodology document, and our cyber security factsheet, amongst others. These references are for readers' convenience only and information included on Vodafone's website is not incorporated in, and does not form part of, this Annual Report.
1 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
FY24 highlights
Progress against our strategic priorities | FY24 results |
We have made good initial progress against our | Our financial performance was slightly ahead |
strategic priorities, which are focused on | of expectations for the year. |
Customers, Simplicity and Growth. | |
We have right-sized our European portfolio for growth. | |
Organic service revenue growth1 | |
During the year we announced: |
- UK: merger of Vodafone UK and Three UK | |
€8bn | - Italy: sale of Vodafone Italy to Swisscom |
€5bn | - Spain: sale of Vodafone Spain to Zegona |
We are now focused on growing telecommunications markets, where we have strong assets and good scale.
Progress against our strategic priorities:
Customers
Consumer NPS | Detractors | Revenue |
market share |
Germany
UK
Other Europe
South Africa
Key: Improved Deteriorated Stable
Network quality
Very good reliability in all European markets. German cable network quality recognised in 4 independent tests
Simplicity
Europe opex savings1 | Productivity1 | ||||
€0.4bn | c.5k | ||||
(FY23 and FY24) | role reductions | ||||
Shared operations NPS | Employee engagement | ||||
+85% | +75% | ||||
Growth2 | |||||
Organic service | B2B organic service | ||||
revenue growth | revenue growth | ||||
+6.3% | +5.0% | ||||
Organic adjusted | Adjusted free cash flow | ||||
EBITDAal growth | €2.6bn | ||||
+2.2% |
Pre-tax return on capital
employed
+7.5%
Notes:
- Includes Vodafone Italy and Vodafone Spain.
- These are non-GAAP measures. See page 235 for more information.
6.6% | 6.3% | 7.1% | ||
5.4% | ||||
3.4% | 3.0% | 4.2% | 3.6% | 4.0% |
1.6% | ||||
Q4 FY23 | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 |
Group | Group excluding Turkey |
- All segments growing in FY24
- Group growth accelerated in Q4
- Vodafone Business +5.4% growth in Q4
Adjusted EBITDAaL
€14.7bn | +2.2%2 | ||
(2.3) | €12.4bn | €11.0bn | |
33.0% | 30.0% | ||
FY23 | Italy & | FY23 | FY24 |
EBTDAaL | Spain | EBTDAaL | EBTDAaL |
(reported) | (re-presented) | (reported) |
- On a like-for-like basis +2.2% growth in FY24
- EBITDAaL margin impacted by higher energy costs
Return on capital employed ('ROCE')3
6.8% | 1.4pp | 8.2% | 7.5% | |||
FY23 | Italy & | FY23 | FY24 |
(reported) | Spain | (re-presented) (reported) |
Pre-tax ROCE
- Higher pre-tax ROCE under the new footprint
- Lower operating profit impacting year-over-year
Full year dividend: 9.0 eurocents per share
Notes:
- Organic growth. See page 235 for more information.
- Organic Adjusted EBITDAaL growth.
- This is a non-GAAP measure. See page 235 for more information..
Click or scan to watch our Group Chief | Read more about our | |||||
Executive, Margherita Della Valle | financial performance | |||||
and Chief Financial Officer provide | in FY24 on pages | |||||
an update on our FY24 results: | 21 to 31 | |||||
investors.vodafone.com/videos |
2 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
About Vodafone
We are a leading European and African telecommunications company transforming the way our customers live and work through our technology, platforms, products and services.
Where we operate
We operate mobile and fixed networks in 15 countries and have stakes in a further seven countries through our joint ventures and associates. We also partner with mobile networks in 43 countries outside our footprint. Our portfolio of local markets is supported by corporate services and shared operations, which deliver benefits through scale and standardisation.
How we are structured and what we sell
Our business comprises of infrastructure assets, shared operations, growth platforms and retail and service operations. Our retail and service operations are split across three broad business lines: Vodafone Business, Europe Consumer and Africa Consumer.
Core connectivity products and services in fixed and mobile account for the majority of our revenue. However, our portfolio also includes high return growth areas that leverage and complement our core connectivity business, such as digital services, the Internet of Things ('IoT') and financial services. We market and sell through digital and physical channels.
Europe1 | Africa |
9 countries
98m mobile customers
17m fixed customers
4m converged customers
6 countries
157m mobile customers
46m FinTech users
Vodafone Business
€8bn
service revenue
We serve private and public sector customers of all sizes with a broad range of connectivity services, supported by our dedicated global network. We have unique scale and capabilities, and are expanding our portfolio of products
and services into growth areas such as unified communications, cloud & security, and IoT.
Europe
Consumer1
€16bn
service revenue
We provide a range of market leading mobile and fixed line connectivity services in our European markets. Our converged plans combine these offerings, providing simplicity and better value for our customers.
Other value added services include our Consumer IoT propositions, as well as security and insurance products.
Africa
Consumer
€5bn
service revenue
We provide a range of mobile services. The demand for mobile data is growing rapidly driven by the lack of fixed broadband access and by increased smartphone penetration. Together with Vodacom's VodaPay super-app and the M-Pesa payment platform, we are the leading provider of financial services, as well as business and merchant services in Africa.
Note:
1. Includes Turkey.
3 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
Operating in a rapidly changing industry
Our governance
Our business is underpinned by our strong governance and risk management framework.
Mega trends
The long-term trends that are shaping our industry and driving new growth opportunities.
Governance
Connected devices
The Board held seven scheduled meetings this year to discuss key strategic matters, our purpose and culture, our people and stakeholder interests. The Nominations and Governance Committee evaluates the composition and performance of the Board and ensures an appropriate balance of independence, skills, knowledge, experience and diversity. The Audit and Risk Committee provides effective governance over the appropriateness of financial reporting of the Group, including the adequacy of related disclosures, the performance of the internal audit function and the external auditor and oversight of the Group's systems of internal control, risk management framework and compliance activities. The Technology Committee supports the Board with fulfilling the technology strategy for the Group, including assessing risks and
Click or scan to watch our Vodafone Business investor briefing: investors.vodafone.com/ vtbriefing
- A wide range of new devices, across all sectors and applications, are increasingly being connected to the internet.
- The Internet of Things ('IoT') is expected to create huge value for businesses and society, unlocking new efficiencies by delivering real-time information.
- As the number of IoT devices increases, physical assets are also communicating with each other in real-time and new digital markets are being established giving birth to the 'Economy of Things'.
exploring new innovations for future growth.
The ESG Committee oversees our Environmental, Social and Governance ('ESG') programme, including our purpose, sustainability and responsible business practices, and our contribution to the societies we operate in under our social contract.
The Remuneration Committee advises the Board on policies for executive remuneration and reward packages for the Chair, executives and senior management team.
Click or scan to watch our Non- | Read more | |||||||||||
Executive Directors speak about | on pages 70 to 99 | |||||||||||
their roles in short video interviews: | ||||||||||||
investors.vodafone.com/videos | ||||||||||||
Digital payments
- Businesses demand reliable and secure mobile | |||||||||||
connectivity as transactions migrate to online | |||||||||||
channels and apps. | |||||||||||
Click or scan to watch | - In Africa, increasing smartphone penetration | ||||||||||
our Digital Services | drives the adoption of digital payments. | ||||||||||
investors.vodafone.com/ | - Network operators and a range of FinTech | ||||||||||
investor briefing: | startups are using mobile payment | ||||||||||
digital-services | |||||||||||
applications to sell additional financial services | |||||||||||
focused products such as insurance and loans. |
Adoption of cloud technology
Risk management
Risks are not static and as the environment changes, so do risks - some diminish or increase, while new risks appear. We continuously review and improve our risk processes in order to ensure that the Company has the appropriate level of support in meeting its strategic objectives.
Our risk framework clearly defines roles and responsibilities, and sets out a consistent end-to-end process for identifying and managing risks. We have embedded the risk framework across the Group as this allows us to take a holistic approach and to make meaningful comparisons. Our approach is continuously enhanced,
Click or scan to watch our Vodafone Technology investor briefing: investors.vodafone.com/ vtbriefing
- The cloud is increasingly utilised by businesses and consumers as a more efficient way of sharing compute capacity and services.
- SMEs increasingly understand the benefits of cloud technology but lack the technical expertise or direct relationships with cloud specialists to make an effective transition to the cloud.
- This presents an opportunity for network operators to play a role as a partner to support smaller businesses on their digital transformation journeys.
enabling more dynamic risk detection, modelling of risk interconnectedness and use of data, all of which are improving our risk visibility and our responses.
Our Board oversees principal and emerging risks, which are reported to the various management committees and the Board throughout the year. Additionally, risk owners are invited to present in-depthreviews to ensure that risks are continuously monitored, and appropriate treatment plans are implemented to bring each risk within an acceptable tolerance level.
Click or scan to watch our privacy and | Read more | ||||||||||||||||
cyber experts explain how we protect | on pages 57 to 63 | ||||||||||||||||
customer data and our networks: | |||||||||||||||||
investors.vodafone.com/videos |
Generative artificial intelligence ('Gen AI')
- The full range of potential applications and | |||||||||||||||
long-term impacts of Gen AI are only starting | |||||||||||||||
to be understood. | |||||||||||||||
Click or scan to learn | - The technology is widely expected to drive | ||||||||||||||
more about how Vodafone | significant economic benefit globally through | ||||||||||||||
works with artificial | productivity increases and new business | ||||||||||||||
intelligence ('AI'): | opportunities. | ||||||||||||||
investors.vodafone.com/ | |||||||||||||||
artificial-intelligence | - Potential applications include AI-generated | ||||||||||||||
content for marketing campaigns, customer | |||||||||||||||
care and back-office activities. | |||||||||||||||
Read more | |||||||||||||||
on pages 10 to11 | |||||||||||||||
4 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
Business Model
Our investment case
We operate in growing markets, where we hold strong positions with good local scale. We have a sustainable and predictable financial profile, and have compelling structural drivers in Vodafone Business, Africa and in our portfolio of investments.
1 Strong positions in growing markets
2Focus on driving operational excellence
3Sustainable and predictable financial profile
4Structural growth drivers
Attractive markets | Germany | UK | Other Europe | Africa | ||||||||||||
Market size | €57bn | €56bn | €28bn1 | €18bn | ||||||||||||
+3.2% | +3.4% | +3.1% | +6.8% | |||||||||||||
Majority three player markets, all growing over the last three years | ||||||||||||||||
Strong assets | ||||||||||||||||
Vodafone revenue mix | 38% | 19% | 23%2 | 20% | ||||||||||||
Service revenue growth3 | 0.2% | 5.0% | 4.2% | 9.2% | ||||||||||||
Vodafone growing faster than the market in most regions | ||||||||||||||||
Right-sized for growth & reorganised for operational excellence | ||||||||||||||||
Europe1 | Africa4 | Business | Investments | |||||||||||||
- 9 countries | - 6 countries | - Connectivity | - Operations | |||||||||||||
- 98m mobile | - 157m mobile | - Communications | - Infrastructure | |||||||||||||
customers | customers | services | - Innovation | |||||||||||||
- 17m fixed customers | - 46m FinTech users | - Cloud & Security | - Partner Markets | |||||||||||||
- Internet of Things | (43 countries) | |||||||||||||||
Shared Operations | - Technology and | - Roaming and carrier | - Network services | ||
- Procurement | |||||
operations | services | ||||
Cash flows | Robust balance sheet | Attractive returns | |||
- Growing free cash flow per | - Long dated and low cost debt | - Secure and growing dividend | |||
share | 2.25-2.75x | programme | |||
- Long-term share buyback |
target leverage range
Vodafone Business | Africa | Investments & innovation |
Digital service growth | Financial service growth | |
+11% | +20% |
Notes:
- Includes Turkey.
- Includes Turkey and Common Functions.
- Organic growth. See page 235 for more information.
- Excludes Safaricom.
5 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
Clear and consistent strategic priorities
To drive operational excellence across the Group.
Creating long-term value for our stakeholders
We are committed to delivering value and building strong relationships with all of our stakeholders.
Our priorities
Customers
- Delivering the simple and predictable experience our customers expect
- Getting the basics right and refocusing our resources towards improving customer experience
Simplicity
- Become a simple and faster business
- Simplify our operations and executing on our cost programmes to improve profitability
Growth
- Right-sizingthe portfolio for growth
- Significant opportunity to grow in:
- Business
- Africa
- Vodafone Investments
Well positioned to take advantage of the key mega trends shaping our industry
Our customers | 310m | 1 | 22m | |||
mobile customers | broadband | |||||
18m | customers1 | |||||
1 | ||||||
TV customers | ||||||
Our people | 93,000 | 75% | ||||
employees and | employee | |||||
contractors | engagement index | |||||
Our suppliers | 8,000 | €19bn | ||||
suppliers | spend | |||||
€6.3bn | ||||||
capital additions | ||||||
Our local | €40m | |||||
communities and | ||||||
non-governmental | donated in contributions and in-kind | |||||
organisations | services, combined with our technology, to | |||||
improve health and education, and provide | ||||||
('NGOs') | ||||||
emergency response across 21 countries. | ||||||
and regulators | €2.6bn | €9.3bn | ||||
Government | total direct | total tax and | ||||
contribution across2 | economic | |||||
63 | contribution2 | |||||
2 | ||||||
markets | ||||||
Our investors | Secure and | Sustainable | ||||
growing | returns | |||||
dividend | ||||||
Read more | Notes: | ||||
Read more | on pages 12-14 | 1. | Includes VodafoneZiggo and Safaricom. | ||
on pages 9 to 11 | 2. | FY23. |
6 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
Financial and non-financial performance
Key Performance Indicators
Our progress
We measure our success by tracking key performance indicators that reflect our strategic, operational and financial progress and performance.
Financial results summary1
2024 | 2023 | 2022 | |||||
Group revenue | €m | 36,717 | 37,672 | 37,010 | |||
Group service revenue | €m | 29,912 | 30,318 | 30,207 | |||
Operating profit | €m | 3,665 | 14,451 | 5,740 | |||
Adjusted EBITDAaL2 | €m | 11,019 | 12,424 | 12,693 | |||
Profit for the financial year (continuing operations) | €m | 1,570 | 12,582 | 2,588 | |||
Basic earnings per share (continuing operations) | €c | 4.45 | 43.66 | 7.07 | |||
Adjusted basic earnings per share2 | €c | 7.47 | 11.28 | 10.18 | |||
Cash inflow from operating activities | €m | 16,557 | 18,054 | 18,081 | |||
Adjusted free cash flow2 | €m | 2,600 | 4,139 | 4,560 | |||
Net debt2 | €m | (33,242) | (33,250) | (39,711) | |||
Total dividends per share | €c | 9.00 | 9.00 | 9.00 |
Performance against our strategic priorities1
Customers
Consumer NPS
Germany
UK
Other Europe
South Africa
Detractors
Germany
UK
Other Europe
South Africa
2024
2024 | |||
Simplicity | |||
Europe opex savings3 (FY23 and FY24) | €bn | 0.4 | |
Employee engagement index4,5 | % | 75 | |
Shared operations NPS4 | % | 85 | |
Productivity (role reductions)3 | thousand | c.5 |
2024 |
Growth2 |
Revenue market share
Germany
UK
Other Europe
South Africa
Key: Improved Deteriorated Stable
Network quality
Very good reliability in all European markets. German cable network quality recognised in 4 independent tests.
Notes:
- The results for the year ended 31 March 2024 exclude Vodafone Spain and Vodafone Italy and therefore, except as otherwise described, the results for the year ended 31 March 2023 and 31 March 2022 have been re-presented to reflect that.
- These are non-GAAP measures. See page 235 for more information.
- Includes Vodafone Italy and Vodafone Spain.
Organic service revenue growth | % | 6.3 |
B2B organic service revenue growth | % | 5.0 |
Organic adjusted EBITDAaL growth | % | 2.2 |
Adjusted free cash flow | €bn | 2.6 |
Pre-tax return on capital employed | % | 7.5 |
- As at May 2024.
- The employee engagement index is based on an average index of responses to three questions: satisfaction working at Vodafone; experiencing positive emotions at work; and recommending us as an employer.
7 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
A purpose-led, sustainable and responsible business
We want to enable a digital, inclusive and sustainable society. To underpin the delivery of our purpose, we ensure that we operate in a responsible way. Acting lawfully and with integrity is critical to our long-term success.
Empowering People1,2 | 2024 | 2023 | 2022 | |
4G population coverage (outdoor 1Mbps) - Europe2 | % | 99 | 99 | 99 |
4G population coverage (outdoor 1Mbps) - Africa3 | % | 74 | 70 | 66 |
4G population coverage (outdoor 1Mbps) - Group2 | % | 85 | 83 | 80 |
Cumulative V-Hub unique visitors4 | million | 3.3 | 2.3 | 3.65 |
Customers connected to our financial inclusion services6 | million | 66.2 | 60.7 | 54.5 |
Protecting our Planet1,2 | 2024 | 2023 | 2022 | |
Energy use | ||||
Total energy use | GWh | 5,217 | 5,052 | 4,926 |
Mobile and fixed access network and technology centres energy use | % | 93 | 93 | 93 |
Percentage of purchased electricity from renewable sources | % | 84 | 75 | 69 |
Percentage of purchased electricity from renewable sources in Europe | % | 100 | 100 | 93 |
Greenhouse gas emissions ('GHGs') | ||||
Total Scope 1 and Scope 2 GHG emissions (market-based method) | m tonnes CO2e | 0.69 | 0.91 | 1.02 |
Total Scope 3 GHG emissions | m tonnes CO2e | 6.07 | 6.92 | 6.91 |
Total customer emissions avoided due to our green digital solutions7 | m tonnes CO2e | 32.8 | 24.9 | 13.5 |
Waste | ||||
Total network waste (including hazardous waste) | metric tonnes | 6,205 | 7,716 | 6,367 |
Network waste reused or recycled | % | 96 | 95 | 96 |
Maintaining Trust1 | 2024 | 2023 | 2022 | |
Our people | ||||
Average number of employees and contractors | thousand | 93 | 91 | 90 |
Employee turnover rate (voluntary) | % | 9 | 12 | 14 |
Women on the Board | % | 42 | 54 | 50 |
Women in management and senior leadership roles | % | 35 | 33 | 31 |
Women as a percentage of employees | % | 39 | 39 | 39 |
Health & safety | ||||
Number of lost-time incidents - employees and contractors | # | 18 | 13 | 9 |
Lost-time incident rate per 200,000 hours8 | # | 0.02 | 0.01 | 0.01 |
Code of Conduct | ||||
Completed 'Doing What's Right' employee training5 | % | 94 | 92 | 89 |
Number of 'Speak Up' reports5 | # | 649 | 505 | 642 |
Tax and economic contribution | ||||
Total tax and economic contributions9 | €bn | - | 9.3 | 8.2 |
Responsible supply chain | ||||
Total spend10 | €bn | 19 | 21 | 20 |
Number of direct suppliers10,11 | thousand | 8 | 9 | 9 |
Number of site assessments conducted collectively by JAC12 initiative members | # | 150 | 83 | 71 |
Notes:
- Information relating to 2023 and 2022 has been restated to reflect portfolio changes completed during FY23 and FY24.
- Operations in Italy and Spain have been classified as discontinued operations in line with 'IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations'. All remaining operations are reported as continuing operations. This disaggregation of information has been reflected in all comparative periods.
- Based on coverage in Africa, including Egypt.
- Includes 100% of data relating to Vodafone Ziggo.
- Includes Vodafone Italy and Vodafone Spain.
- Includes 100% of data relating to Safaricom.
- The avoided emissions for 2022 have been restated to 13.5 million tonnes CO2e (previously 15.6 million tonnes CO2e) resulting from the incorrect calculation of emissions avoided in fleet management solutions.
- Total Recordable Incident Rate ('TRIR') is an industry-standard calculation that is based on the assumption that 100 employees work a combined 200,000 hours p.a (equivalent to 40 hours per week, for 50 weeks of the year per employee).
- Includes direct taxes, non-taxation based revenue mechanisms, such as payments for the right to use spectrum, and indirect taxes collected on behalf of governments around the world, excludes joint ventures and associates. The FY24 figure will be finalised during FY25. For more information, refer to our Tax and Economic Contribution reports, available at: vodafone.com/tax.
- Unique suppliers based on suppliers' ultimate parent company.
- Excludes Vodafone Automotive.
- Joint Alliance for CSR.
8 | Vodafone Group Plc | Strategic report | Governance | Financials | Other information |
Annual Report 2024 |
Chair's message
Reshaping Vodafone for growth
This has been a year of significant change as we aim to deliver our purpose to connect for a better future. We have taken all the steps needed to transform our portfolio and good progress has been made with our strategic priorities of Customers, Simplicity and Growth.
Portfolio transformed, good initial strategic progress
As I said last year, the Company has underperformed and further change is needed to drive sustainable value creation for our shareholders. The Board and I have been pleased with Margherita's pace and decisiveness over the last year and we have seen the first impacts of our focus on our new strategic priorities of Customers, Simplicity and Growth. Whilst there is much more to do, we are making faster and more decisive commercial decisions, customer satisfaction has seen broad-based improvements, and we have moved towards a commercial model for our shared operations. Vodafone Business growth is accelerating as we are strengthening our position as the leading platform for businesses, supported by unique strategic partnerships. We are also forging partnerships that leverage our existing strengths, unlock value and accelerate growth.
The shape of the Group has also changed as we focus on markets where we can grow and earn returns on our investments in excess of our cost of capital; this was not possible organically in UK, Spain or Italy. With our reshaped footprint, Vodafone will have strong positions with good local scale in each of our markets, and this will ensure we can deliver sustainable and predictable growth and a step-up in returns.
Board composition
Following an extensive and rigorous search, I was delighted to welcome Luka Mucic as Chief Financial Officer and an Executive Director of the Board in September 2023. Luka brings substantial experience in finance, international leadership and enterprise & technology solutions. Luka has been very supportive of the transformation of Vodafone and I am confident that his track record and expertise will aid the delivery of our strategic priorities.
We have also welcomed Hatem Dowidar, Group Chief Executive Officer of e&, to our Board as a Non-Executive Director from 19 February 2024. Hatem represents our largest shareholder and brings extensive telecommunications experience. He also knows us well after holding various Vodafone leadership positions prior to joining e&. Hatem's appointment to the Board marks the next phase of our strategic relationship with e&.
Last year, the Board approved the creation of a Technology Committee as a Committee of the Board. I have been pleased to see the Committee and its expert membership bring additional insight to the Board and Vodafone, in its first year overseeing the Group's technology strategy and considering how it supports the overall Company strategy today, and in the future.
FY24 financial performance & new capital allocation framework
Our financial results for FY24 were ahead of expectations and we achieved our financial guidance for the year.
Total revenue declined 2.5% to €36.7 billion, with Group organic service revenue growing by 6.3%1 this year. This was driven by growth in Europe, Africa and Business.
Our reported financials were also impacted by adverse currency movements during the year.
Adjusted EBITDAaL increased by 2.2%1 on an organic basis as good service revenue progress was partially offset by higher energy costs and inflationary impacts. Adjusted free cash flow was €2.6 billion1, reflecting lower adjusted EBITDAaL. Group return on capital employed
Notes:
- This is a non-GAAP measure. See page 235 for more information.
- Proforma ratio after adjusting for foreign exchange and M&A.
increased as a result of the right-sizing of our portfolio, however decreased year-on-year to 7.5% on a pre-tax basis due to lower operating profit1. Group operating profit decreased by 74.6% to €3.7 billion, primarily reflecting business disposals in the prior financial year and adverse foreign exchange rate movements, and as a result basic earnings per share decreased to 7.47 eurocents. Our balance sheet position remains robust, with Group leverage now at 2.5x2.The Board has declared a total dividend per share of 9.0 eurocents with respect to FY24, implying a final dividend per share of 4.5 eurocents, which will be paid on 2 August 2024 following shareholder approval at our AGM.
In March 2024, we announced a new capital allocation framework as the execution of our portfolio right-sizing has provided the necessary clarity over the future shape of the Group. Under our new capital allocation framework, we will continue our disciplined investment approach, supporting our network, strategy and growth levers; adopt a new lower target leverage range with built-in flexibility; re-base the FY25 dividend to 4.5 eurocents per share to reflect the reshaped Group, with an ambition to grow over time; and return surplus capital to shareholders through share buybacks.
Connectivity drives competitiveness
As the economies and societies in Vodafone's markets continue to evolve, our role in providing digital connectivity and solutions grows in importance, not only for our customers but for policymakers too. Our digital services help to improve lives, transform industrial productivity, drive growth and secure infrastructure. We remain firmly committed to supporting Europe's and Africa's digital ambitions for the benefit of their citizens and businesses.
In Africa, connectivity that enables our customers to access the internet and make mobile money transfers is fundamental to the economic development of the six countries in which we operate. As more customers wish to move to more advanced technologies, Vodafone is working with international partners and multilateral institutions to tackle the challenge of smartphone affordability.
In Europe, a 'connectivity chasm' is opening with regions like North America and Asia. There is a risk that in the future Europeans will have inferior access to the latest digital innovations simply because of outdated public policies. As a result, Europe will lack the advanced connectivity that is essential to its global competitiveness.
Though European policymakers have made some progress, the telecommunications market in Europe remains highly fragmented and more needs to be done to create the right environment for investing in next-generation connectivity. With structurally low returns on capital in European markets and its wider importance to competitiveness, connectivity must be a priority for European politicians as they seek to reverse the continent's declining productivity and share of global output.
This is an important year for Europe. European Parliament elections and a new European Commission give political leaders the rare chance to change course and return the continent to its position as a global economic leader. They must take it.
The year ahead
On behalf of the Board, I would like to thank all our colleagues across the Group who have continued to work tirelessly to support our transformation as we focus on our customers, become a simpler business, and accelerate growth.
As we enter FY25, I am confident that Margherita and her management team will continue to make progress on our strategic priorities. The 'reshaped Vodafone' will be a best-in-class telco in Europe & Africa and the leading platform for businesses, ultimately delivering value for all our stakeholders.
Jean-François van Boxmeer
Chair
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Vodafone Group plc published this content on 24 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 May 2024 12:27:06 UTC.