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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Vodafone Group Plc    VOD   GB00BH4HKS39

VODAFONE GROUP PLC

(VOD)
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Vodafone : Annual Report 2020

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06/01/2020 | 08:21am EDT

Vodafone Group Plc

Annual Report 2020

Welcome to our 2020 Annual Report

Overview

  • 01Our strategic framework

  • 02Highlights of the year

  • 04Chairman's statement

Strategic Report

  • 06Our business at a glance

  • 08Key trends shaping our industry

  • 10Our business model

  • 12Our stakeholders

  • 14Chief Executive's review

  • 16Our purpose

  • 20Our strategy

  • 26Our key performance indicators

  • 28Chief Financial Officer's review

  • 30Our financial performance

  • 40Sustainable business

  • 52Developing a new 'social' contract

  • 56Our people and culture

  • 62Risk management

Governance

  • 72Chairman's governance statement

  • 74Board leadership and Company purpose

  • 75Division of responsibilities

  • 76Board of Directors

  • 78Executive Committee

  • 80Board activities

  • 82Engaging with our stakeholders

  • 84Induction, development and evaluation

  • 87Nominations and Governance Committee

  • 90Audit and Risk Committee

  • 96Remuneration Committee

  • 100Executive pay at a glance

  • 102Remuneration Policy

  • 108Annual Report on Remuneration

  • 121Our US listing requirements

  • 122Directors' report

Financials

124Reporting our financial performance

125Directors' statement of responsibility

127Audit report on the consolidatedand Company financial statements

141Consolidated financial statements and notes

231Company financial statements and notes

Other information

  • 239Alternative performance measures

  • 248Shareholder information

  • 255History and development

  • 256Regulation

  • 265Form 20-F cross reference guide

  • 268Forward-looking statements

  • 269Definition of terms

  • 272Selected financial data

This document is the Group's UK Annual Report and is not the Group's Annual Report on Form 20-F thatwill be filed separately with the US SEC at a later date.

All amounts marked with an "*" represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. Organic growth is an alternative performance measure. See "Alternative performance measures" on page 239 for further details and reconciliations to the respective closest equivalent GAAP measure.

Who we are:

A leading technology communications company keeping society connectedand building a digitalfuture for everyone.

Sustainability is at the core of our purpose:

'We connect for a better future'

We are optimistic about how technology and connectivity can enhance the future and improve people's lives.

Through our business, we aim to build a digital society that enhances socio-economic progress, embraces everyone and does not come at the cost of our planet.

That is why we have committed toimprove one billion lives and halve our environmentalimpact by 2025.

Our strategic framework

OverviewStrategic Report Governance Financials

Other information

Why we exist:Our purpose

We connect for a better future

We aim to improve one billion lives and halve our environmental impact

What we do:Our strategy

A technology communications leader, enabling an inclusive and sustainable digital society

Focused on two scaled and differentiated regional platforms

Europe

Africa

A converged leader

Mobile data and payments leader

Supported by our leading Gigabit networks and scaled platforms

Our priorities:

Deepening customer engagementAccelerating digital transformationImproving asset utilisationOptimising the portfolio

improving loyalty and driving revenue growth across our customer segments

by being Digital 'First'

and leveraging our Group scale

through network sharing, capturing synergies and tower monetisation

to strengthen our market positions, simplify the Group and reduce ourfinancial leverage

20 Read more

23 Read more

24 Read more

25 Read more

...enabling us to earn a fair return on our investments

How we do it:Our approach

Sustainable business

40 Read more

Developing a new 'social' contract

52 Read more

The 'Spirit of Vodafone' - our people and culture

56 Read more

Risk management

62 Read more

Governance

72 Read more

Creating value for society and shareholders

Highlights of the year

Financial results summary1

Profit/(loss) for the year

Total dividends per share

Alternative performance measures1,2

Adjusted EBITDA

Pre-tax return on capital employed (controlled)

Strategic progress summary

Deepening customer engagementEurope mobile contract customers4Europe broadband customers4

Europe on-net Gigabit capable connections4Europe Consumer converged customers4Europe mobile contract customer churn Africa data users5

M-Pesa transaction volume5

Business fixed-line service revenue growthIoT SIM connections

Accelerating digital transformationEurope net opex saving

Improving asset utilisation

Average Europe monthly mobile data usage per customerEurope Tower sites (proportionate)

Sustainable business metrics

Women in management and leadership rolesAdditional female customers in Africa and TurkeyYoung people supported to access digital skills, learning and employment opportunitiesPurchased electricity from renewable sources

Group revenue

€m

44,974

43,666

46,571

47,631

Operating profit/(loss)

€m

4,099

(951)

4,299

3,725

Profit/(loss) for the year

€m

(455)

(7,644)

2,788

(6,079)

Basic earnings/(loss) per share

€c

(3.13)

(29.05)

8.78

(22.51)

Total dividends per share

€c

9.00

9.00

15.07

14.77

2020 IFRS 15/16

Group service revenue

€m

37,871

36,458

41,066

42,987

Adjusted EBITDA

€m

14,881

13,918

14,737

14,149

Adjusted earnings per share

€c

5.60

6.27

11.59

8.04

Free cash flow (pre-spectrum)

€m

5,700

5,443

5,417

4,056

Free cash flow

€m

4,949

4,411

4,044

3,316

Net debt

€m

(42,168)3

(27,033)

(29,631)

(29,338)

Net debt to adjusted EBITDA

ratio

2.83

1.9

2.0

2.1

Pre-tax return on capital employed (controlled)

%

6.1

5.3

-

-

Europe net opex saving6

€bn

0.4

0.4

0.3

-

Europe digital channel sales mix

%

21

17

11

9

Frequency of customer contacts

contacts per year

1.4

1.5

1.7

1.8

MyVodafone app penetration

%

65

62

60

55

Average Europe monthly mobile data usage per customer

GB

5.7

3.7

2.6

1.7

Europe Tower sites (proportionate)

thousand

c. 60

-

-

-

Europe on-net NGN broadband penetration4

%

30

28

28

26

M-Pesa customers5

millions

41.5

37.1

33.0

29.5

Women in management and leadership roles

%

31

31

30

29

Additional female customers in Africa and Turkey5,7

millions

9.3

9.4

4.8

3.2

Young people supported to access digital skills, learning and employment opportunities

thousands

708.2

533.7

-

-

Greenhouse gas emissions (Scope 1 and 2)

m tonnes CO2e

1.84

2.01

2.07

2.03

Purchased electricity from renewable sources

%

25.9

15.6

15.4

13.3

Network waste reused or recycled

%

99.9

-

-

-

Notes:

  • 1 IFRS 16 "Leases" was adopted on 1 April 2019 for our statutory reporting, without restating prior period figures. As a result, the Group's statutory results for the year ended 31 March 2020 are on an IFRS 16 basis, whereas the comparative periods for the years ended 31 March 2019, 2018 and 2017 are on an IAS 17 basis. Note 1 "Basis of preparation" of the consolidated financial statements explains the key differences for the Group's accounting for leases following the adoption of IFRS 16 and the financial impact on the Group's consolidated statement of financial position at 1 April 2019.

  • 2 Alternative performance measures are non-GAAP measures that are presented to provide readers with additional financialinformation that is regularly reviewed by management and should not be viewed in isolation or as an alternative to the equivalent GAAP measures. See "Alternative performance measures" on page 239 for further details.

  • 3 Adjusted to exclude derivative gains in cash flow hedge reserves, corresponding losses for which are not recognised on the bonds within net debt and which are significantly increased due to COVID-19 related market conditions.

2019 IFRS 15/IAS 17

2018 IAS 18/IAS 17

2017 IAS 18/IAS 17

2020

2019

2020

2019

  • 4 Including VodafoneZiggo.

  • 5 Africa including Safaricom.

    2018 2017

    2018 2017

  • 6 Europe and common function operating costs.

  • 7 Excludes Egypt.

  • 8 Excluding the impact of inactive data only SIM losses in Italy during Q3 and Q4 FY20.

Strategic highlights

OverviewStrategic Report Governance Financials

Other information

Accelerating digital transformation

0230 Read more

Leveraging newdigital technologies:

Radicalsimplification:Delivering a best-in-class cost structure:

21%

4.0 million

€0.4 billion

sales now in digital channels

65%

consumer customers on simplifiedspeed-tiered unlimited mobile data plans

Europe net opex saving achieved in FY20

MyVodafone app penetration

›€1.0 billion

9%

reduction in frequency of customer contact

new Europe net opex saving target announced for FY21-23reducing our total European opex baseby 20% over five years

Mobile network sharingagreements in place in all major European markets

European TowerCooperational as of May,aiming to drive efficiencies and increase tenancy ratiosacross our tower portfolio

Merger of Vodafone Italy Towers and INWIT complete€2.35 billion of cash received

24 Read more

Fast start made in capturing synergiesfrom the recently acquired Unitymedia & CEE cable assets

Successfully acquired Unitymedia & CEE cable assets, as well as Abcom in Albania

Completed the sale of New Zealand and Malta

Australia merger with TPG on-track to complete

Signed a memorandum of understanding with stc on potential Egypt sale for €2.2 billion

Simplification of the Groupnow largely completeFocused on two scaled and differentiated regional platforms -EuropeandAfrica

25 Read more

Optimising the portfolio

Disclaimer

Vodafone Group plc published this content on 01 June 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 June 2020 12:20:09 UTC

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Sales 2021 43 899 M 50 023 M 50 023 M
Net income 2021 2 179 M 2 483 M 2 483 M
Net Debt 2021 40 894 M 46 599 M 46 599 M
P/E ratio 2021 20,8x
Yield 2021 6,47%
Capitalization 37 490 M 42 664 M 42 719 M
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EV / Sales 2021 1,79x
Nbr of Employees 104 000
Free-Float 92,7%
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NameTitle
Nicholas Jonathan Read Group Chief Executive Officer & Executive Director
Gerard Johannes Kleisterlee Chairman
Margherita Della Valle Group Chief Financial Officer & Director
Johan Wibergh Group Chief Technology Officer
Renée Jo James Independent Non-Executive Director
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