Vodafone Announces Results for the Year Ended 31 March 2010
18 May 2010

Group Press Releases (2010)

2010 guidance exceeded, revenue trends improve in fourth quarter

Group revenue increased by 8.4% to £44.5 billion. Group service revenue increased by 8.9% to £41.7 billion. Q4 organic service revenue fell 0.2%(*)(1), a second successive quarterly improvement

Europe service revenue declined 3.5%(*) to £28.3 billion.

In Q4 service revenue declined 1.7%(*)(1), an improvement on Q3. Strong revenue growth continued in data and fixed broadband. In mobile, improvements were driven by data, enterprise and roaming, with voice usage and price trends broadly similar to the previous quarter Africa and Central Europe service revenue declined 1.2%(*) to £7.4 billion.

In Q4 service revenue increased by 2.4%(*), a 2.9 percentage point improvement on Q3, driven by strong revenue growth in Turkey (+31.3%(*)) and continued growth at Vodacom (+4.6%(*)) Asia Pacific and Middle East service revenue increased by 9.8%(*) to £6.1 billion. In Q4 service revenue increased by 5.0%(*), lower than the previous quarter due to the start-up of Indus Towers in Q1 2009.

India again generated quarter on quarter revenue growth. Its customer base now exceeds 100 million Group EBITDA was £14.7 billion, up 1.7%. The EBITDA margin declined in line with expectations Verizon Wireless posted another set of strong results for the financial year with service revenue growth of 6.3%(*)

Adjusted operating profit was £11.9 billion using guidance assumptions(2), exceeding revised guidance. On a reported basis adjusted operating profit was £11.5 billion

Although our operational performance in India since acquisition in 2007 has been strong, the award of six new national licences in the market one year after our entry and the resulting intense price competition have led to an impairment charge of £2.3 billion, partially offset by a £0.2 billion reversal related to Turkey

Adjusted earnings per share was 16.11 pence with growth impacted by the inclusion of a tax benefit and associated interest credit in the prior year. Excluding this benefit adjusted earnings per share increased by 6.6%

Free cash flow grew 26.5% to £7.2 billion, exceeding guidance and reflecting the benefits of a working capital improvement programme. Capital investment was maintained at prior year levels

Proportionate mobile customer base was 341 million with 8.5 million net additions during Q4
Positive results on our strategic priorities

In Europe we targeted commercial investment in high value and data customers, increased our range of value enhancement products and improved our device portfolio to increase competitiveness; in India we increased revenue market share; and the impact of our turnaround strategy is now evident in Turkey

Data revenue exceeded £4 billion for the first time, up 19.3%(*), with increased take up of data-enabled smartphones across Europe. The Group’s active data users now exceed 50 million

Fixed line revenue grew by 7.9%(*) to £3.3 billion with strong broadband customer growth and increased market share. The Group’s fixed broadband customer base is now 5.6 million

We have launched integrated services for enterprise customers across Europe. Vodafone Global Enterprise delivered organic revenue growth and now has a customer base of over 550 multinational businesses

£1 billion cost savings programme delivered one year ahead of schedule, partially used to finance growth initiatives and volume increases. New two-year £1 billion cost programme, announced in November 2009, now under execution

Final dividend +9%; 3 year dividend per share growth target of 7% per annum(3)

Final dividend per share 5.65 pence up 9% making total dividends 8.31 pence per share, up 7% reflecting strong underlying business performance and cash generation

Expect free cash flow to be between £6.0 billion and £7.0 billion per annum for the next three financial years, reflecting strong operational performance and delivery in emerging markets over this time period

Annual dividend per share growth target of no less than 7% for the next three financial years

We expect that total dividends per share will be no less than 10.18 pence per share for the 2013 financial year

Guidance for the 2011 financial year(3)

Adjusted operating profit expected to be in the range of £11.2 billion to £12.0 billion
Return to organic service revenue growth expected during 2011 financial year
Capital expenditure should be similar to 2010 financial year, adjusted for foreign exchange
Free cash flow expected to be in excess of £6.5 billion consistent with three year target