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Press Release -- May 14th, 2019
Source: Vodafone Group
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Vodafone announces results for the year ended 31 March 2019

Financial highlights
Group revenues of €43.7 billion. The loss for the financial year of €7.6 billion was primarily due to a loss on disposal of Vodafone India (following the completion of the merger with Idea Cellular) and impairments, as announced in November
Organic service revenue (excluding handset financing and settlements in Germany, IAS 18 basis) up 0.3%** (Q4 -0.6%**), as good performance in most markets offset increased competition in Spain and Italy and headwinds in South Africa
Organic adjusted EBITDA up 3.1%** (excluding handset financing and prior year settlements, IAS 18 basis), meeting guidance for ‘around 3%’ growth. This was supported by an operating expense decline of €0.4 billion in Europe and common functions
Free cash flow pre-spectrum of €5.5 billion (guidance basis), with sustained capital additions of €7.2 billion (16.0% of revenue)
Dividend per share rebased to 9.00 eurocents (15.07 eurocents in FY18), implying a final dividend of 4.16 eurocents; progressive future dividend policy
2020 financial guidance (IFRS15/16 basis): Adjusted EBITDA of €13.8 billion - €14.2 billion, implying low single digit organic growth. Free cash flow pre-spectrum of at least €5.4 billion

Operational highlights

Deepening customer engagement: record low mobile contract churn in H2, over 1.0 million net additions in fixed broadband and 1.1 million in convergence during the year, and stabilising commercial trends in Italy and Spain during Q4
Accelerating digital transformation: actions taken to deliver over half of the net operating expense reduction target for Europe & common functions of at least €1.2 billion by FY21, supporting a fourth consecutive year of EBITDA margin expansion
Improving asset utilisation: 4G/5G active network sharing agreements announced in Italy and Spain, unlocking aggregate mid-term savings of c.€200 million per annum, and UK agreement extended to 5G; cost synergy targets accelerated in India and Netherlands
Portfolio optimisation: completion of merger in India and successful €3.2 billion rights issue; sale of New Zealand for €2.1 billion; actively exploring options to monetise our towers in Italy, the Netherlands, Spain and the UK; on track to complete Liberty Global acquisitions in July.

Year ended 31 March 2019

Growth
Page 2019
IFRS 15
€m 2018
IAS 18
€m Reported
% Organic**
%
Group revenue 29 43,666 46,571 (6.2)
Operating (loss)/profit 29 (951) 4,299 NM
(Loss)/profit for the financial year 29 (7,644) 2,788 NM
Basic (loss)/earnings per share 29 (29.05c) 8.78c NM
Total dividends per share 41 9.00c 15.07c NM
Net debt 21 (27,033) (29,631) (8.8)
Alternative performance measures1
Group service revenue 10
39,220 41,066 (4.5) +0.3
Adjusted EBITDA 10
14,139 14,737 (4.1) +3.1
Adjusted EBIT 10
4,474 4,827 (7.3) +9.4
Adjusted earnings per share 20 5.26c 11.59c (54.6)
Free cash flow pre-spectrum 21
5,443 5,417 +0.5
Free cash flow 21
4,411 4,044 +9.1
Nick Read, Group Chief Executive, commented:

“We are executing our strategy at pace and have achieved our guidance for the year, with good growth in most markets but also increased competition in Spain and Italy and headwinds in South Africa. These challenges weighed on our service revenue growth during the year, and together with high spectrum auction costs have reduced our financial headroom. The Group is at a key point of transformation – deepening customer engagement, accelerating digital transformation, radically simplifying our operations, generating better returns from our infrastructure assets and continuing to optimise our portfolio. To support these goals and to rebuild headroom, the Board has made the decision to rebase the dividend, helping us to reduce debt and delever to the low end of our target range in the next few years.

We are making strong progress on the priorities I described in November, supporting our outlook for EBITDA growth in FY20, with improving momentum in H2. Together with the strategic and financial benefits of the Liberty Global transaction, which we expect to close in July, this underpins our ambition to grow free cash flow and improve shareholder returns going forwards.”

For further information:

Investor Relations
Telephone: +44 7919 990230

Media Relations
www.vodafone.com/media/contact

Notes:

* All amounts in this document 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. “Change at constant exchange rates” presents performance on a comparable basis in terms of foreign exchange rates only. Organic growth and change at constant exchange rates are alternative performance measures.

** Organic growth excluding the impact of UK handset financing and settlements in Germany and the UK. See page 52 for further details.

1. Alternative performance measures are non-GAAP measures that are presented to provide readers with additional financial information 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 44 for reconciliations to the closest respective equivalent GAAP measure and “Definition of terms” on page 57 for further details.

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