# Vodafone to cut 11,000 jobs, with action plan already underway

- Link: https://www.directorstalkinterviews.com/vodafone-to-cut-11000-jobs-with-action-plan-already-underway/4121118844
- Published: 2023-05-16T08:09:10+01:00
- Author: Amilia Stone

**[Vodafone Group Plc](https://www.directorstalkinterviews.com/ftse-company/vodafone-group/vod.l)**(
[LON:VOD](https://www.directorstalkinterviews.com/ftse-company/vodafone-group/vod.l))
has announced its FY23 preliminary results.

> **Margherita Della Valle, Group Chief Executive, commented: **
> _“Today I am announcing my plans for Vodafone. Our performance has not been good
> enough. To consistently deliver, Vodafone must change._
> _My priorities are customers, simplicity and growth. We will simplify our organisation,
> cutting out complexity to regain our competitiveness. We will reallocate resources
> to deliver the quality service our customers expect and drive further growth from
> the unique position of Vodafone Business.”_

| **Financial results** |  | **FY23** | **FY22** | **_Change_** | 
| Page | **€m ** | **€m ** | **_%_** | 
| Group revenue | 7 | 45,706 | 45,580 | _0.3 _ | 
| Group service revenue | 7 | 37,969 | 38,203 | _2.2*_ | 
|  |  |  |  |  | _ _ | 
| Operating profit^(1) | 7 | 14,296 | 5,813 | _145.9 _ | 
| Adjusted EBITDAaL^(2) | 7 | 14,665 | 15,208 | _(1.3)*_ | 
| Profit for the financial year^(1) | 7 | 12,335 | 2,773 | _ _ | 
|  |  |  |  |  | _ _ | 
| Basic earnings per share^(1) | 19 | 42.77c | 7.71c | _ _ | 
| Adjusted basic earnings per share^(1,2) | 19 | 11.45c | 11.68c | _ _ | 
|  |  |  |  |  | _ _ | 
| Total dividends per share | 22 | 9.00c | 9.00c | _ _ | 
|  |  |  |  |  | _ _ | 
| Cash inflow from operating activities | 19 | 18,054 | 18,081 | _(0.1)_ | 
| Adjusted free cash flow^(2) | 20 | 4,842 | 5,437 | _ _ | 
|  |  |  |  |  | _ _ | 
| Net debt^(2) | 21 | (33,375) | (41,578) | _+19.7 _ | 
|  |  |  |  |  |  | 
| * represents organic growth. See page 3. ǀ 1. FY22 re-presented for the reclassification of Indus Towers. See page 31. ǀ 2. Non-GAAP measure. See page 36. |

·   FY23 performance slowdown in line with expectations

·   Germany remains under pressure with -1.6%* service revenue growth and -6.1%*
adjusted EBITDAaL growth

·   Good performance in Vodafone Business with 2.6%* service revenue growth

·   Group revenue increased by 0.3% to €45.7 billion driven by growth in Africa 
and higher equipment sales, offset by lower European service revenue and adverse
exchange rate movements

·   Adjusted EBITDAaL declined by 1.3%* to €14.7 billion due to higher energy costs,
and commercial underperformance in Germany

·   Gain on disposal of Vantage Towers supporting significant increase in operating
profit and basic EPS

·   Adjusted free cash flow of €4.8 billion, reflecting lower adjusted EBITDAaL 
and tax phasing

·   Significant reduction in net debt to €33.4 billion, proforma net debt to adjusted
EBITDAaL improved to 2.5x

·   Total dividends per share are 9.0 eurocents, including a final dividend per 
share of 4.5 eurocents

**A new roadmap for Vodafone**

Today, we set out a new roadmap for Vodafone, following a strategic review conducted
over the last five months.

1.   Vodafone must change

The circumstances of our industry and the position of Vodafone within it, require
us to change.

·   The European telecommunication sector has amongst the lowest ROCE in Europe,
alongside the highest capital investment demands. This has resulted in ROCE being
below WACC for over a decade, impacting Total Shareholder Returns.

·   More importantly, the comparative performance of Vodafone has worsened over 
time, which is connected to the experience of our customers.

·   Our market position and performance varies by geography and segment. Where we
have the right combination of strong local execution and a rational market structure,
we can grow and drive returns. There are also material differences between our Consumer
and Business segments, with Business growing in nearly all European markets.

·   Our turnaround must be built from our strengths, but we need to overcome some
clear challenges. We are more complex than we need to be, which limits our local
commercial agility.

2.   Strategic shifts

Our target is to be a best-in-class telco in Europe and Africa, and become Europe’s
leading platform for Business. To achieve this, we must change in four essential
areas.

·   We will rebalance our organisation to maximise the potential of Vodafone Business,
which continues to accelerate growth, has a unique set of capabilities and has a
strong position in a large and growing market as organisations digitise.

·   In order to win in our consumer markets, we will refocus on the basics and deliver
the simple and predictable experience our customers expect.

·   We will be a leaner and simpler organisation, to increase our commercial agility
and free up resources.

·   We will focus our resources on a portfolio of products and geographies that 
is right-sized for growth and returns over time.

3.   Our action plan

To execute the change in these four areas, we have an action plan already underway,
focused around three priorities: Customers, Simplicity and Growth. Early examples
of this action plan include:

·   Customers: Significant investment reallocated in FY24 towards customer experience
and brand

·   Simplicity: 11,000 role reductions planned over three years, with both HQ and
local markets simplification

·   Growth: Germany turnaround plan, continued pricing action and strategic review
in Spain

We will change the level of ambition, speed and decisiveness of execution. We will
have empowered markets focused on customers, scale up Vodafone Business and take
out complexity to simplify how we operate.

A more detailed outline  of the new roadmap for the transformation of Vodafone is
contained within an accompanying video presentation available here: investors.vodafone.
com/results.

Financial summary

**_Organic growth_**

All amounts marked with an ‘*’ in this document represent organic growth which presents
performance on a comparable basis, excluding the impact of foreign exchange rates,
mergers and acquisitions, the hyperinflation adjustments in Turkey and other adjustments
to improve the comparability of results between periods. Organic growth figures 
are non-GAAP measures. See non-GAAP measures on page 36 for more information.

**Financial performance**

Total revenue increased by 0.3% to €45.7 billion (FY22: €45.6 billion) driven by
growth in Africa and higher equipment sales, offset by lower European service revenue
and adverse exchange rate movements.

Adjusted EBITDAaL declined by 1.3%* to €14.7 billion (FY22: €15.2 billion), with
revenue growth offset by higher energy costs and commercial underperformance in 
Germany. The adjusted EBITDAaL margin was 1.4* percentage points lower year-on-year
at 32.1%.

Operating profit increased to €14.3 billion and the Group made a profit for the 
period of €12.3 billion (FY22: €2.8 billion), largely reflecting a gain on disposal
of Vantage Towers.

Basic earnings per share was 42.77 eurocents, compared to basic earnings per share
of 7.71 eurocents in the prior year.

**Cash flow, funding & capital allocation**

Cash inflow from operating activities were broadly stable year-on-year at €18.1 
billion.

Free cash flow was an inflow of €1.4 billion (FY22: inflow of €3.3 billion) partly
reflecting a lower adjusted EBITDAaL, higher licence and spectrum payments and tax
phasing. Adjusted free cash flow was €4.8 billion (FY22: €5.4 billion).

Net debt decreased by €8.2 billion to €33.4 billion (€41.6 billion as at 31 March
2022). This was driven by free cash inflow of €1.4 billion, acquisitions and disposals
of €8.7 billion, partially offset by equity dividends of €2.5 billion, and share
buybacks of €1.9 billion (used to offset dilution linked to the conversion of certain
mandatory convertible bonds). Other movements in net debt includes €1.7 billion 
relating to the settlement of 5G spectrum in Italy previously included in net debt.

Current liquidity, which includes cash and equivalents and short-term investments,
is €16.0 billion (€12.3 billion as at 31 March 2022). This includes €4.6 billion
of net collateral which has been posted to Vodafone from counterparties as a result
of positive mark-to-market movements on derivative instruments (€2.2 billion as 
at 31 March 2022).

Total dividends per share are 9.0 eurocents (FY22: 9.0 eurocents) including a final
dividend per share of 4.5 cents. The ex-dividend date for the final dividend is 
8 June 2023 for ordinary shareholders, the record date is 9 June 2023 and the dividend
is payable on 4 August 2023.

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’. See note 1 of the condensed
consolidated financial statements for further information.

**Outlook**

**Performance against FY23 guidance**

In May 2022, we set out guidance for FY23 for Group adjusted EBITDAaL and adjusted
free cash flow. In November 2022, this was updated to reflect the worsening global
macroeconomic climate, with higher energy costs and broader inflation in particular.

For FY23 we reported adjusted EBITDAaL and adjusted free cash flow of €14.7 billion
and €4.8 billion. This included adverse foreign exchange rate movements versus those
used for the basis of guidance and other items which in aggregate impacted adjusted
EBITDAaL by €0.2 billion and adjusted free cash flow by €0.5 billion.

The table below compares the guidance given and our actual performance.

|  | Original guidance | Updated guidance | FY23 outcome on guidance basis^(1) | FY23 outcome as reported | 
| Adjusted EBITDAaL^(2) | €15.0 – €15.5 billion | €15.0-15.2 billion | €14.9 billion | €14.7 billion | 
| Adjusted free cash flow^(2,3) | c. €5.3 billion | c.€5.1 billion | €5.3 billion | €4.8 billion |

**FY24 Guidance**

In order to provide a basis of comparison for our FY24 guidance, we have rebased
our FY23 financials to reflect the current structure of the Group and applied foreign
exchange rates that are consistent with FY24 guidance rates. On a comparable basis,
the rebased FY23 adjusted EBITDAaL is €13.3 billion and adjusted free cash flow 
is €4.2 billion. 

Based on the current prevailing assessments of the global macroeconomic outlook,
for FY24 we expect:

·      Adjusted EBITDAaL to be ‘broadly flat’ at around €13.3 billion; and

·      Adjusted free cash flow to be ‘around’ €3.3 billion, reflecting expected 
working capital movements, interest and dividend receipts

The guidance above reflects the following:

·      Foreign exchange rates used when setting guidance were as follows:

–   EUR 1 : GBP 0.88;

–   EUR 1 : ZAR 19.30;

–   EUR 1 : TRY 21.10; and

–   EUR 1 : EGP 33.38.

·      This guidance assumes no material change to the structure of the Group.

**Notes:**

1.     The FY23 outcome on guidance basis is derived by applying FY23 guidance foreign
exchange rates. The FY23 guidance foreign exchange rates were €1 : GBP 0.84; €1 :
ZAR 17.32;  €1 : TRY 16.75; €1 : EGP 19.28.

2.     Adjusted EBITDAaL and adjusted free cash flow are non-GAAP measures. See 
page 36 for more information.

3.     Adjusted free cash flow is Free cash flow before licences and spectrum, restructuring
costs arising from discrete restructuring plans, integration capital additions and
working capital related items, M&A, and Vantage Towers growth capital expenditure.
Growth capital expenditure is total capital expenditure excluding maintenance-type
expenditure.

**Operational Key Performance Indicators**

|  | _ _ | **Units** | **FY23** | **FY22** | 
| Europe mobile contract customers^(1) |  | million | 64.8 | 66.4 | 
| Europe broadband customers^(1 ) |  | million | 24.7 | 25.6 | 
| Europe Consumer converged customers^(1) |  | million | 9.1 | 9.0 | 
| Europe mobile contract customer churn |  | % | 13.5 | 13.6 | 
| Africa mobile customers^(2) |  | million | 189.9 | 184.5 | 
| Africa data users^(2) |  | million | 94.8 | 89.9 | 
| Business service revenue growth*^(3) |  | % | 2.6 | 0.8 | 
| Europe TV subscribers^(1) |  | million | 20.7 | 21.9 | 
| IoT SIM connections^( ) |  | million | 162.3 | 150.1 | 
| Africa M-Pesa customers^(2) |  | million | 56.7 | 52.4 | 
| Africa M-Pesa transaction volume^(2) ^( ) |  | billion | 26.0 | 19.9 | 
| Digital channel sales mix^(4) |  | % | 26 | 25 | 
| End-to-end TOBi completion rate^(5) |  | % | 56.2 | 42.9 | 
| 5G available in European cities^(1) |  | # | 332 | 294 | 
| Europe on-net gigabit capable connections^(1) |  | million | 50.0 | 48.5 | 
| Europe on-net NGN broadband penetration^(1) |  | % | 29 | 30 | 
| Pre-tax ROCE (controlled)^(3 6) | ** ** | % | 6.8 | 7.2 | 
| Post-tax ROCE (controlled and associates/joint ventures)^(3 6 7) |  | % | 5.1 | 5.2 | 
| Europe markets where 3G switched off^(1) |  | # | 4 | 4 |

1. Including VodafoneZiggo | 2. Africa including Safaricom | 3. These line items
are non-GAAP measures. See page 36 for more information | 4. Based on Germany, Italy,
UK, Spain only | 5. Defined as percentage of total customer contacts resolved without
human interaction through TOBi. Group excluding Egypt | 6. The FY23 ROCE excludes
Vantage Towers. FY22 excluding Vantage Towers pre-tax ROCE is 7.0% and post-tax 
ROCE is 5.0% | 7. The FY22 comparative for post-tax ROCE has been re-presented for
the reclassification of Indus Towers. See page 31.

Our purpose ⫶ We connect for a better future

We believe that Vodafone has a significant role to play in contributing to the societies
in which we operate and we want to enable an inclusive and sustainable digital society.
We continue to make progress against our purpose strategy and will provide a full
update in our FY23 Annual Report and supplementary materials (available on investors.
vodafone.com). Highlights and achievements from FY23 are summarised below.

_Supporting customers in financial hardship_

We are conscious of the cost of living pressures our customers are facing during
this challenging macroeconomic period. For financially vulnerable customers, we 
have implemented a cost-of-living plan, consisting of three elements: social or 
low-cost tariffs in all markets; extra measures to ensure our consumers and small
businesses are supported, including our free SME advisory service V-Hub; and leveraging
our technology & digital services to help customers reduce their energy usage.

_Access for all_

Expanding fixed and mobile coverage to rural networks remains a focus. Our partnership
with AST & Science LLC will help to deliver more universal coverage as we seek to
develop the first space-based mobile network designed to connect directly to consumers’
4G and 5G devices without the need for specialised hardware. This year, AST successfully
launched and deployed its first communications array and announced in April 2023
the first connection from space to a mobile with no specialised equipment. The space-
based based network has the potential to enable even those in the hardest to reach
areas to connect to the internet, ultimately reaching an estimated 1.6 billion people
across 49 countries.

_Supplier [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)_

In March 2023, we launched a new environmentally-linked supply chain programme, 
to provide financial incentives for our suppliers to disclose carbon data to CDP
and take action to improve their score over time. In partnership with CDP, we have
developed a framework consisting of 12 criteria from the CDP survey. Our suppliers
will be invited to share their environmental performance score with their supply
chain financing provider, and in doing so will have the opportunity to receive preferential
financing rates based on their ranking. In future, CDP plans to make a template 
of the framework available to others in the telecoms sector, with a view to driving
industry-wide adoption of the model.

_Supporting a circular economy_

In November 2022, we formed a new strategic partnership with WWF and launched a 
new programme ‘one million phones for the planet’ which will help accelerate our
circular economy strategy by raising consumer awareness of e-waste and incentivising
our customers to bring back their used devices for trade-in, donation or recycling.
Our three-year partnership with WWF will also see other strategic initiatives launched
across markets in Europe and Africa. These will include apps to help customers make
more sustainable choices, as well as projects in South Africa, Germany, and the 
UK that use mobile technology to help address conservation and sustainability challenges.

_Reporting_

We will shortly be publishing our third standalone report that summarises our progress
towards meeting the recommendations of the Task Force on Climate-related Financial
Disclosures (‘TCFD’), as well as our first standalone cyber security factsheet. 
We also publish a comprehensive spreadsheet that includes data on environmental,
social and governance (‘ESG’) topics (‘ESG Addendum’). We report against a number
of voluntary reporting frameworks to help our stakeholders understand our sustainable
business performance, including guidance provided by the Global Reporting Initiative(‘
GRI’) and Sustainability Accounting Standards Board (‘SASB’).

**Financial performance ⫶ In-line with expectations**

·    Group revenue increased by 0.3% to €45.7 billion driven by growth in Africa
and higher equipment sales, offset by lower European service revenue and adverse
exchange rate movements

·    Group service revenue trend was impacted by a decline in Germany, Italy, and
Spain, offset by continued growth in the UK, Other Europe, and Africa  

·    Service revenue growth in Turkey increased to 47.6%*, driven by higher inflation.
Group service revenue growth excluding Turkey was 1.0%*

·    Adjusted EBITDAaL declined by 1.3%* to €14.7 billion due to higher energy costs,
and commercial underperformance in Germany

·    Inflationary cost pressures in Europe were mitigated by our ongoing cost efficiency
programme, with a further €0.2 billion of savings in FY23

·    Returns broadly maintained; pre-tax ROCE (ex. Vantage) at 6.8%

**Group financial performance**

|  |  | ** ** | Re-presented^(2) | **_ _** | 
|  |  | **FY23**^(1) | **FY22** | **_Reported_** | 
|  | **€m** | **€m** | **_change %_** | 
| **Revenue** | **45,706 ** | **45,580 ** | _0.3_ | 
|  – Service revenue | 37,969  | 38,203  | _(0.6)_ | 
|  – Other revenue | 7,737  | 7,377  | _ _ | 
| **Adjusted EBITDAaL**^(3,4) | **14,665 ** | **15,208 ** | _(3.6)_ | 
| Restructuring costs | (587) | (346) | _ _ | 
| Interest on lease liabilities^(5) | 436  | 398  | _ _ | 
| Loss on disposal of property, plant and equipment and intangible assets | (36) | (28) | _ _ | 
| Depreciation and amortisation of owned assets | (9,649) | (9,858) | _ _ | 
| Share of results of equity accounted associates and joint ventures | 433  | 389  | _ _ | 
| Impairment loss | (64) | –  | _ _ | 
| Other income | 9,098  | 50  | _ _ | 
| **Operating profit** | **14,296 ** | **5,813 ** | _145.9_ | 
| Investment income | 248  | 254  | _ _ | 
| Financing costs | (1,728) | (1,964) | _ _ | 
| **Profit before taxation** | **12,816 ** | **4,103 ** | _ _ | 
| Income tax expense | (481) | (1,330) | _ _ | 
| **Profit for the financial year** | **12,335 ** | **2,773 ** | _ _ | 
| ** ** | ** ** | ** ** | ** ** | _ _ | 
| Attributable to: | ** ** | ** ** | _ _ | 
|  – Owners of the parent | 11,838  | 2,237  | _ _ | 
|  – Non-controlled interests | 497  | 536  | _ _ | 
| **Profit for the financial year** | **12,335 ** | **2,773 ** | **_ _** | 
|  |  |  |  | _ _ | 
| Basic earnings per share | 42.77c | 7.71c | _ _ | 
| Adjusted basic earnings per share^(3) | 11.45c | 11.68c | _ _ |

Further information is available in a spreadsheet at investors.vodafone.com/results

**Notes:**

1.   The FY23 results reflect average foreign exchange rates of €1:£0.86, €1:INR
83.69, €1:ZAR 17.69, €1:TRY 18.53 and €1:EGP 23.72.

2.   The results for the year ended 31 March 2022 have been re-presented to reflect
that Indus Towers Limited is no longer reported as held for sale. There is no impact
on previously reported revenue and adjusted EBITDAaL. However, operating profit,
profit before taxation and profit for the financial year have all increased by €
149 million compared to amounts previously reported. Consequently, basic earnings
per share increased by 0.51c and adjusted basic earnings per share increased by 
0.65c compared to amounts previously reported. See note 3 ‘Assets held for sale’
in the condensed consolidated financial statements for more information.  

3.   Adjusted EBITDAaL and adjusted basic earnings per share are non-GAAP measures.
See page 36 for more information. 

4.   Includes depreciation on leased assets of €3,883 million (FY22: €3,908 million).

5.   Reversal of interest on lease liabilities included within adjusted EBITDAaL
under the Group’s definition of that metric, for re-presentation in financing costs.

| Geographic performance summary | ** ** | ** ** | ** ** | _ _ | 
| ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **Other** | ** ** | **Other** | **Vantage** | **Common** | **Elimi-** | **_ _** | 
| ** ** | ** ** | **Germany** | **Italy** | **UK** | **Spain** | **Europe** | **Vodacom** | **Markets** | **Towers** | **Functions** | **nations** | **Group** | 
| **FY23** | **€m** | **€m** | **€m** | **€m** | **€m** | **€m** | **€m** | **€m** | **€m** | **€m** | **€m** | 
| Total revenue | 13,113  | 4,809  | 6,824  | 3,907  | 5,744  | 6,314  | 3,834  | 1,338  | 1,387  | (1,564) | 45,706  | 
| Service revenue | 11,433  | 4,251  | 5,358  | 3,514  | 5,005  | 4,849  | 3,300  | –  | 530  | (271) | 37,969  | 
| Adjusted EBITDAaL^(1) | 5,323  | 1,453  | 1,350  | 947  | 1,632  | 2,159  | 1,145  | 795  | (139) | –  | 14,665  | 
| _Adjusted EBITDAaL margin (%)^(1)_ | _40.6%_ | _30.2%_ | _19.8%_ | _24.2%_ | _28.4%_ | _34.2%_ | _29.9%_ | _59.4%_ | _ _ | _ _ | _32.1%_ | 
| Downloadable performance information is available at: investors.vodafone.com/results | 
|  |  | **FY23** |   | 
| **Organic service revenue growth %***^(1) | **Q1** | **Q2** | **H1** | **Q3** | **Q4** | **H2** | **Total** |   | 
| Germany | (0.5) | (1.1) | (0.8) | (1.8) | (2.8) | (2.3) | (1.6) |   | 
| Italy | (2.3) | (3.4) | (2.8) | (3.3) | (2.7) | (3.0) | (2.9) |   | 
| UK | 6.5  | 6.9  | 6.7  | 5.3  | 3.8  | 4.6  | 5.6  |   | 
| Spain | (3.0) | (6.0) | (4.5) | (8.7) | (3.7) | (6.2) | (5.4) |   | 
| Other Europe | 2.5  | 2.9  | 2.7  | 2.1  | 3.6  | 2.8  | 2.8  |   | 
| Vodacom | 2.9  | 4.8  | 3.9  | 3.5  | 2.6  | 3.1  | 3.5  |   | 
| Other Markets | 24.7  | 26.7  | 25.7  | 34.1  | 40.0  | 36.8  | 30.7  |   | 
| **Group** | **2.5 ** | **2.5 ** | **2.5 ** | **1.8 ** | **1.9 ** | **1.8 ** | **2.2 ** |   |

Note:

1.   Organic service revenue growth, Group adjusted EBITDAaL and Group adjusted 
EBITDAaL margin are non-GAAP measures. See page 36 for more information. 

| Germany ⫶ 30% of Group service revenue |  |  |  | _ _ | 
| ** ** | ** ** | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 13,113  | 13,128  | _(0.1)_ | _ _ | 
|  – Service revenue | 11,433  | 11,616  | _(1.6)_ | _(1.6)_ | 
|  – Other revenue | 1,680  | 1,512  | _ _ | _ _ | 
| Adjusted EBITDAaL | 5,323  | 5,669  | _(6.1)_ | _(6.1)_ | 
| _Adjusted EBITDAaL margin_ | _40.6%_ | _43.2%_ | _ _ | _ _ |

Total revenue decreased by 0.1% to €13.1 billion, driven by lower service revenue
partially offset by higher equipment sales.

On an organic basis, service revenue declined by 1.6%* (Q3: -1.8%*, Q4: -2.8%*) 
due to broadband customer losses and a lower mobile ARPU, partially offset by higher
roaming revenue and broadband ARPU growth. The slowdown in quarterly trends was 
primarily driven by small one-off benefits in Q4 last year and the impact of a multi-
year IoT contract renewal.

Fixed service revenue declined by 1.8%* (Q3: -2.0%*, Q4: -2.1%*), driven by a lower
broadband customer base, primarily as a result of specific operational challenges
related to the implementation of policies to comply with the 2021 Telecommunications
Act, which are now resolved. This was partially offset by ARPU growth. In November
2022 we increased prices for new broadband customers, and in March 2023, we started
to communicate price increases to some of our existing customers, which will be 
implemented during H1 FY24. Our cable broadband customer base declined by 119,000
and we lost 87,000 DSL broadband customers during the year. As expected, our commercial
performance in Q4 was impacted by the decision to increase retail prices. 

Our TV customer base declined by 412,000 and our converged customer base decreased
by 52,000 to 2.3 million Consumer converged accounts. These declines primarily reflect
higher disconnections of broadband bundle customers, as well as fewer cross-selling
opportunities.

Ahead of changes to German TV laws, which take effect from July 2024 and end the
practise of bulk TV contracting in Multi Dwelling Units (‘MDUs’), we are actively
working with our Housing Association partners to manage this transition, and sign
customers up to individual contracts. In total, we have 8.5 million MDU TV customers,
and they generate around €800 million in basic-TV revenue. We have commenced our
first trials to re-contract customers.

Mobile service revenue declined by 1.2%* (Q3: -1.7%*, Q4: -3.7%*) primarily driven
by lower contract ARPU reflecting mobile termination rate cuts and a change in customer
mix, as well as lower MVNO revenue, partially offset by higher roaming revenue. 
The slowdown in quarterly trends was due to small one-off benefits in the prior 
year, and the impact of a major IoT automotive contract renewal in Q4 which will
enable us to capture additional future revenue opportunities. We added 68,000 contract
customers in the year across both Business and Consumer. We also added 8.2 million
IoT connections, driven by continued strong demand from the automotive sector.

Adjusted EBITDAaL declined by 6.1%*, of which 0.8 percentage points was due to higher
energy costs. Adjusted EBITDAaL growth was also impacted by lower service revenue
and one-off settlements in the prior year. The adjusted EBITDAaL margin was 2.6*
percentage points lower year-on-year at 40.6%.

On 8 March 2023 we announced the completion of our fibre-to-the-home (‘FTTH’) joint
venture with Altice, which will deploy FTTH to up to seven million homes over a 
six-year period. This partnership is complementary to our upgrade plans for our 
existing hybrid fibre cable network.

| Italy ⫶ 11% of Group service revenue |  |  |  | _ _ | 
|  |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 4,809  | 5,022  | _(4.2)_ | _ _ | 
|  – Service revenue | 4,251  | 4,379  | _(2.9)_ | _(2.9)_ | 
|  – Other revenue | 558  | 643  | _ _ | _ _ | 
| Adjusted EBITDAaL | 1,453  | 1,699  | _(14.5)_ | _(14.5)_ | 
| _Adjusted EBITDAaL margin_ | _30.2%_ | _33.8%_ | _ _ | _ _ |

Total revenue declined 4.2% to €4.8 billion due to lower service revenue and equipment
sales.

Service revenue declined by 2.9%* (Q3: -3.3%*, Q4: -2.7%*), as a result of continued
price pressure in the mobile value segment, partly offset by strong Business demand
in fixed line and digital services.

Mobile service revenue declined by 5.4%* (Q3: -5.7%*, Q4: -5.4%*). Price competition
in the mobile value segment has remained intense, resulting in a lower active prepaid
customer base and ARPU. This was partially offset by targeted pricing actions taken
during the year.  Our second brand ‘ho.’ continued to grow and now has 3.0 million
customers.

Fixed service revenue increased by 3.3%* (Q3: 2.7%*, Q4: 3.6%*) supported by strong
Business demand for connectivity and digital services, including a good take up 
of the Business voucher programme, an initiative related to the EU Recovery and 
Resilience Facility that subsidises high-speed broadband connectivity.  This was
partially offset by a slightly lower customer base in Consumer broadband. Our broadband
customer base declined by 55,000 during the year, however this was largely offset
by 47,000 fixed-wireless additions which are reported in mobile. Our Consumer converged
customer base now stands at 1.4 million, and in total 56% of our broadband customers
are converged.

Our next generation network (‘NGN’) broadband services are now available to 23.5
million households, including 9.4 million through our own network and our partnership
with Open Fiber. In October 2022, we launched 5G fixed-wireless services and now
cover 3.4 million households. This complements our 4G fixed-wireless access products,
which covers an additional 2.2 million households.

Adjusted EBITDAaL declined by 14.5%* including a 5.7 percentage point impact relating
to a €105 million legal settlement received in the prior year, and 3.0 percentage
points due to higher energy costs. Adjusted EBITDAaL growth was also impacted by
lower mobile service revenue, partly offset by our continued strong focus on cost
efficiency. The adjusted EBITDAaL margin was 3.6* percentage points lower year-on-
year at 30.2%.

| UK ⫶ 14% of Group service revenue |  |  |  | _ _ | 
|  |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 6,824  | 6,589  | _3.6 _ | _ _ | 
|  – Service revenue | 5,358  | 5,154  | _4.0 _ | _5.6 _ | 
|  – Other revenue | 1,466  | 1,435  | _ _ | _ _ | 
| Adjusted EBITDAaL | 1,350  | 1,395  | _(3.2)_ | _(1.4)_ | 
| _Adjusted EBITDAaL margin_ | _19.8%_ | _21.2%_ | _ _ | _ _ |

Total revenue increased by 3.6% to €6.8 billion driven by service revenue growth,
partly offset by the depreciation of the pound sterling against the euro.

On an organic basis, service revenue increased by 5.6%* (Q3: 5.3%*, Q4: 3.8%*). 
This was driven by continued strong growth in Consumer and an acceleration in Business.
The slowdown in quarterly trends was driven by lower MVNO revenues.

Mobile service revenue grew by 8.0%* (Q3: 8.1%*, Q4: 2.8%*), driven by our strong
commercial momentum and annual price increases in Consumer, good growth in Business,
and higher roaming revenue. The slowdown in quarterly trends reflected the complete
migration of the Virgin Media MVNO off our network. We continued to deliver good
customer base growth, supported by our flexible proposition Vodafone ‘Evo’, adding
230,000 contract customers. Our digital prepaid sub-brand ‘VOXI’ also continued 
to grow, with 134,000 customers added in FY23. Our digital sales mix improved by
4 percentage points year-on-year to 37% of total sales.

Fixed service revenue declined by 0.3%* (Q3: -1.6%*, Q4: 6.3%*) with strong growth
in Consumer offset by a decline in Business. The improvement in quarterly trends
was driven by Business, which returned to growth in Q4, supported by several large
corporate contract wins and higher project work. Consumer growth was supported by
our price actions and good demand for our Vodafone ‘Pro Broadband’ and fibre products.
Our broadband customer base increased by 173,000 during the year and we now have
over 1.2 million broadband customers. Through our partnerships with CityFibre and
Openreach we are able to reach over 11 million households with full fibre broadband,
more than any other provider in the UK.

Adjusted EBITDAaL declined by 1.4%*, of which 5.4 percentage points was due to higher
energy costs. Adjusted EBITDAaL excluding energy grew, driven by service revenue
growth, partially offset by other inflationary costs, a lower Virgin MVNO contribution
and new annual licence fees. The adjusted EBITDAaL margin declined 1.3* percentage
points year-on-year at 19.8%.

On 3 October 2022, we confirmed that we are in discussions with CK Hutchison Holdings
Limited (‘CK Hutchison’) in relation to a possible combination of Vodafone UK and
Three UK. The envisaged transaction would entail us combining our UK business with
Three UK, with Vodafone owning 51% and CK Hutchison owning 49% of the combined business.
There can be no certainty that any transaction will ultimately be agreed.

| Spain ⫶ 9% of Group service revenue |  |  |  | _ _ | 
|  |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 3,907  | 4,180  | _(6.5)_ | _ _ | 
|  – Service revenue | 3,514  | 3,714  | _(5.4)_ | _(5.4)_ | 
|  – Other revenue | 393  | 466  | _ _ | _ _ | 
| Adjusted EBITDAaL | 947  | 957  | _(1.0)_ | _(1.1)_ | 
| _Adjusted EBITDAaL margin_ | _24.2%_ | _22.9%_ | _ _ | _ _ |

Total revenue declined by 6.5% to €3.9 billion due to lower service revenue and 
equipment sales.

On an organic basis, service revenue declined by 5.4%* (Q3: -8.7%*, Q4: -3.7%*) 
driven by continued price competition in the value segment and a lower customer 
base. The improvement in quarterly trends was driven by inflation-linked price increases,
which took effect at the end of January 2023, and increased Business demand for 
digital services.

In mobile, our contract customer base declined by 159,000 reflecting one-off disconnections
of 123,000 relating to temporary business SIMs provided to schools and higher education
providers during the pandemic, as well as ongoing price competition in both the 
Consumer and SoHo segments. Our Q4 commercial performance was impacted by our price
increases. Consumer contract churn improved by 2.7 percentage points during the 
year, supported by our simplified and more transparent range of tariff plans. Our
second brand ‘Lowi’ continued to grow, adding 200,000 customers.

Our broadband customer base declined by 121,000 and our TV customer base decreased
by 56,000 due to price competition and the ongoing shutdown of DSL. Our converged
customer base remained broadly stable at 2.2 million.

Adjusted EBITDAaL declined by 1.1%*, which included 6.7 percentage points of one-
off tax benefits and a 1.5 percentage point impact from higher energy costs. Excluding
these impacts, adjusted EBITDAaL declined due to lower service revenue, partly offset
by our ongoing cost efficiency programme.

On 12 January 2023, we announced that Spain will become part of the ‘Europe Cluster’,
managed by Serpil Timuray, CEO Europe Cluster. In March 2023, we announced that 
Mário Vaz, previously CEO of Vodafone Portugal, had been appointed as new CEO of
Spain, effective from 1 April 2023.

| Other Europe ⫶ 13% of Group service revenue |  |  | _ _ | 
|  |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 5,744  | 5,653  | _1.6 _ | _ _ | 
|  – Service revenue | 5,005  | 5,001  | _0.1 _ | _2.8 _ | 
|  – Other revenue | 739  | 652  | _ _ | _ _ | 
| Adjusted EBITDAaL | 1,632  | 1,606  | _1.6 _ | _4.7 _ | 
| _Adjusted EBITDAaL margin_ | _28.4%_ | _28.4%_ | _ _ | _ _ |

Total revenue increased by 1.6% to €5.7 billion driven by service revenue and equipment
sales growth.

On an organic basis, service revenue increased by 2.8%* (Q3: 2.1%*, Q4: 3.6%*), 
with good growth in all markets other than Romania, which was impacted by a mobile
termination rate reduction. The improvement in quarterly trends was driven by inflation-
linked price increases in several markets, as well as strong Business growth in 
Greece.

In Portugal, service revenue grew due to our strong commercial momentum, with 183,000
mobile contract customers and 48,000 fixed broadband customer additions during the
year. In September 2022, we announced that we had entered into an agreement to buy
Portugal’s fourth largest converged operator, Nowo Communications, from Llorca JVCO
Limited, the owner of Masmovil Ibercom S.A. The transaction is conditional on regulatory
approval, with completion expected in the second half of the 2023 calendar year.

In Ireland, service revenue increased driven by customer base growth, higher roaming
revenue, and contractual price increases. Our mobile contract customer base increased
by 64,000 and our broadband customer base grew by 14,000. In October 2022, we announced
that we had agreed a fixed wholesale network access agreement with Virgin Media 
Ireland. Vodafone is already the largest fibre-to-the home provider in Ireland, 
covering over 1 million households.

Service revenue in Greece grew, reflecting higher roaming revenue, good growth in
Business fixed supported by several public sector contract wins relating to the 
EU Recovery Fund, and higher wholesale revenue. During the year we added 138,000
mobile contract customers, and our broadband customer base declined by 26,000.

Adjusted EBITDAaL increased by 4.7%*, including a 3.4 percentage point impact from
higher energy costs. Excluding this, adjusted EBITDAaL grew driven by service revenue
growth, ongoing cost efficiencies and a one-off provision in Greece last year. The
adjusted EBITDAaL margin remained stable year-on-year at 28.4%.

On 31 January 2023, we announced that we had completed the sale of Vodafone Hungary
to 4iG Public Limited Company and Corvinus Zrt for a cash consideration of HUF 660
billion (€1.6 billion), representing a multiple of 8.4x Adjusted EBITDAaL for the
year ended 31 March 2022. 

| Vodacom ⫶ 13% of Group service revenue |  |  |  | _ _ | 
| _ _ |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 6,314  | 5,993  | _5.4 _ | _ _ | 
|  – Service revenue | 4,849  | 4,635  | _4.6 _ | _3.5 _ | 
|  – Other revenue | 1,465  | 1,358  | _ _ | _ _ | 
| Adjusted EBITDAaL | 2,159  | 2,125  | _1.6 _ | _1.4 _ | 
| _Adjusted EBITDAaL margin_ | _34.2%_ | _35.5%_ | _ _ | _ _ |

Total revenue increased by 5.4% to €6.3 billion driven by service revenue growth
and higher equipment sales.

On an organic basis, Vodacom’s service revenue grew by 3.5%* (Q3: 3.5%*, Q4: 2.6%*)
with growth in both South Africa and Vodacom’s international markets. The slowdown
in quarterly trends was driven by a tough prior year comparative in Vodacom Business
within South Africa.

In South Africa, service revenue growth was supported by contract price increases
and prepaid ARPU growth, partially offset by repricing pressure from a government
mobile contract renewal. We added 192,000 mobile contract customers in the year,
and now have a total base of 6.7 million. Across our active customer base, 74.9%
of our mobile customers now use data services, an increase of 2.0 million year-on-
year. Financial Services revenue grew by 10.6%* to €167 million, supported by good
demand for insurance services. Our VodaPay ‘super-app’ has continued to gain traction
with 3.3 million registered users.

In Vodacom’s international markets, service revenue growth was supported by strong
growth in data, a higher customer base and strong M-Pesa growth. This was despite
disruptions caused by heavy flooding in both Mozambique and the DRC during the year.
M-Pesa revenue grew by 15.5% and now represents 25.0% of service revenue. Our mobile
customer base now stands at 50.2 million with 63.5% of active customers using data
services.

Vodacom’s adjusted EBITDAaL increased by 1.4%*, including a 1.7 percentage point
impact from higher energy costs. Excluding this, adjusted EBITDAaL was supported
by service revenue growth and accelerated cost initiatives, partially offset by 
an increase in technology operating expenses as we continued to improve the resilience
and capacity of our network. The adjusted EBITDAaL margin decreased by 1.2* percentage
points to 34.2%.

On 13 December 2022, Vodafone completed the transfer of its 55% shareholding in 
Vodafone Egypt to Vodacom. This transfer simplifies the management of our African
assets. Vodafone received cash proceeds of €577 million and 242 million shares in
Vodacom in exchange for Vodafone’s shareholding in Vodafone Egypt. Following completion,
Vodafone’s shareholding in Vodacom has increased from 60.5% to 65.1%. Vodafone Egypt
will be included within the Vodacom reporting segment from 1 April 2023.

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

| Other Markets ⫶ 9% of Group service revenue |  |  | _ _ | 
|  |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 3,834  | 3,830  | _0.1 _ | _ _ | 
|  – Service revenue | 3,300  | 3,420  | _(3.5)_ | _30.7 _ | 
|  – Other revenue | 534  | 410  | _ _ | _ _ | 
| Adjusted EBITDAaL | 1,145  | 1,335  | _(14.2)_ | _22.2 _ | 
| _Adjusted EBITDAaL margin_ | _29.9%_ | _34.9%_ | _ _ | _ _ |

Total revenue remained broadly unchanged at €3.8 billion, with strong service revenue
growth offset by significant currency devaluations in both Turkey and Egypt.

On an organic basis, service revenue grew by 30.7%* (Q3: 34.1%*, Q4: 40.0%) reflecting
a higher contribution from Turkey, impacted by accelerating inflation, as well a
strong customer base and ARPU growth.

Service revenue growth in Turkey was driven by continued customer base growth and
ongoing repricing actions to reflect the high inflationary environment. We maintained
our good commercial momentum, adding 1.6 million mobile contract customers during
the year, including migrations of prepaid customers. Customer loyalty rates continued
to improve, with mobile contract churn down by 1.5 percentage points year-on-year
to 13.9%. Our Q4 performance was impacted by the earthquakes in Turkey.

Service revenue in Egypt continued to grow strongly, reflecting good customer base
growth and increased data usage. During the year, we added 153,000 contract customers
and 2.5 million prepaid mobile customers.

Adjusted EBITDAaL increased by 22.2%* despite significant inflationary pressure 
on our cost base. The adjusted EBITDAaL margin decreased by 3.8* percentage points
year-on-year to 29.9%.

On 21 February 2023, Vodafone completed the sale of our 70% shareholding in Vodafone
Ghana (‘GTCL’) to Telecel Group, further simplifying our African portfolio.

_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’. See note 1 ‘Basis of
preparation’ in the condensed consolidated financial statements for further information.

During the year service revenue in Turkey increased by 47.6*% and adjusted EBITDAaL
grew by 49.8%* due to ongoing repricing actions to reflect increasing inflation.
Organic growth metrics exclude the impact of the hyperinflation adjustment in the
period in Turkey. Group service revenue growth excluding Turkey was 1.0%* (Q3: 0.5%*,
Q4: 0.5%*) and adjusted EBITDAaL excluding Turkey declined 1.1%*

| Vantage Towers |  |  | _ _ | 
|  |  | **FY23** | **FY22** | **_Reported_** | **_Organic_** | 
|  | **€m** | **€m** | **_change %_** | **_change %\*_** | 
| Total revenue | 1,338  | 1,252  | 6.9  | _ _ | 
|  – Service revenue | –  | –  | –  | _– _ | 
|  – Other revenue | 1,338  | 1,252  |  | _ _ | 
| Adjusted EBITDAaL | 795  | 619  | 28.4  | _7.9 _ | 
| _Adjusted EBITDAaL margin_ | _59.4%_ | 49.4% |  | _ _ |

Total revenue increased 6.9% to €1.3 billion in FY23, driven by 1,750 new tenancies
and new macro sites. As a result, the tenancy ratio increased to 1.46x.

Adjusted EBITDAaL increased 7.9%* to €795 million, driven by revenue growth, partly
offset by increased costs relating to the ramp up of the build to suit programme
and 1&1 rollout.

On 23 March 2023, we announced the completion of our co-control partnership for 
Vantage Towers with a consortium of long-term infrastructure investors led by Global
Infrastructure Partners and KKR. Reflecting the final take-up in the connected voluntary
takeover offer and delisting offer, the co-control partnership, Oak Holdings GmbH.,
will own 89.3% of Vantage Towers. Vodafone has received initial net cash proceeds
of €4.9 billion and now hold a 64% shareholding in Oak Holdings. The Consortium 
has the option to increase its ownership of Oak Holdings up to a maximum of 50% 
by 30 June 2023, subject to the outcome of its fundraising process.

| Associates and joint ventures |  |  | 
|  |  |  | Re-presented^(1) | 
|  |  | **FY23** | **FY22** | 
|  | **€m** | **€m** | 
|  | VodafoneZiggo Group Holding B.V. | 137  | (19) | 
|  | Safaricom Limited | 195  | 217  | 
|  | Indus Towers Limited | 50  | 178  | 
|  | Other | 51  | 13  | 
| Share of results of equity accounted associates and joint ventures | 433  | 389  |

Note:

1.  The results for the year ended 31 March 2022 have been re-presented to reflect
that Indus Towers Limited is no longer reported as held for sale. The share of results
from Indus Towers Limited has increased by €178 million compared to €nil as previously
reported. See note 3 ‘Assets held for sale’ in the condensed consolidated financial
statements for more information.   

_VodafoneZiggo Joint Venture (Netherlands)_

The results of VodafoneZiggo, in which we own a 50% stake, are reported here under
US GAAP, which is broadly consistent with our IFRS basis of reporting.

Total revenue remained stable at €4.1 billion, as mobile contract customer base 
growth, higher roaming revenue and contractual price increases were offset by a 
decline in the fixed Consumer customer base.

During the period, VodafoneZiggo added 181,000 mobile contract customers, supported
by its best-in-class net promoter score. VodafoneZiggo’s broadband customer base
declined by 13,000 customers to 3.3 million due to ongoing price competition. The
number of converged households increased by 21,000, with 46% of broadband customers
now converged. VodafoneZiggo now offers nationwide 1 gigabit speeds across its fixed
network.

In FY23, we received €165 million in dividends from the joint venture, as well as
€51 million in interest payments.

_Safaricom Associate (Kenya)_

Safaricom service revenue grew to €2.3 billion due to a higher customer base and
continued data revenue and M-Pesa growth. In FY23, we received €249 million in dividends
from Safaricom.

_Indus Towers Limited Associate (India)_

Following the sale of shares in Indus Towers Limited (‘Indus Towers’) in February
and March 2022, the Group holds 567.2 million shares in Indus Towers, equivalent
to a 21.0% shareholding.

_Vodafone Idea Limited Joint Venture (India)_

See note 4 ‘Contingent liabilities and legal proceedings’ in the condensed consolidated
financial statements for more information’

_TPG Telecom Limited Joint Venture (Australia)_

We own an economic interest of 25.05% in TPG Telecom Limited, a fully integrated
telecommunications operator in Australia. Hutchison Telecommunications (Australia)
Limited owns an equivalent economic interest of 25.05%, with the remaining 49.9%
listed as free float on the Australian stock exchange. We also hold a 50% share 
of a US$3.5 billion loan facility held within the structure that holds the Group’s
equity stake in TPG Telecom.

| Net financing costs |  |  |  | 
|  |  | **FY23** | **FY22** | **_Reported_** | 
|  | ** ** | **€m** | **€m** | **_change %_** | 
| Investment income | 248  | 254 | **_ _** | 
| Financing costs | (1,728) | (1,964) | **_ _** | 
| **Net financing costs** | **(1,480)** | **(1,710)** | _(13.5)_ | 
| Adjustments for: |  |  | _ _ | 
|  | Mark-to-market gains | (534) | (256) | _ _ | 
|  | Foreign exchange losses | 135  | 284  | _ _ | 
| **Adjusted net financing costs**^(1) | **(1,879)** | **(1,682)** | _11.7_ |

Note:

1.  Adjusted net financing costs is a non-GAAP measure. See page 36 for more information.

Net financing costs decreased by €230 million, primarily due to mark-to-market gains
recycled from reserves on derivatives that were previously in cash flow hedge relationships
and mark-to-market gains on embedded derivatives. Adjusted net financing costs increased
by €197 million primarily due to interest movements on lease liabilities and tax
provisions and other individually immaterial movements. Excluding items outside 
of net debt, net financing costs remained broadly stable.

| Taxation |  |  |  | 
| ** ** | ** ** | **FY23** | **FY22** | **_Change_** | 
|  | **%** | **%** | **_pps_** | 
| **Effective tax rate** | **3.8%** | **33.6%** | _(29.8)_ | 
| **Adjusted effective tax rate**^(1) | **26.2%** | **27.9%** | _(1.7)_ |

Note:

1.  Adjusted effective tax rate is a non-GAAP measure. See page 36 for more information.

The Group’s effective tax rate for the year ended 31 March 2023 was 3.8%, (2022:
33.6%). The rate is lower than the prior year’s due to gains on the disposals of
Vantage Towers and Vodafone Ghana. These gains are largely exempt from tax, except
for a €88 million charge relating to the disposal of Vantage Towers.  

The effective tax rate also includes a tax credit of €309m relating to the impacts
of hyperinflation accounting in Turkey and a €33 million tax charge (2022: €327 
million) relating to the use of losses in Luxembourg, which is lower than the prior
period because of an internal restructuring which resulted in a loss in Luxembourg.
As a result of the restructuring, the amount of losses in Luxembourg are no longer
subject to changes in the value of investments.

The year ended 31 March 2022 includes the following items: i) a charge of €1,468
million for the utilisation of losses against our profits in Luxembourg. This arose
from an increase in the valuation of investments based upon local GAAP financial
statements and tax returns; ii) a credit of €699 million relating to the recognition
of a deferred tax asset in Luxembourg because of higher interest rates increasing
our forecasts of future profits; iii) an increase in our deferred tax assets in 
the UK of €593 million following the increase in the corporate tax rate to 25% and;
iv) €273 million following the revaluation of assets for tax purposes in Italy.

The Group’s adjusted effective tax rate for the year ended 31 March 2023 was 26.2%(
2022: 27.9%). This is in line with our expectations for the year.

The adjusted effective tax rate excludes the amounts relating to Luxembourg, the
impact of hyperinflation accounting in Turkey and the tax charge relating to the
disposal of Vantage Towers which are set out above. 

| Earnings per share | ** ** | ** ** | **_ _** | 
|  | ** ** | ** ** | Re-presented^(1) | **_Reported_** | 
|  | ** ** | **FY23** | **FY22** | **_change_** | 
|  | ** ** | **eurocents** | **eurocents** | **_eurocents_** | 
| **Basic earnings per share** | **42.77c** | 7.71c | _35.06c_ | 
| **Adjusted basic earnings per share**^(2) | **11.45c** | 11.68c | _(0.23)c_ |

Notes:

1.  The results for the year ended 31 March 2022 have been re-presented to reflect
that Indus Towers Limited is no longer reported as held for sale. Consequently, 
basic earnings per share increased by 0.51c, from 7.20c as previously reported, 
to 7.71c. Adjusted basic earnings per share increased by 0.65c, from 11.03c as previously
reported, to 11.68c. See note 3 ‘Assets held for sale’ in the condensed consolidated
financial statements for more information.

2.  Adjusted basic earnings per share is a non-GAAP measure. See page 36 for more
information.

Basic earnings per share was 42.77 eurocents, compared to 7.71 eurocents for FY22.
The increase is primarily attributable to the gains on disposal of Vantage Towers
A.G. and Vodafone Ghana, partially offset by the loss on disposal of Vodafone Hungary.

Adjusted basic earnings per share was 11.45 eurocents, compared to 11.68 eurocents
for FY22.  

Cash flow, capital allocation and funding

| Analysis of cash flow |  | _ _ | 
|  | **FY23** | **FY22** | **_Reported_** | 
|  | **€m ** | **€m ** | **_change %_** | 
| Inflow from operating activities | 18,054  | 18,081  | _(0.1)_ | 
| Outflow from investing activities | (379) | (6,868) | _94.5_ | 
| Outflow from financing activities | (13,430) | (9,706) | _(38.4)_ | 
| **Net cash inflow** | **4,245 ** | **1,507 ** | _181.7_ | 
| Cash and cash equivalents at beginning of the financial year | 7,371  | 5,790  | _ _ | 
| Exchange gain on cash and cash equivalents | 12  | 74  | _ _ | 
| **Cash and cash equivalents at end of the financial year** | **11,628 ** | **7,371 ** | _ _ |

Cash inflow from operating activities decreased to €18,054 million, as favourable
working capital movements were offset by lower operating profit, excluding a net
gain resulting from the sale of Vantage Towers, Vodafone Ghana and Vodafone Hungary,
and higher taxation payments.  

Outflow from investing activities decreased to €379 million, primarily in relation
to proceeds resulting from the disposals of Vantage Towers and Vodafone Hungary,
which outweighed a lower net inflow in respect of short-term investments. Short-
term investments include highly liquid government and government-backed securities
and managed investment funds that are in highly rated and liquid money market investments
with liquidity of up to 90 days.

Outflows from financing activities increased by 38.4% to €13,430 million, as higher
outflows arising from the repayment of borrowings, including the repayment of debt
in relation to licenses and spectrum, notably in Italy, outweighed higher proceeds
from the issue of long-term borrowings.

| Analysis of cash flow (continued) |  |  | _ _ | 
|  | **FY23** | **FY22** | **_Reported_** | 
|  | **€m ** | **€m ** | **_change %_** | 
| **Adjusted EBITDAaL**^(1) | **14,665 ** | **15,208 ** | _(3.6)_ | 
| Capital additions^(2) | (8,378) | (8,306) | _ _ | 
| Working capital | 256  | (31) | _ _ | 
| Disposal of property, plant and equipment and intangible assets | 98  | 27  | _ _ | 
| Integration capital additions^(3) | (287) | (314) | _ _ | 
| Restructuring costs including working capital movements^(4) | (312) | (480) | _ _ | 
| Licences and spectrum | (2,467) | (896) | _ _ | 
| Interest received and paid^(5) | (1,164) | (1,254) | _ _ | 
| Taxation | (1,234) | (925) | _ _ | 
| Dividends received from associates and joint ventures | 617  | 638  | _ _ | 
| Dividends paid to non-controlling shareholders in subsidiaries | (400) | (539) | _ _ | 
| Other | 48  | 181  | _ _ | 
| **Free cash flow**^(1) | **1,442 ** | **3,309 ** | _(56.4)_ | 
| Acquisitions and disposals | 8,727  | 138  | _ _ | 
| Equity dividends paid | (2,484) | (2,474) | _ _ | 
| Share buybacks^(5) | (1,893) | (2,029) | _ _ | 
| Foreign exchange loss | 141  | (378) | _ _ | 
| Other movements in net debt^(6) | 2,270  | 399  | _ _ | 
| **Net debt decrease/(increase)**^(1) | **8,203 ** | **(1,035)** | _ _ | 
| Opening net debt^(1) | (41,578) | (40,543) | _ _ | 
| **Closing net debt**^(1) | **(33,375)** | **(41,578)** | _19.7_ | 
| ** ** | ** ** | ** ** | _ _ | 
| **Free cash flow**^(1) | **1,442 ** | **3,309 ** | _ _ | 
| Adjustments: | ** ** | ** ** | _ _ | 
|  – Licences and spectrum | 2,467  | 896  | _ _ | 
|  – Restructuring costs including working capital movements^(4) | 312  | 480  | _ _ | 
|  – Integration capital additions^(3) | 287  | 314  | _ _ | 
|  – Vantage Towers growth capital expenditure | 497  | 244  | _ _ | 
|  – Other adjustments^(7) | (163) | 194  | _ _ | 
| **Adjusted free cash flow**^(1) | **4,842 ** | **5,437 ** | _ _ |

Notes:

1.  Adjusted EBITDAaL, Free cash flow, Adjusted free cash flow and Net debt are 
non-GAAP measures. See page 36 for more information.

2.  See page 47 for an analysis of tangible and intangible additions in the year.

3.  Integration capital additions comprises amounts for the integration of acquired
Liberty Global assets and network integration.

4.  Includes working capital in respect of Integration capital additions.

5.  Interest received and paid excludes interest on lease liabilities of €372 million
outflow (FY22: €361 million) included within Adjusted EBITDAaL and €26 million of
cash outflow (FY22: €58 million inflow) from the option structures relating to the
issue of the mandatory convertible bonds which is included within Share buybacks.
The option structures were intended to ensure that the total cash outflow to execute
the programme were broadly equivalent to the amounts raised on issuing each tranche.

6.  Other movements on net debt for the year ended 31 March 2023 includes mark-to-
market gains recognised in the income statement of €534 million (FY22: €256 million
gain), together with €1,739 million (FY22: €55 million) for the repayment of debt
in relation to licenses and spectrum in Italy.

7.  Other adjustments in FY23 includes €120 million received in respect of the Group’s
new fibre joint venture in Germany and an allocation of €43 million from the Vodafone
Hungary proceeds for future services to be provided by the Group. The amount for
FY22 includes a special dividend of €194 million paid to the minority shareholders
in Egypt.

Adjusted free cash flow decreased by €595 million to €4,842 million in the year.
This reflected a decrease in Adjusted EBITDAaL in the year, together with higher
payments on lease liabilities, which outweighed favourable working capital movements
and higher taxation payments.

| Borrowings and cash position |  |  | _ _ | 
| ** ** | ** ** | **FY23** | **FY22** | **_Reported_** | 
| ** ** | ** ** | **€m ** | **€m ** | **_change %_** | 
| Non-current borrowings | (51,669) | (58,131) | _ _ | 
| Current borrowings | (14,721) | (11,961) | _ _ | 
| **Borrowings** | **(66,390)** | **(70,092)** | _ _ | 
| Cash and cash equivalents | 11,705  | 7,496  | _ _ | 
| **Borrowings less cash and cash equivalents** | **(54,685)** | **(62,596)** | _12.6 _ |

Borrowings principally includes bonds of €44,116 million (FY22: €48,031 million),
lease liabilities of €13,364 million (FY22: €12,539 million) and cash collateral
liabilities €4,886 million (FY22: €2,914 million).

The decrease in borrowings of €3,702 million was principally driven by repayments
of bonds of €5,742 million, Italy licences and spectrum liabilities of €1,739 million
and the disposal of our controlling interest in Vantage Towers of €2,188 million,
partially offset by bonds issued of €3,577 million, an increase in collateral liabilities
of €1,972 million and lease liabilities of €825 million.

| Funding position |  |  |  | 
|  | **FY23** | **FY22** | **_Reported_** | 
| ** ** | ** ** | **€m ** | **€m ** | **_change %_** | 
| Bonds | (44,116) | (48,031) | _ _ | 
| Bank loans | (795) | (1,317) | _ _ | 
| Other borrowings including spectrum | (1,744) | (3,909) | _ _ | 
| **Gross debt**^(1) | **(46,655)** | **(53,257)** | _12.4 _ | 
| Cash and cash equivalents | 11,705  | 7,496  | _ _ | 
| Short-term investments^(2) | 4,305  | 4,795  | _ _ | 
| Derivative financial instruments^(3) | 1,917  | 1,604  | _ _ | 
| Net collateral liabilities^(4) | (4,647) | (2,216) | _ _ | 
| **Net debt**^(1) | **(33,375)** | **(41,578)** | _19.7 _ |

Notes:

1.  Gross debt and Net debt are non-GAAP measures. See page 36 for more information.

2.  Short-term investments includes €1,338 million (FY22: €1,446 million) of highly
liquid government and government-backed securities and managed investment funds 
of €2,967 million (FY22: €3,349 million) that are in highly rated and liquid money
market investments with liquidity of up to 90 days.

3.  Derivative financial instruments excludes derivative movements in cash flow 
hedging reserves of €2,785 million gain (FY22: €1,350 million gain).

4.  Collateral arrangements on derivative financial instruments result in cash being
held as security. This is repayable when derivatives are settled and is therefore
deducted from liquidity.

Net debt decreased by €8,203 million to €33,375 million. This was driven by the 
free cash inflow of €1,442 million and acquisitions and disposals of €8,727 million,
partially offset by equity dividends of €2,484 million, share buybacks of €1,893
million (used to offset dilution linked to the conversion of certain mandatory convertible
bonds). Other movements in net debt includes €1,730 million relating to the settlement
of 5G spectrum in Italy previously included in net debt. Settlement of the liability
during the period had no impact overall on net debt, with the resulting cash payment
included in free cash flow.

Other funding obligations to be considered alongside net debt include:

–     Lease liabilities of €13,364 million (€12,539 million as at 31 March 2022);

–     KDG put option liabilities of €485 million (€494 million as at 31 March 2022);

–     Guarantee over Australia joint venture loan of €1,611 million (€1,573 million
as at 31 March 2022); and

–     Pension liabilities of €258 million (€281 million as at 31 March 2022).

The Group’s gross and net debt includes €9,942 million (€9,942 million as at 31 
March 2022) of long-term borrowings (‘Hybrid bonds’) for which a 50% equity characteristic
of €4,971 million (€4,971 million as at 31 March 2022) is attributed by credit rating
agencies.

The Group’s gross and net debt includes certain bonds which have been designated
in hedge relationships, which are carried at €1,282 million higher value (€1,316
million higher as at 31 March 2022) than their euro equivalent redemption value.
In addition, where bonds are issued in currencies other than euro, the Group has
entered into foreign currency swaps to fix the euro cash outflows on redemption.
The impact of these swaps is not reflected in gross debt and if it were included
would decrease the euro equivalent value of the bonds by €1,440 million (€1,456 
million as at 31 March 2022).

Return on capital employed

Return on capital employed (‘ROCE’) reflects how efficiently we are generating profit
with the capital we deploy.  We calculate two ROCE measures: i) Pre-tax ROCE for
controlled operations only and ii) Post-tax ROCE including associates and joint 
ventures. ROCE calculated using GAAP measures^(3) for the year was 12.9% (FY22: 
5.2%), impacted by the disposal of Vantage Towers to the newly formed joint venture,
resulting in an increase in the average capital employed.

The table below presents adjusted ROCE metrics. 

|  | Excluding | _ _ |  | 
| ** ** | Vantage Towers^(2) | Re-presented^(1) | **_ _** | 
| ** ** | **FY23** | **FY22** | **_Change_** | 
|  | **%** | **%** | **_pps_** | 
| **Pre-tax ROCE (controlled)^(3)** | **6.8%** | **7.2%** | _(0.4)_ | 
| **Post-tax ROCE (controlled and associates/joint ventures)^(3)** | **5.1%** | **5.2%** | _(0.1)_ |

Notes:

1. The results for the year ended 31 March 2022 have been re-presented to reflect
that Indus Towers Limited is no longer reported as held for sale. Consequently, 
post-tax ROCE (controlled and associates/joint ventures) has increased by 0.2pps,
from 5.0% as previously reported, to 5.2%. Similarly, ROCE calculated using GAAP
measures has increased by 0.2pps, from 5.0% as previously reported, to 5.2%. See
note 3 ‘Assets held for sale’ in the condensed consolidated financial statements
for more information.

2.  FY23 excludes the results of Vantage Towers following its disposal on 22 March
2023. FY22 excluding Vantage Towers pre-tax ROCE is 7.0% and post-tax ROCE is 5.0%.

3.  ROCE is calculated by dividing Operating profit by the average of capital employed
as reported in the consolidated statement of financial position. Pre-tax ROCE (controlled)
and Post-tax ROCE (controlled and associates/joint ventures) are non-GAAP measures.
See page 36 for more information. 

Funding facilities

As at 31 March 2023, the Group had undrawn revolving credit facilities of €7.7 billion
comprising euro and US dollar revolving credit facilities of €4.0 billion and US
$4.0 billion (€3.7 billion) which mature in 2025 and 2028 respectively. Both committed
revolving credit facilities support US dollar and euro commercial paper programmes
of up to US$15 billion and €10 billion respectively.

Post employment benefits

As at 31 March 2023, the Group’s net surplus of scheme assets over scheme liabilities
was €71 million (FY22: €274 million net surplus).  

Dividends

Dividends will continue to be declared in euros, aligning the Group’s shareholder
returns with the primary currency in which we generate free cash flow, and paid 
in euros, pounds sterling and US dollars. The foreign exchange rate at which future
dividends declared in euros will be converted into pounds sterling and US dollars
will be calculated based on the average World Markets Company benchmark rates over
the five business days during the week prior to the payment of the dividend.

The Board is recommending total dividends per share of 9.0 eurocents for the year.
This includes a final dividend of 4.5 eurocents compared to 4.5 eurocents in the
prior year.

The ex-dividend date for the final dividend is 8 June 2023 for ordinary shareholders,
the record date is 9 June 2023 and the dividend is payable on 4 August 2023. Dividend
payments on ordinary shares will be paid directly into a nominated bank or building
society account.

**Other significant developments**

Board changes

On 5 December 2022, the Group announced that Nick Read had agreed with the Board
to step down as Group Chief Executive and as a Director of Vodafone on 31 December
2022.

On 27 April 2023, Margherita Della Valle was appointed Group Chief Executive and
will continue as Group Chief Financial Officer until an external search for a new
Group Chief Financial Officer is complete.  

On 14 November 2022, Christine Ramon was appointed as a non-executive director. 

On 28 March 2023, Christine Ramon, non-executive director, joined the Audit and 
Risk Committee.

On 10 May 2023, the following changes were announced and will take effect from the
conclusion of the 2023 AGM:

–   David Nish, non-executive director, will be appointed Senior Independent Director
and also join the Nominations and Governance Committee.  

–   Delphine Ernotte Cunci and Christine Ramon, non-executive directors, will be
appointed Workforce Engagement Leads.  

–   Amparo Moraleda, non-executive director, will cease to be a member of the Audit
and Risk Committee and will be appointed Chair of the Remuneration Committee.  

–   Jean-Francois van Boxmeer, Chair of the Board, and Christine Ramon, will join
the ESG Committee.  

In addition, on 10 May 2023, the Board approved the creation of a Technology Committee
as a Committee of the Board. The Committee will be formed of non-executive directors,
chaired by Simon Segars with Stephen Carter, Delphine Ernotte Cunci and Deborah 
Kerr as members.

Executive Committee changes

On 31 December 2022, Johan Wibergh retired from his role as Group Chief Technology
Officer. Scott Petty, formerly Digital & IT Director, became the Group Chief Technology
Officer on 1 January 2023 and joined the Executive Committee.

On 31 December 2022, Alex Froment-Curtil stepped-down as Group Chief Commercial 
Officer. On 12 January 2023, Aldo Bisio was appointed Group Chief Commercial Officer
in addition to his existing role as Chief Executive of Vodafone Italy.   

On 1 January 2023, Alberto Ripepi, Group Chief Network Officer, joined the Executive
Committee.

On 12 January 2023, Colman Deegan stepped down from the Executive Committee and 
as CEO of Vodafone Spain on 31 March 2023. 

On 28 February 2023, Rosemary Martin, former Group General Counsel and Company Secretary,
stepped down from the Executive Committee and retired on 31 March 2023.   

On 1 March 2023, Maaike de Bie was appointed Group General Counsel and Company Secretary
and joined the Executive Committee.

Vantage Towers

On 22 March 2023, the Group completed the disposal of its interest in Vantage Towers
A.G. to Oak Holdings GmbH, the co-control partnership of Vodafone, GIP and KKR. 
Vodafone retained an interest of 64.2% in Oak Holdings 1 GmbH, which owns 89.3% 
of Vantage Towers A.G.

On 18 April 2023, the Management Board and the Supervisory Board of Vantage Towers
A.G. published their joint reasoned statement on the public delisting tender offer
of Oak Holdings GmbH to the shareholders of Vantage Towers. Both recommended that
all remaining shareholders accept the delisting tender offer.  

Vodafone Ghana

On 21 February 2023, the Group announced it had completed the sale of its 70% shareholding
in Ghana Telecommunications Limited (‘Vodafone Ghana’) to Telecel Group. 

Vodafone Hungary

On 31 January 2023, the Group announced it had completed the sale of Vodafone Magyarország
Zrt (‘Vodafone Hungary’) to 4iG Public Limited Company and Corvinus Zrt.

Vodafone Egypt

On 13 December 2022, the Group announced it had completed the transfer of its 55%
shareholding in Vodafone Egypt to Vodacom Group Limited (‘Vodacom’). Following completion,
Vodafone’s shareholding in Vodacom has increased from 60.5% to 65.1%.   

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