Vodafone Announces Results for Year Ended 31 March 2014
OREANDA-NEWS. Group revenue down 1.9% to Ј43.6 billion; full year organic service revenue decline 4.3%.
Q4 organic service revenue declined 3.8%*2, or 4.0%* including Italy at 100% from 21 February 2014.
EBITDA3 down 7.4% at Ј12.8 billion; organic EBITDA margin down 1.3 percentage points.
Adjusted operating profit3 Ј7.9 billion, including Ј3.2bn for Verizon Wireless to 2 September 2013.
Pro forma full year 13/14 guidance met: adjusted operating profit Ј4.94 billion, free cash flow Ј4.84 billion.
Completion of Verizon Wireless disposal, USD 85 billion returned to shareholders; Ј45.0 billion pre-tax gain.
Ј19.3 billion deferred tax assets recognised in relation to the Group’s historical tax losses, Ј17.7 billion of this announced H1.
Impairments totalling Ј6.6 billion in Germany, Spain, Portugal, Czech Republic and Romania.
Planned organic investments of around Ј19 billion over the next two years, including Project Spring.
Final dividend per share of 7.47 pence, giving total dividends per share of 11.0 pence, up 8%.
Significant progress on unified communications strategy: acquisition of Kabel Deutschland (‘KDG’), announced acquisition of Ono, ongoing fibre build in Spain and Portugal, with Italy to commence this year.
Project Spring underway, initially with increased network investment in India and Germany.
4.7 million 4G customers in 14 markets; early 4G data usage more than double that of 3G data usage.
European smartphone penetration 45%, up 7 percentage points year-on-year.
Mobile in-bundle revenue grew 7.8%* in the year and Q4, and now represents 51% of Q4 Group mobile service revenue, and 61% in Europe.
Vodafone Red now in 20 markets; 12 million customers as at 31 March 2014.
M-Pesa now in 10 markets, 17 million customers.
Guidance for the 2015 financial year.
EBITDA in the range of Ј11.4 billion to Ј11.9 billion, principally reflecting the impact of Project Spring investment and foreign exchange movements.
Positive free cash flow after all capex, before M&A, spectrum and restructuring costs.
Total capex programme of around Ј19 billion in the two years to March 2016, with capital intensity subsequently normalising to 13-14% of annual revenue.
Intention to grow dividends per share.
Vittorio Colao, Group Chief Executive, commented:
“It has been a year of substantial strategic progress. The sale of our Verizon Wireless stake has rewarded shareholders for their support, and enabled the acceleration of our strategy through the acquisition of KDG, the pending acquisition of Ono and our Project Spring investment programme.
“Our operational performance has been mixed. The Group’s emerging markets businesses have performed strongly throughout the year: we have executed our strategy well and have successfully positioned ourselves for the rapid growth in data we are now witnessing. In Europe, where we continue to face competitive, regulatory and macroeconomic pressures, we have taken steps to improve our commercial performance, particularly in Germany and Italy, and are beginning to see encouraging early signs.
“I am confident about the future of the business given the growth prospects in data, emerging markets, enterprise and unified communications. We have commenced our Project Spring two-year investment programme which will accelerate our plans to establish stronger network and service differentiation for our customers. I expect the first signs of this to become evident later this year, with wider 4G coverage in Europe and 3G coverage in emerging markets, improved network performance and increased customer advocacy. While cash flow will be depressed during this investment phase, our intention to continue to grow dividends per share annually demonstrates our confidence in strong future cash flow generation.”
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