Sir John Bond
Chairman
Dear Shareholder,
We took a major step forward in building our developing market presence with the acquisition of Vodafone Essar in India last year.
Review of the Year
I am pleased to report that your Company made further progress during the year, with continuing execution of our strategy and delivery of our financial targets. This is reflected in our results, with a final dividend per share of 5.02 pence, giving total dividends for the year of 7.51 pence, up 11.1%. The share price increased 21%, since the beginning of the year, while the FTSE 100 index was down 4% during the same period.
Vodafone is a truly international company, with more than 260 million proportionate customers across 25 markets and partner networks in 42 more countries.
With more than two thirds of the world’s population now able to benefit from mobile phone coverage, there are approximately 3.5 billion mobile customers globally, a figure that industry analysts expect to rise by around 10% per year in the near future.
Approximately half of the world’s GNP now comes from emerging markets and this year we reported that, for the first time, over half our customers are in our EMAPA region. We took a major step forward in building our developing market presence with the acquisition of Vodafone Essar in India last year. The business, which now operates under the Vodafone brand, is already our largest controlled business in terms of customer numbers at over 44 million. We have much to learn from this successful business and much to contribute.
In Europe, our challenges are very different given the relative maturity of the markets, most of which have over 100% penetration. Here we are countering pressure on our traditional revenue by becoming more productive and we are establishing new sources of revenue.
In the US, our investment in Verizon Wireless continues to do well and in our judgement is an appreciating asset, which generates very strong levels of cash flow. We are cooperating closely with Verizon Wireless in a number of important areas, including 4G technology and servicing international companies.
Our industry remains very much in the regulatory spotlight and your Board monitors the regulatory environment carefully as it has significant economic consequences for shareholders.
After five years in the role our Chief Executive, Arun Sarin, has decided to retire and will be stepping down at the conclusion of our AGM. He has done a tremendous job, having led the Company with distinction and navigated Vodafone through a period of rapid change. He developed a new strategy for the business and significantly expanded our footprint in emerging markets. The Board has a great deal to thank him for and I would like personally to thank him for all he has done for the business and wish him and his family all the best for the future. In Vittorio Colao we have a fine successor and I am looking forward to working with him in his new role.
We also say goodbye to non-executive directors, Michael Boskin and Jürgen Schrempp, who will retire from the Board at the conclusion of the Company’s AGM. They have served with distinction for many years and I am particularly grateful to them for their tireless work on our committees.
Your Board is confident that we are well positioned to build on our success in the coming years.
Annual General Meeting
The Annual General Meeting provides an opportunity for the Company’s shareholders to communicate with the directors and I sincerely hope that you will take the opportunity to do so. The Notice of Meeting, together with an explanation of the business to be conducted at the meeting, is set out on pages 6 to 12.
Your directors consider that the Resolutions on pages 6 and 7 are in the best interests of shareholders and they recommend that shareholders vote for the Resolutions.
I do understand that most shareholders will not be able to attend the AGM in person but nevertheless your vote is still important. I would strongly encourage you, regardless of the number of shares you own, to vote and details on how to do this are set out on page 12. The results of voting on all the resolutions will be announced via the Regulatory News Service and published on the Company’s website as soon as possible after the end of the meeting.
Your Board appreciates your continuing support.
Yours sincerely
Vodafone Group Plc
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England
Registered in England No. 1833679