Half-year financial report for the six months ended 30 September 2011
Consistent results: growth, investment, cash generation, shareholder returns
Q2 Group organic service revenue growth +1.3%(*); Europe -1.2%(*), AMAP +8.2%(*)
H1 EBITDA up 2.3% to £7.5 billion; EBITDA margin 32.0%, down 0.6 percentage points, as expected
Adjusted operating profit £6.0 billion; full year guidance now improved to £11.4 – £11.8 billion
Free cash flow £2.6 billion; full year guidance of £6.0 – £6.5 billion confirmed(1)
Interim dividend 3.05 pence, up 7.0%; special dividend of 4.0 pence to be paid at the same time
Continued progress on strategic delivery
Data revenue +23.8%(*), with smartphone penetration in Europe rising to 21.7% in Q2; 24% of consumer contract customers in Europe(2) are on integrated voice, SMS and data tariffs
Enterprise revenue +2.6%(*), driven by new account wins, growth in demand for converged services and increasing penetration of existing clients
Continued strong momentum in emerging markets: India service revenue +18.4%(*), Turkey +27.9%(*), Vodacom +7.3%(*)
Increased focus on new services: M-Pesa now in 7 markets with 27 million registered users; charge-tobill launched in Europe; machine-to-machine revenue up 33%(*) with 6.2 million SIMs
£2.8 billion dividend from Verizon Wireless due January 2012, with £2.0 billion special dividend to be paid to Vodafone shareholders; SFR stake sold, with £4.0 billion committed to a share buyback
(*) 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 foreign exchange rates.
(1) Excludes the dividend due from Verizon Wireless in January 2012.
(2) Five European markets: Germany, Italy, Spain, UK, Netherlands.
Vittorio Colao, Group Chief Executive, commented:
“A year on from announcing our updated strategy, we are making clear progress. We are gaining share in most of our major markets, through our focus on superior network quality and an improved customer experience. In addition, we are achieving sustained growth in the key areas of data, emerging markets andenterprise.
“At the same time, we have delivered on our commitment to crystallise value from our non-controlled assets through a successful programme of disposals and the announcement of a dividend from VerizonWireless, with the majority of proceeds pledged to shareholder returns.
“Although we remain mindful of the uncertain economic outlook, we are confident that we have the right strategy and capabilities to continue to perform consistently through top line growth, cost efficiency, investment and cash generation.”
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