Interim Management Statement for the Quarter Ended 31 December 2010
Further improvements in revenue growth
- Group service revenue +2.5%(*), fifth sequential quarter of improvement - both regions delivered faster growth rates
- Strong service revenue growth in India +16.7%(*), Turkey +31.7%(*), the UK +7.0%(*) and Vodacom +5.6%(*). Excluding termination rate cuts, growth was solid in Germany at +2.3%(*) (headline +1.1%(*)). Performance was stable in Italy with revenue growth of -1.4%(*). Conditions remain challenging in Spain at -7.4%(*)
- Verizon Wireless service revenue +7.0%(*); strong customer and data growth. iPhone from February 2011
- Underlying free cash flow generation remains strong
- Outlook confirmed, with adjusted operating profit now expected to be towards the upper end of the £11.8 -£12.2 billion range before the impact of the Verizon Wireless iPhone launch
| Quarter ended 31 December 2010 | Change year on year | Change compared to Q2 | ||
| Reported | Organic | Organic | ||
| £m | % | % | pps | |
| Group revenue | 11,894 | +3.0 | +3.5 | +0.8 |
| Group service revenue | 10,960 | +2.1 | +2.5 | +0.2 |
| Europe | 7,657 | -3.5 | +0.2 | +0.1 |
| Africa, Middle East and Asia Pacific | 3,210 | +18.1 | +9.3 | +0.3 |
| Capital expenditure | 1,545 | +14.5 | ||
| Free cash flow | 1,086 | -39.9 |
Progress against strategic priorities
- Data: revenue +27.2%(*) led by higher smartphone penetration and data attach rates in Europe
- European data pricing: tiered plans launched in eight markets. New smartphone roaming plans launched in November
- Enterprise: improved trend with Europe service revenue +1.3%(*) and Vodafone Global Enterprise revenue up approximately 6%(*)
- Total communications: fixed line revenue +4.7%(*), with fixed broadband customers +11.7%(*)
- Shareholder returns: £1.1 billion of £2.8 billion share buy-back executed by the end of the quarter
Vittorio Colao, Chief Executive, commented
“This is the fifth successive quarter of service revenue growth improvement, with strong results from India, Turkey, the UK and Vodacom. In addition, Verizon Wireless continues to show strong momentum. Our performance has been driven by the effective execution of our strategy to strengthen our businesses and deliver growth, particularly in data services and emerging markets.”
Note:
(*) 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.
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