Vodafone Group Plc — FY2024 Form 20-F summary
Reporting period: This is an annual report for the fiscal year ended 31 March 2024, not a standalone 2023 fourth-quarter filing. Vodafone reports under IFRS as issued by the IASB. FY2023 comparatives were re-presented to classify Vodafone Spain and Vodafone Italy as discontinued operations.
Business context and portfolio changes
Vodafone operates mobile and fixed telecommunications networks, principally across Europe and Africa, and provides business connectivity, IoT, cloud, security and financial services. The Group reported continuing operations excluding Spain and Italy. Vodafone Spain was sold after year-end, on 31 May 2024; the sale of Vodafone Italy to Swisscom was agreed but remained subject to regulatory approval, with completion expected in the first half of calendar 2025.
Financial performance
| Metric | FY2024 | FY2023, re-presented |
|---|---|---|
| Revenue | €36.717bn | €37.672bn |
| Service revenue | €29.912bn | €30.318bn |
| Operating profit | €3.665bn | €14.451bn |
| Profit from continuing operations | €1.570bn | €12.582bn |
| Profit for the year, including discontinued operations | €1.505bn | €12.335bn |
| Basic EPS from continuing operations | 4.45 eurocents | 43.66 eurocents |
| Adjusted EBITDAaL | €11.019bn | €12.424bn |
| Cash inflow from operating activities | €16.557bn | €18.054bn |
| Net cash flow | (€5.420bn) | €4.245bn |
| Total dividend per share for the year | 9.0 eurocents | 9.0 eurocents |
Reported revenue fell 2.5%, while service revenue declined 1.3%; organic service revenue grew 6.3%, reflecting growth in Europe, Africa and Business, partly offset by currency movements and portfolio changes. In Q4, Group organic service revenue growth was 7.1%. Operating profit fell 74.6%, primarily because the prior year included an €8.6bn gain on the Vantage Towers disposal and other disposal-related effects. Financing costs rose to €2.626bn from €1.609bn; adjusted net financing costs were broadly unchanged at €1.775bn.
Segment performance was mixed. Germany service revenue grew 0.2%, but Adjusted EBITDAaL fell 5.8% and its margin declined to 38.7%. UK service revenue grew 5.1% and Adjusted EBITDAaL rose 4.3%. Africa organic service revenue grew 9.2%, while reported revenue and Adjusted EBITDAaL were reduced by currency depreciation. Turkey organic service revenue grew 88.5%, reflecting repricing amid high inflation.
Balance sheet, liquidity and capital allocation
At 31 March 2024, borrowings were €56.987bn and cash and cash equivalents were €6.183bn; borrowings less cash were €50.804bn. Cash and short-term investments together were €9.4bn, and undrawn committed facilities were approximately €8.0bn. Total equity was €60.998bn. Vodafone says it reviews liquidity daily and stress-tests its position; the Board concluded it had sufficient headroom in scenarios tested and a reasonable expectation of meeting liabilities through 31 March 2027.
The Group’s capital additions were €6.3bn. The Board’s new capital framework maintains disciplined investment, sets a lower target leverage range with flexibility, and rebases the FY2025 dividend to 4.5 eurocents per share, with an ambition to grow it over time. After year-end Vodafone announced a €2.0bn shareholder-return plan over 12 months, beginning with a €500m buyback; no buybacks occurred during FY2024.
Outlook, management commentary and material risks
- Management said FY2024 performance was slightly ahead of expectations and financial guidance was achieved. The filing text provided here does not state clear numerical FY2025 guidance for Adjusted EBITDAaL or adjusted free cash flow.
- Management’s FY2025 priorities include improving Germany’s underlying performance and customer experience, strengthening Vodafone Business, completing the commercialisation of shared operations, and progressing the portfolio transformation.
- The proposed Vodafone UK–Three UK combination is subject to approvals and was expected to close around the end of calendar 2024; the UK competition inquiry had progressed to Phase 2 by April 2024. The companies outlined an £11bn investment plan for the combined network.
- Key risks include intense competition and price pressure, macroeconomic and currency volatility, execution of the transformation and disposals, cyber threats, data privacy, technology resilience, and geopolitical supply-chain disruption.
- Notable contingencies include a South African “Please Call Me” dispute with a wide range of possible outcomes; a claim against Vodafone and other UK operators alleged to be worth about €1.6bn, which Vodafone intends to defend; and a capped potential exposure to Vodafone Idea of INR64bn (about €713m), for which no further Group cash payments were considered probable at year-end.
- Unusual accounting items include a €1.019bn deferred tax asset recognised on Luxembourg tax losses following favourable case law, contributing to a low 3.1% effective tax rate. The recognised Luxembourg deferred tax asset is €16.714bn and management forecasts utilisation over 52–57 years. Auditors identified its recoverability as a critical audit matter.
- Vodafone recorded non-cash remeasurement charges of €345m for Spain and €83m for Italy in discontinued operations. Spain’s final disposal gain or loss remained undetermined at the filing date, pending completion-account adjustments.
Most important facts for investors to verify
- Progress and final consideration from the Italy sale, including regulatory approval, completion timing and associated service agreements; and the final disposal result for Spain.
- Whether the lower FY2025 dividend and planned buybacks are supported by recurring cash generation after disposals and portfolio changes.
- Germany’s customer, revenue and margin trends, plus the assumptions and headroom in its goodwill impairment assessment; Germany goodwill was €20.335bn.
- The sustainability of the Luxembourg deferred tax asset given the long recovery period and dependence on forecast Group financing, procurement and roaming income.
- Developments in the UK merger review and the material legal proceedings, especially the Vodafone Idea exposure and “Please Call Me” case.
- Underlying performance against reported performance: organic growth excludes foreign exchange, acquisitions and disposals, and Turkey’s hyperinflation adjustment.
Audit: Ernst & Young issued an unqualified opinion on the IFRS financial statements and an unqualified opinion that internal control over financial reporting was effective as of 31 March 2024.