UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

Report of Foreign Private Issuer

Pursuant to Rules 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

 

Dated September 9, 2019

 

Commission File Number: 001-10086

 

VODAFONE GROUP

PUBLIC LIMITED COMPANY

(Translation of registrant’s name into English)

 

VODAFONE HOUSE, THE CONNECTION, NEWBURY, BERKSHIRE RG14 2FN, ENGLAND

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x      Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes o      No x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN EACH OF THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-219583), THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-81825) AND THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-149634) OF VODAFONE GROUP PUBLIC LIMITED COMPANY AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

news release

 

Trading update for the quarter ended 30 June 2019

26 July 2019

 

Highlights

 

·                  Group revenue of €10.7 billion, down by €0.2 billion due to foreign exchange rate effects.

 

·                  Q1 organic service revenue declined 0.2%*, improving compared to Q4 (-0.7%**); gradual recovery expected to continue.

 

·                  Sequential progress in Europe, with service revenues -1.7%* (Q4: -2.1%**), as market conditions continued to improve in Italy and retail growth in Germany remained robust, offsetting the impact of competitor promotions in Spain.

 

·                  Rest of the World grew 5.3%* (Q4: 5.7%*) as the impact of regulation introduced in March in South Africa was offset by strong growth ahead of inflation in other markets.

 

·                  Good progress on strategic priorities during the quarter:

 

·                  Deepening customer engagement: Group mobile contract churn down 0.6 percentage points year-on-year to another record low; 115,000 converged customer net adds in Europe; 5G services launched in all major EU markets.

 

·                  Radical simplification & digital transformation: Simplified pricing plans with speed-tiered unlimited data launched in 5 markets; on track to meet the Group’s €400 million FY20 net operating expenses reduction target in Europe.

 

·                  Improving asset utilisation: Network sharing agreements signed in Spain/UK, Italy imminent; intention to monetise a substantial part of our European tower infrastructure over the next 18 months, depending on market conditions.

 

·                  Portfolio optimisation: Acquisition of Liberty Global’s cable assets in Germany and CEE approved by the EC; deal expected to complete by 31 July 2019. NZ$3.4 billion (€2.1 billion) New Zealand disposal also to complete on 31 July.

 

·                  Confident on full year guidance1: adjusted EBITDA of €13.8-14.2 billion, free cash flow (pre-spectrum) at least €5.4 billion.

 

		Quarter ended 30 June
		2019		2018		Statutory growth
		€m		€m		%
Group revenue2		10,653		10,902		(2.3	)
Europe		7,792		7,957		(2.1	)
Rest of the World		2,547		2,652		(4.0	)

 

		2019		2018		Organic growth*
Non-GAAP financial information3		€m		€m		%
Group service revenue		8,994		9,130		(0.2	)
Europe		6,782		6,896		(1.7	)
Rest of the World		2,114		2,132		+5.3

 

Nick Read, Group Chief Executive, commented:

 

“Our service revenue growth improved during the first quarter, led by Italy, and mobile churn fell to another record low. Following a significant quarter of commercial activity, we expect the gradual recovery in our service revenues to continue, underpinning our financial outlook for the year.

 

With the completion of the Liberty Global acquisitions, Vodafone will become Europe’s leading converged operator, with growing fixed and converged services contributing around half of our European service revenues. We have developed a detailed plan to deliver the customer benefits and capture the substantial synergies from the deal, which we will start to execute immediately.

 

We also have made good progress on improving the utilisation of our assets. We will capture industrial efficiencies through network sharing agreements signed in multiple markets, and today we are announcing the decision to create Europe’s largest tower company. We believe there is a substantial opportunity to unlock the embedded value of our towers, and we have started preparations for a range of monetisation options over the next 18 months, including a potential IPO.”

 

1

 

OPERATING REVIEW

 

Strategic progress

 

During Q1 the Group made good progress on its key priorities for the year ahead.

 

Deepening customer engagement

 

We aim to deepen customer engagement by selling additional products, particularly in fixed, contributing to revenue growth and a reduction in churn.

 

In mobile we saw an encouraging 0.5 percentage point year-on-year reduction in Europe contract churn during Q1, reaching a new record low level of 14.6%. Data usage growth remained strong at 49%, with average smartphone usage increasing to 3.9 GB per month in Europe.

 

We have now launched 5G in five European markets, with services available in Spain, Italy and Romania since June, and the UK and Germany since July. 5G roaming is now live for Vodafone 5G customers roaming on Vodafone networks in Germany, Italy, the UK and Spain. Our 5G network will be live across more than 50 cities and available in nine European markets by the end of the current financial year.

 

Including VodafoneZiggo, we had 18.8 million fixed broadband customers, 14.6 million NGN customers, 6.7 million converged customers and 13.6 million TV customers in Europe at the end of the period. Excluding VodafoneZiggo, we added 54,000 broadband customers, 237,000 NGN customers and 115,000 converged customers during the quarter. Our customer growth slowed compared to previous quarters, primarily reflecting increased competitor promotions in Spain and Germany, as well as slower broadband market growth in Italy. However, our Consumer mobile commercial performance in Spain stabilised in June.

 

Radical simplification & digital transformation

 

We have launched new simplified commercial propositions across multiple markets during the quarter, including speed-tiered unlimited mobile data plans in five markets (Spain, UK, Romania, Czech Republic and Malta) and new simplified mobile price plans in Germany. A simpler pricing structure with reduced discounts reduces complexity for customers and sales staff, enhancing our ability to sell ‘one more product’ including fixed, consumer IoT and device insurance.

 

The new speed-differentiated unlimited data plans are primarily targeted at our existing customer base, respond to customer demand for ‘worry-free’ data usage and create opportunities for ARPU growth. In only two months we have reached an unlimited customer base of over 700,000 SIMs. Customer satisfaction and data usage have significantly increased, and ARPU has increased.

 

We are making good progress on reducing operating costs, and continue to target a net reduction in operating expenses in Europe and Common Functions of at least €1.2 billion by FY21 compared to FY18 on an absolute organic basis. This includes €400 million of savings in FY20, matching our achievement in FY19.

 

Improving asset utilisation

 

We aim to improve the utilisation of all of the Group’s assets as part of our focus on improving returns on capital. In particular, we see a unique window of opportunity to initiate or extend our existing mobile network sharing agreements as the industry begins to deploy 5G.

 

In April, we announced an enhanced network sharing agreement with Orange in Spain. The new agreement expands active network sharing to around two thirds of the Spanish population, and extends the agreement to include 5G technology. The new agreement is expected to deliver cumulative operating expenses and capital expenditure savings to Vodafone of at least €600 million over the next ten years.

 

In July, we signed an agreement with Telefonica in the UK to extend our network sharing agreement to include 5G active equipment on joint network sites. Vodafone and O2 have also agreed to greater 5G network autonomy on approximately 2,700 sites in 23 of the UK’s larger cities, bringing the total proportion of autonomous sites to 25%. This gives both parties more flexibility to meet the needs of their customers and deploy future network technologies. In addition, Vodafone and O2 will now proceed to explore potential monetisation options for Cornerstone (our 50:50 joint venture company that owns and manages the parties’ passive tower infrastructure).

 

We have started the work required to legally separate our European Tower infrastructure into a new organisation (referred to as ‘TowerCo’), which will be operational by May 2020 with a dedicated management team. We intend to monetise a substantial proportion of TowerCo over the next 18 months, depending on market conditions. The ultimate form of monetisation may include an IPO or disposal of a minority stake in TowerCo, as well as potential disposals of minority or majority stakes at an individual country level.  We believe that there is significant scope to generate operational efficiencies and increase tenancy ratios across our Tower portfolio, and that it will be possible to monetise towers while preserving network differentiation and long-term strategic flexibility.

 

2

 

OPERATING REVIEW

 

Portfolio management

 

We continue to actively manage our asset portfolio as we focus on reducing our financial leverage towards the lower end of our targeted 2.5-3.0x range. In July, we received regulatory approvals for our acquisition of Liberty Global’s cable assets in Germany and Central and Eastern Europe (“CEE”), and for the disposal of our New Zealand business.

 

The EC approved our acquisition of Liberty Global’s cable assets in Germany, Czech Republic, Hungary and Romania on 18 July 2019, and we expect to close the transaction on 31 July 2019. The acquisition targets expected cost and capex savings of €535 million by the fifth full year post-completion, with an NPV of at least €6 billion including integration costs. We have developed a detailed plan to deliver the customer benefits and capture the significant opportunities for value creation from the deal.

 

On 13 May 2019, the Group agreed to the sale of Vodafone New Zealand Limited for a consideration of NZ$3.4 billion (€2.1 billion)4, implying an FY19 multiple of 7.3x Adjusted EBITDA5 and 16.2x Adjusted OpFCF6. We received regulatory approval for the transaction on 11 July and completion is expected on 31 July 2019.

 

On 8 May 2019, the Australian Competition and Consumer Commission (ACCC) opposed the proposed merger of Vodafone Hutchison Australia (“VHA”) and TPG Telecom (“TPG”). We remain firmly committed to the merger and have challenged the ACCC’s decision in Federal Court. The date of the initial hearing is scheduled for 10 September 2019.

 

We expect the merger of Indus Towers and Bharti Infratel to complete shortly, having received all remaining regulatory approvals with the exception of the Department of Telecommunications.

 

Outlook

 

The Group has adopted the IFRS 16 accounting standard in FY20 for statutory reporting. Consequently, we have changed some of our non-GAAP financial information; specifically, we intend to report organic adjusted EBITDA and free cash flow pre-spectrum after deducting the depreciation and interest effects of leases capitalised under IFRS 16. Please see page 44 of our 2019 Preliminary Results release for updated definitions of our non-GAAP financial information.

 

Trading during the first quarter was in line with management’s expectations underlying the outlook statement for FY20. The Group therefore confirms its expectation that based on guidance FX rates and IFRS 15 and IFRS 16 accounting standards, adjusted EBITDA is expected to be in the range of €13.8 - 14.2 billion, implying low single digit organic growth. Free cash flow generation pre-spectrum is expected to be at least €5.4 billion, after all capex, before M&A and restructuring costs, and based on guidance FX rates.

 

Our financial guidance includes New Zealand and excludes the announced acquisition of Liberty Global’s assets. We intend to update our guidance to incorporate the benefit from the acquired Liberty Global assets and the impact of the New Zealand disposal at our interim results in November.

Notes

*                   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 movements in foreign exchange rates. Organic growth is a non-GAAP financial performance measure. See “Non-GAAP financial information” on page 8 for further details and reconciliations to the respective closest equivalent GAAP measure.

**              Organic growth excluding the impact of settlements in Germany.

1.             Our financial guidance includes New Zealand and excludes the announced acquisition of Liberty Global’s assets.

2.             All revenue figures in this trading update are presented on an IFRS 15 basis.

3.             Non-GAAP financial information are measures that are presented to provide readers with additional financial information that is regularly reviewed by management and should not be viewed in isolation or as an alternative to the equivalent GAAP measure. See “Non-GAAP financial information” on page 8 for more information and reconciliations to the closest respective equivalent GAAP measure and “Definition of terms” on page 12 for further details.

4.             Converted from NZ$ to € at a rate of 1.6464 as of 31 March 2019.

5.             Net of proforma Vodafone Partner Market Agreement service fees.

6.             Adjusted OpFCF defined as Adjusted EBITDA minus capex.

 

3

 

 

OPERATING REVIEW

 

Group

 

Following the adoption of IFRS 15 “Revenue from Contracts with Customers” on 1 April 2018, revenue is presented on an IFRS 15 basis.

 

		Quarter ended 30 June
						Growth
		2019		2018		Reported		Organic *
		€m		€m		%		%
Service revenue
Europe		6,782		6,896		(1.7)		(1.7)
Rest of the World		2,114		2,132		(0.8)		+5.3
Other		123		131
Eliminations		(25)		(29)
Total service revenue		8,994		9,130		(1.5)		(0.2)
Other revenue		1,659		1,772
Revenue		10,653		10,902		(2.3)		(0.9)

 

Group revenue decreased by €0.2 billion to €10.7 billion, reflecting foreign exchange headwinds of €0.2 billion.

 

Group organic service revenue declined by 0.2%* (Q4: -0.7%**). Growth in the majority of markets was offset by declines in Italy and Spain, which were impacted by increased competition, and a decline in South Africa, which faced increased revenue pressures following the adoption of out of bundle regulation in March 2019.

 

4

 

OPERATING REVIEW

 

Europe

 

Total revenue decreased by 2.1% and organic service revenue declined 1.7%* (Q4: -2.1%**), with growth in Germany, the UK and Other Europe being offset by declines in Italy and Spain.

 

		Quarter ended 30 June 2019						Quarter ended 30 June 2018						Service revenue growth
		Service		Other				Service		Other
		revenue		revenue		Revenue		revenue		revenue		Revenue		Organic*
		€m		€m		€m		€m		€m		€m		%
Germany		2,265		307		2,572		2,257		302		2,559		+0.4
Italy		1,198		132		1,330		1,245		180		1,425		(3.8)
UK		1,233		336		1,569		1,229		321		1,550		+0.1
Spain		988		94		1,082		1,094		112		1,206		(9.3)
Other Europe		1,128		142		1,270		1,097		147		1,244		+2.1
Eliminations		(30)		(1)		(31)		(26)		(1)		(27)
Total		6,782		1,010		7,792		6,896		1,061		7,957		(1.7)

 

Germany

 

Service revenues increased 0.4%* (Q4: 0.3%**) as robust retail growth was partially offset by a decline in wholesale revenues. Retail revenues grew by 1.8%* in the quarter (Q4: 1.3%**), with continued customer growth only partially offset by headwinds from international calling regulation.

 

Mobile service revenues declined 0.5%* (Q4: -0.5%*) as retail growth was offset by declines in wholesale. Retail revenues grew by 1.4%* (Q4: 0.6%*), supported by a higher contract customer base. We added 74,000 contract customers in the quarter, thanks in part to the success of our GigaCube proposition. Contract churn improved sequentially by 0.8 percentage points to 12.3%, supported by improvements in all segments.

 

Fixed service revenues increased 1.5%* (Q4: 1.3%**) as good retail growth was partially offset by wholesale declines. Retail revenues grew 2.4%* (Q4: 2.1%**). We added 24,000 broadband customers in Q1 (Q4: 76,000) with the sequential slowdown reflecting an increased level of promotions from other operators. We added 35,000 cable customers but lost DSL customers as lower ARPU subscribers disconnected. We maintained good momentum in convergence supported by our GigaKombi proposition, adding 107,000 Consumer converged customers, which took our total Consumer converged customer base to 1.6 million. Our TV customer base declined by 38,000 primarily reflecting the loss of lower ARPU basic access subscribers, however we increased premium TV penetration.

 

On 18 July, the EC approved our acquisition of Liberty Global’s cable assets in Germany and CEE, and we expect the transaction to close on 31 July. As part of the remedy package we have agreed a Cable Wholesale Agreement with Telefonica Deutschland enabling them to offer up to 300Mbps broadband services over the combined Vodafone and Unitymedia cable network. The Cable Wholesale Agreement is long-term in nature and includes minimum customer commitment levels from Telefonica Deutschland.

 

Italy

 

Service revenues declined 3.8%* (Q4: -7.0%*), with the improved trend primarily reflecting the lapping of the shift from 28-day to monthly billing in the prior year.

 

Mobile service revenues declined 7.4%* (Q4: -11.1%*) due to a lower active customer base and lower ARPU. However, promotional activity continued to moderate during the quarter, with mobile market number portability (‘MNP’) volumes 12% lower sequentially and 34% lower year-on-year; additionally, main brand pricing for new customers improved. Our active customer base continued to decline, partially mitigated by the success of our second brand, ho., which ended the quarter with 1.2m customers. Combined with the benefit from lapping the shift from 28-day to monthly billing in the prior year, this supported the sequential improvement in mobile service revenue trends.

 

Fixed service revenues increased 9.2%* (Q4: 9.5%*) reflecting continued growth in our fixed broadband customer base. We added 27,000 broadband customers in the quarter as we maintained a strong share of broadband market net additions despite slower market growth, which reflected price increases by most operators in Q1. We added 14,000 converged customers in the quarter, taking our total converged Consumer customer base to 971,000, representing 35% of our broadband base.

 

On 10 July 2019 we announced an extension to our strategic partnership with Open Fiber, which will enable us to offer Gigabit services to c.19m homes and businesses as envisaged in their build-out plan.

 

5

 

OPERATING REVIEW

 

UK

 

Service revenues grew +0.1%* (Q4: -0.2%*) with an improved mobile service revenue performance partially offset by lower fixed service revenue growth.

 

Mobile service revenues stabilised at 0.0%* (Q4: -1.2%*) supported by a higher contract customer base and RPI-linked price increases, partially offset by reduced out of bundle revenues as a result of spend capping and lower wholesale revenue. Excluding Talkmobile we added 66,000 contract customers (Q4: 40,000). We added 53,000 prepaid customers (Q4: 9,000) supported by our fully digital sub-brand VOXI. Consumer contract branded churn improved by 0.7 percentage points year-on-year to a record low of 12.0%, supported by our VeryMe loyalty programme, where 9 million reward offers have been claimed to date.

 

Fixed service revenues increased 0.3%* (Q4: 2.5%*) as continued growth in our fixed broadband customer base was partially offset by the phasing of Business project revenues. We added 31,000 broadband customers in the quarter.

 

On 3 July 2019, our 5G UK network went live and we launched a new range of speed-differentiated mobile data and convergent offers. The new commercial propositions aim to improve customer experience, deepen the relationship and lower churn, by responding to customer demand for ‘worry-free’ data usage, and to simplify our tariffs by reducing discounts.

 

Spain

 

Service revenues declined 9.3%* (Q4: -7.9%*) reflecting the continued impact of the commercial actions we took over the past year in order to improve the competitiveness of our offers, our decision not to renew unprofitable football rights, and the lapping of a prior year price increase. In April 2019, we announced a new simplified tariff structure which includes speed-differentiated unlimited data bundles in both mobile-only and convergent offers for the first time in the Spanish market. We also reduced promotions in the market as we focused on migrating our customers to the new offers at a similar or higher level of overall spending. We have seen good uptake of the new unlimited plans by our existing customer base, and on average ARPU for these customers has increased.

 

However, our competitors increased promotional discounts following the launch, and we also lost two corporate accounts during the period. Consequently, during the quarter we lost 158,000 mobile contract customers, 49,000 fixed broadband customers and 24,000 TV customers. Promotional intensity moderated significantly towards the end of the quarter and our mobile market number portability (‘MNP’) for the Consumer contract segment was positive for the month of June.

 

We launched 5G services in 15 cities on 15 June 2019.

 

Other Europe

 

Service revenues increased 2.1%* (Q4: 2.5%*). Greece, Portugal, the Czech Republic and Hungary grew, but Ireland declined.

 

In Ireland, service revenue declined 1.1%* (Q4: 1.6%*) as continued growth in mobile was offset by a decline in fixed revenues. In Portugal service revenue grew 3.2%* (Q4: 2.1%*) supported by strong contract customer base growth and higher fixed line ARPU. In Greece, service revenue grew by 3.7%* (Q4: 9.2%*) supported by growth in prepaid ARPU and the fixed customer base.

 

6

 

 

OPERATING REVIEW

 

Rest of the World

 

On an organic basis service revenue was up 5.3%*, supported by customer base and data revenue growth, as well as the benefit of price increases to adjust for local inflation. Total revenue decreased by 4.0%, with organic growth offset by a 7.1 percentage point drag from foreign exchange movements, particularly with regard to the Turkish Lira and South African Rand.

 

														Service revenue
		Quarter ended 30 June 2019						Quarter ended 30 June 2018						growth
		Service		Other				Service		Other
		revenue		revenue		Revenue		revenue		revenue		Revenue		Organic*
		€m		€m		€m		€m		€m		€m		%
Vodacom		1,078		254		1,332		1,113		258		1,371		+1.1
Other Markets		1,036		179		1,215		1,019		262		1,281		+10.0
Total		2,114		433		2,547		2,132		520		2,652		+5.3

 

Vodacom

 

Vodacom Group service revenue grew 1.1%* (Q4: 3.5%*) as growing demand for data and M-Pesa supported good growth at Vodacom’s International operations, which offset regulatory and macro pressures in South Africa.

 

In South Africa, service revenue declined by 1.2%* (Q4: 1.4%*) reflecting regulation introduced in March affecting out of bundle charges, rollover and transfer of data, a proactive pricing transformation including a 50% out of bundle rate cut, and customer bundle spend optimisation amid macroeconomic pressures. Prepaid customers declined by 793,000 in Q1 as we continued to drive a reduction in one-off SIM card usage, taking our total prepaid customer base to 46.0 million. Our active prepaid customer base increased in the quarter, and we added 86,000 contract customers.

 

Vodacom’s International operations outside of South Africa grew by 8.6%* (Q4: 9.4%*). Growth was strong across all markets, but slowed in Mozambique following the cyclones in Q4.

 

Turkey

 

In Turkey, service revenue grew 17.2%* (Q4: 15.0%*) supported by strong consumer contract ARPU, increased mobile data revenue, and fixed line customer base growth.

 

Other Markets

 

Egypt service revenue grew 13.6%* (Q4: 11.2%*), ahead of inflation, supported by growing data usage.

 

7

 

NON-GAAP FINANCIAL INFORMATION

 

In the discussion of the Group’s reported operating results, non-GAAP financial information are presented to provide readers with additional financial information that is regularly reviewed by management. However, this additional information presented is not uniformly defined by all companies including those in the Group’s industry. Accordingly, it may not be comparable with similarly titled measures and disclosures by other companies. Additionally, certain information presented is derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted GAAP measure. Such measures should not be viewed in isolation or as an alternative to the equivalent GAAP measure.

 

Further information on the use of non-GAAP financial information is outlined on pages 231 to 245 of the Group’s annual report for the financial year ended 31 March 2019.

 

Service revenue

 

Service revenue comprises all revenue related to the provision of ongoing services including, but not limited to, monthly access charges, airtime usage, roaming, incoming and outgoing network usage by non-Vodafone customers and interconnect charges for incoming calls. We believe that it is both useful and necessary to report this measure for the following reasons:

 

·             It is used for internal performance reporting;

 

·             It is used in setting director and management remuneration; and

 

·             It is useful in connection with discussion with the investment analyst community.

 

A reconciliation of reported service revenue to the respective closest equivalent GAAP measure, revenue, is provided where used in the Operating Review on pages 2 to 7.

 

Organic growth

 

All amounts in this document marked with an “*” represent “organic growth”, which presents performance on a comparable basis in terms of merger and acquisition activity and foreign exchange rates. Whilst organic growth is neither intended to be a substitute for reported growth, nor is it superior to reported growth, we believe that these measures provide useful and necessary information to investors and other interested parties for the following reasons:

 

·             They provide additional information on underlying growth of the business without the effect of certain factors unrelated to its operating performance;

 

·             They are used for internal performance analysis; and

 

·             They facilitate comparability of underlying growth with other companies (although the term “organic” is not a defined term under IFRS and may not, therefore, be comparable with similarly titled measures reported by other companies).

 

The Group’s organic growth rates for all periods exclude the results of Vodafone India, which were reported in discontinued operations prior to the completion of the merger with Idea Cellular Limited on 31 August 2018.

 

We have not provided a comparative in respect of organic growth rates as the current rates describe the change between the beginning and end of the current period, with such changes being explained by the commentary in this news release. If comparatives were provided, significant sections of the commentary from the news release for prior periods would also need to be included, reducing the usefulness and transparency of this document.

 

8

 

 

NON-GAAP FINANCIAL INFORMATION

 

										Other activity (incl.		Foreign
				2019		2018		Reported		M&A)		exchange		Organic*
				€m		€m		%		pps		pps		%
Quarter ended 30 June - Service revenue
Germany				2,265		2,257		0.4		—		—		0.4
		Mobile service revenue		1,260		1,268		(0.6	)	0.1		—		(0.5	)
		Fixed service revenue		1,005		989		1.6		(0.1	)	—		1.5
Italy				1,198		1,245		(3.8	)	—		—		(3.8	)
		Mobile service revenue		905		977		(7.4	)	—		—		(7.4	)
		Fixed service revenue		293		268		9.3		(0.1	)	—		9.2
UK				1,233		1,229		0.3		—		(0.2	)	0.1
		Mobile service revenue		897		895		0.2		—		(0.2	)	—
		Fixed service revenue		336		334		0.6		—		(0.3	)	0.3
Spain				988		1,094		(9.7	)	0.4		—		(9.3	)
Other Europe				1,128		1,097		2.8		(0.8	)	0.1		2.1
		Of which: Ireland		209		211		(0.9	)	(0.2	)	—		(1.1	)
		Of which: Portugal		238		231		3.0		0.2		—		3.2
		Of which: Greece		218		202		7.9		(4.2	)	—		3.7
Eliminations				(30	)	(26	)
Europe				6,782		6,896		(1.7	)	—		—		(1.7	)
Vodacom				1,078		1,113		(3.1	)	—		4.2		1.1
		Of which: South Africa		778		845		(7.9	)	—		6.7		(1.2	)
		Of which: International operations		299		266		12.4		—		(3.8	)	8.6
Other Markets				1,036		1,019		1.7		—		8.3		10.0
		Of which: Turkey		434		469		(7.5	)	—		24.7		17.2
		Of which: Egypt		313		248		26.2		—		(12.6	)	13.6
Rest of the World				2,114		2,132		(0.8	)	—		6.1		5.3
Other				123		131
Eliminations				(25	)	(29	)
Total service revenue				8,994		9,130		(1.5	)	(0.1	)	1.4		(0.2	)
Other revenue				1,659		1,772		(6.4	)	(2.0	)	3.3		(5.1	)
Revenue				10,653		10,902		(2.3	)	(0.3	)	1.7		(0.9	)
Other growth metrics
Germany - Mobile retail revenue				1,212		1,195		1.4		—		—		1.4
Germany - Fixed retail revenue				956		934		2.4		—		—		2.4
Germany - Retail revenue				2,168		2,129		1.8		—		—		1.8

 

9

 

 

NON-GAAP FINANCIAL INFORMATION

 

										Other activity (incl.		Foreign
				2019		2018		Reported		M&A)		exchange		Organic*
				€m		€m		%		pps		pps		%
Quarter ended 31 March - Service revenue
Germany				2,267		2,366		(4.2	)	0.2		—		(4.0	)
		Mobile service revenue		1,262		1,273		(0.9	)	0.4		—		(0.5	)
		Fixed service revenue		1,005		1,093		(8.1	)	0.1		—		(8.0	)
Italy				1,234		1,330		(7.2	)	0.2		—		(7.0	)
		Mobile service revenue		945		1,067		(11.4	)	0.3		—		(11.1	)
		Fixed service revenue		289		263		9.9		(0.4	)	—		9.5
UK				1,257		1,255		0.2		(0.9	)	0.5		(0.2	)
		Mobile service revenue		895		908		(1.4	)	(0.5	)	0.7		(1.2	)
		Fixed service revenue		362		347		4.3		(1.8	)	—		2.5
Spain				1,002		1,092		(8.2	)	0.3		—		(7.9	)
Other Europe				1,103		1,064		3.7		(2.2	)	1.0		2.5
		Of which: Ireland		218		215		1.4		0.2		—		1.6
		Of which: Portugal		227		224		1.3		0.8		—		2.1
		Of which: Greece		214		183		16.9		(7.7	)	—		9.2
Eliminations				(23	)	(35	)
Europe				6,840		7,072		(3.3	)	(0.5	)	0.3		(3.5	)
Vodacom				1,096		1,113		(1.5	)	5.0		—		3.5
		Of which: South Africa		807		864		(6.6	)	8.1		(0.1	)	1.4
		Of which: International operations		287		250		14.8		(5.4	)	—		9.4
Other Markets				1,012		1,136		(10.9	)	31.0		(11.8	)	8.3
		Of which: Turkey		432		491		(12.0	)	27.5		(0.5	)	15.0
		Of which: Egypt		279		231		20.8		(9.6	)	—		11.2
Rest of the World				2,108		2,249		(6.3	)	17.7		(5.7	)	5.7
Other				123		257
Eliminations				(34	)	(58	)
Total service revenue				9,037		9,520		(5.1	)	5.1		(1.8	)	(1.8	)
Other revenue				1,783		1,796		(0.7	)	(6.7	)	5.1		(2.3	)
Revenue				10,820		11,316		(4.4	)	3.2		(0.7	)	(1.9	)
Other growth metrics
Group service revenue - excl. settlements in Germany				9,037		9,520		(5.1	)	6.3		(1.9	)	(0.7	)
Europe service revenue - excl. settlements in Germany				6,840		7,072		(3.3	)	1.1		0.1		(2.1	)
Germany - excl. settlements:
Service revenue				2,267		2,366		(4.2	)	4.5		—		0.3
Retail revenue				2,158		2,235		(3.4	)	4.7		—		1.3
Mobile retail revenue				1,203		1,200		0.3		0.3		—		0.6
Fixed retail revenue				955		1,035		(7.7	)	9.8		—		2.1
Fixed service revenue				1,005		1,093		(8.1	)	9.4		—		1.3

 

10

 

 

ADDITIONAL INFORMATION

 

Revenue - Quarter ended 30 June

 

Group and Regions		Group				Europe				Rest of the World
		2019		2018		2019		2018		2019		2018
		€m		€m		€m		€m		€m		€m
Mobile customer revenue		5,655		5,770		3,994		4,095		1,655		1,669
Mobile incoming revenue		438		465		307		334		142		150
Other service revenue		458		474		301		319		92		90
Mobile service revenue		6,551		6,709		4,602		4,748		1,889		1,909
Fixed service revenue		2,443		2,421		2,180		2,148		225		223
Service revenue		8,994		9,130		6,782		6,896		2,114		2,132
Other revenue		1,659		1,772		1,010		1,061		433		520
Revenue		10,653		10,902		7,792		7,957		2,547		2,652

 

Operating Companies		Germany				Italy				UK
		2019		2018		2019		2018		2019		2018
		€m		€m		€m		€m		€m		€m
Mobile customer revenue		1,103		1,092		773		835		771		760
Mobile incoming revenue		48		51		75		89		65		70
Other service revenue		109		125		57		53		61		65
Mobile service revenue		1,260		1,268		905		977		897		895
Fixed service revenue		1,005		989		293		268		336		334
Service revenue		2,265		2,257		1,198		1,245		1,233		1,229
Other revenue		307		302		132		180		336		321
Revenue		2,572		2,559		1,330		1,425		1,569		1,550

 

		Spain				Vodacom
		2019		2018		2019		2018
		€m		€m		€m		€m
Mobile customer revenue		575		646		923		958
Mobile incoming revenue		31		32		40		42
Other service revenue		38		38		51		55
Mobile service revenue		644		716		1,014		1,055
Fixed service revenue		344		378		64		58
Service revenue		988		1,094		1,078		1,113
Other revenue		94		112		254		258
Revenue		1,082		1,206		1,332		1,371

 

11