Final Results - Part 4

Vodafone Group Plc 27 May 2003 Vodafone Group Plc Preliminary Results for the year ended 31 March 2003 PART 4 FINANCIAL STATEMENTS CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2003 Year ended Year ended 31 March 2003 31 March 2002 £m £m Turnover: Group and share of joint ventures and associated undertakings 39,152 33,541 Less: Share of joint ventures and associated undertakings (8,777) (10,696) --------- --------- 30,375 22,845 ========= ========= Turnover (Note 2) 30,375 22,845 ========= ========= Operating loss (5,295) (10,377) Share of operating loss in joint ventures and associated undertakings (156) (1,457) --------- --------- Total Group operating loss (Note 2) (5,451) (11,834) Exceptional non-operating items (Note 4) (5) (860) --------- --------- Loss on ordinary activities before interest and similar items (5,456) (12,694) Net interest payable and similar items (752) (845) - Group (457) (503) - Share of joint ventures and associated undertakings (295) (342) --------- --------- Loss on ordinary activities before taxation (6,208) (13,539) Tax on loss on ordinary activities (Note 5) (2,956) (2,140) --------- --------- Loss on ordinary activities after taxation (9,164) (15,679) Minority interests (including non-equity minority interests) (655) (476) --------- --------- Loss for the financial year (9,819) (16,155) Equity dividends (1,154) (1,025) --------- --------- Retained loss for the Group and its share of Joint ventures and associated undertakings (10,973) (17,180) ========= ========= Basic and diluted loss per share (Note 6) (14.41)p (23.77)p Adjusted earnings per share (Note 6) 6.81p 5.15p Dividends per share 1.6929p 1.4721p CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2003 31 March 2003 31 March 2002 £m £m Fixed assets Intangible assets 108,085 105,944 Tangible assets 19,574 18,541 Investments 27,030 28,977 Loans to joint ventures - 321 Investments in associated undertakings 25,825 27,249 Other investments 1,205 1,407 --------- --------- 154,689 153,462 --------- --------- Current assets Stocks 365 513 Debtors 7,460 7,053 Investments 291 1,792 Cash at bank and in hand 475 80 --------- --------- 8,591 9,438 Creditors: amounts falling due within one year (14,293) (13,455) --------- --------- Net current liabilities (5,702) (4,017) --------- --------- Total assets less current liabilities 148,987 149,445 Creditors: amounts falling due after more than one year (13,757) (13,118) Provisions for liabilities and charges (3,696) (2,899) Investments in joint ventures: - Share of gross assets - 76 - Share of gross liabilities - (345) --------- --------- - (269) Other provisions (3,696) (2,630) --------- --------- 131,534 133,428 ========= ========= Capital and reserves Called up share capital 4,275 4,273 Share premium account 52,073 52,044 Merger reserve 98,927 98,927 Other reserve 843 935 Profit and loss account (27,447) (25,606) --------- --------- Total equity shareholders' funds 128,671 130,573 Equity minority interests 1,848 1,727 Non-equity minority interests 1,015 1,128 --------- --------- 131,534 133,428 ========= ========= CONSOLIDATED CASH FLOW FOR THE YEAR ENDED 31 MARCH 2003 Year ended Year ended 31 March 2003 31 March 2002 £m £m Net cash inflow from operating activities (Note 7) 11,142 8,102 Dividends received from joint ventures and associated undertakings 742 139 Net cash outflow for returns on investments and servicing of finance (551) (936) Taxation (883) (545) Net cash outflow for capital expenditure and financial investment (5,373) (4,447) Purchase of intangible fixed assets (99) (325) Purchase of tangible fixed assets (5,289) (4,145) Disposal of tangible fixed assets 109 75 Purchase of investments (560) (44) Disposal of investments 575 319 Other (109) (327) --------- --------- Net cash outflow for acquisitions and disposals (4,880) (7,691) Purchase of interests in subsidiary undertakings (3,519) (3,078) Net cash/(overdrafts) acquired with subsidiary undertakings 11 (2,514) Purchase of interests in joint ventures and associated undertakings (1,491) (7,159) Disposal of interests in subsidiary undertakings 125 - Disposal of businesses - 5,071 Purchase of customer bases (6) (11) --------- --------- Equity dividends paid (1,052) (978) --------- --------- Cash outflow before management of liquid resources and financing (855) (6,356) Management of liquid resources 1,384 7,042 Net cash outflow from financing (136) (675) Issue of ordinary share capital 28 3,581 Debt repayment (165) (4,268) Issue of shares to minorities 1 12 --------- --------- Increase in cash in the year 393 11 ========= ========= Reconciliation of net cash flow to movement in net debt Increase in cash in the year 393 11 Cash outflow from decrease in debt 165 4,268 Cash inflow from management of liquid resources (1,384) (7,042) --------- --------- Increase in net debt resulting from cash flows (826) (2,763) Premium on repayment of debt (157) - Debt acquired on acquisition of subsidiaries - (3,116) Translation difference (826) 517 Other movements 4 50 --------- --------- Increase in net debt in the year (1,805) (5,312) Opening net debt (12,034) (6,722) --------- --------- Closing net debt (Note 8) (13,839) (12,034) ========= ========= CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 MARCH 2003 Year ended Year ended 31 March 2003 31 March 2002 £m £m Loss for the financial year - Group (9,049) (14,131) - Share of joint ventures and associated undertakings (770) (2,024) --------- --------- (9,819) (16,155) --------- --------- Currency translation - Group 10,484 (1,980) - Share of joint ventures and associated undertakings (1,445) (283) --------- --------- 9,039 (2,263) --------- --------- Total recognised losses for the year (780) (18,418) ========= ========= MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS FOR THE YEAR ENDED 31 MARCH 2003 Year ended Year ended 31 March 2003 31 March 2002 £m £m Loss for the financial year (9,819) (16,155) Equity dividends (1,154) (1,025) --------- --------- (10,973) (17,180) Currency translation 9,039 (2,263) New share capital subscribed 31 5,984 Shares to be issued - (978) Other 1 3 --------- --------- Net movement in equity shareholders' funds (1,902) (14,434) Opening equity shareholders' funds 130,573 145,007 --------- --------- Closing equity shareholders' funds 128,671 130,573 ========= ========= NOTES TO THE PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2003 1 Basis of preparation Statutory financial information The preliminary results for the year ended 31 March 2003 are an abridged statement of the full Annual Report & Accounts and Form 20-F, which was approved by the Board of Directors on 26 May 2003. The Auditors' Report on these accounts was unqualified. The preliminary results do not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. The information relating to the year ended 31 March 2002 is an extract from the published accounts for that year, which have been delivered to the Registrar of Companies, and on which the Auditors' Report was unqualified. The accounts for the year ended 31 March 2003 will be delivered to the Registrar of Companies following the Company's Annual General Meeting, to be held on 30 July 2003. 2 Segmental and other analysis The Group's principal business is the supply of mobile telecommunications services and products. Other operations primarily comprise fixed line telecommunications businesses and, until 29 August 2002, the Vizzavi joint venture. Analyses of turnover and total Group operating profit/(loss) by geographical region and class of business are as follows: Year ended Year ended 31 March 2003 31 March 2002 Turnover * £m £m Mobile telecommunications: Northern Europe 6,057 5,432 Central Europe 4,775 4,177 Southern Europe 8,051 6,743 --------- --------- Europe 18,883 16,352 Americas 5 12 Asia Pacific 8,364 4,072 Middle East and Africa 290 306 --------- --------- 27,542 20,742 Other operations: Europe 854 998 Asia Pacific 1,979 1,105 --------- --------- 30,375 22,845 ========= ========= * The analysis of turnover represents turnover of the Company and its subsidiary undertakings and is stated net of inter-company turnover. Total Group operating profit/(loss) Year ended Year ended (before goodwill and 31 March 31 March exceptional items) 2003 2002 £m £m Mobile telecommunications: Northern Europe 2,222 1,685 Central Europe 1,616 1,543 Southern Europe 2,495 2,072 --------- --------- Europe 6,333 5,300 Americas 1,219 1,317 Asia Pacific 1,421 589 Middle East and Africa 197 161 --------- --------- 9,170 7,367 Other operations: Europe (138) (306) Asia Pacific 149 (17) --------- --------- 9,181 7,044 Subsidiary undertakings 7,076 5,071 Share of joint ventures and associated undertakings 2,105 1,973 --------- --------- Goodwill amortisation (14,056) (13,470) Exceptional operating items (Note 3) (576) (5,408) --------- --------- Total Group operating loss (5,451) (11,834) ========= ========= 3 Exceptional operating items Year ended Year ended 31 March 2003 31 March 2002 £m £m Impairment of intangible and tangible fixed assets 485 5,100 Reorganisation costs 91 86 Share of exceptional operating items of associated undertakings and joint ventures - 222 --------- --------- 576 5,408 ========= ========= 4 Exceptional non-operating items Year ended Year ended 31 March 2003 31 March 2002 £m £m Amounts written off fixed asset investments 340 920 Profit on disposal of fixed asset investments (255) (9) Profit on disposal of fixed assets (3) (10) Profit on disposal of businesses (22) (41) Share of associate profit on disposal of investment (55) - --------- --------- 5 860 ========= ========= 5 Tax on loss on ordinary activities Year ended Year ended 31 March 2003 31 March 2002 £m £m United Kingdom corporation tax charge at 30% 195 187 --------- --------- Overseas corporation tax Current tax: Current year 1,971 857 Prior year 9 (322) --------- --------- 1,980 535 --------- --------- Total current tax 2,175 722 Deferred tax - origination of and reversal of timing differences 818 1,489 --------- --------- Tax on loss on ordinary activities, before exceptional items 2,993 2,211 Tax on exceptional items (37) (71) --------- --------- Total tax charge 2,956 2,140 ========= ========= Parent and subsidiary undertakings 2,624 1,925 Share of associated undertakings and joint ventures 332 215 --------- --------- 2,956 2,140 ========= ========= 6 Earnings per share Year ended Year ended 31 March 2003 31 March 2002 £m £m Loss for basic loss per share (9,819) (16,155) Goodwill amortisation 14,056 13,470 Exceptional operating items 576 5,408 Exceptional non-operating items 5 860 Tax on exceptional items (37) (71) Share of exceptional items attributable to minority interests (139) (14) --------- --------- Earnings for adjusted earnings per share 4,642 3,498 ========= ========= Weighted average number of shares (millions): Basic, diluted and adjusted 68,155 67,961 7 Reconciliation of operating loss to net cash inflow from operating activities Year ended Year ended 31 March 2003 31 March 2002 £m £m Operating loss (5,295) (10,377) Exceptional items 496 4,486 Depreciation 3,979 2,880 Goodwill amortisation 11,875 10,962 Amortisation of other intangible fixed assets 53 34 Loss on disposal of tangible fixed assets 109 46 --------- --------- Group EBITDA, before exceptional items * 11,217 8,031 Working capital movements (52) 98 Payments in respect of exceptional items (23) (27) --------- --------- Net cash inflow from operating activities 11,142 8,102 ========= ========= * Group EBITDA, before exceptional items, is not a measure recognised under UK GAAP but is presented in order to highlight operational performance of the Group. 8 Analysis of net debt Other non-cash changes At 1 & At 31 April exchange March 2002 Cash flow movements 2003 £m £m £m £m Liquid resources 1,789 (1,384) (114) 291 -------- -------- -------- -------- Cash at bank and in hand 80 393 2 475 -------- -------- -------- -------- Debt due within one year (other than bank overdrafts) (1,219) 1,366 (1,470) (1,323) Debt due after one year (12,317) (1,298) 621 (12,994) Finance leases (367) 97 (18) (288) -------- -------- -------- -------- (13,903) 165 (867) (14,605) -------- -------- -------- -------- (12,034) (826) (979) (13,839) ======== ======== ======== ======== A maturity analysis of net debt is shown below: £m One year or less 664 More than one year but not more than two years 2,169 More than two years but not more than five years 4,519 More than five years but not more than ten years 5,018 More than ten years but not more than twenty years 251 More than twenty years 1,218 -------- 13,839 ======== 9 Summary of differences between UK and US GAAP The preliminary results have been prepared in accordance with UK Generally Accepted Accounting Principles ('UK GAAP'), which differ in certain significant respects from US Generally Accepted Accounting Principles ('US GAAP'). A description of the relevant accounting principles which differ materially is provided within Vodafone Group Plc's Annual Report & Accounts and Form 20-F for the year ended 31 March 2003. The effects of these differing accounting principles are as follows: Year ended Year ended 31 March 31 March 2003 2002 £m £m Revenues in accordance with UK GAAP 30,375 22,845 Items decreasing revenues: Non-consolidated subsidiaries (4,371) (4,162) Connection revenues (1,760) (1,044) --------- --------- Revenues in accordance with US GAAP 24,244 17,639 ========= ========= Net loss in accordance with UK GAAP (9,819) (16,155) Items (increasing)/decreasing net loss: Goodwill and other intangibles amortisation, including share of equity accounted interests (8,659) (9,719) Exceptional items 405 - Connection income 16 (15) Capitalised interest 549 387 Deferred taxes, including share of equity accounted interests 8,242 7,627 Minority interests 269 1,308 Loss on disposal of businesses - (85) Other (58) (36) --------- --------- Net loss in accordance with US GAAP (9,055) (16,688) ========= ========= US GAAP basic loss per ordinary share (13.29)p (24.56)p ========= ========= Shareholders' equity in accordance with UK GAAP 128,671 130,573 Items increasing/(decreasing) shareholders' equity: Goodwill and other intangibles including share of equity accounted interests - net of amortisation 96,263 61,765 Exceptional items 405 - Connection income (84) (100) Capitalised interest 1,301 752 Cumulative deferred income taxes including share of equity accounted interests (82,189) (46,996) Minority interests (4,068) (5,514) Proposed dividends 612 511 Other (475) (104) --------- --------- Shareholders' equity in accordance with US GAAP 140,436 140,887 ========= ========= This information is provided by RNS The company news service from the London Stock Exchange

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