Final Results - Part One

Vodafone Group Plc
24 May 2005


PART 1




VODAFONE GROUP PLC                                          Embargo:
                                                            Not for publication
VODAFONE ANNOUNCES FULL YEAR RESULTS                        before 07:00 hours
                                                            24 May 2005


Vodafone today announces preliminary results for the year ended 31 March 2005,
which meet or exceed stated targets for the Group's global operations across
every metric. The highlights of the results are:


Strong financial performance:

• Group turnover of £34.1 billion. Mobile telecommunications turnover
  increased to £33.2 billion, with organic growth of 5%(1)

• Earnings per share, before goodwill amortisation and exceptional items,
  increased by 14% to 10.41 pence. Basic loss per share was 11.39 pence. Loss 
  for the financial year was £7.5 billion after goodwill amortisation of 
  £14.7 billion

• Free cash flow(1) of £7.8 billion. Net cash inflow from operating
  activities up 3% to £12.7 billion

Delivering results through strong customer focus:

• Net organic proportionate customer additions in the year of 16.3
  million, representing organic growth of 12%(1). Closing proportionate customer
  base of 154.8 million in 26 markets

• Vodafone live! active devices increased to 30.9 million

• Increasing adoption of 3G services, with 2.4 million devices at year end

• Launch of Vodafone Simply, a new, easy to use service for customers who
  want to use voice and text services with minimum complexity

• Introduction of Vodafone Passport, a new voice roaming price plan which
  provides customers with greater price clarity when using mobile voice services
  abroad

Increasing returns to shareholders:

• Total dividends per share increased by 100% to 4.07 pence, giving a total
  dividend payout of £2.7 billion

• £4.5 billion share purchase target for the 2006 financial year. £4 billion
  expended on the share purchase programme in the 2005 financial year,
  reducing shares in issue by 4%

(1) See page 38 for definition of terms.


Arun Sarin, Chief Executive, commented:

These strong results highlight both our operational and financial strength. We
have met or exceeded all of our stated targets and significantly increased
returns to shareholders. Whilst competitive pressures are increasing, there is
clear evidence that our global scale and scope is enabling us to deliver
innovative customer propositions and to produce superior results.


Chief Executive's Statement

Vodafone Group has posted a strong set of annual results, highlighting both
operational and financial strength. I am pleased to report that the Group met or
exceeded our stated targets on every metric.

We exceeded 12% organic growth in proportionate customers, bringing the total in
our 26 markets to over 154 million by the end of the year. Following the
successful launch of 3G in November, we are able to report 2.4 million
registered 3G devices on our networks at the year end as our customers
increasingly enjoy the benefits of enhanced services.

Organic revenue growth for the year was 6% on a statutory basis and 9% on a
proportionate basis. Particularly strong markets included the US and Spain,
which both grew revenues at more than 20% year on year. In our core European
markets, good performances were also recorded by Italy and Germany and the UK
performed well despite a very competitive backdrop. We were disappointed with
our performance in Japan, where we are working to improve further our service
proposition. We are committed to improving our competitive position in this
market and are executing on a business improvement plan in the year ahead.

Many of the mobile markets in which we operate are highly penetrated and
competitive pressures are increasing, with new players entering our markets.
Vodafone's response is to focus on addressing customer needs with segmented
propositions. Our biggest commercial launch for the year occurred in November
with the introduction of Vodafone live! with 3G. Through an end-to-end service
encompassing industry leading handsets, new and exciting products and services,
enhanced portal access and robust quality 3G networks, we have leveraged our
unique scale and scope advantages.

Last week we introduced Vodafone Simply, to appeal to those users who want a
simple, basic service. Equally important is the launch of our new roaming price
plan, Vodafone Passport, which leverages our unrivalled footprint and delivers
roaming tariffs that are better value for money and easier to understand.

Together with new and innovative product offerings, we see the traditional lines
between mobile and fixed line communications increasingly breaking down. Given
the power of mobility and the additional capacity afforded to us by 3G networks,
we are pursuing many opportunities, both in the consumer and business
environments, to take more minutes from fixed line networks.

The platform for Vodafone to deliver a differentiated service at the lowest cost
is the driving force behind the 'One Vodafone' programme. We are on track to
derive significant benefits from the 'One Vodafone' programme and to deliver
£2.5 billion additional pre-tax operating free cash flow by the 2008 financial
year.

'One Vodafone' focuses on a combination of standardising designs and processes,
reducing duplication, centralising certain functions and sharing best practice.
The plans are now established and work streams already well advanced, such as
the roaming initiative we announced recently and service platform hosting
centres that are already built in Germany and Italy.

As we indicated to you in November, we are proposing to double the final 
dividend for the year.  This step change in dividend payout underlines our
confidence in the future prospects for the Group. We were also able to complete
a share purchase programme of £4 billion, reducing our shares in issue by 4%.
The total return of £6.7 billion is a significant increase on the previous year
and as a result Vodafone has one of the highest total return yields in the
industry.

Looking forward to current financial year, we are targeting a further buyback of
£4.5 billion, and having rebased dividends in the year, to grow our dividend in
line with underlying earnings. The Board continues to believe that the Group's
balance sheet capacity provides Vodafone with the appropriate flexibility to
consider selective acquisitions, whilst progressively increasing returns to
shareholders.

Shortly we expect to complete acquisitions from the TIW Group, which will add
controlled businesses in both Romania and the Czech Republic. These two
businesses are an excellent geographic fit and have attractive growth prospects
that, we believe, are value enhancing for our shareholders.

We live in a challenging world. However significant opportunities exist for
Vodafone to continue to deliver superior shareholder returns by executing on our
strategic goals.


Arun Sarin



GROUP FINANCIAL HIGHLIGHTS

                                     
                                     Year ended 31 March            Change %
                                     2005             2004      ---------------
                                       £m               £m        £   Organic(1)
--------------------------------------------------------------------------------
Statutory
---------
Turnover
 - continuing operations           34,133           32,741        4          6
 - discontinued operations              -              818
                                  --------         --------
                                   34,133           33,559        2          6

Group EBITDA, before
exceptional items                  13,041           12,640        3          7

Total Group operating
profit, before
goodwill amortisation and                           
exceptional items                 10,904            10,749        1          5

Profit on ordinary
activities before
taxation, goodwill                                  
amortisation and
exceptional items                  10,300           10,035         3
Goodwill amortisation             (14,700)         (15,207)       (3)
Net exceptional items                (302)             125
                                  --------         --------
Loss on ordinary
activities before
taxation                           (4,702)          (5,047)       (7)

Loss for the financial
year                               (7,540)          (9,015)      (16)

Effective tax rate before
goodwill amortisation and
exceptional items                    27.5%            30.4%


Proportionate
-------------

Turnover
- mobile telecommunications        42,762           38,157        12         9
- other operations                  1,178            1,789       (34)
Less: turnover between mobile
and other operations                 (338)            (500)      (32)
                                  --------         --------
                                   43,602           39,446        11         9

EBITDA before exceptional items
- mobile telecommunications        16,483           14,826        11        10
- other operations                    158              288       (45)
                                  --------         --------
                                   16,641           15,114        10         9

Mobile EBITDA margin(2)              38.5%            38.9%
Mobile EBITDA margin excluding
Japan stake change(2)(3)             39.0%            38.9%

Proportionate information is presented and calculated on the basis described on
page 33.


Cash flow information
---------------------

Net cash inflow from operating
activities                         12,713           12,317         3
Free cash flow                      7,847            8,521        (8)
Net debt at 31 March               (8,339)          (8,488)       (2)


Per share information               Pence            Pence
---------------------
Earnings/(loss) per share
- before goodwill amortisation
  and exceptional items             10.41              9.10       14
- after goodwill amortisation
  and exceptional items            (11.39)           (13.24)     (14)
Dividends per share                  4.07            2.0315      100

This results announcement contains certain information on the Group's results
and cash flows that have been derived from amounts calculated in accordance with
UK Generally Accepted Accounting Principles, ('UK GAAP'), but are not themselves
UK GAAP measures. They should not be viewed in isolation as alternatives to the
equivalent UK GAAP measure and should be read in conjunction with the equivalent
UK GAAP measure. Further disclosures are also provided under 'Use of Non-GAAP
Financial Information' on page 37.

(1) See page 38 for definition of terms
(2) Before exceptional items
(3) See page 33 for a reconciliation of proportionate turnover and proportionate
    EBITDA, before exceptional items, excluding the impact of the Japan stake
    change


GROUP OPERATING HIGHLIGHTS
                                            Year ended / at 31 March
                                                       2005     2004  % change

Vodafone live! - closing active devices
(million)(1)(2)                                        30.9      6.8       354

Vodafone Mobile Connect data card
- registered cards (million)(1)                         0.5      0.2       150
- including 3G/GPRS cards (million)(1)                  0.3        -

Registered 3G devices (million)(1)(3)                   2.4        -

Mobile voice usage (billion minutes)                  170.7    154.8        10
Non-voice services as % of service revenue             17.0%    16.1%

Tangible fixed assets
- Group additions (£ billion)                           5.1      4.8         6
- Mobile additions (£ billion)                          4.9      4.6         7
- Mobile additions as a percentage of 
  mobile turnover                                      14.8%    14.4%

(1) On a controlled venture basis
(2) With effect from 31 December 2004, Vodafone live! active devices in Japan 
    have been included in the closing total as the service in Japan has become 
    aligned with the Vodafone live! experience in other countries
(3) Includes all registered devices capable of accessing 3G data services

See page 38 for definition of terms


OUTLOOK

Please see 'Forward-Looking Statements' on page 36.

For the year ending 31 March 2006(1)('2006 financial year')

These expectations for the 2006 financial year have been prepared on the basis
of International Financial Reporting Standards ('IFRS'). Financial information
for the year ended 31 March 2005 ('2005 financial year') under IFRS will be
announced in July 2005. These expectations do not include the impact of
the proposed acquisition of interests in MobiFon in Romania and Oskar in the
Czech Republic, which are subject to certain conditions.

The Group considers the organic increase in proportionate mobile revenue to be 
the key growth indicator. As a result of increasing multiple SIM usage and 
differences in customer number measurement between mobile operators, the Group 
will no longer provide customer growth guidance. The Group will, however, 
continue to report customer number information on a quarterly basis.

The Group expects to deliver organic growth in proportionate mobile revenue in
the 6% to 9% range. Proportionate mobile EBITDA margin is expected to be in the
range of flat to 1 percentage point lower than that achieved in the 2005
financial year, after taking into account the effect of declines in interconnect
rates and increased competition.

Capitalised fixed asset additions(2) are anticipated to be similar to the levels
for the 2005 financial year at around £5 billion, as the Group continues the
roll out of its 3G networks.

Free cash flow is expected to be in the £6.5 billion to £7.0 billion range. This
is expected to be lower than that to be reported under IFRS for the 2005
financial year as the benefit of higher operating cash flow is more than offset
by:

• the expectation that dividends received from Verizon Wireless will be
  approximately £0.7 billion lower; and
• higher payments on fixed assets and tax.

Share purchases by Vodafone Group Plc are currently targeted to be approximately
£4.5 billion in the financial year. Vodafone Italy shareholders are expected to
approve the re-purchase of €7.9 billion of shares in that company at a meeting
on 26 May 2005.

The adjusted effective tax rate(3) is expected to be slightly higher than in the
2005 financial year. The absence of the benefits arising in the 2005 financial
year from the German reorganisation are expected to be partially offset by the
part reversal of deferred tax provisions on unremitted earnings and anticipated
tax settlements. However, the adjusted effective tax rate and tax payments are
subject to the resolution of open issues, planning opportunities, corporate
acquisitions and disposals and changes in tax legislation.

The Group is not currently aware of any developments to IFRS accounting
standards and related interpretations that would result in the reconciling items
between UK GAAP and IFRS to be reported for the year ended 31 March 2005 being
significantly different from those previously reported for the six months ended
30 September 2004.

The Group's outlook statement is prepared on the basis of IFRS. If the Group had
prepared an outlook statement on the basis of UK GAAP, there would be no
material differences to its expectations for proportionate mobile revenue growth
and change in proportionate mobile EBITDA margin between the two bases.

Other

The section of this Preliminary Announcement press release entitled 'One
Vodafone' on page 17 provides additional outlook statements in relation to the
expected future benefits of One Vodafone initiatives on pre-tax operating free
cash flow, capital expenditure and operating expenditure.


(1) Comparisons to the 2005 financial year are prepared on the basis of IFRS
    and, where appropriate, using constant exchange rates and after adjusting 
    for business acquisitions and disposals and items not reflecting underlying 
    business performance.

(2) Capitalised fixed asset additions represents the aggregate of capitalised
    property, plant and equipment additions and capitalised software costs.

(3) The adjusted effective tax rate is calculated excluding items not reflecting
    underlying business performance and reflecting the Group's share of its
    associated undertakings tax on profit on ordinary activities as a component 
    of the total tax charge and not as a deduction from the share of results in
    associated undertakings which is included in profit on ordinary 
    activities before taxation.


BUSINESS REVIEW

                                            Year ended 31 March
                                              2005      2004(4)      % change
                                                £m          £m      £   Organic
Turnover     Mobile telecommunications
              - Total service revenue       29,322      28,249      4         5

              - Other revenue(1)             3,862       3,666      5
                                           --------    --------
                                            33,184      31,915      4         5
             Other operations                1,108       2,128    (48)
             Less: turnover between 
             mobile and other operations      (159)       (484)   (67)
                                           --------    --------
                                            34,133      33,559      2         6
                                           --------    --------
Total Group
operating
profit/
(loss)       Mobile telecommunications      10,875      10,729      1         4
(2)(3)       Other operations                   29          20     45
                                           --------    --------
                                            10,904      10,749      1         5
Goodwill
amortisation                               (14,700)    (15,207)    (3)

Exceptional
operating
items                                         (315)        228
                                           --------    --------
Total Group
operating loss                              (4,111)     (4,230)    (3)
                                           --------    --------
Mobile telecommunications
-------------------------

Trading      Voice services                 24,349      23,708      3
results      Non-voice services              4,973       4,541     10
                                           --------    --------
             Total service revenue          29,322      28,249      4         5
             Net other revenue(1)              557         512      9
             Interconnect costs             (4,311)     (4,137)     4
             Other direct costs             (1,975)     (2,004)    (1)
             Net acquisition costs(1)       (2,051)     (1,897)     8
             Net retention costs(1)         (1,914)     (1,638)    17
             Payroll(2)                     (2,091)     (2,016)     4
             Other operating expenses(2)    (4,693)     (4,802)    (2)
                                           --------    --------
             EBITDA(2)                      12,844      12,267      5         6
             Depreciation and 
             amortisation(3)                (4,971)     (4,197)    18
             Share of operating profit in
             associated undertakings(2)(3)   3,002       2,659     13
                                           --------    --------
             Total Group operating 
             profit(2)(3)                   10,875      10,729      1         4
                                           --------    --------

(1) Turnover for the mobile telecommunications ('mobile') business includes 
    revenue of £3,305 million (2004: £3,154 million) which has been deducted 
    from acquisition and retention costs and excluded from other revenue in the
    trading results
(2) Before exceptional items 
(3) Before goodwill amortisation
(4) Consistent with the presentation adopted for the interim results for the six
    months ended 30 September 2004, the Group has amended its segmental 
    disclosure of turnover to a gross of intercompany turnover basis, rather 
    than a net of intercompany turnover basis as previously disclosed, in order 
    to facilitate analysis of the performance of the Group and as part of the 
    Group's preparations for the introduction of IFRS. There is no impact on 
    total Group turnover, which continues to be stated on a net of intercompany
    turnover basis. In addition, a more detailed analysis of the trading results
    of the Group's mobile business and certain key markets has been provided, on
    a basis consistent with internal measures, to facilitate management's 
    discussion of the results

See page 38 for definition of terms

GROUP RESULTS

Turnover increased by 2% to £34,133 million in the year ended 31 March 2005,
comprising organic growth of 6%, offset by unfavourable movements in exchange
rates of 2% and the net effect of acquisitions and disposals, principally the
disposal of Japan Telecom, of 2%. The foreign exchange impact primarily arose
due to the relative strength of sterling in the first half of the financial year
compared to the prior period, partially offset by a relative weakening in the
second half.

Before goodwill amortisation and exceptional items, total Group operating profit
increased by 1% to £10,904 million, with underlying organic growth of 5%,
broadly in line with the growth in turnover. Unfavourable exchange rate
movements represented 3% of the difference between reported and organic growth,
whilst acquisitions and disposals reduced reported growth by a further 1%.

After goodwill amortisation and exceptional items, the Group reported a total
operating loss of £4,111 million, compared with a loss of £4,230 million for the
prior year. The charges for goodwill amortisation, which do not affect the cash
flows of the Group or the ability of the Company to pay dividends, fell by 3% to
£14,700 million, principally as a result of the impact of foreign exchange
movements. Following the Group's transition to IFRS in the 2006 financial year,
no goodwill amortisation charges will be incurred. Exceptional operating
items moved from a £228 million net credit in the prior financial year, due
principally to expected recoveries and provision releases in relation to a
contribution tax levy on Vodafone Italy, to a £315 million charge in the 2005
financial year due to an impairment of the carrying value of the goodwill
relating to Vodafone Sweden.


MOBILE TELECOMMUNICATIONS RESULTS

Turnover

Turnover in the mobile business increased by 4%, or 5% on an organic basis, for
the year ended 31 March 2005. The increase in turnover was driven principally by
organic service revenue growth, at constant exchange rates, of 5%, which
improved principally as a result of a 9% increase in the Group's average
controlled customer base and 10% growth in total voice usage compared to the
prior year, offset by the effect of regulatory and competitive pressures on
pricing and the increase in the proportion of prepaid customers across the
Group.

Voice revenue improved by 4% on an organic basis, following an increase in voice
usage, partially offset by tariff reductions due to increased competition and
lower termination rates.

Non-voice service revenue increased to £4,973 million for the year ended 31
March 2005, or by 11% on an organic basis. Messaging revenue continued to
represent the largest component of non-voice revenue at £3,589 million for the
financial year, a 7% increase over the previous financial year. Non-messaging
data revenue increased by 17% to £1,384 million as the Group continued to drive
adoption of consumer services, such as Vodafone live! and Vodafone live! with
3G, and business offerings, including the Vodafone Mobile Connect data card and
BlackBerry(R) from Vodafone. Japan generates the highest level of non-messaging
data revenue in the Group and, following the loss of higher value customers and
an increased proportion of prepaid customers with access to only basic data
services, its non-messaging data revenue reduced by 7% to £816 million in the
2005 financial year.

Other revenue increased to £3,862 million, principally due to growth in revenue
related to acquisition and retention activities to £3,305 million, being 7% on
an organic basis. The increase has arisen principally from higher levels of
gross additions and upgrades in the year, partially offset by a reduction in the
average handset sales price.

Group operating profit before goodwill amortisation and exceptional items

Total Group operating profit, before goodwill amortisation and exceptional
items, increased by 1% to £10,875 million, comprising organic growth of 4%
offset by unfavourable exchange rate movements, particularly the strengthening
of sterling against the euro and the US dollar.

Acquisition and retention costs, net of attributable revenue, increased by 12%
to £3,965 million. The increase was primarily driven by higher customer growth
in the UK and Spain and increased investment in retention activities in the UK
and Japan. Other operating expenses as a percentage of service revenue reduced
from 17.0% to 16.0% as the Group continued to realise cost efficiencies,
particularly in network and IT costs.

Depreciation and licence amortisation charges increased by 18% following the
commencement of 3G services in a number of the Group's controlled mobile
businesses. Licence amortisation amounted to £412 million in the year compared
to £98 million in the prior year.

The Group's share of operating profit, before goodwill amortisation and
exceptional items, in associated undertakings grew strongly, primarily due to
growth at Verizon Wireless in the US.








                      This information is provided by RNS
            The company news service from the London Stock Exchange