Interim Results - Part 3

Vodafone Group PLC 13 November 2001 PART 3 FINANCIAL STATEMENTS CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS TO 30 SEPTEMBER 2001 Six months Year Six months to ended to 30 31 30 September March September 2000 2001 2001 as as restated restated £m £m £m Turnover: Group and share of joint ventures and associated undertakings - Continuing operations 13,720 11,340 23,993 - Acquisitions 1,563 - - -------- -------- -------- 15,283 11,340 23,993 Less: Share of joint ventures and associated undertakings (6,377) (4,321) (8,989) -------- -------- -------- 8,906 7,019 15,004 ======== ======== ======== Group turnover (Note 2) - Continuing operations 8,709 7,019 15,004 - Acquisitions 197 - - -------- -------- -------- 8,906 7,019 15,004 ======== ======== ======== Operating loss - Continuing operations (7,056) (3,130) (6,439) - Acquisitions (33) - - -------- -------- -------- (7,089) (3,130) (6,439) Share of operating loss in joint ventures and associated undertakings - Continuing operations (162) (176) (550) - Acquisitions (569) - - -------- -------- -------- Total Group operating loss (Note 2) (7,820) (3,306) (6,989) Exceptional non-operating items (Note 4) (248) 5 80 -------- -------- -------- Loss on ordinary activities before interest (8,068) (3,301) (6,909) Net interest payable (381) (597) (1,177) - Group (188) (456) (850) - Share of joint ventures and associated undertakings (193) (141) (327) -------- -------- -------- Loss on ordinary activities before taxation (8,449) (3,898) (8,086) Tax on loss on ordinary activities (Note 5) (1,086) (680) (1,426) - Group (940) (461) (1,195) - Share of joint ventures and associated undertakings (146) (219) (231) -------- -------- -------- Loss on ordinary activities after taxation (9,535) (4,578) (9,512) Minority interests (including non-equity minority interests) (200) (176) (373) -------- -------- -------- Loss for the financial period (9,735) (4,754) (9,885) Equity dividends (514) (423) (887) -------- -------- -------- Retained loss for the Group and its share of joint ventures and associated undertakings (10,249) (5,177) (10,772) ======== ======== ======== Basic loss per share (Note 6) (14.36)p (8.01)p (16.09)p Diluted loss per share (14.41)p (8.01)p (16.10)p Adjusted basic earnings per share (Note 6) 2.51p 1.54p 3.54p CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2001 30 September 30 September 31 March 2001 2000 2001 as restated as restated £m £m £m Fixed assets Intangible assets 102,872 96,504 108,853 Tangible assets 11,309 7,767 10,586 Investments 39,274 32,315 34,769 Loans to joint ventures 188 - 85 Investments in associated undertakings 37,284 31,237 31,729 Other investments 1,802 1,078 2,955 -------- -------- -------- 153,455 136,586 154,208 -------- -------- -------- Current assets Stocks 247 378 316 Debtors 4,873 5,582 4,587 Investments 6,987 17,436 13,211 Cash at bank and in hand 96 1,133 68 -------- -------- -------- 12,203 24,529 18,182 Creditors: amounts Falling due within one year (12,302) (8,466) (12,377) -------- -------- -------- Net current (liabilities)/assets (99) 16,063 5,805 -------- -------- -------- Total assets less current liabilities 153,356 152,649 160,013 Creditors: amounts falling due after more than one year (10,810) (13,092) (11,235) Provisions for liabilities and charges (1,739) (1,194) (1,350) Investments in joint ventures: - Share of gross assets 95 21 88 - Share of gross liabilities (242) (31) (146) -------- -------- -------- (147) (10) (58) Other provisions (1,592) (1,184) (1,292) -------- -------- -------- 140,807 138,363 147,428 ======== ======== ======== Capital and reserves Called up share capital 4,271 3,804 4,054 Share premium account 51,989 39,772 48,292 Merger reserve 98,928 96,914 96,914 Other reserve 977 1,082 1,024 Profit and loss account (17,720) (5,368) (6,255) Shares to be issued - - 978 -------- -------- -------- Total equity shareholders' funds 138,445 136,204 145,007 Equity minority interests 1,269 1,077 1,292 Non-equity minority interests 1,093 1,082 1,129 -------- -------- -------- 140,807 138,363 147,428 ======== ======== ======== CONSOLIDATED CASH FLOW FOR THE SIX MONTHS TO 30 SEPTEMBER 2001 Six months Six months Year to to ended 30 30 31 September September March 2001 2000 2001 £m £m £m Net cash inflow from operating activities (Note 7) 3,640 1,888 4,587 Dividends received from joint ventures and associated undertakings 32 138 353 Net cash outflow for returns on investments and servicing of finance (482) (646) (47) Taxation (545) (829) (1,585) Net cash outflow for capital expenditure and financial investment (2,107) (12,915) (19,011) Purchase of intangible fixed assets (223) (11,470) (13,163) Purchase of tangible fixed assets (1,816) (1,348) (3,698) Purchase of investments (37) (189) (3,254) Disposal of investments 110 485 513 Other (141) (393) 591 Net cash (outflow)/inflow for acquisitions and disposals (6,003) 19,395 30,653 Purchase of subsidiary undertakings (1,163) (86) (219) Purchase of interests in joint ventures and associated undertakings (7,088) (35) (79) Disposal of acquired businesses held for sale 2,210 14,924 26,002 Disposal of interests in joint ventures and associated undertakings - 1,483 1,878 Proceeds on formation of joint venture - 2,544 2,544 Other 38 565 527 Equity dividends paid (486) (391) (773) -------- -------- -------- Cash (outflow)/inflow before management of liquid resources and financing (5,951) 6,640 14,177 Management of liquid resources 2,881 24 (7,541) Net cash inflow/(outflow) from financing 3,099 (5,697) (6,691) Issue of ordinary share capital 3,548 31 65 Debt repayment (449) (5,757) (6,800) Other - 29 44 -------- -------- -------- Increase/(decrease) in cash in the period 29 967 (55) ======== ======== ======== Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the period 29 967 (55) Cash outflow from decrease in debt 449 5,757 6,800 Cash (inflow)/outflow from management of liquid resources (2,881) (24) 7,541 -------- -------- -------- (Increase)/decrease in net debt resulting from cash flows (2,403) 6,700 14,286 Debt acquired on acquisition of subsidiaries (167) (13,106) (13,726) Translation difference 52 (131) (629) Other movements - 2 (10) -------- -------- -------- Increase in net debt in the period (2,518) (6,535) (79) Opening net debt (6,722) (6,643) (6,643) -------- -------- -------- Closing net debt (Note 8) (9,240) (13,178) (6,722) ======== ======== ======== CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE SIX MONTHS TO 30 SEPTEMBER 2001 Six months Year to ended 30 31 Six months September March to 2000 2001 30 as as September restated restated 2001 £m £m £m Loss for the financial period - Group (8,653) (4,183) (8,730) - Share of joint ventures and associated undertakings (1,082) (571) (1,155) -------- -------- -------- (9,735) (4,754) (9,885) Currency translation - Group (284) (1,114) 2,724 - Share of joint ventures and associated undertakings (980) 1,672 2,448 -------- -------- -------- (1,264) 558 5,172 -------- -------- -------- Total recognised gains and losses for the period (10,999) (4,196) (4,713) ======== ======== Prior period restatement for FRS 19 (386) -------- Total gains and losses recognised since last annual report (11,385) ======== MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS FOR THE SIX MONTHS TO 30 SEPTEMBER 2001 Loss for the financial period (9,735) (4,754) (9,885) Equity dividends (514) (423) (887) -------- -------- -------- (10,249) (5,177) (10,772) Currency translation (1,264) 558 5,172 New share capital subscribed 5,929 202 8,972 Shares to be issued (978) - 978 Scrip dividends - 26 67 Other - 1 (4) -------- -------- -------- Net movement in equity (6,562) (4,390) 4,413 shareholders' funds Opening equity shareholders' funds (originally £145,393m before restatement for FRS 19 of £386m) 145,007 140,594 140,594 -------- -------- -------- Closing equity shareholders' funds 138,445 136,204 145,007 ======== ======== ======== NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2001 1. Basis of preparation Statutory financial information The unaudited interim results have been prepared on a basis consistent with the accounting policies set out on pages 29 and 30 of Vodafone Group Plc's Annual Report & Accounts for the year ended 31 March 2001, with the exception that deferred taxation is now stated in accordance with FRS 19, 'Deferred Tax', as discussed below. The interim results should therefore be read in conjunction with the 2001 Annual Report & Accounts. The interim results for the six months to 30 September 2001, which were approved by the Board of Directors on 13 November 2001, do not comprise statutory accounts within the meaning of section 240 of the Companies Act 1985. Full accounts for the year ended 31 March 2001, incorporating an unqualified auditors' report, have been filed with the Registrar of Companies. Restatements Following the reorganisation of the Group's overall management structure and geographical division of operations on 1 April 2001, the Group has adopted the following segments for the presentation of its geographical analysis of results: Europe (further sub-analysed between Northern Europe, Central Europe and Southern Europe); the Americas; Asia Pacific; and Middle East and Africa. Prior period comparatives have been restated on the new segmental basis. Deferred taxation is now stated on a full liability basis in accordance with FRS 19 and comparative financial information has been restated as necessary. The impact of adopting FRS 19 was to increase the tax charge for the six months to 30 September 2001, the six months to 30 September 2000 and the year ended 31 March 2001 by £262m, £99m and £136m, respectively. In accordance with FRS 19, goodwill in respect of certain past acquisitions has been restated which resulted in the charge for the amortisation of goodwill for the six months to 30 September 2001, the six months to 30 September 2000 and the year ended 31 March 2001, reducing by £4m, £4m and £9m, respectively. Proportionate financial information The tables of financial information on page 27 are presented on a proportionate basis. Proportionate presentation is not required by UK GAAP and is not intended to replace the consolidated financial statements prepared in accordance with UK GAAP. However, since significant entities in which the Group has an interest are not consolidated, proportionate information is provided as supplemental data to facilitate a more detailed understanding and assessment of the consolidated financial statements prepared in accordance with UK GAAP. UK GAAP requires consolidation of entities controlled by the Group and the equity method of accounting for entities in which the Group has significant influence but not a controlling interest. Proportionate presentation is a pro rata consolidation, which reflects the Group's share of turnover and expenses in both its consolidated and unconsolidated entities. Proportionate results are calculated by multiplying the Group's ownership interest in each entity by each entity's results. Proportionate information includes results from the Group's equity accounted investments and investments held at cost. The Group does not have control over the turnover, expenses or cash flow of these investments and is only entitled to cash from dividends received from these entities. The Group does not own the underlying assets of these investments. Pro forma proportionate comparative financial information Pro forma proportionate financial information for the six months ended 30 September 2000 and the year ended 31 March 2001 has been derived from the unaudited and audited consolidated financial statements of the Group for the relevant periods and the unaudited financial results of Mannesmann for the period from 1 April 2000 to 12 April 2000, excluding the results of businesses held for resale on acquisition. The financial results of Mannesmann, previously prepared under German GAAP, have been adjusted to conform materially with Vodafone Group's accounting policies under UK GAAP. The pro forma adjustments for the six month period ended 30 September 2000 and the year ended 31 March 2001 have been determined as if the acquisition of Mannesmann took place on 1 April 2000. 2. Segmental analysis The Group's principal business is the supply of mobile telecommunications services and products. Other operations primarily comprise fixed line telecommunications businesses and the Vizzavi Europe joint venture. Analyses of turnover and total Group operating profit/(loss) by geographical region and class of business are as follows: Six months Year to ended Six months 30 31 to September March 30 2000 2001 September as as 2001 restated restated £m £m £m Group turnover Mobile telecommunications: Northern Europe 2,582 2,182 4,511 Central Europe 2,090 1,964 4,031 Southern Europe 3,228 1,932 4,479 -------- -------- -------- Europe 7,900 6,078 13,021 Americas 6 3 9 Asia Pacific 366 341 713 Middle East and Africa 168 147 308 -------- -------- -------- 8,440 6,569 14,051 Other operations 466 450 953 -------- -------- -------- 8,906 7,019 15,004 ======== ======== ======== Total Group operating profit/(loss) (before goodwill and exceptional items) Mobile telecommunications: Northern Europe 749 596 1,284 Central Europe 782 434 1,097 Southern Europe 1,066 693 1,449 -------- -------- -------- Europe 2,597 1,723 3,830 Americas 740 584 1,237 Asia Pacific 185 122 205 Middle East and Africa 83 99 213 -------- -------- -------- 3,605 2,528 5,485 Other operations (213) (108) (281) -------- -------- -------- 3,392 2,420 5,204 Subsidiary undertakings 2,246 1,466 3,322 Share of joint ventures and associated undertakings 1,146 954 1,882 Amortisation of goodwill (6,697) (5,589) (11,873) Exceptional operating items (Note 3) (4,515) (137) (320) -------- -------- -------- Total Group operating loss (7,820) (3,306) (6,989) ======== ======== ======== 3 Exceptional operating items Six months Six months Year to to ended 30 30 31 September September March 2001 2000 2001 £m £m £m Impairment of fixed assets (4,450) - (91) Reorganisation costs - (54) (85) Share of exceptional operating items of associated undertakings (65) (83) (141) Other items - - (3) -------- -------- -------- (4,515) (137) (320) ======== ======== ======== 4 Exceptional non-operating items Six months Six months Year to to ended 30 30 31 September September March 2001 2000 2001 £m £m £m Impairment of fixed asset Investments (300) - (193) Profit on disposal of fixed asset investments 45 5 6 Profit on disposal of fixed assets 7 - 6 Profit on termination of hedging instrument - - 261 -------- -------- -------- (248) 5 80 ======== ======== ======== 5 Tax on loss on ordinary activities Six months Year to ended Six months 30 31 to September March 30 2000 2001 September as as 2001 restated restated £m £m £m United Kingdom taxation 179 84 217 International taxation 907 596 1,209 -------- -------- -------- 1,086 680 1,426 ======== ======== ======== 6 Earnings per share Six months Year to ended Six months 30 31 to September March 30 2000 2001 September as as 2001 restated restated £m £m £m Loss for basic loss per share (9,735) (4,754) (9,885) Amortisation of goodwill 6,697 5,589 11,873 Exceptional operating items, net of attributable taxation 4,477 82 230 Exceptional non-operating items, net of attributable taxation 263 (5) (45) -------- -------- -------- Earnings for adjusted earnings per share 1,702 912 2,173 ======== ======== ======== Weighted average number of shares (millions): Basic and adjusted 67,776 59,362 61,439 MORE TO FOLLOW

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