Interim Results - Part 4

Vodafone Group PLC 13 November 2001 PART 4 7 Reconciliation of operating loss to net cash inflow from operating activities Six months Six months Year to to ended 30 30 31 September September March 2001 2000 2001 £m £m £m Operating loss (7,089) (3,130) (6,439) Exceptional items 4,000 54 176 Depreciation 1,053 690 1,593 Amortisation of goodwill 5,335 4,542 9,585 Amortisation of other intangible fixed assets 19 10 24 -------- -------- -------- 3,318 2,166 4,939 Working capital movements 322 (224) (268) Payments in respect of exceptional items - (54) (84) -------- -------- -------- 3,640 1,888 4,587 ======== ======== ======== 8. Analysis of net debt Other Acquisitions non-cash At 1 (excluding changes & At 30 April Cash cash & exchange September 2001 flow overdrafts) movements 2001 £m £m £m £m £m Liquid resources 7,593 (2,881) - (140) 4,572 -------- ----- ------- ------ ------- Cash at bank and in hand 68 30 - (2) 96 Bank overdrafts (5) (1) - - (6) -------- ----- ------- ------ ------- 63 29 - (2) 90 -------- ----- ------- ------ ------- Debt due within one year (other than bank overdrafts) (3,596) 862 (139) (618) (3,491) Debt due after one year (10,630) (445) (1) 812 (10,264) Finance leases (152) 32 (27) - (147) -------- ----- ------- ------ ------- (14,378) 449 (167) 194 (13,902) -------- ----- ------- ------ ------- (6,722) (2,403) (167) 52 (9,240) ======== ==== ======= ====== ======= Included within net debt are bond issues maturing as follows: £m One year or less 3,254 More than two years but not more than five years 3,909 More than five years 5,747 ------- 12,910 ======= 9. Summary of differences between UK and US GAAP The interim 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 for the year ended 31 March 2001. The effects of these differing accounting principles 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 Revenues in accordance with UK GAAP 8,906 7,019 15,004 Items decreasing revenues: Non-consolidated subsidiaries (2,182) (1,409) (3,409) Deferral of connection revenues (155) - (492) -------- -------- -------- Revenues in accordance with US GAAP 6,569 5,610 11,103 ======== ======== ======== Net loss in accordance with UK GAAP (9,735) (4,754) (9,885) Items (increasing) /decreasing net loss: Goodwill and other intangibles amortisation (6,280) (2,338) (5,302) Deferral of connection income (20) - (54) Capitalised interest 203 - 365 Income taxes 4,750 2,302 7,847 Minority interests 1,020 19 (40) Other (43) 14 (2) -------- -------- -------- Net loss in accordance with US GAAP (10,105) (4,757) (7,071) ======== ======== ======== US GAAP basic loss per ordinary share (14.91)p (8.01)p (11.51)p ======== ======== ======== Shareholders' equity in accordance with UK GAAP 138,445 136,204 145,007 Items increasing /(decreasing) shareholders' equity: Goodwill and other intangibles - net of amortisation 62,067 51,385 66,197 Deferral of connection income (105) - (85) Capitalised interest 568 - 365 Cumulative deferred income taxes (48,469) (44,941) (51,222) Minority interests (3,887) (1,318) (5,149) Proposed dividends 492 423 464 Other (103) (65) (55) -------- -------- -------- Shareholders' equity in accordance with US GAAP 149,008 141,688 155,522 ======== ======== ======== 10 Proportionate financial information Six months Year Six months to ended to 30 31 30 September March September 2000 2001 2001 Note 1 Note 1 £m £m £m Proportionate turnover Mobile telecommunications: Northern Europe 3,133 2,582 5,357 Central Europe 2,343 2,115 4,323 Southern Europe 2,408 1,612 3,521 -------- -------- -------- Europe 7,884 6,309 13,201 Americas 2,839 2,414 5,008 Asia Pacific 2,517 1,234 2,771 Middle East and Africa 252 213 448 -------- -------- -------- 13,492 10,170 21,428 Other operations 834 372 802 -------- -------- -------- 14,326 10,542 22,230 ======== ======== ======== Proportionate EBITDA (Note 2) Mobile telecommunications: Northern Europe 1,028 785 1,674 Central Europe 1,026 624 1,478 Southern Europe 1,049 673 1,450 -------- -------- -------- Europe 3,103 2,082 4,602 Americas 1,000 815 1,627 Asia Pacific 567 285 587 Middle East and Africa 108 100 227 -------- -------- -------- 4,778 3,282 7,043 Other operations (1) 6 (27) -------- -------- -------- Proportionate EBITDA 4,777 3,288 7,016 (Note 2) Less: depreciation and amortisation, excluding goodwill (1,648) (1,078) (2,234) -------- -------- -------- Mobile telecommunications 3,321 2,302 5,019 Other operations (192) (92) (237) -------- -------- -------- Proportionate total Group operating profit before goodwill amortisation and exceptional items 3,129 2,210 4,782 ======== ======== ======== Notes (1)Financial information for the comparative periods is stated on a pro forma basis for the acquisition of Mannesmann, and has been presented in accordance with the new segmental basis. Further details are provided in Note 1. (2)Proportionate EBITDA (earnings before interest, tax, depreciation and amortisation) is defined as operating profit before exceptional items plus depreciation and amortisation of subsidiary undertakings, joint ventures, associated undertakings and investments, proportionate to equity stakes. Proportionate EBITDA represents the Group's ownership interests in the respective entities' EBITDA. As such, proportionate EBITDA does not represent EBITDA available to the Group. Other information 1) Copies of the Group's Interim Report will be sent to all shareholders. Further copies will be available from the Company's registered office: The Courtyard 2-4 London Road Newbury Berkshire RG14 1JX England. 2) This report will also be available on the Vodafone Group Plc website: www.vodafone.com from 13 November 2001. For further information: Tim Brown, Group Corporate Affairs Director Melissa Stimpson, Head of Group Investor Relations Bobby Leach, Head of Group Financial Public Relations Darren Jones, Senior Investor Relations Manager Jon Earl, Senior Investor Relations Manager Tel: +44 (0) 1635 673310 Lulu Bridges/John West Tavistock Communications Tel: +44 (0) 207 600 2288 Forward-Looking Statements This document contains certain 'forward-looking statements' with respect to the financial condition, results of operations and business and some of our plans and objectives with respect to these items. In particular, certain statements concerning our expectations and plans, strategy, management's objectives, prospects, trends, market standing, overall market trends, and revenues, contain forward-looking information. In addition, 'forward-looking statements' include statements made with respect to expectations as to launch and roll-out dates for products and services, including 3G services, future performance, costs, revenues, improvements in margin, expected synergies, the likelihood of impairment charges, average revenue per customer and revenues derived from the new non- voice services, expected EBITDA results, growth, churn rate, mobile penetration rates and internet use and other trend projections. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates'. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: changes in economic conditions in markets served by our operations that would adversely affect the level of demand for mobile services; greater than anticipated competitive activity requiring reduced pricing and/or new product offerings or resulting in higher costs of acquiring new customers; slower customer growth or reduced customer retention; the impact on capital spending from investment in network capacity and the deployment of new technologies, or the rapid obsolescence of existing technology; the possibility that technologies, including mobile internet platforms, and services, including 3G services, will not perform according to expectations or that vendors' performance will not meet our requirements; changes in the projected growth rates of the mobile telecommunications industry; accuracy of or any changes in our projected revenue model or global branding strategy; our ability to meet the objectives of our management initiatives; future revenue contributions of the services we offer as a percentage of total revenue leading to difficulties in meeting our target improvements in margin; lower than expected impact of GPRS, 3G and Vizzavi Europe's partnership with our operators on our future revenues; our ability to harmonise our mobile platforms and any delays, impediments or other problems associated with the roll-out and scope of 3G technology and services and Vizzavi services in new markets; our ability to offer new services and the delivery and performance of GPRS and 3G handsets, network equipment and other key products from our suppliers; greater than anticipated prices of new mobile handsets; any conditions imposed in connection with regulatory approvals sought in connection with pending acquisitions and dispositions; changes in the regulatory framework in which we operate; the impact of legal or other proceedings against us or other companies in the mobile telecommunications industry; and changes in exchange rates, including in particular the exchange rate of the pound to the euro. Furthermore, a review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found under the heading 'Risk Factors' on pages 8 to 10 of our U.S. Annual Report on Form 20-F for the year ended 31 March 2001. All subsequent written or oral forward-looking statements attributable to Vodafone, any Vodafone members or persons acting on our behalf are expressly qualified in their entirety by the factors referred to above. APPENDIX 1 - VODAFONE GROUP PLC - MOBILE TELECOMMUNICATIONS BUSINESSES CUSTOMER INFORMATION AS AT 30 SEPTEMBER 2001 REGISTERED PERCENTAGE PROPORTIONATE REGISTERED COUNTRY OPERATOR OWNERSHIP CUSTOMERS PREPAID (Note 2) (thousands) (%) NORTHERN EUROPE UK Vodafone** 100.0 12,799 64 Ireland Eircell 100.0 1,611 71 Netherlands Libertel Vodafone 70.0 2,256 66 Sweden Europolitan Vodafone** 71.1 762 25 France SFR 31.9 3,699 48 Belgium Proximus 25.0 1,014 56 TOTAL 22,141 57 CENTRAL EUROPE Germany D2 Vodafone 99.6 21,787 60 Hungary Vodafone** 50.1 169 90 Poland Plus GSM 19.6 620 42 Switzerland Swisscom Mobile 25.0 878 40 TOTAL 23,454 56 SOUTHERN EUROPE Greece Panafon Vodafone** 52.8 1,423 72 Italy Omnitel Vodafone 76.5 12,738 91 Malta Vodafone** 80.0 105 91 Portugal Telecel Vodafone 50.9 * * Spain Airtel Vodafone 91.6 6,824 56 Albania Vodafone** 76.9 41 99 Romania Connex GSM 20.1 N/A N/A TOTAL 22,815 78 AMERICAS United States Verizon Wireless 44.1 12,658 6 (Note 3) Mexico Iusacell 34.5 590 76 TOTAL 13,248 10 ASIA PACIFIC Australia Vodafone 95.5 1,991 34 New Zealand Vodafone 100.0 1,077 78 Japan J-Phone Various 6,726 3 China China Mobile 2.2 1,384 47 (Hong Kong) Limited Fiji Vodafone 49.0 36 90 India RPG Cellular 20.6 19 57 TOTAL 11,233 41 MIDDLE EAST & AFRICA Egypt Click Vodafone** 60.0 844 89 South Africa Vodacom 31.5 1,782 81 Kenya Safaricom 40.0 97 99 TOTAL 2,723 83 GROUP TOTAL 95,614 48 Appendix 1 (continued) CONTROLLED ACTIVE CONTROLLED (Note 1) INACTIVE COUNTRY OPERATOR PREPAID CONTRACT TOTAL TOTAL (%) (%) (%) (%) NORTHERN EUROPE UK Vodafone** 75 99 84 16 Ireland Eircell 97 98 97 3 Netherlands Libertel Vodafone 93 99 95 5 Sweden Europolitan Vodafone** 82 91 89 11 France SFR Belgium Proximus TOTAL 80 98 87 13 CENTRAL EUROPE Germany D2 Vodafone 88 95 91 9 Hungary Vodafone** 89 97 89 11 Poland Plus GSM Switzerland Swisscom Mobile TOTAL 88 95 91 9 SOUTHERN EUROPE Greece Panafon Vodafone** * * * * Italy Omnitel Vodafone 94 92 93 7 Malta Vodafone** 93 99 94 6 Portugal Telecel Vodafone * * * * Spain Airtel Vodafone 85 95 89 11 Albania Vodafone** Romania Connex GSM TOTAL 90 94 91 9 AMERICAS United States Verizon Wireless (Note 3) Mexico Iusacell TOTAL N/A N/A N/A N/A ASIA PACIFIC Australia Vodafone 88 94 92 8 New Zealand Vodafone 91 99 93 7 Japan J-Phone China China Mobile (Hong Kong) Limited Fiji Vodafone India RPG Cellular TOTAL 90 95 92 8 MIDDLE EAST & AFRICA Egypt Click Vodafone** 97 97 97 3 South Africa Vodacom Kenya Safaricom TOTAL 97 97 97 3 GROUP TOTAL 88 96 90 10 Note 1 Active customers are defined as customers who have made or received a chargeable event in the last three months or, where information is not available, defined as customers who have made a chargeable event in the last three months (indicated by **). Note 2 All ownership percentages are stated as at 30 September 2001 and exclude options, warrants or other rights or obligations of Vodafone Group Plc to increase or decrease ownership in any venture. Ownership interests have been rounded to the nearest tenth of one percent. Note 3 The Group's proportionate customer base has been adjusted for Verizon Wireless's proportionate ownership of its customer base of approximately 98.1%. *Listed subsidiaries still to report. APPENDIX 2 - VODAFONE GROUP PLC - MOBILE TELECOMMUNICATIONS BUSINESSES ARPU INFORMATION FOR THE 12 MONTH PERIOD TO 30 SEPTEMBER 2001 (Note 1) ARPU (Note 2) LOCAL REGISTERED REGISTERED REGISTERED COUNTRY OPERATOR CURRENCY PREPAID CONTRACT TOTAL NORTHERN EUROPE UK Vodafone GBP 139 535 281 Netherlands Libertel Vodafone EUR * * * Sweden Europolitan Vodafone SEK * 6,646 5,329 CENTRAL EUROPE Germany D2 Vodafone EUR 119 586 317 Hungary Vodafone HUF 31,820 200,546 51,048 SOUTHERN EUROPE Greece Panafon Vodafone EUR * * * Italy Omnitel Vodafone EUR 287 757 332 Malta Vodafone MTL 106 922 206 Portugal Telecel Vodafone EUR * * * Spain Airtel Vodafone EUR 141 663 369 ASIA PACIFIC Australia Vodafone AUD 298 906 711 New Zealand Vodafone NZD 280 1,821 646 MIDDLE EAST & AFRICA Egypt Click Vodafone EGP 1,076 2,525 1,275 Note 1 Vodafone introduced a new industry measurement of active customers in March 2001. This is the third quarter for which Vodafone has collated and reported on this information. As there is no historical information prior to 31 March 2001, Vodafone will include active ARPU numbers when it has a history of performance for a proper basis of comparison. However, the underlying levels of active customer spend continue to be higher than the reported registered ARPU. Note 2 ARPU is calculated for the twelve month period to 30 September 2001 and excludes handset revenues and connection fees. * Listed subsidiary information not published. APPENDIX 3 - VODAFONE GROUP PLC - MOBILE TELECOMMUNICATIONS BUSINESSES NON-VOICE SERVICES AS A PERCENTAGE OF SERVICE REVENUES 12 MONTHS TO 30 SEPTEMBER 2001 TOTAL OPERATOR MESSAGING INTERNET NON-VOICE DATA DATA SERVICES NORTHERN EUROPE UK Vodafone 7.1% 0.9% 8.0% Others 4.3% 0.2% 4.5% TOTAL 6.0% 0.6% 6.6% CENTRAL EUROPE D2 Vodafone 13.9% 0.3% 14.2% Others 5.8% 0.1% 5.9% TOTAL 13.1% 0.3% 13.4% SOUTHERN EUROPE Omnitel Vodafone 7.1% 0.2% 7.3% Others 7.4% 0.1% 7.5% TOTAL 7.2% 0.2% 7.4% AMERICAS Verizon Wireless - 0.5% 0.5% Other - - - TOTAL - 0.5% 0.5% ASIA PACIFIC J-Phone 4.4% 7.4% 11.8% Others 4.9% 0.1% 5.0% TOTAL 4.5% 5.3% 9.8% MIDDLE EAST & AFRICA 2.5% - 2.5% PROPORTIONATE GROUP TOTAL 6.0% 1.1% 7.1% ======= ======= ======= CONTROLLED GROUP TOTAL 8.7% 0.4% 9.1% ======= ======= ======= Appendix 3 (continued) SEPTEMBER 2001 (MONTH ONLY) TOTAL OPERATOR MESSAGING INTERNET NON-VOICE DATA DATA SERVICES NORTHERN EUROPE UK Vodafone 8.4% 0.8% 9.2% Others 6.6% 0.2% 6.8% TOTAL 7.6% 0.6% 8.2% CENTRAL EUROPE D2 Vodafone 13.7% 0.4% 14.1% Others 6.0% 0.4% 6.4% TOTAL 12.8% 0.4% 13.2% SOUTHERN EUROPE Omnitel Vodafone 8.6% 0.2% 8.8% Others 7.4% 0.1% 7.5% TOTAL 8.0% 0.2% 8.2% AMERICAS Verizon Wireless 0.1% 0.6% 0.7% Other - - - TOTAL 0.1% 0.6% 0.7% ASIA PACIFIC J-Phone 5.4% 9.2% 14.6% Others 7.0% 0.3% 7.3% TOTAL 5.7% 7.6% 13.3% MIDDLE EAST & AFRICA 3.8% - 3.8% PROPORTIONATE GROUP TOTAL 6.7% 1.7% 8.4% ======= ======= ======= CONTROLLED GROUP TOTAL 9.5% 0.4% 9.9% ======= ======= =======
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