Vodafone 2002 Annual Report Download - page 35

Operating and Financial Review and Prospects Vodafone Group Plc 33Annual Report & Accounts and Form 20-F
Operating Results
The statutory consolidated profit and loss account presented on page 74, and the accompanying notes, have been prepared on the basis required by UK GAAP and are
summarised below.
Continuing Years ended 31 March
Operations Acquisitions 2002 2001 2000
£m £m £m £m £m
Income and expense items
Turnover 17,940 4,905 22,845 15,004 7,873
Cost of sales, selling, distribution and administrative expenses
(including amortisation of goodwill) (27,886) (5,336) (33,222) (21,443) (6,890)
Operating (loss)/profit (9,946) (431) (10,377) (6,439) 983
Share of (loss)/profit of joint ventures and associated undertakings (889) (568) (1,457) (550) (185)
Total Group operating (loss)/profit (10,835) (999) (11,834) (6,989) 798
Total Group operating profit before goodwill amortisation
and exceptional costs 6,438 606 7,044 5,204 2,538
Amortisation of goodwill (12,715) (755) (13,470) (11,873) (1,710)
Exceptional operating costs (4,558) (850) (5,408) (320) (30)
(10,835) (999) (11,834) (6,989) 798
Exceptional non-operating items (860) 80 954
Net interest expense (845) (1,177) (401)
Taxation (2,140) (1,426) (632)
(Loss)/profit on ordinary activities after taxation (15,679) (9,512) 719
(Loss)/profit for the financial year (16,155) (9,885) 542
Amounts for acquisitions primarily comprise the results of the J-Phone Group, Japan Telecom, Eircell, and the Group’s share of the results of Grupo Iusacell, from the date
of the acquisition of these businesses to 31 March 2002.
2002 financial year compared to 2001 financial year
Turnover
The Group’s turnover increased by £7,841 million from £15,004 million for the
year ended 31 March 2001 to £22,845 million for the year ended 31 March
2002, reflecting a combination of growth in turnover from existing operations,
which increased £1,610 million, and a further £6,231 million in respect of
businesses acquired during the 2002 financial year. Of the businesses acquired
during the year, the J-Phone Group (subsequently rebranded J-Phone Vodafone),
Japan Telecom and Eircell (subsequently renamed Vodafone Ireland plc)
contributed £3,323 million, £1,105 million and £477 million, respectively.
Airtel, which was acquired in the second half of the 2001 financial year
contributed the remaining £1,326 million.
Turnover by type of activity was £20,742 million for mobile telecommunications
businesses, compared with £14,051 million in the prior year, and £2,103 million
for other operations, compared with £953 million in the prior year. Turnover from
other operations comprises turnover relating to the Group’s interests in its fixed-
line businesses, principally Arcor in Germany and Japan Telecom, and turnover
from Vodafone Information Systems GmbH (formerly Vodafone Telecommerce
GmbH) a German IT and data services business.
In Europe, turnover from mobile telecommunications increased from £13,021
million for the year to 31 March 2001 to £16,352 million for the year ended
31 March 2002. Included in turnover for the year ended 31 March 2002 is
£1,770 million in respect of a full year’s contribution from Airtel, compared to
only £444 million of turnover in the year ended 31 March 2001, being turnover
from 29 December 2000, the date Airtel became a subsidiary undertaking of the
Group. Previously, Airtel was accounted for as an associated undertaking.
In Northern Europe, turnover increased 20% to £5,432 million from £4,511
million in the 2001 financial year. In addition to the increase resulting from the
first time inclusion of Vodafone Ireland, the growth in turnover primarily reflects
increases in revenues in the United Kingdom, which grew 9% from £3,444
million to £3,763 million, as a result of increases in revenues from data services
and in the proportion of higher spending contract customers. In Central Europe,
turnover increased approximately 4% from £4,031 million in the 2001 financial
year to £4,177 million in the 2002 financial year. Of this increase, £107 million
relates to an increase in Germany, reflecting the inclusion of a first full year’s
results from Vodafone Germany (formerly D2 Vodafone). Last year’s turnover
included only amounts from 12 April 2000, being the date of completion of the
Mannesmann acquisition. Turnover in Germany also benefited from a 5%
increase in service revenues, in particular, messaging and data revenues, which