Vodafone 2006 Annual Report Download - page 9

Vodafone Group Plc Annual Report 2006 7
Strategy
However, the Group now faces many challenges, particularly of competition, regulation
and new technology. During the year, we conducted, in the face of these challenges,
a review of the future growth prospects for the Group and our analysis indicated a lower
view of growth, particularly in the medium to long term, and led to an impairment of
the Group’s goodwill by £23.5 billion, the majority of which is attributable to Vodafone
Germany. This charge does not impact this year’s reported cash flows or distributable
reserves, out of which we are making returns to shareholders.
However, in this challenging market the Chief Executive has spent a great deal of time
reviewing the management structure and future planning required to take the Company
forward. In April he announced his new management team and in May they produced a
clear forward-looking strategy. I believe that through this statement the Chief Executive
sets out a clear vision for the future. I congratulate him on these changes and wish him
and his impressive team well.
It has been my privilege to be the Chairman of a company that has proved to be one
of the outstanding international success stories of the last decade. The development
and expansion of the Group has been made possible by the excellence of the
management team whose flair and vision has enabled us to identify international
opportunities for profitable growth while at the same time introducing technological
advances to enhance the mobile experience for our customers.
It was announced earlier this year that Sir Julian Horn-Smith had decided to retire from
the Board following the Annual General Meeting in July. Julian has been with Vodafone for
22 years and a Board member for 10 years. He has had an outstanding career, being a
major contributor to the creation of the UK network and subsequently leading the early
development of our international presence. More recently he was Group Chief Operating
Officer and then Deputy Chief Executive, with responsibility for our affiliates and business
development. I am sure all shareholders will join with me in wishing him well for the future.
Peter Bamford, Chief Marketing Officer, who left the Company in early April, was
instrumental in developing our brand both within the UK and internationally and developing
a number of major initiatives, including the launch of Vodafone live! with 3G. I wish him
well and thank him for his contribution to the success of the Company.
At the AGM, we say farewell to Paul Hazen, our Deputy Chairman, who has served
with distinction as a non-executive director since 1999. We also say goodbye to
Penny Hughes, a fine non-executive director for eight years and who was an
exceptional Remuneration Committee Chair for five years. Her contribution cannot
be overstated. Paul and Penny leave with our best wishes. Taking Paul’s place as
Deputy Chairman and senior independent director will be John Buchanan, who has
been a non-executive director since April 2003, shortly after his retirement from
BP p.l.c. I am sure that John will discharge his new duties very effectively.
During the year, we welcomed two new non-executive directors to the Board. In September,
Philip Yea, Chief Executive Officer of 3i Group plc, was appointed and he was joined in
November by Anne Lauvergeon, the Chairman of the Executive Board of AREVA, the
leading French energy company. On 1 May, we welcomed Anthony Watson to the Board.
Until his recent retirement, he was Chief Executive of Hermes Pensions Management
Limited. I know that their collective experience in their different areas of business will
be of great benefit to the Company.
Finally I come to my own retirement. As I have said, it has been a great privilege for
me to have been Chairman of a truly outstanding British company. I have, however,
been particularly saddened this year by the nature of some of the media coverage
and particularly by the suggestion of boardroom splits. There are no factions within
the Board and any claim that your Board is not united is unfounded. I leave with the
knowledge that Vodafone, which is now very different to the company which I first
chaired, is well placed to continue to enjoy an exciting and profitable future. I wish
Sir John Bond, my successor, Arun Sarin, your Chief Executive, and everyone at Vodafone
the very best for the future and thank you all for your support during the last eight years
as your Chairman.
Lord MacLaurin of Knebworth, DL
Chairman
05 1015202530
Number of markets (1998-2006)
1998
2006
12
Number of Partner Networks at 31 March 2006: 32
26
020 40 60 80 100 120 140 160 180
Number of customers (1998-2006)
millions
1998
2006
5.8
170.6
05 1015202530
Revenue (1998-2006)
£bn
1998
2006
2.5
29.4