Vodafone 2011 Annual Report Download - page 8

Dividend per share (pence)
7.77 8.31 8.90
Improving operational performance
After the macroeconomic shocks of the previous nancial
year and the business challenges that accompanied them,
our overall operating environment did not deteriorate further
during the year. Most markets saw economic growth recover,
although southern Europe remained weaker.
Within this context, the Group has performed well. We achieved
organic service revenue growth of 2.1%(*), a signicant change
in momentum from last year’s 1.6%(*) decline.
Our adjusted operating prot was up 3.1% at £11.8 billion,
reecting a stable performance in our controlled operations
and strong growth in the contribution from Verizon Wireless,
our US associate.
Data has been the key driver of growth over the last year. Our
customers around the world are increasingly drawn to the
experience of the mobile internet and related services.
Organic data revenue growth was 26.4%(*) achieved through
combining increasingly disciplined pricing structures with a
broad range of devices and a network with a deserved
reputation for market-leading speed and reliability.
We have continued to make substantial investments in our
infrastructure to maintain our advantage over our peers, with a
total capital expenditure outlay of £6.2 billion during the year.
The Group, however, remains highly cash generative, with free
cash ow for the year totalling £7.0 billion.
Delivering value from non-controlled interests
The Board remains committed to achieving full value from
the non-controlled interests within the Group. This has been
an ongoing process, starting with the disposals of our
interests in Belgacom and Swisscom ve years ago, but
inevitably pausing during the nancial crisis when asset
prices were depressed. During the year, we successfully
disposed of our holdings in China Mobile Limited and
SoftBank, generating proceeds of £7.4 billion. Just after the
year end, we were pleased to announce the sale of our 44%
interest in SFR, the number two mobile operator in France.
Increasing shareholder returns
This time last year the Board put in place a target to grow total
dividends per share by at least 7% per annum over the
following three years, and I am pleased to announce a 7.1%
increase in the nal dividend for the March 2011 year, giving a
total payout for the year of 8.90 pence.
In addition, from the proceeds from our portfolio
rationalisation, we have committed £6.8 billion to share
buyback programmes. Combined with the dividend, this
takes total committed shareholder returns during the year
to £15.7 billion, or 17% of our market capitalisation at
31 March 2011. Including share price appreciation, our total
shareholder return for the year was 23%, compared to 8% for
the FTSE 100.
Tax policy
During the year, the Group has been involved in two high
prole tax cases in the UK and India. Our tax policy is
straightforward: we pay taxes that are due in the countries
where we make prots or record capital gains in line with the
prevailing legislation of those jurisdictions.
Our people
I am proud to say every year that our people all around the
world are absolutely committed to serving our customers
and are often the difference between Vodafone and our
competitors. However, this year I must highlight the
extraordinary commitment and dedication shown to
maintaining services to customers in two of our markets
in extremis.
In Egypt, our employees risked their personal safety in a very
volatile environment to keep the network up and running at
a time when mobile communication was more important
than ever, keeping the voice network outage to less than
24 hours.
In New Zealand, our people responded magnicently to the
earthquake that devastated Christchurch in February 2011.
They ensured network coverage was maintained 24 hours a
day despite major power outages and structural damage, and
managed unprecedented levels of demand as the mobile
phone became the primary means of communication for the
people of Christchurch and the rescue services. The team
worked around the clock to ensure the safety of our own staff
and to provide temporary stores and subsidised packages to
support customers’ communications needs.
The Vodafone Foundation
We have continued to fund the good work of the Vodafone
Foundation. Through the Vodafone Foundation and our
network of national afliate foundations we support
communities and societies in the countries in which we
operate. In this nancial year we invested a total of £50 million
in foundation programmes and social causes.
Our World of Difference programme is now in 20 countries
and has so far enabled 1,500 people to take paid time to work
for a charitable purpose of their choice in their own
community or in a developing country.
Our Mobiles for Good programme, combining our
technology with our giving, saw the launch of Instant
Network, a partnership with Telecoms Sans Frontieres which
enables a network to be deployed from three suitcases,
covering 10 sq km for usage of up to 12,000 people. Field trials
are currently underway.
“I leave Vodafone
with huge optimism
for its future”
2009 2010 2011
Chairman’s statement
6 Vodafone Group Plc Annual Report 2011