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14
Vodafone Group Plc
Annual Report 2012
Chief Executive’s review
View our year in conversation online:
vodafone.com/ar2012/conversation
Financial review of the year
Our overall nancial performance this
yearhasbeen steady. Our major emerging
marketsoperations have had a very strong
year. In addition, Verizon Wireless (‘VZW’),
our45%owned associate in the United States,
combined continued good revenue growth
with substantial cash ow. On the other hand,
thetough macroeconomic and regulatory
environment in much of Europe has made
revenue growth in that region increasingly
challenging.
However, on a relative basis, we have held or
gained share in most of our major markets,
continuing last year’s trend. The quality of our
network continues to improve, with high speed
data now available across a growing proportion
of our voice network in our European markets,
and low frequency spectrum for 4G/LTE
services now secured in Italy and Spain.
Cashow generation and shareholder
remuneration, even after sustained network
investment, continue to be signicant.
Group revenue for the year was up 1.2% to
£46.4 billion, with Group organic service
revenue up 1.5%* and data revenue up 22.2%*.
Group EBITDA margin fell 0.8 percentage
points, as a result of continuing high levels
ofcommercial costs associated with the
migration to smartphones, and the difcult
trading environment in Spain in particular.
Group EBITDA was £14.5 billion, down 1.3%
year-on-year, but at organically before
restructuring costs.
Continued
strategic
progress
“ Our focus on the key growth areas of data services,
emergingmarkets and enterprise is positioning
uswellina difcult operating environment.”
Summary of where we are now…
a Our commercial performance continues to be strong, enabling us to gain or hold
market share in most of our major markets
a Group revenue increased by 1.2% to £46.4 billion driven by strong performance in
data services and continued penetration of mobile services in emerging markets
a We continue to generate a strong level of free cashow of £6.1 billion,
whileincreasing our capital expenditure to £6.4 billion in order to maintain
ourleading network quality