Vodafone 2013 Annual Report Download - page 20

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Our performance
over the year
We track our performance against 12 key nancial,
operational and commercial metrics which we judge
tobe the best indicators of how we are doing.
Organic service revenue growth
Growth in the top line demonstrates our abilityto grow our
customer base and stabiliseor increase ARPU. It also helps
tomaintain margins. As we anticipated at the start of the year,
we missed our service revenue target because of ongoing
macroeconomic and regulatory pressures in Europe.
EBITDA margin
Trends in our EBITDA margin demonstrate whether our revenue
growth isgenerating a good return and whether we can offset
underlying cost pressures in ourbusiness with cost efciencies.
Thisyear excluding M&A and restructuring costs, margins fell only
0.1*percentage point year-on-year.
Adjusted operating prot (‘AOP’)
Due to the signicant contribution madeto our overall protability
by our USassociate, VZW, AOP is a better indicator of overall
protability than EBITDA. We exceeded our target for the year
dueto a strong performance from VZW.
Free cash ow
Our regular dividend is paid out of free cashow, so maintaining
a high level of cash generation (even after signicant continued
investment in capital expenditure) is key to delivering strong
shareholder returns. Free cash ow of £5.6 billion was within
ourguidance range for the year.
% of consumer contract revenue from integrated plans (Europe)
Our strategic push towards integrated plans allows us both
to defend our revenue base from voice and SMS substitution,
and to monetisefuture data demand growth.
Smartphone penetration (Europe)
Smartphones are the key to giving our customers access to the
mobile internet; themore our customers have them, the bigger
our data opportunity becomes. In 2010, we set a target of at least
35% smartphone penetration by March 2013, which we achieved.
We now have a new ambition of over 50%by March 2015.
Key performance indicators
Target:
To maximise service
revenue growth.
Target:
EBITDA margin to
stabilise by March
2014.
Target:
£11.1–£11.9 billion in
2013 nancial year.
Target:
£5.3–£5.8 billion in
2013 nancial year.
Target:
To increase
signicantly
eachyear.
Target:
To increase to over
50% by 2015.
2011 2.1%*
1.5%*
-1.9%*
2012
2013
2011 32.0%
31.2%
29.9%
2012
2013
2011 £11.8bn
£11.5bn
£12.0bn
2012
2013
2011 £7.0bn
£6.1bn
£5.6bn
2012
2013
2011 27%
44%
67%
2012
2013
2011 19%
27%
36%
2012
2013
More work to do
On-track
Achieved
Achieved
Achieved
On-track
18 Vodafone Group Plc
Annual Report 2013