Vodafone 2014 Annual Report Download - page 4

Chairman’s statement
Three pillars of success
Three distinct elements sum up why Vodafone has had such a strong
track record of shareholder value creation over recent years. First,
in response to the increasing demand for data we have formulated
a clear strategy of becoming a leading unied communications provider
and to strengthen further our network and service differentiation,
through investments in mobile and xed capabilities. Second, we have
made signicant progress in executing our strategy. We have actively
managed our portfolio, particularly disposing of our non-controlling
interests, and used part of the proceeds to accelerate the roll-out of 3G
and 4G mobile capability and the deployment of next-generation xed
line operations in a number of key markets. To accelerate our strategy
further we acquired Kabel Deutschland in Germany and agreed the
purchase of Ono in Spain – two leading cable companies in their
respective markets. Finally, we have extended our very strong track
record of balancing the long-term needs of the business with signicant
returns to shareholders. We ended the year in a strong nancial position
and with a clear strategy for long-term growth.
Our role in society and protection of customer data
Telecommunications technology has a signicant positive impact
on economic development and individual wellbeing. We remain
committed to enhancing the positive social impact of mobile –
our networks and services are used to address everything from illiteracy
to supporting the local healthcare infrastructure and realising the
potential of budding entrepreneurs.
Our technology helps people to connect and share information.
In this context data protection is critical. However, this year there have
been a number of troubling allegations about the activities of security
agencies in accessing customer data. As a trusted communications
service provider, we view our customers’ privacy as absolutely key.
As a demonstration of our commitment to transparency in this regard,
our latest sustainability report includes a section on law enforcement
disclosure. This explains the nature and extent of government powers
to order our assistance, together with information about agency and
authority demands in countries where statistical data can lawfully
be disclosed.
We are dependent on government policies and regulatory frameworks.
While this applies to all our operations, it is critical for the development
of a globally competitive and healthy telecom industry in Europe.
Europe needs to nd the right balance between protecting consumer
interests and the consumer’s long-term interest in investment
in next-generation telecom infrastructure and innovation, that will
enable future growth and prosperity for its citizens. So far that balance
in our opinion has not been found in the proposals for reform of the
digital single market currently under consideration in Brussels.
Alignment with shareholders
Our remuneration policies continue to ensure that management
is strongly aligned with shareholders, with a focus on rewarding long-
term value creation. After the return of value arising from the sale of our
Verizon Wireless stake, Vittorio, and other members of the Executive
Committee reinvested a signicant proportion of their net proceeds back
into Vodafone shares to demonstrate their commitment to the business
and the strength of that alignment. The Board continues to consider
the ordinary dividend to be the core element of shareholder returns,
and believes in a consistent dividend policy. This year we raised the
dividend per share by 8%, and as a reection of our condence in our
future performance, we intend to raise it annually hereafter.
Changes to the Board
During the year, Andy Halford informed the Board of his intention
to step down as Group CFO. I would like to thank him for his outstanding
contribution to Vodafone during his eight year tenure as CFO and
in his previous roles. He has brought an invaluable rigour and clarity
to our nancial reporting and investor communication, while
consistently driving signicant improvements to our organisational
efciency. I am condent that Nick Read, who joined the Board as CFO
on 1 April 2014, will be a worthy successor. During the year there were
a number of changes to the non-executive team and these are set out
in my Governance statement on page 49. My medium-term ambitions
for the composition of the Board are to bring in further marketing
expertise, and achieve a greater gender balance. By September we will
have three female directors and we will be well on our way to our goal
of 25% of Board members being women by 2015.
Gerard Kleisterlee
Chairman
Reections on the year
It has been a momentous year for Vodafone and our shareholders.
Wehave completed the second biggest transaction in corporate history,
with the sale of our interest in Verizon Wireless; progressed our unied
communications strategy with the acquisition of leading cable companies;
and delivered the biggest ever return to shareholders, ofUS$85billion
(£51billion).
Vodafone Group Plc
Annual Report 201402