Vodafone 2015 Annual Report Download - page 179

EBITDA declined 18.2%*, with a 4.3* percentage point decline
in EBITDA margin, driven by lower service revenue and increased
customer investment.
The roll-out of 4G services continued with a focus on urban areas, with
overall outdoor population coverage of 70% at 31 March 2014, which
combined with our ongoing network enhancement plan has resulted
in a signicant improvement in voice and data performance in the
second half of the year.
Following its acquisition on 14 October 2013, KDG contributed
£702 million to service revenue and £297 million to EBITDA in Germany.
The domination and prot and loss transfer agreement was registered
on 14 March 2014 and the integration of Vodafone Germany and KDG
began on 1 April 2014.
Italy
Service revenue for the year declined 17.3% on a local currency basis
driven by the effect of the summer prepaid price war penetrating the
customer base and the negative impact of MTR cuts effective from
January and July 2013. Mobile in-bundle revenue grew 15.5% on a local
currency basis driven by the take-up of integrated prepaid plans.
Vodafone Red, which had nearly 1.5 million customers at 31 March
2014, continues to penetrate further into the base leading to improving
churn in the contract segment.
Enterprise revenue growth, while still negative, showed signs
of improvement during the year thanks to the success of “Zero”.
Prepaid experienced a steep ARPU decline as a result of the market
move to aggressive bundled offers. 4G services are now available
in 202 municipalities and outdoor coverage has reached 35%.
Fixed line revenue for the year declined 3.0% on a local currency basis
as a result of declining xed voice usage, partly offset by continued
broadband revenue growth supported by 77,000 net broadband
customer additions during the year. Vodafone Italy now offers bre
services in 37 cities and is progressing well on its own bre build plans.
EBITDA for the year declined 24.9% on a local currency basis, with
a 4.7percentage point decline in the local currency EBITDA margin,
primarily driven by the lower revenue, partially offset by strong
efciency improvements delivered on operating costs which fell
6.9%on a local currency basis.
UK
Service revenue decreased 4.4%*, principally driven by declines
in enterprise and prepaid and a 1.9 percentage point impact from MTR
cuts, partially offset by consumer contract service revenue growth.
Mobile in-bundle revenue increased 0.6%* as the positive impact
of contract customer growth and greater penetration of Vodafone
Red plans into the customer base, with nearly 2.7 million customers
at 31 March 2014, offset pricing pressures. Mobile out-of-bundle
declined 7.2%*, primarily driven by lower prepaid revenue.
The activity to integrate the UK operations of CWW was accelerated
successfully and we continue to deliver cash and capex synergies
as planned. The sales pipeline is now growing, which we expect
to materialise into revenue increases in the 2015 nancial year.
The roll-out of 4G services continued following the launch in August
2013, with services now available in 14 cities and over 200 towns,
with over 637,000 4G enabled plans (including Mobile Broadband)
at 31 March 2014. We are making signicant progress in network
performance, particularly in the London area.
EBITDA declined 9.8%*, driven by lower revenue and a 1.0*
percentage point decline in the EBITDA margin as a result of higher
customer investment.
Spain
Service revenue declined 13.4%*, as a result of intense convergence
price competition, macroeconomic price pressure in enterprise and
an MTR cut in July 2013. Service revenue trends began to improve
towards the end of the year. As a result of a stronger commercial
performance and lower customer churn from an improved customer
experience, the contract customer base decline slowed during the
year and the enterprise customer base remained broadly stable.
Mobile in-bundle revenue declined 0.4%* driven by the higher
take-up of Vodafone Red plans, which continue to perform well,
with over 1.2 million customers at 31 March 2014. We had 797,000
4G customers at 31 March 2014 and services are now available in all
Spanish provinces, 227 municipalities and 80 cities.
Fixed line revenue declined 0.2%* as we added 216,000 new
customers during the year and added 276,000 homes to our joint bre
network with Orange. On 17 March 2014 we agreed to acquire Grupo
Corporativo Ono, S.A. (‘Ono’), the leading cable operator in Spain and
the transaction is, subject to customary terms and conditions including
anti-trust clearances by the relevant authorities, expected to complete
in calendar Q3 2014.
EBITDA declined 23.9%*, with a 3.4* percentage point decline in EBITDA
margin, primarily driven by the lower revenue, partly offset by lower
commercial costs and operating cost reductions of 9.4%*.
Other Europe
Service revenue declined 7.1%* as price competition and MTR cuts
resulted in service revenue declines of 5.6%*, 8.4%* and 14.1%* in the
Netherlands, Portugal and Greece respectively. However, Hungary and
Romania returned to growth in H2, and all other markets apart from
Portugal showed an improvement in revenue declines in Q4.
In the Netherlands mobile in-bundle revenue increased by 3.4%*, driven
by the success of Vodafone Red plans. In Portugal, the broadband
customer base and xed line revenues continued to grow as the bre
roll-out gained momentum in a market moving strongly towards
converged offers, whilst in Greece the customer base grew due
to the focus on data. In Ireland, contract growth remained good
in a declining market.
EBITDA declined 14.0%*, with a 2.1* percentage point reduction
in the EBITDA margin, driven by lower service revenue, partly offset
by operating cost efciencies.
Overview Strategy review Performance Governance Financials Additional information Vodafone Group Plc
Annual Report 2015
177