British telecoms giant Vodafone Group has reported a 3.0% year-on-year decline in revenue in reported terms for the year ended 31 March 2016, primarily due to foreign exchange movements, while on an organic basis turnover was actually up 2.3% at GBP40.973 billion (USD61.8 billion). Group service revenue totalled GBP37.159 billion in the year under review, a figure representing an organic increase of 1.5% from the previous fiscal year, but was down 3.5% in reported terms. Notably, the group’s Africa, Middle East and Pacific (AMAP) division saw a 6.9% organic annual increase in service revenues, which reached GBP11.843 billion, with this growth helping offset lower service revenues in Europe, which fell by 0.6% in organic terms to GBP24.461 billion.
Group EBITDA in FY 2016 totalled GBP11.612 billion, a 2.5% reported decline, again attributed to forex movements, while organic EBITDA was up by 2.7% year-on-year, with the group highlighting the fact that this was a faster pace of growth than revenues despite an increase in operating expenses linked to its ‘Project Spring’ investment programme. Meanwhile, adjusted operating profit fell by 11.1% to GBP3.117 billion as organic EBITDA growth was offset by the increase in depreciation and amortisation resulting from Project Spring, spectrum acquisitions and currency movements. Reported operating profit was GBP1.377 billion in the fiscal year, down 30% y-o-y, having been impacted by a goodwill impairment in relation to Romania of GBP450 million, which the group said reflected increased competitive intensity.
With regards to Project Spring, Vodafone Group confirmed that it has now delivered ‘almost all of the major targets outlined’ when it unveiled the programme in November 2013. To that end, the company said that key highlights stemming from its investments included: the extension of its European 4G coverage to 87% of its footprint, just below the target of 90% due to rollout delays primarily in the UK and Germany; 85% 3G population coverage in AMAP, excluding India, where coverage in targeted urban areas is now 95%; the addition of 43,000 new mobile sites and the installation of 115,000 modernised ‘single RAN’ base stations, giving the group 50,000 more 2G-enabled sites, 77,000 more 3G-enabled sites and 76,000 more 4G-enabled sites; and the extension of fibre coverage to 72 million homes, 30 million of which are passed by owned next generation network (NGN) infrastructure in Europe, up from 14 million in September 2013, thanks in part to cable acquisitions.
In operational terms, meanwhile, Vodafone Group ended March 2016 with 462.284 million mobile customers on its books, up from 460.991 million three months earlier, of which 20.2% were signed up to a post-paid plan. Fixed broadband accesses at the end of the fiscal year numbered 13.373 million, up from 12.957 million at end-2015.
Commenting on the company’s performance, Vodafone Group CEO Vittorio Colao noted: ‘This has been a year of strong execution for the Group, returning to organic growth in both revenue and EBITDA for the first time since 2008. We achieved the first quarter of positive revenue growth in Europe since December 2010 while growth in AMAP accelerated with strong performance in South Africa, Turkey and Egypt. EBITDA margins also grew y-o-y, supported by our cost efficiency programmes … We have now successfully concluded our Project Spring organic investment programme. This has transformed the quality of our technology, enhancing our customers’ experience and enabling us to expand our Enterprise services.’