Download - Sir Christopher Gent Vodafone Group Plc

Sir Christopher GentChief Executive

Vodafone Group Plc

This presentation is being made only to, and is directed at (a)persons who have professional experience in matters relating toinvestments falling within Article 19(1) of the Financial Servicesand Markets Act 2000 (Financial Promotion) Order 2001 and (b)persons to whom it may otherwise lawfully be communicated(together "relevant persons") Any person who is not a relevantperson should not act or rely on this presentation or any of itscontents. Information in this presentation about the yield onrelevant investments cannot be relied upon as a guide to futureperformance.

Agenda

• Summary of Results• Analysis of Results• Group Funding• Progress on KPI’s• Major Achievements• Outlook and Q&A• Vodafone & the Future

Ken Hydon

Sir Christopher Gent

Julian Horn-Smith

Sir Christopher Gent

Arun Sarin

• Exceeded expectations

Results Overview

• Strong growth in:– Customers– Operating Profit*– Adjusted Earnings Per Share*– EBITDA– Free Cash Flow

*Before goodwill and exceptional items

Mar 03 Change Group Turnover £30.4bn +33% Group Operating Profit £9.2bn +30% Profit Before Taxation £8.4bn +36% Adjusted EPS 6.81 pence +32%

Statutory Highlights

1 Before goodwill and exceptional items2 Change on same period last year

1

1

1

2

More than 30% growth

• Capital additions £4.8bn• Improved mobile capital

efficiency - 16.3%• Group net debt of

£13.8bn

• More than double lastyear

Cash Flow Highlights

0

1000

2000

3000

4000

5000

Mar

-02

Mar

-03

Free Cash Flow£5.2bn

£2.4bn

Proportionate Highlights

Mar 03 Change

Turnover £33.9bn +14% EBITDA £12.7bn +26% Registered customers 119.7m +18%

1 Change on same period last year2 Before exceptional items

1

2

Margin Improvement

0%

10%

20%

30%

40%M

ar-0

2

Mar

-03

Proportionate Mobile EBITDA Margin 1

1 Before exceptional items2 After exceptional items

+2.8 pp38.4%

0%

10%

20%

30%

40%

Mar

-02

Mar

-03

Proportionate Total EBITDA Margin 2

+4.0 pp37.1%

– Enhanced operating performance

– Interconnect delays in Japan and Italy

– Re-phased and lower cost capital additions

– Lower than expected tax rate

• Better than anticipated

Second Half Performance

Operational Highlights

Customer Growthi Better organic customer growthi More stake increases

Servicesi Launch of Vodafone live!

i Over 1m customersi Launch of Mobile Office from

Vodafone

Rise in Data Revenuesi Up 73% to £3.6bni 14.6% for year to Marchi 15.6% in month of March

ARPUi Sustained improvement in some

key marketsi Better levels in Japan and US

Transactions

83.8%59.0%Hungary97.2%70.0%Netherlands64.0%51.9%Greece94.4%50.9%Portugal99.1%71.1%Sweden100%91.6%Spain100%99.7%Germany35.0%31.5%Vodacom3.3%2.2%CMHK43.9%32.0%SFR30.0%15.0%Cegetel

Dividend Growth

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

Mar-00 Mar-01 Mar-02 Mar-03

Div

iden

d pe

r Sha

re

5%

15%

5%

Ken HydonGroup Financial Director

Vodafone Group Plc

Statutory ResultsYear ended 31 March

2003£m

2002£m

Increase%

Turnover 30,375 22,845 33

Group operating profit* 9,181 7,044 30Net interest payable (752) (845) (11)

Profit before tax* 8,429 6,199 36Tax (2,956) (2,140)

Goodwill amortisation (14,056) (13,470)Exceptional items (581) (6,268)Minority interests (655) (476)

Loss for the year (9,819) (16,155)

Basic loss per share (14.41p) (23.77p)Adjusted earnings per share* 6.81p 5.15p

* Before amortisation of goodwill and exceptional items as detailed in notes 3 & 4 of the Preliminary Announcement dated 27 May 2003

Sources of Revenue (£ billions)

16.621.2

2.1

3.6

2.0

2.7

2.1

2.8

2002 2003

Mobile Voice Mobile DataOther Mobile Fixed Line

Shareholder ReturnsDividend per share history (1989 - 2003)

-

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Year ended 31 M arch

Penc

e pe

r Sha

re

Interim dividend Final dividend

Final Dividend:

• 0.8983p per share

Total Dividend:

• 1.6929p per share

• Up 15% on 2001/2

• £1.15 billion

Statutory TurnoverTurnover - Year Ended 31 March

2003£m

Growth%

Germany 4,646 13Italy 4,371 18United Kingdom 4,026 7Other Europe 5,840 23

Total Europe 18,883 15Americas 5 (58)Japan 7,539 127Other Asia Pacific 825 10Middle East & Africa 290 (5)

Total Mobile 27,542 33Other Operations 2,833 35

Total Group 30,375 33

Organic Service Revenue & Organic Average Customer Growth

6%

11%

6%

11%10%

1%

10%

2%

17%

9%

Germany Italy UnitedKingdom

Japan ConsolidatedGroup

Service Revenue Growth Average Customer Growth

* Before exceptional items

Proportionate presentation is not a recognised measure under UK GAAP, is not intended to replace it and is only provided as supplemental datato facilitate a more detailed understanding and assessment of the consolidated financial statements prepared in accordance with UK GAAP.

Year Ended 31 March 2003Turnover

£m EBITDA*

£mMargin*

%Germany 4,642 2,016 43.4Italy 3,353 1,654 49.3United Kingdom 4,026 1,541 38.3Other Europe 7,068 2,685 38.0

Total Europe 19,089 7,896 41.4Americas 5,802 1,977 34.1Japan 5,258 1,645 31.3Other Asia Pacific 1,178 474 40.2Middle East & Africa 526 243 46.2

Total Mobile 31,853 12,235 38.4Other Operations 2,073 444 21.4

Total Group 33,926 12,679 37.4

Mobile EBITDA* Organic Growth

19%

52%

14%

19%

22%

4%

Total Mobile

Japan

United States

UnitedKingdom

Italy

Germany

Proportionate Results

Cash Flow Year ended 31 March2003

£m2002

£mIncrease

%Operating cash flow 11,142 8,102 38Capital expenditure (5,180) (4,070) 27Licences (99) (325) (70)

Operating free cash flow 5,863 3,707 58Tax paid (883) (545) 62Net interest paid (475) (855) (44)Dividends received & other 666 58 1,048

Free cash flow 5,171 2,365 119Acquisitions (5,685) (16,249)

Disposals 700 5,390Share placement - 3,510Group dividends (1,052) (978)Other (939) 650

Net debt increase (1,805) (5,312)

Analysis of Operating Cash Flow

Germany19%

Italy20%

United Kingdom

13%

Japan22%

Other Europe

19%

Other Mobile

3%

Other4%

Tangible Fixed AssetsMarch 2003:

• £4.8 billion additions (£5.2 billion cash spend)

• 35% on 3G

• Mobile capital intensity:

Analysis of Tangible Fixed Asset Additions

Germany17%

Italy15%

United Kingdom

11%Japan27%

Other Mobile

23%

Other Operations

7%

2002/3 2001/2Including 3G 16.3% 20.4%Excluding 3G 10.2% 18.7%

Tangible Fixed Assets

March 2004:

• >£5.0 billion

• Savings:

– Rephasings

– Efficiencies

• 40% on 3G

Germany17%

Italy13%

United Kingdom

11%

Japan26%

Other Mobile

25%

Other Operations

8%

Analysis of Tangible Fixed Asset Additions

Net Debt

• £13.8 bn at 31 March 2003

• 18% of market capitalisation

• Single ‘A’ credit profile

* Before exceptional items. Includes dividends receivedfrom joint ventures and associates.

1.4x

1.5x

1.2x

Net Debt vs Operating Cash Flow*(£ Billions)

6.7

12.0

13.8

4.9

8.2

11.9

2000/1 2001/2 2002/3

Net debt Group Operating Cash Flow*

Summary

• Strong growth:– Service revenues

– Adjusted earnings per share

– Free cash flow

• Healthy financial position

• Increase returns to shareholders

Julian Horn-SmithGroup Chief Operating Officer

Vodafone Group Plc

Broader Vision

• Grow global revenues– increased marketing focus

• Extend operational leadership– leverage of scale & scope

• Extend service differentiation– investing in delivering a Vodafone branded, easy

to use customer proposition

Impressive Performance

• Good customer growth

• Sustained ARPU levels• Continued focus on cost management

38.4 % Mobile EBITDA Margin* Free Cash Flow Doubled

* Proportionate before exceptionals

Milestones Achieved

• GPRS Roaming• Launch of Vodafone live! across

multiple countries• Rollout of Mobile Office from Vodafone

Customer orientated service proposition

Organic Proportionate Customer Growth

0

20,000

40,000

60,000

80,000

100,000

120,000

2002 2003

Org

anic

Pro

porti

onat

e C

usto

mer

s (0

00s)

Northern Europe, Middle East & Africa Central Europe Southern Europe Americas Asia Pacific

RegionalGrowth

24%

12%

6%

9%

12%

11%

11%

Germany Net Additions

(1,000)

(800)

(600)

(400)

(200)

0

200

400

600

800

1,000

H1 01/02 H2 01/02 H1 02/03 H2 02/03

Net

Add

itions

(000

s)

Contract Prepaid

UK Contract Market Share

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

H1 01/02 H2 01/02 H1 02/03 H2 02/03

Vod

afon

e C

ontra

ct C

usto

mer

s (0

00s)

0%

6%

12%

18%

24%

30%

36%

Con

tract

Mar

ket S

hare

Vodafone contract customers Vodafone O2 Orange T-Mobile

Spain Net Additions

0

100

200

300

400

500

600

700

800

900

H1 01/02 H1 02/03 H2 01/02 H2 02/03

Net

Add

ition

s (0

00s)

91%

7%

Market share leader of net additions in H2 02/03

US Year End 02/03 Closing Customer Base

0

5

10

15

20

25

30

35

Clo

sing

Cus

tom

ers

(Milli

on)

Verizon Wireless Cingular AT&T Sprint Nextel T-Mobil

Churn

15%

17%

19%

21%

23%

25%

27%

29%

H1 01/02 H2 01/02 H1 02/03 H2 02/03

Annu

alis

ed H

alf Y

ear C

hurn

%

Total Contract Prepaid

Annualised Half Year Churn*

* All subsidiaries. For comparability purposes Japan is included for periods prior to its consolidation.

Annualised Quarterly Churn and Upgrade %*

10%

12%

14%

16%

18%

20%

22%

24%

26%

28%

Q3 01/02 Q4 01/02 Q1 02/03 Q2 02/03 Q3 02/03 Q4 02/03

Annu

alis

ed Q

uarte

rly C

hurn

%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

Annu

alis

ed Q

uarte

rly U

pgra

de %

Total Churn Total upgrade %


Vodafone Italy Loyalty Programme

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

Q1 01/02 Q2 01/02 Q3 01/02 Q4 01/02 Q1 02/03 Q2 02/03 Q3 02/03 Q4 02/03

No.

of L

oyal

ty S

chem

e Pr

epai

d C

usto

mer

s

16%

18%

20%

22%

24%

26%

28%

Annu

alis

ed Q

uarte

rly P

repa

id C

hurn

%

Loyalty Scheme Members Vodafone Italy Prepaid Churn Group Subsidiary Prepaid Churn

Twelve Months Rolling ARPU*

200

250

300

350

400

450

500

Mar-02 Jun-02 Sep-02 Dec-02 Mar-03Quarter ending

Annu

al A

RPU

(£)

100

105

110

115

120

125

130

135

140

Annu

al P

repa

id A

RPU

(£)

Total Contract Prepaid* All subsidiaries. For comparability purposes Japan is included for periods prior to its consolidation and theUK is on a consistent basis for all periods.

Total Voice Minutes & Usage*

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

H1 2001/2 H2 2001/2 H1 2002/3 H2 2002/3

Hal

f Yea

r Tot

al V

oice

Min

utes

(milli

ons)

600

620

640

660

680

700

720

740

760

Hal

f Yea

r Tot

al V

oice

Min

utes

per

Cus

tom

er

Total minutes Minutes per customer


Prepaid Voice Minutes & Usage*

18,000

19,000

20,000

21,000

22,000

23,000

24,000

H1 2001/2 H2 2001/2 H1 2002/3 H2 2002/3

Hal

f Yea

r Pre

paid

Voi

ce M

inut

es (m

illio

ns)

380

390

400

410

420

430

440

Hal

f Yea

r Pre

paid

Voi

ce M

inut

es p

er C

usto

mer

Total prepaid minutes Minutes per prepaid customer


SMS Revenue per Active User*

0

100

200

300

400

500

600

700

Q1 01/02 Q2 01/02 Q3 01/02 Q4 01/02 Q1 02/03 Q2 02/03 Q3 02/03 Q4 02/03

Tota

l Qua

rterly

SM

S R

even

ue (£

milli

ons)

25

30

35

40

45

50

55

60

Annu

alis

ed Q

uarte

rly S

MS

Rev

enue

per A

ctiv

e U

ser (

£)

SMS Revenue SMS Revenue per user

*All subsidiaries excluding Japan due to different services offerings. The UK is on a consistent basis for all periods.

Non Voice Revenue % for year to March 2003*

0% 5% 10% 15% 20% 25%

Group

Spain

Italy

UK

Germany

Japan

Mar-02 Mar-03

Increase March2002 to March 2003

5%

2%

3%

3%

2%

4%

* All subsidiaries. For comparability purposes Japan is included for periods prior to its consolidation and theUK is on a consistent basis for all periods.

Customer Base Costs*

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Q1 01/02 Q2 01/02 Q3 01/02 Q4 01/02 Q1 02/03 Q2 02/03 Q3 02/03 Q4 02/03

Acqu

isitio

n an

d R

eten

tion

Net

Cos

ts (£

000s

)

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

% T

urno

ver (

Mob

ile)

SRC SAC % Statutory Turnover


£3,233 million £3,085 million

Acquisition Cost per Gross Additions*

0

20

40

60

80

100

120

140

160Ju

n-01

Sep-

01

Dec

-01

Mar

-02

Jun-

02

Sep-

02

Dec

-02

Mar

-03

Quarter ending

Acq

uisi

tion

Cos

t per

Gro

ss A

dditi

ons

(£)

Total Contract Prepaid


Total acquisition Cost per Gross Addition*

0

10

20

30

40

50

60

70

80

90

Q1 Q2 Q3 Q4A

cqui

sitio

n C

ost p

er G

ross

Add

ition

(£)

2002/3 2001/2

Cost per Upgrade*

0

20

40

60

80

100

120

140

Q1 01/02 Q2 01/02 Q3 01/02 Q4 01/02 Q1 02/03 Q2 02/03 Q3 02/03 Q4 02/03

Upg

rade

Cos

t per

Upg

rade

(£)

0

500

1,000

1,500

2,000

2,500

Volu

me

of U

pgra

des

(000

s)

Cost per upgrade Upgrades

*All subsidiaries excluding Japan, where comparable data in not available.

Germany Customer Base CostsGermany Acquisition Costs and Gross

Additions

H1 01/02 H2 01/02 H1 02/03 H2 02/03

Tota

l Gro

ss A

dditi

ons

(Tho

usan

ds)

Acq

uisi

tion

Cos

ts (£

000)

Gross additions Acquisiton costs

Germany Retention Costs and Upgrades

H1 01/02 H2 01/02 H1 02/03 H2 02/03

Num

ber o

f Upg

rade

s (T

hous

ands

)

Ret

entio

n C

osts

(£00

0)

Number of upgrades Retention Costs

63%23%

Japan EBITDA Margin improvement

0%

5%

10%

15%

20%

25%

30%

35%

2001/02 2002/03

EB

ITD

A m

argi

n

Other margin improvementSAC/SRC margin improvement2001/2 EBITDA margin

• Lower handsetsubsidies

• Change in loyaltyprogram offering

Acquisition and Retention Costs

• Focus on CRM• Segmented customer approach• Cost effective investment

No expected adverse impact on margin forFY 04

Net Operating Expenses as % Turnover*

2,500

2,600

2,700

2,800

2,900

3,000

H1 01/02 H2 01/02 H1 02/03 H2 02/03

Net

Ope

ratin

g Ex

pens

es (£

milli

ons)

18%

19%

20%

21%

22%

23%

24%

% T

urno

ver (

Mob

ile)

Net Operating Expenses % of Statutory Turnover

* All mobile subsidiaries. Turnover represents statutory turnover after adjusting for Japan and the UK to be on a consistent basis forall periods. Operating expenses comprise sales and administration costs, excluding depreciation, together with network operating,leased line, customer care and bad debt costs.

Enhanced Services –Powered by 3G

Deliver enhanced customer experience

• Ready to offer services powered by 3Glater this financial year

Greater speedsBetter quality of serviceImproved range of services

Country Date of launch

Sweden 2 December 2002

Greece 13 January 2003

Hungary 3 February 2003

Egypt 28 March 2003

New Zealand 11 April 2003

Australia 22 April 2003

Country Date of launch

Germany 24 October 2002

Netherlands 25 October 2002

UK 25 October 2002

Spain 29 October 2002

Italy 1 November 2002

Ireland 7 November 2002

Portugal 8 November 2002

• The most successful launch in thehistory of Vodafone

– Award winning

• Differentiation in the marketplace

• Over 1 million customers in 5 months

Best Wireless Handset Best Consumer Application Best Television

• 60% of all MMS handsets• Building customer loyalty and usage

– Half of Vodafone live! handsets were upgrades

• Significant impact on competitiveposition

• Fuelled strong customer growth

• Popular features:– Downloading ringtones and games

• Messaging: increasing ARPU contributor– More MMS enabled handsets– Further interoperability agreements

• Driving higher than average usage andARPU

• Continue to distinguish offering– More features

• Improving service– Video streaming, download, messaging– Multi-media library pictures– More than 11,000 ringtones

Handset Range

• Stimulate further penetration and usage• Wider range of handset pricing• More handsets to be added to the range

Sharp

GX20

Sharp

GX10

Panasonic

GD87

Nokia

7650

April 03

Panasonic

GD87i

Nokia

3650

May 03

Sharp

GX10i

SonyEricssonT610

June 03

Sagem

MY-X6

July 03Oct 02

• Compelling, seamless service• Initial offering: Mobile Connect Card

– Vodafone brand on laptop for first time– 12 markets today: +50,000 customers

Vodafone Mobile Office

• High customer satisfaction• Drive market share of corporate segment

• New sales channels

• Continued development of proposition– Delivering faster data speeds

• Enrich customer experience• Unique to Vodafone

• Combine local and global voice and dataservices to produce best businessoffering

– Wireless LAN in Germany

Vodafone Mobile Office

Vodafone Now in 8 Partner Networks

*

Excellent Operational Performance• Customer Orientated

– Strong customer growth– Reduced churn– Improved voice and data usage

• Focus on cost management

Continue to lead – Continue to succeed

Sir Christopher GentChief Executive

Vodafone Group Plc

• Similar growth in revenues*• Small EBITDA margin* improvement• Better EBITDA* growth than revenue* growth• Good adjusted EPS growth• Capital additions little up on last year• Improved capital efficiency• Free cash flow > £5.2bn

* Proportionate before exceptionals

• Average customer* growth > 10%

Expected Outlook FY 2004

• 28 national networks• 16 controlled networks

– 15 single branded– Japan by October

• 8 Partner Networks

Vodafone Today

• Serve over 295m customers

UNMATCHED GLOBAL FOOTPRINT

Differentiated Services

VOICE

• One rate roamingplans

• International shortcode dialing

• Prepaid roaming

– In country top ups

DATA

• Consumers:– Vodafone live!

• Business:

– Mobile Office fromVodafone

• Fully integrated operations• Vodafone is more than sum of its parts

• Successful acquisitions

Global Capability

Global service offerings

Exceeded synergy targets

Financial Performance

• EPS performance better than anticipated• Compound EBITDA growth > 30% - 3 yrs• Very sound balance sheet• Strong credit profile: 3 stable single A ratings• Flexibility For Further Opportunities

– Invest appropriately in capex– Build new services for future– Improve shareholder returns

Executed Strategy of World Leadership

Strong ExecutiveManagement Team

Arun SarinChief Executive Designate

Sir Christopher Gent Chief Executive

Julian Horn-SmithGroup Chief Operating Officer

Ken HydonFinancial Director

Peter Bamford, Chief Executive Northern Europe, Middle East and

Africa Region

Thomas Geitner, Chief ExecutiveGlobal Products and Services

Vittorio Colao, Chief Executive Southern Europe Region

Brand Ascendancy

Internal Commitments

Values

Passion for customers

Passion for our people

Passion for the world around us

Passion for results

Vision

“The world’s mobile communications leader – enriching customers’ lives,helping individuals,businesses and communities be more connected in a mobile world”

Vodafone’s Potential

• Expect the future to be more exciting• Opportunity to gain market share

through superior capability• Range of services to expand

– Bigger opportunity to increase share ofwallet

• Potential of mobile substitution

“Will forever be a believerin Vodafone, andwhat it can do to

make the world a betterplace for our customers,our shareholders and the

society we serve”

Forward-Looking Statement

This presentation contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Group’s financial condition, results of operations and businesses and certain of the Group’s plans and objectives with respect to these items. In particular, forward looking statements include statements with respect to Vodafone’s expectations as to launch and roll-out dates for products and services, including, for example, 3G services, Vodafone live! and Vodafone Mobile Office; the ability to integrate our operations throughout the Group in the same format and on the same technical platform; the development and impact of new mobile technology, including the expected benefits of GPRS, 3G and other services and demand for such services; the completion of Vodafone’s brand migration programme; growth in customers and usage, including improvements in customer mix; future performance, including turnover, ARPU, EBITDA, cash flows, costs, capital expenditures and improvements in margin, non-voice services and their revenue contribution; the rate of dividend growth by the Group or its existing investments; expected effective tax rates and expected tax payments; the ability to realise synergies through cost savings, revenue generating services, benchmarking and operational experience; future acquisitions, including increases in ownership in existing investments and pending offers for investments; future disposals; mobile penetration and coverage rates; expectations with respect to long-term shareholder value growth; our ability to be the mobile market leader, overall market trends and other trend projections. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as “anticipates”, “aims”, “could”, “may”, “should”, “expects”, “believes”, “intends”, “plans” or “targets”. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: changes in economic or political conditions in markets served by operations of the Group that would adversely affect the level of demand for mobile services; greater than anticipated competitive activity requiring changes in pricing models and/or new product offerings or resulting in higher costs of acquiring new customers or providing new services, or slower customer growth or reduced customer retention; the impact on capital spending from investment in network capacity and the deployment of new technologies, or the rapid obsolescence of existing technology; slower customer growth or reduced customer retention; the possibility that technologies, including mobile internet platforms, and services, including 3G services, will not perform according to expectations or that vendors’ performance will not meet the Group’s requirements; changes in the projected growth rates of the mobile telecommunications industry; the Group’s ability to realise expected synergies and benefits associated with 3G technologies, the integration of our operations and those of recently acquired companies, the completion of the Group’s brand migration programme and the consolidation of IT systems; future revenue contributions of both voice and non-voice services offered by the Group; lower than expected impact of GPRS, 3G and Vodafone live! and Vodafone Mobile Office on the Group’s future revenues, cost structure and capital expenditure outlays; the ability of the Group to harmonise mobile platforms and any delays, impediments or other problems associated with the roll-out and scope of 3G technology and services and Vodafone live! and Vodafone Mobile Office in new markets; the ability of the Group to offer new services and secure the timely delivery of high-quality, reliable GPRS and 3G handsets, network equipment and other key products from suppliers; greater than anticipated prices of new mobile handsets; the ability to realise benefits from entering into partnerships for developing data and internet services and entering into service franchising and brand licensing; the possibility that the pursuit of new, unexpected strategic opportunities may have a negative impact on one or more of the measurements of our financial performance; any unfavourable conditions, regulatory or otherwise, imposed in connection with pending or future acquisitions or dispositions; changes in the regulatory framework in which the Group operates, including possible action by the European Commission regulating rates the Group is permitted to charge; the Group’s ability to develop competitive data content and services which will attract new customers and increase average usage; the impact of legal or other proceedings against the Group or other companies in the mobile telecommunications Industry; changes in exchange rates, including particularly the exchange rate of the pound to the euro, US dollar and the Japanese yen; and the risk that, upon obtaining control of certain investments, the Group discovers additional information relating to the businesses of that investment leading to restructuring charges or write-offs or with other negative implications. Furthermore, a review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found under “Risk Factors” contained in our Form 20-F published with respect to the financial year ended March 31, 2002 and in our Form 20-F to be published with respect to our financial year ended March 31, 2003. All subsequent written or oral forward-looking statements attributable to the Company or any member of the Group or any persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Neither Vodafone nor any of its affiliates intends to update these forward-looking statements.

Arun SarinChief Executive Designate

Vodafone Group Plc

Great Opportunities

Telecommunications

InfotainmentInformation Technology(IT)

Mobile

Great Opportunities

Telecommunications

Infotainment

Mobile

Information Technology(IT)

Our Focus

– Delight our customers– Leverage global scale and scope– Expand our core business– Best workforce– Creating shareholder value

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