Form 6-K

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

Report of Foreign Private Issuer

 

Pursuant to Rules 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

Dated November 15, 2006

 

VODAFONE GROUP

PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

 

 

VODAFONE HOUSE, THE CONNECTION, NEWBURY, BERKSHIRE, RG14 2FN, ENGLAND (Address of principal
executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F

Form 40-F

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes

No

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

 

 

 

 

 

This Report on Form 6-K contains a news release issued by Vodafone Group Plc on, November 14 2006, entitled “VODAFONE ANNOUNCES RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006”.

 

 

VODAFONE GROUP PLC	Embargo:
	Not for publication
VODAFONE ANNOUNCES RESULTS FOR	before 07:00 hours
THE SIX MONTHS ENDED 30 SEPTEMBER 2006	14 November 2006

 

 

Highlights⁽¹⁾:

 

•        Group revenue of £15.6 billion, with organic growth of 4.1%

 

•        Profit before taxation for the period increased to £4.8 billion before impairment charges of £8.1 billion.  Loss before taxation was £3.3 billion

 

•        Adjusted basic earnings per share increased by 17.7% to 5.98 pence, including the benefit from an interim adjusted effective tax rate of 29.2%.  Basic loss per share from continuing operations of 8.02 pence

 

•        Free cash flow from continuing operations of £3.0 billion and net cash inflow from operating activities from continuing operations of £4.8 billion, after net taxation paid of £1.2 billion

 

•        Interim dividend per share increased by 6.8%, to 2.35 pence, giving a pay out of £1.2 billion

 

Outlook summary⁽²⁾:

 

•        No change to the full year organic proportionate mobile revenue growth range of 5% to 6.5% and proportionate organic mobile EBITDA margin expectations of around 1 percentage point lower than last year

 

•        Free cash flow from continuing operations outlook increased to an expected range of £4.7 billion to £5.2 billion due to the delayed settlement of certain long-standing tax issues

 

•        Capitalised fixed asset additions outlook unchanged with a range of £4.2 billion to £4.6 billion

 

•        Full year adjusted effective tax rate expected to be lower than previously indicated at around 30%.  Longer term percentage rate now expected to be in the low 30’s

 

 

(1)     See page 4 for Group Financial and Operating Highlights, page 40 for use of non-GAAP financial information and page 41 for definition of terms

(2)     See page 39 for a cautionary statement on Forward-Looking Statements

 

Arun Sarin, Chief Executive, commented:

 

“These results show that Vodafone is on track to deliver on its key targets for the current financial year.  Competitive and regulatory pressures in the European region have been offset by strong performances in our developing markets and the United States.  We have also made good progress since May in the execution of our new strategy and the response to our new products and services has been very encouraging.”

 

1

 

CHIEF EXECUTIVE’S STATEMENT

 

Vodafone has announced first half results showing progress in very competitive markets. Despite the pressures from competition and regulation, we continue to execute the strategy laid out to shareholders in May and are on track to meet our full year targets.

 

We have a unique franchise of international customers, with over 191 million proportionate mobile customers, of whom 147 million are in controlled or jointly controlled entities.

 

Proportionate mobile revenue for the first half of this financial year increased by 6% on an organic basis.  The Europe region remains very competitive with flat organic growth year on year.  Of our four principal markets, Germany, Italy and the UK saw declining total revenue after taking into account the impact of termination rate cuts, whilst Spain continued its strong progress, posting another period of double digit top line growth.  Our high growth markets in the EMAPA region continued to perform well, growing organically at 13.7% year on year.  Together with the US, where Verizon Wireless revenue grew 18.2% year on year in local currency, this strong performance helped to offset the lower growth in our more established markets.

 

Proportionate mobile EBITDA margins on an organic basis were only slightly lower year on year, though the mobile EBITDA margin is expected to fall by a larger amount year on year in the second half of the 2007 financial year.

 

Free cash flow from continuing operations was slightly lower at £3.0 billion in the first half of the financial year; a 6.9% increase in operating free cash flow was offset by higher tax payments of £1.2 billion.

 

Higher interest rates, along with pricing and continued regulatory pressures in the German market, led to an impairment charge of £8.1 billion in the total carrying value of goodwill in respect of our German and Italian operations.

 

In May this year, we announced five core strategic goals to drive forwards the financial and operating results of the Company:

 

Revenue stimulation and cost reduction in Europe

 

In our mature European markets, we are fighting the twin pressures of price erosion and regulation.  The core strategy in this region is to stimulate revenue and cut costs.

 

Average monthly voice usage per customer in Europe is still below 150 minutes.  Central to stimulating revenue is driving fixed to mobile substitution with larger minute bundles and innovative tariffs, prepaid to contract migrations and targeted promotions.  In Germany and the UK, new larger and better value bundles have been launched, maintaining competitiveness in the respective marketplaces.  In Italy, revenue declines appear to be stabilising following a successful summer promotion.  We are targeting fixed to mobile substitution through Vodafone At Home and similar offerings in Germany, Italy, the UK, Greece, Hungary and Portugal.  Expansion of this offering will occur, with a further three countries expected to launch by the end of the current financial year.  Building on our success in business, we continue to deliver leading edge services, such as Oficina Vodafone in Spain and applications using the benefits of mobile broadband following the introduction of HSDPA.

 

Progress has also been made on core cost reduction programmes which will demonstrate benefits over time.  In outsourcing, we have chosen EDS and IBM to manage application development and maintenance services in a global IT outsourcing deal, which is expected to deliver 25% to 30% unit cost savings within three to five years.  We continue to look at the cost of owning and maintaining networks, with recent announcements including 2G and 3G network sharing in Spain and entering into discussions on network sharing in the Czech Republic.  We have also announced quicker than expected progress on data centre consolidation in Europe, where we expect to save costs of around 25% to 30% in two to three years.

 

Deliver strong growth in emerging markets

 

Our focus in emerging markets is to build on our strong track record of creating value, having delivered strong performances over time in markets such as Egypt and South Africa.  This has continued in the first half of this financial year, with organic service revenue growth of 40.2% in Egypt and 20.8% in South Africa.

 

Our more recent acquisitions are performing very well, with first half year on year organic service revenue growth of 31.3% in Romania and 14.4% in the Czech Republic.  In Turkey, we are very pleased with progress and the company is performing well ahead of its acquisition business plan.  In India, organic revenue growth was greater than 50%.  All of these performances are ahead of our expectations at the time of each acquisition.

 

Innovate and deliver on our customers’ total communications needs

 

As customer needs are evolving, we are providing a sub-segment of our customer base with fixed broadband connectivity as part of a total telecommunications solution.  This type of service will typically be provided using wholesale relationships with infrastructure providers and we have announced deals with BT in the UK, Fastweb in Italy and Arcor in Germany.

 

We are continuing to develop a mobile advertising revenue stream and in this respect we have announced today our intent to partner with Yahoo! in the UK.  We are also developing products and services which will integrate the mobile and PC environments.

 

We will continue to pursue a mobile centric approach, focusing on the core benefits to customers of mobility and personalisation, and will resell fixed line technologies only according to customer needs.

 

2

 

Actively manage our portfolio to maximise returns

 

Vodafone will seek to invest only where we can generate superior returns for our shareholders in markets that offer a strong local position, with a focus on specific regions.

 

In keeping with this strategy, in the first half of the financial year we closed the sale of Vodafone Japan and recently completed the sale of our 25% stake in Proximus in Belgium for cash proceeds of €2 billion.  For Proximus, this represented a good exit price with an enterprise value of 7.2 times forecast EBITDA for the current financial year.  Most recently, we announced the proposed acquisition of up to a further 4.9% of Vodafone Egypt, increasing our exposure to this high growth market.  We will continually review the countries in which we operate going forward.

 

Align capital structure and shareholder returns policy to strategy

 

In May this year, we outlined a new capital structure and returns policy commensurate with the operational strategy of the business.  As a result, we are now targeting a low single A credit rating.

 

The Board also announced a targeted annual 60% payout of adjusted earnings per share in the form of dividends.  We are announcing an interim dividend of 2.35 pence, up by 6.8% when compared to last year.

 

Having returned over £19 billion to shareholders, excluding dividends, in the last two financial years, we have no current plans for further share purchases or other one-off returns.

 

Prospects for the current year

 

Revenue progression remains in line with expectations and the Group continues to expect organic growth in proportionate mobile revenue to be in the range of 5% to 6.5% and proportionate mobile EBITDA margins to be around 1 percentage point lower than the 2006 financial year on an organic basis.

 

Free cash flow from continuing operations on an underlying basis is still expected to be in the range of £5.2 billion to £5.7 billion.  As a result of a delay in the settlement of certain items, payments in respect of long standing tax issues are expected to be around £0.5 billion for this financial year, leading to an expected range of £4.7 billion to £5.2 billion for reported free cash flow from continuing operations.

 

Summary

 

We are successfully executing a clear five point strategy to provide long term value creation for our shareholders.  The financial results for the first six months highlight that we are on track to deliver on our key full year targets.  We will continue to deliver real value to customers that will enable us to achieve our targets in the face of tough competition and regulatory pressures.

 

 

Arun Sarin

 

3

 

GROUP FINANCIAL AND OPERATING HIGHLIGHTS

 

									2006		2005		Change %
Continuing operations(1)(2):							Page		£m		£m		Reported		Organic
	Financial information
Revenue							21		15,594		14,548		7.2		4.1
Operating (loss)/profit							21		(2,952	)	4,286
(Loss)/profit before taxation							21		(3,330	)	3,911
(Loss)/profit for the period							21		(4,548	)	2,629
Basic (loss)/earnings per share (pence)							21		(8.02	)p	4.07p
Capitalised fixed asset additions									1,824		1,750		4.2
Net cash flow from operating activities							19		4,840		5,227		(7.4	)
	Performance reporting(3)
Group EBITDA							7		6,242		5,907		5.7		2.8
Adjusted operating profit							7		5,141		4,782		7.5		7.4
Adjusted profit before tax							17		4,724		4,558		3.6
Adjusted effective tax rate							17		29.2%		31.5%
Adjusted profit for the period attributable to equity shareholders							29		3,441		3,237		6.3
Adjusted basic earnings per share (pence)							29		5.98p		5.08	p	17.7
Free cash flow							19		2,955		3,252		(9.1	)
Net debt at 30 September							19		20,229		13,421		50.7
									2006		2005		Change %
Continuing operations(1)(2):							Page		Million		Million		Reported		Organic
	Operational	(4)(5)
Vodafone live! - Closing active devices							44		30.7		22.2		38.3
Closing 3G registered devices							44		10.9		3.3		230.3
Closing Vodafone Mobile Connect data cards									1.0		0.6		66.7
Mobile voice usage (minutes)							48		112,649		84,077		34.0		18.2

 

The interim results have been prepared in accordance with International Financial Reporting Standards (“IFRS”) (including International Accounting Standards (“IAS”) and interpretations issued by the International Accounting Standards Board (“IASB”) and its committees, and as interpreted by any regulatory bodies applicable to the Group) and adopted for use in the European Union (“EU”).   This interim results announcement contains certain information on the Group’s results and cash flows that have been derived from amounts calculated in accordance with IFRS but are not themselves IFRS measures.  They should not be viewed in isolation as alternatives to the equivalent IFRS measure and should be read in conjunction with the equivalent IFRS measure.  Further disclosures are provided under “Use of Non-GAAP Financial Information” on page 40.

 

See page 41 for definition of terms

(1)     Excluding the results of discontinued operations. See note 9 to the interim consolidated financial statements

(2)     Amounts presented as at 30 September or for the six months then ended

(3)     These measures are stated excluding impairment losses, non-recurring amounts related to business acquisitions and disposals, changes in the fair value of equity put rights and similar arrangements and net foreign exchange gains and losses on certain financial instruments and intercompany borrowings

(4)     Cumulative number as at 30 September

(5)     Figures represent 100% of subsidiary information and a pro-rata share in joint ventures

 

4

 

GROUP PROPORTIONATE INFORMATION

 

		2006			2005			Change %
		£m			£m			£			Organic
Financial Information
Revenue
Europe
- Germany		2,827			2,913			(3.0	)
- Italy		2,174			2,240			(2.9	)
- Spain		2,268			1,968			15.2
- UK		2,549			2,568			(0.7	)
- Other Europe		2,230			2,457			(9.2	)
Less: revenue between Europe operations		(218	)		(197	)
		11,830			11,949			(1.0	)		0.6
EMAPA
- Subsidiaries and joint ventures		2,867			1,865			53.7
- Associated undertakings and investments		6,712			6,092			10.2
Less: revenue between EMAPA operations		(6	)		(5	)
		9,573			7,952			20.4			13.7
Other(1)		606			528			14.8
Eliminations		(112	)		(114	)
Group – Continuing operations		21,897			20,315			7.8			6.2
Mobile operations – Continuing operations		21,263			19,798			7.4			6.0
EBITDA
Europe
- Germany		1,263			1,353			(6.7	)
- Italy		1,128			1,207			(6.5	)
- Spain		813			721			12.8
- UK		785			781			0.5
- Other Europe		819			849			(3.5	)
		4,808			4,911			(2.1	)		(1.6	)
EMAPA
- Subsidiaries and joint ventures		988			657			50.4
- Associated undertakings and investments		2,689			2,344			14.7
		3,677			3,001			22.5			17.5
Other(1)		301			243			23.9
Group - Continuing operations		8,786			8,155			7.7			6.2
Mobile operations - Continuing operations		8,656			8,090			7.0			5.6
								Percentage			Percentage
								Points			Points
EBITDA margin
Europe
- Germany		44.7%			46.4%			(1.7	)
- Italy		51.9%			53.9%			(2.0	)
- Spain		35.8%			36.6%			(0.8	)
- UK		30.8%			30.4%			0.4
- Other Europe		36.7%			34.6%			2.1
		40.6%			41.1%			(0.5	)
EMAPA
- Subsidiaries and joint ventures		34.5%			35.2%			(0.7	)
- Associated undertakings and investments		40.1%			38.5%			1.6
		38.4%			37.7%			0.7
Group EBITDA margin - Continuing operations		40.1%			40.1%			–			–
Mobile EBITDA margin - Continuing operations		40.7%			40.9%			(0.2	)		(0.1	)
(1)   Other operations include the Group’s fixed line operator in Germany, Arcor, and common functions which represent revenue from Partner Markets and unallocated central Group income and expenses
Proportionate information is presented and calculated on the basis described on page37. See page 41 for definition of terms

 

		2006			2005			Change %
		Million			Million			Reported			Organic
Mobile customers
Net proportionate customer additions(1)		12.0			10.1			18.8
Proportionate customers at 30 September		191.6			156.3			22.6			13.9
(1)      Excludes additions from acquisitions and stake changes and the impact of a change in the application of the disconnection policy.  Further analysis is provided on page 43 Customers are presented for continuing operations.  See page 41 for definition of terms

 

5

 

OUTLOOK

 

Please see “Forward-Looking Statements” on page 39, “Use of non-GAAP financial information” on page 40 and definition of terms on page 41.

 

		2007 financial year Outlook
Organic proportionate mobile revenue growth(1)		5% to 6.5%
Organic proportionate mobile EBITDA margin(1)		Around 1 percentage point lower than 2006 financial year
Free cash flow from continuing operations*		£4.7 to £5.2 billion
Capitalised fixed asset additions		£4.2 to £4.6 billion
Adjusted effective tax rate(2)		Around 30%
*   Stated after an estimated £0.5 billion of tax payments, including associated interest, in respect of a number of long standing tax issues
(1)     Assumes constant exchange rates and excludes the impact of business acquisitions and disposals for the financial measures and adjusted to reflect like-for-like ownership levels in both years
(2)     See page 17 for adjusted effective tax rate calculation

 

For the year ending 31 March 2007 (“2007 financial year”)

 

The Group continues to expect organic growth in proportionate mobile revenue to be in the range of 5% to 6.5%.

 

Proportionate mobile EBITDA margin is also still expected to be around 1 percentage point lower than the year ending 31 March 2006 (“2006 financial year”) on an organic basis, excluding the impact of any one-off business restructuring costs.

 

In line with the outlook provided on 30 May 2006, proportionate mobile EBITDA margin is expected to fall by a larger amount year on year for the second half of the 2007 financial year than for the first half of the 2007 financial year.  This is primarily as a result of the timing of commercial initiatives, including pricing changes, in Europe and in particular in Germany and the UK.

 

The Group expects capitalised fixed asset additions to still be in the range of £4.2 billion to £4.6 billion, which is higher than the 2006 financial year due to the effect of recently completed acquisitions and disposals and the Group’s rollout of HSDPA.

 

Free cash flow from continuing operations is still anticipated to be in the range of £5.2 billion to £5.7 billion before tax payments and associated interest in respect of the potential settlement of a number of long standing tax issues.  Due to a delay in the settlement of some of these issues, tax payments and associated interest in the current financial year are now expected to be approximately £0.5 billion, giving an expected range of £4.7 billion to £5.2 billion for reported free cash flow from continuing operations.  The Group still expects significant cash tax and associated interest payments over the next few years in respect of these long standing issues, although certain settlements may be later than previously anticipated.

 

The effective tax rate for the year is expected to be similar to the 2006 financial year at around 30%, slightly higher than in the first half of the financial year due to the net benefit of one-off items recorded in full in the first half.  The Group now expects its longer term effective tax rate percentage to be in the low 30’s, having previously anticipated this in the mid 30’s.

 

The Group continues to maintain its existing provision in respect of the ongoing enquiry by HM Revenue & Customs with regard to the application of the UK Controlled Foreign Company (“CFC”) legislation to the Group, as described in the Group’s Annual Report for the year ended 31 March 2006.  A recent judgment in a similar case in the European Court of Justice has provided guidance to the UK courts and whilst it may be some time before the enquiry is finally resolved, the Group has not made any additional provision.

 

For the year ending 31 March 2008 (“2008 financial year”)

 

In order to simplify its financial reporting and improve understanding of its results, the Group will be moving to a single basis of statutory reporting and will no longer provide proportionate financial information with effect from the 2008 financial year.  The Group’s outlook statement will also change to reflect only statutory financial measures.  The full outlook for the 2008 financial year will be provided with the preliminary results of the 2007 financial year in May 2007.

 

Revenue stimulation and cost reduction

 

The Group continues to anticipate delivering benefits through its One Vodafone initiatives equivalent to at least 1% additional revenue market share in the 2008 financial year compared with the 2005 financial year, which the Group is measuring in Germany, Italy, Spain and the UK against its principal competitors.

 

Capitalised fixed asset additions are expected to be 10% of revenue in the 2008 financial year for the total of the Group’s Europe region and common functions, which will require reducing expenditure in that year by approximately £400 million to £500 million when compared with the 2006 financial year.

 

Assuming no significant changes in exchange rates and after adjusting for acquisitions and disposals, the Group expects operating expenses to be broadly stable in the 2008 financial year when compared with the 2006 financial year for the total of its Europe region and common functions, excluding the potential impact from developing and delivering new services and from any business restructuring costs.

 

6

 

BUSINESS REVIEW

 

In April 2006, the Group announced changes to the organisational structure of its operations, effective from 1 May 2006.  The following results are presented for continuing operations in accordance with the new organisation structure.  Europe includes the results of the Group’s mobile operations in Western Europe, while EMAPA includes the Group’s operations in Eastern Europe, the Middle East, Africa, Asia and the Pacific area and the Group’s associates.  Other operations comprise the Group’s common functions and its fixed line business in Germany.

 

 

		Europe			EMAPA			Other			Eliminations			2006			2005			%	change
		£m			£m			£m			£m			£m			£m			£		Organic
Voice revenue		9,006			2,436			–			(72	)		11,370			10,771			5.6		2.4
Messaging revenue		1,458			331			–			(3	)		1,786			1,613			10.7		6.3
Data revenue		603			56			–			(9	)		650			504			29.0		30.0
Fixed line and DSL revenue		–			34			706			(14	)		726			603			20.4		14.0
Total service revenue		11,067			2,857			706			(98	)		14,532			13,491			7.7		4.4
Acquisition revenue		457			176			–			–			633			603			5.0
Retention revenue		174			8			–			–			182			202			(9.9	)
Other revenue		132			34			86			(5	)		247			252			(2.0	)
Total revenue		11,830			3,075			792			(103	)		15,594			14,548			7.2		4.1
Interconnect costs		(1,760	)		(520	)		(172	)		98			(2,354	)		(2,256	)		4.3		1.8
Other direct costs		(780	)		(353	)		(121	)		5			(1,249	)		(1,032	)		21.0		10.5
Acquisition costs		(1,158	)		(313	)		(40	)		–			(1,511	)		(1,418	)		6.6		4.5
Retention costs		(763	)		(91	)		(43	)		–			(897	)		(924	)		(2.9	)	(2.1	)
Operating expenses		(2,561	)		(698	)		(82	)		–			(3,341	)		(3,011	)		11.0		8.1
EBITDA		4,808			1,100			334			–			6,242			5,907			5.7		2.8
Acquired intangibles amortisation		(8	)		(189	)		–			–			(197	)		(52	)		278.8
Purchased licence amortisation		(443	)		(24	)		–			–			(467	)		(471	)		(0.8	)
Depreciation and other amortisation		(1,365	)		(364	)		(115	)		–			(1,844	)		(1,773	)		4.0
Share of result in associates		2			1,405			–			–			1,407			1,171			20.2		23.6
Adjusted operating profit		2,994			1,928			219			–			5,141			4,782			7.5		7.4
Adjustments for:
- Impairment losses		(8,100	)		–			–			–			(8,100	)		(515	)
- Other		–			–			1			–			1			-
- Non-operating income of associates		–			6			–			–			6			19
Operating (loss)/profit		(5,106	)		1,934			220			–			(2,952	)		4,286

 

GROUP RESULTS

 

Revenue increased by 7.2% to £15,594 million for the six months ended 30 September 2006, resulting from organic growth of 4.1% and the impact from the acquisitions in the Czech Republic, Turkey and India, the stake increases in Romania and South Africa and the disposal of the Group’s operations in Sweden of 3.4%, partially offset by the impact of unfavourable movements in exchange rates of 0.3%.

 

The EMAPA region accounted for more than 70% of the organic growth in revenue, with the Europe region and other operations also growing organically, whilst the EMAPA region accounted for all the growth in reported revenue.

 

Adjusted operating profit increased by 7.5% to £5,141 million, with organic growth of 7.4%.  The EMAPA region achieved organic growth of 26.1%, partially offset by a decline in profitability in the Europe region due to the challenges of increased competition, high penetration and termination rate cuts.  Unfavourable exchange rate movements reduced reported growth for the Group by 0.5%, whilst the net impact of acquisition and disposal activity and the classification of the Group’s associated undertaking in Belgium as held for sale following announcement on 25 August 2006 of the agreement to sell the Group’s 25% interest in Proximus to Belgacom, improved reported growth by 0.6%.

 

The Group recorded an impairment charge of £8,100 million in relation to the carrying value of goodwill in the Group’s operations in Germany (£6,700 million) and Italy (£1,400 million) following an increase in long term interest rates, along with increased price competition and continued regulatory pressures in the German market.  The increase in long term interest rates, which led to higher discount rates, resulted in a reduction in value of £3,700 million.  The impairment charge was the primary reason for the operating loss of £2,952 million for the current period compared with an operating profit of £4,286 million for the six months to 30 September 2005.

 

7

EUROPE

 

		Germany		Italy		Spain		UK		Other		Eliminations		Europe			% change
		£m		£m		£m		£m		£m		£m		£m			£		Organic
Six months ended 30 September 2006
Voice revenue		2,114		1,732		1,738		1,846		1,743		(167	)	9,006			(2.4	)	(0.7	)
Messaging revenue		386		275		190		365		256		(14	)	1,458			2.9		3.7
Data revenue		190		89		122		134		91		(23	)	603			27.2		29.1
Total service revenue		2,690		2,096		2,050		2,345		2,090		(204	)	11,067			(0.4	)	1.1
Acquisition revenue		71		57		153		120		56		–		457			(5.6	)
Retention revenue		17		20		62		29		46		–		174			(12.1	)
Other revenue		49		1		3		55		24		–		132			(12.0	)
Total revenue		2,827		2,174		2,268		2,549		2,216		(204	)	11,830			(1.0	)	0.6
Interconnect costs		(363	)	(326	)	(349	)	(489	)	(437	)	204		(1,760	)		(3.1	)	(1.1	)
Other direct costs		(167	)	(111	)	(174	)	(209	)	(119	)	–		(780	)		5.0		6.4
Acquisition costs		(274	)	(114	)	(323	)	(292	)	(155	)	–		(1,158	)		(1.9	)	0.6
Retention costs		(182	)	(62	)	(183	)	(186	)	(150	)	–		(763	)		(9.6	)	(7.7	)
Operating expenses		(578	)	(433	)	(426	)	(588	)	(536	)	–		(2,561	)		4.4		7.7
EBITDA		1,263		1,128		813		785		819		–		4,808			(2.1	)	(1.6	)
Acquired intangibles amortisation		–		–		–		(4	)	(4	)	–		(8	)		166.7
Purchased licence amortisation		(172	)	(37	)	(34	)	(166	)	(34	)	–		(443	)		–
Depreciation and other amortisation		(367	)	(252	)	(194	)	(297	)	(255	)	–		(1,365	)		(4.6	)
Share of result in associates		–		–		–		–		2		–		2			(33.3	)
Adjusted operating profit		724		839		585		318		528		–		2,994			(1.5	)	(2.7	)
EBITDA margin		44.7%		51.9%		35.8%		30.8%		37.0%		40.6%
Six months ended 30 September 2005
Voice revenue		2,225		1,816		1,546		1,864		1,923		(148	)	9,226
Messaging revenue		408		262		162		334		253		(2	)	1,417
Data revenue		128		81		89		119		84		(27	)	474
Total service revenue		2,761		2,159		1,797		2,317		2,260		(177	)	11,117
Acquisition revenue		72		46		123		152		91		–		484
Retention revenue		31		30		47		31		59		–		198
Other revenue		49		5		1		68		27		–		150
Total revenue		2,913		2,240		1,968		2,568		2,437		(177	)	11,949
Interconnect costs		(394	)	(366	)	(323	)	(438	)	(472	)	177		(1,816	)
Other direct costs		(144	)	(122	)	(155	)	(180	)	(142	)	–		(743	)
Acquisition costs		(251	)	(85	)	(246	)	(368	)	(231	)	–		(1,181	)
Retention costs		(211	)	(71	)	(161	)	(230	)	(171	)	–		(844	)
Operating expenses		(560	)	(389	)	(362	)	(571	)	(572	)	–		(2,454	)
EBITDA		1,353		1,207		721		781		849		–		4,911
Acquired intangibles amortisation		–		–		–		(2	)	(1	)	–		(3	)
Purchased licence amortisation		(171	)	(37	)	(34	)	(166	)	(33	)	–		(441	)
Depreciation and other amortisation		(407	)	(247	)	(158	)	(293	)	(326	)	–		(1,431	)
Share of result in associates		–		–		–		–		3		–		3
Adjusted operating profit		775		923		529		320		492		–		3,039
EBITDA margin		46.4%		53.9%		36.6%		30.4%		34.8%				41.1%
		%		%		%		%		%
Change at constant exchange rates
Voice revenue		(5.4	)	(5.1	)	11.9		(1.0	)	(9.8	)
Messaging revenue		(5.8	)	4.8		16.6		9.3		0.4
Data revenue		48.4		8.3		36.2		12.6		8.3
Total service revenue		(3.0	)	(3.4	)	13.5		1.2		(8.0	)
Acquisition revenue		(1.7	)	22.5		24.4		(21.1	)	(39.6	)
Retention revenue		(46.4	)	(32.7	)	29.9		(6.5	)	(22.0	)
Other revenue		0.3		(85.1	)	–		(19.1	)	(11.1	)
Total revenue		(3.4	)	(3.4	)	14.7		(0.7	)	(9.6	)
Interconnect costs		(8.4	)	(11.3	)	7.6		11.6		(7.8	)
Other direct costs		15.2		(9.3	)	11.6		16.1		(16.2	)
Acquisition costs		8.9		32.2		30.6		(20.7	)	(33.5	)
Retention costs		(14.3	)	(13.2	)	13.2		(19.1	)	(12.8	)
Operating expenses		2.8		10.9		16.9		3.0		(7.0	)
EBITDA		(7.0	)	(7.0	)	12.2		0.5		(4.0	)
Acquired intangibles amortisation		–		–		–		100.0		–
Purchased licence amortisation		–		–		–		–		300.0
Depreciation and other amortisation		(11.0	)	(1.7	)	18.0		1.4		(22.5	)
Share of result in associates		–		–		–		–		–
Adjusted operating profit		(6.9	)	(9.3	)	10.0		(0.6	)	7.3
EBITDA margin movement		(1.7	)	(2.0	)	(0.8	)	0.4		2.2

 

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