UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

Dated May 17, 2016

Commission File Number: 001-10086

VODAFONE GROUP

PUBLIC LIMITED COMPANY

(Translation of registrant’s name into English)

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 x       Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

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 o       No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-      .

This Report on Form 6-K contains a news release dated 17 May 2016 entitled ‘VODAFONE ANNOUNCES RESULTS FOR THE YEAR ENDED 31 MARCH 2016’

17 May 2016

Vodafone announces results for the year ended 31 March 2016

Highlights

·                  Group organic total revenue grew 2.3%* to £41.0 billion; full year organic service revenue grew 1.5%*

·                  Q4 organic service revenue grew 2.5%*; stabilisation in Europe +0.5%*, AMAP accelerated to +8.1%*

·                  Q4 driven by underlying improvement, up 1.8%* excluding adjustments primarily from a leap-year effect

·                  Organic EBITDA growth of 2.7%* to £11.6 billion; H2 EBITDA up 3.6%*

·                  EBITDA on a guidance basis £11.9 billion, upper end of £11.7 - £12.0 billion guidance range

·                  Free cash flow £1.0 billion, consistent with ‘positive’ guidance; capital expenditure £8.6 billion, down 6.5%

·                  Net debt of £29.2 billion, up 31.0% impacted by spectrum acquisitions and foreign exchange movements

·                  Final dividend per share of 7.77 pence, up 2.0%, giving total dividends per share of 11.45 pence

·                  Successful completion of Project Spring build targets supports growth recovery:

·            46.8 million 4G customers, 4G coverage 87% in Europe; 72.5 million 3G data users in emerging markets

·            13.4 million broadband customers; high speed broadband available to 30 million on-net homes in Europe

·            All customer network experience targets met: 91% of data sessions are >3 Mbps in Europe

·            Net Promoter Score (NPS) leader in 13 out of 21 markets, with improved NPS in 15 markets during the year

·                  Strong commercial momentum in strategic focus areas:

·            Data volumes up 71% in the year

·            Enterprise outperforming the market; revenue growth +2.1%* in the year; Vodafone Global Enterprise +5.9%*

·            Unified communications: a record 1.3 million new fixed broadband customers in the year, fastest growing broadband provider in Europe

·            Enhancing fixed services capability; new agreements in the Netherlands and Italy

·                  Strong cost efficiency and acquisition synergies drive EBITDA to grow faster than revenues; raising synergy targets at KDG and Ono

Guidance for the 2017 financial year5

·                  Move to euro reporting for the year ending 31 March 2017, as previously announced

·                  Organic EBITDA growth in the range of 3-6%, implying €15.7 - 16.2 billion (£12.4 - 12.8 billion) at guidance FX rates

·                  Free cash flow after capex, before M&A, spectrum and restructuring costs of at least €4.0 billion (£3.2 billion)

·                  Post Project Spring capital intensity expected to be in the mid-teens as a percentage of annual revenue

·                  Dividends to be declared in euros for the year-ending 31 March 2017 and thereafter; intention to grow dividends per share annually (relative to a 2016 ‘baseline’ of 14.48 eurocents per share), demonstrating confidence in future cash flow generation

Vittorio Colao, Group Chief Executive, commented:

‘‘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 year-on-year, 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. We are pleased to be the leader or co-leader in mobile network quality tests and Net Promoter Scores in the majority of our markets. We have also posted a record quarter of net additions in fixed as our convergence strategy continues to accelerate.

Looking forward, we will continue to invest in our customer excellence programmes in both mobile and converged services. I am confident we will sustain our positive momentum in the coming year, allowing us to maintain attractive returns for our shareholders.’’

Notes:

*       All amounts in this document marked with an “*” represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. See page 28 for “Use of non-GAAP financial information”.

1     The Group has amended its reporting to reflect changes in the internal management of its Enterprise business. The primary change has been that on 1 April 2015, the Group redefined its segments to report international voice transit service revenue within common functions rather than within the service revenue amount disclosed for each country and region. The service revenue amounts presented for the year ended 31 March 2015 have been restated onto a comparable basis together with all disclosed organic service revenue growth rates. There is no impact on total Group service revenues or costs. Group service revenue includes the results of Europe, AMAP, Other (which includes the results of partner markets) and eliminations.

2     Free cash flow for the year ended 31 March 2016 excludes £186 million (2015: £336 million) of restructuring costs and a £50 million (2015: £100 million) payment in respect of the Group’s historic UK tax settlement.

3     Year ended 31 March 2016 includes £3,207 million arising from the tax treatment of the revaluation of investments based upon the local GAAP financial statements. Year ended 31 March 2015 included the recognition of £5,468 million of deferred tax assets in respect of tax losses in Luxembourg.

4     Adjusted earnings per share from continuing operations excludes the results and related tax charge of the Group’s former investment in Verizon Wireless in the prior year and the recognition of deferred tax assets in both years.

5     See “Guidance” on page 7.

2

REVIEW OF THE YEAR

Financial review of the year

Group

Group revenue for the year decreased by 3.0% to £41.0 billion primarily due to foreign exchange rate movements, with Group organic service revenue returning to growth (1.5%*, or 2.1%* excluding the impact of regulated mobile termination rate (‘MTR’) cuts). Improving organic service revenue growth of 2.5%* in Q4 reflected continued underlying improvement, but was also supported by a leap-year effect and certain accounting reclassifications. Organic service revenue trends in Europe recovered throughout the year, stabilising at 0.5%* in Q4 while growth in Africa, Middle East and Asia Pacific (‘AMAP’) accelerated to 8.1%*.

Group EBITDA declined 2.5% to £11.6 billion primarily due to foreign exchange rate movements, with organic EBITDA growing 2.7%*, a faster pace than revenues despite the increase in operating expenses as a result of Project Spring. The Group EBITDA margin stabilised at 28.3%. H2 EBITDA grew 3.6%*, faster than in the first half of the year reflecting better revenue performance and continued good cost control, including greater than anticipated synergy capture at Ono.

Adjusted operating profit fell by 11.1% to £3.1 billion as organic EBITDA growth was offset by the increase in depreciation and amortisation resulting from Project Spring, spectrum acquisitions and foreign exchange rate movements. Reported operating profit was £1.4 billion, impacted by a goodwill impairment in relation to Romania of £0.45 billion, which reflects increased competitive intensity.

The Group’s underlying tax rate for the year ended 31 March 2016 was 28.8%. Certain non-recurring items had a material impact on the adjusted effective tax rate, which was 15.1% in the year. These include a benefit of 18.4% following the restructuring and simplification of our Indian business, partially offset by a tax cost of 4.6% due to the reduction in the UK corporation tax rate (which resulted in a decrease in the value of our UK capital allowances). We now have £22 billion of deferred tax assets.

Adjusted earnings per share from continuing operations fell 9.2% to 5.04 pence, mainly reflecting the decline in adjusted operating profit.

Free cash flow1 was £1.0 billion (2015: £1.1 billion), suppressed by elevated capital expenditures for Project Spring. Total capital expenditure was £8.6 billion (2015: £9.2 billion), thereby completing our targeted 2-year outlay of £19 billion for the Project Spring investment programme. Actual spend was modestly lower than originally forecast, a result of capex synergies following the acquisition of Ono and favourable foreign exchange rate movements.

Net debt as at 31 March 2016 was £29.2 billion (2015: £22.3 billion). Net debt includes the impact of renewing or acquiring spectrum for a total cash cost in the year of £2.9 billion, including Germany (£1.4 billion), India (£0.6 billion), Turkey (£0.6 billion), Italy (£0.2 billion) and the UK (£0.1 billion). Additionally, foreign exchange losses of £2.0 billion were recognised on net debt as losses on the euro and rupee offset favourable exchange rate movements on the South African rand. Net debt at 31 March 2016 also includes liabilities of £4.1 billion (2015: £1.8 billion) relating to acquisitions or renewals of spectrum in India and £1.4 billion (2015: £1.3 billion) of liabilities relating to minority holdings in KDG.

The Board is recommending a final dividend per share of 7.77 pence, up 2.0% year-on-year, in line with our intention to increase the full year dividend per share annually. The total dividend per share for the year would therefore be 11.45 pence, also up 2.0% year-on-year.

As previously communicated, the Group will change its presentation currency from pounds sterling to euros from 1 April 2016. Dividends for the year-ending 31 March 2017 and beyond will be declared in euros and paid in euros, pounds sterling and US dollars.

Europe

Organic service revenue in Europe declined 0.6%* year-on-year, reflecting continued competitive pressures in a number of markets. However, trends improved throughout the year, with Europe growing 0.5%* in Q4 as our two largest markets, Germany and Italy, returned to growth, together with the benefit from a leap-year effect and the reclassification of certain fixed-line sales into service revenues in Germany and the Netherlands.

Mobile service revenue declined 2.0%*, with a better trend in H2 (Q3 -2.0%*, Q4 -1.1%*). The main factors behind this performance include continued growth in our contract customer base and stabilising consumer ARPU in a number of markets, supported by customer appetite for 4G services and strong data growth, and ongoing pressure on Enterprise ARPU in several markets.

Fixed service revenue grew 3.5%* (Q3 +3.7%*, Q4 +5.4%*) driven by strong consumer broadband customer growth, particularly in fibre and cable services. Fixed now accounts for 26.1% of European service revenue, compared to 24.1% in the prior year. Broadband net additions for the year were 1.1 million, taking the European base to 12.3 million.

Organic EBITDA grew 1.7%* to £7.7 billion, and the EBITDA margin improved to 28.8%, up 0.4* percentage points on an organic basis. This reflects good cost control, as well as the benefits of acquisition integrations. The trend in H2 was better, with organic EBITDA up 2.3%* and the margin up 0.6* percentage points.

3

REVIEW OF THE YEAR

AMAP

Organic service revenue in AMAP was up 6.9%* year-on-year continuing its sustained track record of strong organic growth. Growth improved further in Q4 to 8.1%* (Q3: 6.5%*). Vodacom, Turkey and Egypt accelerated service revenue growth for the year to 5.4%*, 19.7%* and 8.9%* respectively. Performance in India (+5.0%*) was affected adversely during the year by significant regulatory impacts and price competition.

The drivers of our competitive advantage — strong brand, leading network quality and distribution reach — continued to strengthen during the year. In H2 our growth was supported by a continued increase in our customer base (+8.2 million to 340.9 million), with 3G/4G data users growing by 17.7 million and data usage up 74% year-on-year.

Organic EBITDA increased by 7.2%* and the EBITDA margin was 30.6%. The EBITDA margin increased 0.1* percentage points on an organic basis as the scale benefits of revenue growth were largely offset by increased operating costs from Project Spring, inflationary pressures in some markets and higher import costs following local currency devaluations.

Strategic progress

Project Spring

First communicated in detail in November 2013, we have now delivered almost all of the major targets outlined at that time, achieving tangible benefits in both network and service quality for customers. Key highlights include:

1)             Extension of our European 4G coverage to 87% of our footprint, just below our target of 90% due to rollout delays primarily in the UK and Germany. 91% of data sessions are >3Mbps, ahead of our target of 90%. Dropped call rates in Europe are now <0.5% vs. 0.9% previously, as targeted.

2)             In AMAP ex-India we have built 3G population coverage to 85%, and in India 3G coverage in targeted urban areas is now 95%, as anticipated. Dropped call rates have fallen from 1.3% to 0.9%, ahead of our target.

3)             In total we have added 43,000 new mobile sites and installed 115,000 modernised ‘single RAN’ base stations. As a result we now have 50,000 more 2G-enabled sites, 77,000 more 3G-enabled sites and 76,000 more 4G-enabled sites. We have also added 102,000 new high capacity backhaul links, well ahead of our targets.

4)             We have extended fibre coverage to 72 million homes; 30 million of these homes are passed by owned NGN infrastructure in Europe, up from 14 million in September 2013, thanks in part to cable acquisitions.

5)             Internet of Things (IoT) services are now available in 30 countries (previously, these were described as Machine-2-Machine services or ‘M2M’); IP-VPN services are available in 70 countries; and cloud and hosting services in 12 countries.

Going forward we intend to sustain our network leadership while modernising our IT platforms. We expect that cloud-based technologies will be the key enablers of our strategy, delivering large cost savings and increased agility. In mobile we aim to be ready to lead the industry in 5G across Europe, while significantly expanding our 4G coverage in emerging markets. In fixed we plan to continue to build out our NGN coverage where it is needed to compete, while upgrading our cable networks to deliver gigabit speeds.

Customer eXperience eXcellence (‘CXX’)

We have been focused during the year on our CXX initiative, first introduced in 2015, which aims to give customers — whether individuals or businesses, mobile or fixed — the best possible service. This is not just about providing the best coverage and connectivity, but also about making everything about being a Vodafone customer easier, clearer and more reliable. Signing a contract, adding more services, understanding a bill, seeking help and advice using the ‘My Vodafone’ app, online, over the phone or in one of our shops: we aim to improve every aspect of the customer relationship with Vodafone.

In combination with Project Spring, the CXX programme has contributed to significant gains in NPS for both consumer and Enterprise customers. We now enjoy NPS leadership in 13 out of 21 markets, and in 15 of these markets NPS improved year-on-year. This contributed to a reduction in contract churn in the majority of our markets over the year.

Data

Customer demand for data continues to grow very quickly, stimulated by the increasing availability of great TV, sport and video on smartphones and tablets, the improving reliability and speed of mobile networks, the continued deflation in unitary data pricing, and the increasing size and quality of smartphone screens.

Data traffic in H2 grew 66% (Q3: 68%; Q4: 65%). We now have 47 million 4G customers across the 21 countries where we offer 4G, with a further 16.7 million customers added in H2. Although take-up continues to be rapid, still only 27% of our European customer base is taking a 4G service, providing us with a very substantial opportunity for future growth. Customers who move to 4G typically buy bigger data packages and see their data consumption double; average usage per smartphone customer in Europe is up 48% year-on-year to 1.1GB per month, and over half of the data traffic in Europe is now on 4G.

In our AMAP region, data adoption is also rapid, supported by our significant network investment and the relative scarcity of fixed line internet access. The total mobile data customer base is 129 million, up 12% year-on-year. In South Africa we are seeing encouraging signs that customers are consuming more of our data services, with prepaid customer ARPU increasing by 21% when moving from 2G to 3G, and postpaid ARPU by 18% when moving from 3G to 4G. In India we have launched 4G in five circles, covering 45% of data revenues, and expect to reach over 60% in the coming year. Given the high cost of spectrum, we intend to take a disciplined approach to further 4G rollout.

4

REVIEW OF THE YEAR

Vodafone M-Pesa, our money transfer service, now has more than 25 million active customers, an increase of 27% year-on-year, including market launches in Albania and Ghana and is supported by a network of more than 261,000 agents in 11 countries.

Unified communications

We are becoming a full service integrated operator, for both households and businesses, in our main markets. We market high speed broadband services to 72 million households across Europe, and through organic investment and acquisition, 41% of these households are ‘on-net’ — serviced by our own fibre or cable infrastructure. In the last 12 months we have extended our network to reach an additional 31 million homes, of which 4.0 million were on our own NGN networks, and we continue to invest to reach more homes and businesses in Spain and Portugal. Our high speed broadband rollout in Italy will be enhanced by our commercial agreement with Enel, which plans to roll out Fibre-To-The-Home (FTTH) to 224 cities nationwide, providing access on competitive commercial terms. In these areas Enel will be our exclusive fibre partner going forward.

In February we announced our intention to create a 50:50 Joint Venture in the Netherlands with Ziggo, part of Liberty Global. Combining Ziggo’s fibre-rich broadband network with Vodafone’s mobile operations will create a stronger fixed and mobile competitor in the Dutch market, delivering significant benefits for consumers, businesses and the public sector through investment in digital infrastructure and customer experience. We anticipate total cost, capex and revenue synergies with an estimated net present value of approximately €3.5 billion after integration costs. The transaction is expected to close around the end of 2016 and is subject to regulatory approvals and consultations with the local Works Councils.

We are achieving strong and consistent customer growth across our footprint. We now have 13.4 million broadband customers, with 1.3 million new broadband customers added in the year. 6.4 million of these customers take a high speed service over fibre or cable. In Europe, we had 12.3 million broadband customers and 9.4 million TV customers, with 51% of our European broadband customers taking a high speed service as at 31 March 2016.

During the year we launched Vodafone One, our converged service in Spain combining mobile services and our own infrastructure with the cable services of Ono, which we acquired in 2014. By 31 March 2016, 1.5 million customers had subscribed to the service. In November we launched Vodafone Red One in Germany, our fully integrated bundle combining mobile with high speed broadband on the Kabel Deutschland (‘KDG’) cable network; as of 31 March 2016 we had 54,000 customers.

In H2, 26.3% of our service revenue in Europe came from fixed line.

Enterprise

Services to business comprise 27.7% of our Group service revenue, and 32.7% in Europe. Our relationships with business customers are evolving, expanding from traditional mobile voice and data services to embrace total communications, IoT, Cloud & Hosting and IP-VPN provision. These new areas offer both market growth and market share opportunities for us.

We are a recognised global leader in the provision of IoT services, with a strong presence in key industries such as automotive and utilities. During the year, we increased our total IoT connections by 37% year-on-year to 38 million, with revenue growing 29%*. Vodafone Global Enterprise (‘VGE’), which provides services to our biggest international customers, achieved revenue growth for the year of 5.9%*, driven by our unmatched geographical presence and the increasing trend among multinational corporations to retain a single provider of services across borders.

Prospects for the 2017 financial year2

In the coming financial year it will be important to build on the improving execution seen during the 2016 financial year as we continue to monetise our Project Spring investments and work towards further improvements in customer experience through our CXX initiative. Additionally, we intend to continue to pursue incremental operating efficiencies across all of our operating companies. We are initiating a series of IT transformation projects which we anticipate will deliver significant long-term benefits in terms of both cost savings and enhanced strategic flexibility. Executing these programs with minimal disruption to customers is a priority.

We expect EBITDA to grow organically by 3% to 6%. Following the completion of Project Spring, total capex is now targeted to be in the mid-teens as a percentage of annual revenue; this is higher than the 13%-14% range that we previously anticipated, as we believe that there are attractive investment opportunities available to further accelerate our growth and improve our long-term strategic positioning. We expect free cash flow to exceed €4.0 billion, after all capex, before M&A, spectrum payments and restructuring costs. This level of cash generation, combined with healthy growth and continued operating leverage, provides us with the visibility to sustain a progressive dividend policy.

Notes:

*             All amounts in this document marked with an “*” represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. See page 28 for “Use of non-GAAP financial information”.

1           Free cash flow for the year ended 31 March 2016 excludes £186 million (2015: £336 million) of restructuring costs, a £50 million (2015: £100 million) payment in respect of the Group’s historic UK tax settlement and £nil of other payments (2015: £180 million).

2           See “Guidance” on page 7.

5

GROUP FINANCIAL HIGHLIGHTS

Notes:

*            All amounts in this document marked with an “*” represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. See page 28 for “Use of non-GAAP financial information”.

1          Statutory basis prepared in accordance with IFRS accounting principles, including the results of the Group’s joint ventures using the equity accounting basis.

2          Year ended 31 March 2016 includes £3,207 million arising from the tax treatment of the revaluation of investments based upon the local GAAP financial statements. Year ended 31 March 2015 included the recognition of £5,468 million of deferred tax assets in respect of tax losses in Luxembourg.

3          See page 28 for “Use of non-GAAP financial information” and page 34 for “Definitions of terms”.

4          Adjusted earnings per share from continuing operations excludes the results and related tax charge of the Group’s former investment in Verizon Wireless in the prior year and the recognition of deferred tax assets in both years.

5          Free cash flow for the year ended 31 March 2016 excludes £186 million (2015: £336 million) of restructuring costs and a £50 million (2015: £100 million) payment in respect of the Group’s historic UK tax settlement.

6

GUIDANCE

Please see page 28 for “Non-GAAP financial information”, page 34 for “Definitions of terms” and page 36 for “Forward-looking statements”.

Performance against 2016 financial year guidance

Based on guidance foreign exchange rates, EBITDA for the 2016 financial year was £11.9 billion, at the upper end of the £11.7 billion to £12.0 billion range set in November 2015. On the same basis our free cash flow was £1.0 billion, consistent with our positive free cash flow guidance.

2017 financial year guidance

We expect EBITDA to grow organically by 3-6%; this implies a range of €15.7 billion to €16.2 billion at guidance exchange rates. We expect free cash flow of at least €4.0 billion, before the impact of M&A, spectrum payments and restructuring costs.

Dividend policy

The Board intends to grow dividends per share annually. For the financial year ending 31 March 2017 and beyond, dividends will be declared in euros and paid in euros, pounds sterling and US dollars, aligning the Group’s shareholder returns with the primary currency in which we generate free cash flow. The foreign exchange rate at which future dividends declared in euros will be converted into pounds sterling and US dollars will be calculated based on the average exchange rate over the five business days during the week prior to the payment of the dividend. The Board has determined that future dividend growth will be calculated from the level of 14.48 eurocents per share in 2016, which is equivalent to the 2016 total dividend payout of 11.45 pence at the year end £:€ exchange rate of 1.2647.

Assumptions

We have based guidance for the financial year ending 31 March 2017 on our current assessment of the global macroeconomic outlook and assume foreign exchange rates of €1:INR 76.4, €1:ZAR 16.5, €1:£0.79, €1:TRY 3.2 and €1:EGP 9.8. It excludes the impact of licence and spectrum payments, material one-off tax-related payments, restructuring costs and any fundamental structural change to the Eurozone, including a potential decision by the United Kingdom to leave the European Union. It also assumes no material change to the current structure of the Group.

Actual foreign exchange rates may vary from the foreign exchange rate assumptions used. A 1% change in the rupee to euro exchange rate would impact EBITDA by approximately €20 million and would have a c.€5 million impact on free cash flow. A 1% change in the South African rand to euro exchange rate would impact EBITDA by approximately €15 million and free cash flow by c.€5 million. A 1% change in the pounds sterling to euro exchange rate would impact EBITDA by approximately €15 million and free cash flow by c.€5 million.

7

CONTENTS

FINANCIAL RESULTS

Group1,2

Notes:

8

FINANCIAL RESULTS

Revenue

Group revenue decreased 3.0% to £41.0 billion and service revenue decreased by 3.5% to £37.2 billion. Reported growth includes the full year impact from the acquisitions of Hellas Online (‘HOL’) and Cobra Automotive (‘Cobra’) in the prior year.

In Europe, organic service revenue declined 0.6%* reflecting continued competitive pressures in a number of markets, with improving trends throughout the year. In AMAP, organic service revenue increased by 6.9%* continuing its sustained track record of strong organic growth.

EBITDA and operating profit

Group EBITDA declined 2.5% to £11.6 billion, with organic growth in Europe and AMAP and the acquisitions of HOL and Cobra being more than offset by foreign exchange movements. On an organic basis, EBITDA rose 2.7%* and the Group’s EBITDA margin stabilised at 28.3%.

An impairment loss of £450 million was recognised in the current financial year (2015: £nil) in respect of the Group’s operations in Romania. The impairment charge relates solely to goodwill.

Operating profit decreased £0.6 billion to £1.4 billion as the £0.45 billion impairment charge, £0.3 billion reduction in EBITDA and £0.1 billion increase in restructuring costs were partly offset by £0.1 billion of lower depreciation and amortisation charges and £0.1 billion higher contribution from associates and joint ventures.

Net financing costs

Note:

1          Comprises foreign exchange rate differences reflected in the income statement in relation to certain intercompany balances.

Net financing costs, excluding mark to market losses and foreign exchange differences in relation to certain intercompany balances, decreased by 3% primarily due to the impact of foreign exchange losses on financing costs.

9

FINANCIAL RESULTS

Taxation

Note:

1            See “Earnings per share” on page 11.

The Group’s underlying tax rate for the year ended 31 March 2016 was 28.8%. Certain non-recurring items had a significant effect on the adjusted effective tax rate in the year, which was 15.1%. These include a benefit of 18.4% following the restructuring and simplification of our Indian business, partially offset by a tax cost of 4.6% due to the reduction in the UK corporation tax rate (which resulted in a decrease in the value of our UK capital allowances). We now have £22 billion of deferred tax assets. The Group’s adjusted effective tax rate is expected to be in the mid-twenties over the medium term reflecting the ongoing impact from the re-organisation of our Indian business.

The Group’s adjusted effective tax rate for both years does not include the use of Luxembourg losses in the year of £423 million (2015: £439 million) and a reduction in the deferred tax asset in the period of £3,207 million (2015: recognition of an additional asset of £2,127 million) arising from the tax treatment of the revaluation of investments based upon the local GAAP financial statements. These items reduce the amount of losses we have available for future use against our profits in Luxembourg and do not affect the amount of tax we pay in other countries.

Additionally, the adjusted effective tax rate in the year ended 31 March 2015 did not include the impact of the recognition of an additional £3,341 million deferred tax asset in respect of the Group’s historic tax losses in Luxembourg. The losses were recognised as a consequence of the acquisition of Ono.

10

FINANCIAL RESULTS

Earnings per share

Adjusted earnings per share, which excludes the reduction in the tax losses in Luxembourg following the revaluation of investments based upon the local statutory accounts in the current period and the recognition of deferred tax assets in respect of tax losses in Luxembourg in the prior year, was 5.04 pence, a decrease of 9.2% year-on-year, reflecting the Group’s lower adjusted operating profit for the year.

Basic earnings per share was a loss of 15.08 pence due to the reduction in deferred tax on losses, as described above, which has been excluded from adjusted earnings per share.

Earnings per share

Notes:

1  Year ended 31 March 2016 includes £3,207 million arising from the tax treatment of the revaluation of investments based upon the local GAAP financial statements. Year ended 31 March 2015 included the recognition of £5,468 million of deferred tax assets in respect of tax losses in Luxembourg.

2  Discontinued operations represents the results and related tax charge of the Group’s former investment in Verizon Wireless.

11

FINANCIAL RESULTS

Europe1