189 Vodafone Group Plc Annual Report 2024 189
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Vodafone Group Plc Annual Report 2024
Interest expense on lease liabilities for the year is disclosed in note 5 ‘Investment income and financing costs’. The Group has no material liabilities under residual value guarantees and makes no material variable payments not included in the lease liability. The Group does not apply either the short term or low value expedient options in IFRS 16 ‘Leases’. The Group’s leasing activities as a lessor The Group has a wide range of lessor activities with consumer and enterprise customers, other telecommunication companies and other companies. With consumer and enterprise customers, the Group generates lease income from the provision of handsets, routers and other communications equipment. The Group provides wholesale access to the Group’s fibre and cable networks, leases out space on the Group’s owned mobile base stations to other telecommunication companies and subleases certain retained mobile base station sites to telecommunication tower companies. In addition, the Group subleases retail stores to franchise partners in certain markets and leases out surplus assets (e.g. vacant offices and retail stores) to other companies. Lessor transactions are classified as operating or finance leases based on whether the lease transfers substantially all of the risks and rewards incidental to ownership of the asset. Leases are individually assessed, but generally, the Group’s lessor transactions in the year are classified as: - Operating leases where the Group provides wholesale access to its fibre and cable networks, provides routers or similar equipment to fixed customers or is lessor of space on owned mobile base stations; and - Finance leases where the Group is sub-lessor of handsets or similar items in back-to-back arrangements or where surplus assets or certain retained mobile base stations sites are sublet out for all or substantially all of the remaining head lease term. The Group’s income as a lessor in the year is as follows: Re-presented 1 Re-presented 1 2024 2023 2022 €m €m €m Operating leases Lease revenue (note 2 ‘Revenue disaggregation and segmental analysis’) 463 673 673 Income from leases not recognised as revenue 38 37 36 Substantially all of the Group’s income as a lessor is operating lease income. The committed amounts to be received from the Group’s operating leases are as follows: Maturity Within one year In one to two years In two to three years In three to four years In four to five years In more than five years Total €m €m €m €m €m €m €m Committed operating lease payments due to the Group as a lessor 31 March 2024 296 121 29 16 9 20 491 31 March 2023 Re-presented 2 275 114 30 14 7 4 444 31 March 2022 Re-presented 2 487 234 153 126 113 342 1,455 The Group recognises a net investment in leases (receivables) as a result of providing finance leases as a lessor, which are disclosed in note 14 ‘Trade and other receivables’. The maturity profile of the Group’s net investment in leases is as follows: 2024 2023 €m €m Within one year 106 111 In more than one year but less than two years 80 88 In more than two years but less than three years 56 67 In more than three years but less than four years 49 54 In more than four years but less than five years 35 47 In more than five years 17 39 343 406 Unearned finance income (33) (33) Net investment in leases - as disclosed in note 14 ‘Trade and other receivables’ 310 373 The Group has no material lease income arising from variable lease payments. Notes: 1 The results for the years ended 31 March 2023 and 31 March 2022 have been re-presented to reflect that the results of Vodafone Spain and Vodafone Italy are now reported as discontinued operations, decreasing the previously disclosed amounts of lease revenue and income from leases not recognised as revenue by €78 million (2022: €85 million) and €10 million (2022: €9 million), respectively. See note 7 ‘Discontinued operations and assets held for sale’ for more information. 2 The committed operating lease payments as of 31 March 2023 and 31 March 2022 have been re-presented to reflect that the results of Vodafone Spain and Vodafone Italy are now reported as discontinued operations, decreasing the previously disclosed total amounts by €51 million (2022: €54 million). See note 7 ‘Discontinued operations and assets held for sale’ for more information.
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