236 Vodafone Group Plc Annual Report 2024 236 Vodafone Group Plc Annual Report 2024
Strategic report
Governance
Financials
Other information
Non-GAAP measures (continued) Unaudited information
Performance metrics Non-GAAP measure Adjusted EBITDAaL
Purpose
Definition
Adjusted EBITDAaL is used in conjunction with financial measures such as operating profit to assess our operating performance and profitability. It is a key external metric used by the investor community to assess performance of our operations. It is our segment performance measure in accordance with IFRS 8 (Operating Segments).
Adjusted EBITDAaL is operating profit after depreciation on lease-related right of use assets and interest on lease liabilities but excluding depreciation, amortisation and gains/losses on disposal of owned assets and excluding share of results of equity accounted associates and joint ventures, impairment losses/reversals, restructuring costs arising from discrete restructuring plans, other income and expense and significant items that are not considered by management to be reflective of the underlying performance of the Group.
Adjusted EBITDAaL margin is Adjusted EBITDAaL divided by Revenue. Organic growth Organic growth presents performance on a comparable basis, excluding the impact of foreign exchange rates, mergers and acquisitions, the hyperinflation adjustment in Turkey and other adjustments to improve the comparability of results between periods. Organic growth is calculated for revenue and profitability metrics, as follows: − Adjusted EBITDAaL; − Revenue; − Mobile service revenue; − Fixed service revenue; − Vodafone Business service revenue (Group and Operating segments); and − Financial services revenue in South Africa. Whilst organic growth is not intended to be a substitute for reported growth, nor is it superior to reported growth, we believe that the measure provides useful and necessary information to investors and other interested parties for the following reasons: − It provides additional information on underlying growth of the business without the effect of certain factors unrelated to its operating performance; − It is used for internal performance analysis; and − It facilitates comparability of underlying growth with other companies (although the term ‘organic’ is not a defined term under GAAP and may not, therefore, be comparable with similarly-titled measures reported by other companies). We have not provided a comparative in respect of organic growth rates as the current rates describe the change between the beginning and end of the current period, with such changes being explained by the commentary in this document. If comparatives were provided, significant sections of the commentary for prior periods would also need to be included, reducing the usefulness and transparency of this document. − Group service revenue excluding Turkey; − Group Adjusted EBITDAaL excluding Turkey; − Service revenue;
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