58 Vodafone Group Plc Annual Report 2024
Strategic report
Governance
Financials
Other information
Risk interdependencies By analysing the connectivity between risks we can identify those that have the potential to impact or increase other risks, so that they are weighted appropriately. This exercise also informs our scenario analysis, particularly the combined scenario used in the long-term viability statement. Read more about our long-term viability statement on page 63 Risk management (continued)
Principal risks Adverse changes in macroeconomic conditions Description Adverse changes to economic conditions could result in reduced customer spending, higher interest rates, adverse inflation, or adverse foreign exchange rates. Adverse conditions could also lead to limited debt refinancing options and/or increase in costs.
Principal risks Financial Risk related to our financial status, standing and continued growth A Adverse changes in macroeconomic conditions Strategic Risks affecting the execution of our strategy B Adverse political and policy environment C Adverse market competition D Disintermediation E Portfolio transformation and governance of investments Operational
Risk ranking movement Risk owner Group Chief Financial Officer
Scenario A severe contraction in economic activity leads to lower cash flow generation for the Group and disruption in global financial markets, which impacts our ability to refinance debt obligations as they fall due in a cost-effective manner. Emerging factors Because this is an externally driven risk, the threat environment is continually changing. External factors such as the conflicts in the Middle East, the ongoing war in Ukraine and uncertainty around the future path of monetary and fiscal policies could have impacts on economic activity across our markets. The financial markets are experiencing high levels of volatility, with sovereign debt at record levels. These factors could lead to a significant change in the availability and cost of capital. Mitigation activities We have a relatively resilient business model. We continue to keep a close eye on the possibility of recessions, which could manifest differently across our various jurisdictions. For our consumers who might be affected by an economic downturn, we offer competitive options and social plans and tariffs in the markets in which we operate. We have a long average life of debt, which reduces refinancing requirements, and all of our bond debt is effectively held at fixed interest rates.
Risks impacting our operations F Company transformation G Cyber threat H Data management and privacy I Supply chain disruption
J Technology resilience and future readiness Risks are ordered by category and not by priority.
E
B
G
H
I
D
F
J
C
A
n
a
Key:
External
Internal
Bidirectional
Unidirectional
Year-on-year risk ranking movement Increasing Decreasing
No change
New/change in scope
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