Vodafone 2025 Annual Report

Vodafone Group Plc Annual Report 2025 145

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Value in use assumptions The table below shows key assumptions used in the value in use calculations, and separately presented cash- generating units for which the carrying amount of goodwill is significant in comparison with the Group’s total carrying amount of goodwill: Assumptions used in value in use calculations Germany Italy % % Pre-tax discount rate 7.8 8.9 Long-term growth rate 0.6 1.5 Projected adjusted EBITDAaL CAGR 1 1.8 1.0 Projected capital expenditure 2 19.4-19.8 16.5-17.9 Sensitivity analysis The estimated recoverable amounts of the Group’s operations in Germany, Italy, the UK, and Spain exceed ed their carrying values by €3.2 billion, €0.2 billion, €1.3 billion, and €0.4 billion respectively. If the assumptions used in the impairment review were changed to a greater extent than as presented in the following table, the changes would, in isolation, have led to an impairment loss being recognised for the year ended 31 March 2023. Change required for carrying value to equal recoverable amount Germany Italy UK Spain pps pps pps pps Pre-tax discount rate 0.6 0.2 1.6 0.5 Long-term growth rate (0.6) (0.2) (1.9) (0.6) Projected adjusted EBITDAaL CAGR 1 (1.8) (0.5) (4.1) (1.5) Projected capital expenditure 2 5.5 0.9 4.2 2.2 Notes: 1. Projected adjusted EBITDAaL CAGR is expressed as the compound annual growth rates in the initial five years for all cash-generating units of the plans used for impairment testing. 2. Projected capital expenditure, which excludes licences and spectrum, is expressed as capital expenditure as a percentage of revenue in the initial five years for all cash-generating units of the plans used for impairment testing. For the Group’s operations in Italy and Spain management prepared the following sensitivity analysis for changes in pre-tax discount rate and projected adjusted EBITDAaL CAGR 1 assumptions. The associated impact of the change in each key assumption did not consider any consequential impact on other assumptions used in the impairment review. Recoverable amount less carrying value Italy Spain €bn €bn Base case as at 31 March 2023 0.2 0.4 Change in pre-tax discount rate Decrease by 1pps 1.4 1.3 Increase by 1pps (0.8) (0.3) Change in projected adjusted EBITDAaL CAGR 1 Decrease by 5pps (1.6) (0.8) Increase by 5pps 2.3 1.8 Note: 1. Projected adjusted EBITDAaL CAGR is expressed as the compound annual growth rates in the initial five years for all cash-generating units of the plans used for impairment testing.

4. Impairment losses (continued) Sensitivity analysis

The estimated recoverable amounts of the Group’s operations in Germany and the UK exceed ed their carrying values by €2.3 billion and €1.6 billion respectively. If the assumptions used in the impairment review were changed to a greater extent than as presented in the following table, the changes would, in isolation, have led to an impairment loss being recognised for the year ended 31 March 2024. Change required for carrying value to equal recoverable amount Germany UK pps pps Pre-tax discount rate 0.5 2.2 Long-term growth rate (0.4) (2.1) Projected adjusted EBITDAaL CAGR 1 (1.2) (2.9) Projected capital expenditure 2 3.9 4.9 Notes: 1. Projected adjusted EBITDAaL CAGR is expressed as the compound annual growth rates in the initial five years for all cash-generating units of the plans used for impairment testing. 2. Projected capital expenditure, which excludes licences and spectrum, is expressed as capital expenditure as a percentage of revenue in the initial five years for all cash-generating units of the plans used for impairment testing. Year ended 31 March 2023 The disclosures below for the year ended 31 March 2023 are as previously disclosed in the Annual Report for the year ended 31 March 2023. Indus Towers Limited The Group’s investment in Indus Towers was tested for impairment at 31 March 2023 following a decline in Indus Towers’ quoted share price. Management concluded that fair value less costs to sell was the appropriate basis to determine the recoverable amount of the Group’s investment. Indus Towers’ share price was observable in a quoted market and was considered a level 1 input under the fair value hierarchy in IFRS 13 ‘Fair Value Measurement’. The share price of INR143.00 per share implied a recoverable amount of INR81 billion (€0.9 billion) which was lower than the carrying value of the investment at the same date. An impairment charge of €64 million was recognised to reduce the carrying value of the Group’s investment to the recoverable amount in the Group’s consolidated statement of financial position.