80 Vodafone Group Plc Annual Report 2025
Strategic report
Governance
Financials
Other information
Governance continued Board activities and principal decisions continued
31 May 2024 that the sale of Vodafone Spain had completed for €4,069 million in cash (subject to closing accounts adjustments) and up to €900 million of non-cash consideration in the form of redeemable preference shares. As part of the transaction, Vodafone and Zegona have also entered into an agreement whereby Vodafone will provide certain services to Vodafone Spain after completion of the transaction, and Vodafone will continue to have a presence in Spain through its Innovation Hub in Malaga. The Board approved the commencement of a share buyback programme following completion. Read more on the share buyback on page 80 Germany turnaround In addition to receiving regular business updates on the turnaround plan in Germany, the Board held deep-dive sessions to discuss the progress made in further detail. A turnaround plan had been initiated and the Board considered the identified improvement areas – customer service, brand, network and IT across the key operational areas. Following Board feedback on the governance structure required for execution and the longer-term view of a sustainable business in Germany, further updates were provided in November 2024. The Board and Committee meetings in January were held over a dedicated two day visit to Germany. The Board met with the leadership team and undertook an extensive review to gain a deeper level of insight into the status, challenges and progress of the turnaround plan. Improvements to customer experience were progressing and significant work was taking place on process optimisation. Deep-dive reviews of key operational functions and programmes both within Vodafone Germany and between Germany and Group had also taken place. The Board anticipates the turnaround programme to take time amongst the increasing competitive pressure and a
worsening market environment. The Board remains confident in the turnaround plan and we have seen the first clear signs of improvement, which we expect to grow and build momentum in the coming fiscal years. Financial performance and capital Financial performance Throughout the year, the Board received regular updates on the financial performance of the Group from the CFO and management teams against the backdrop of strategic portfolio transformation. The Board reviewed the Group’s performance versus the budget for last year. The budget for the coming year and long-range plan were approved. The impact of VOIS and the commercialisation of our shared operations was also considered as part of the review. During the year, the Board considered and approved the half-year and full-year results announcements, and the Annual Report and Accounts, following the recommendation of the Audit and Risk Committee. The Audit and Risk Committee also reviewed the Q1 and Q3 results. Buyback programme The Board reviewed and approved the new capital allocation framework in March 2024 and following discussion at the Capital Decision Board (sub-committee of the Executive Committee), the Board agreed that the proposed €2 billion buyback programme would be split into quarterly rolling programmes. In May 2024, after consideration, the Board approved the commencement of the share buyback programme following the completion of the sale of Vodafone Spain in accordance with the authority obtained at the relevant Annual General Meeting. The commencement of subsequent tranches were announced in August and November 2024, and February 2025 respectively.
and services that were making an impact in the market. The Board considered how AI could be leveraged to improve customer experience and visited a store whereby they experienced a fixed broadband service journey through the eyes of the customer and had the opportunity to meet with front-line store employees. Artificial intelligence The Board received an update on GenAI at its September strategy session. The initial priority areas for GenAI applications have focused on customer experience, productivity and efficiency, including the development of the customer engagement chatbot. The Board considered how internal capabilities are being built for GenAI readiness, including how they will be developed and tested for wider adoption across the organisation, and the responsible AI guardrails in place. The Technology Committee considers GenAI and Machine Learning under its delegated authority and provides regular updates to the Board to keep them abreast of the developments. The Board reviews how these technologies can be used to create efficiencies and improve customer journeys. Satellite strategy The Board reviewed the satellite strategy and investment at its September strategy session. By looking beyond ground-based networks, we can utilise low-earth orbit satellites to provide mobile signals to even remote areas, helping to close coverage gaps and keep our customers connected.
Simplicity and Growth Our simplicity and growth strategic priorities have been a key focus for Board discussion during the year as we continue to reduce complexity within our business and focus on our portfolio of segments, products and geographies that are right-sized for growth and returns. In addition to the scheduled meetings, the Board also attended a strategy off-site session in Portugal that focused on our overall strategic framework, the turnaround plan for Germany, Europe Consumer Strategy, GenAI, and our people transformation. Strategy and business developments Sale of Vodafone Italy Following the announcement that a binding agreement had been entered into with Swisscom for the sale of Vodafone Italy in March 2024, the Board received regular updates of the progress made in the reshaping of the Group’s European operations. The transaction entered Phase 2 of the regulatory approval process with the Italian Competition Authority in September, and approval was obtained on 20 December 2024. The sale for €7.9 billion in cash completed on 31 December 2024. Proceeds from the sale will be used to reduce Vodafone Group net debt. Following Board approval, we announced the commencement of a second share buyback program of up to €2 billion on 20 May 2025, which will be split into quarterly rolling programmes. Sale of Vodafone Spain The Board approved the request to enter into binding agreements with Zegona in relation to the full sale of Vodafone Spain in October 2023. During the year, the Board was kept updated on the progress of the sale, and in May we announced the sale had received final approval from the Spanish authorities. We announced on
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