i Table of contents 246

Vodafone 2025 Annual Report

Vodafone FY25 Annual Report

FY25 highlights		3
About Vodafone		4
Operating in a rapidly changing industry		7
Welcome to our 2025 Annual Report		2
In this report		2
At Vodafone our purpose is to connect everyone		6
Business model		5
Financial and non-financial performance		8
A purpose-led, sustainable and responsible business		9
Chair’s message		10
Chief Executive’s statement and strategic roadmap		11
Mega trends		12
Stakeholder engagement		13
Our people strategy		16
Our financial performance		21
Our approach to ESG strategy and reporting		35
Protecting the Planet		36
Empowering People		41
Our ESG disclosures		34
Our approach		44
Privacy, Security, and Resilience		48
Data privacy		48
Privacy risks and impacts		48
Policies		48
Using customer data		48
Governance		48
Enabling customers to control their data		49
Privacy compliance		49
Responding to privacy incidents		49
Our performance		49
Vodafone’s approach to responsible artificial intelligence (‘AI’)		49
Cyber security		50
Strategy		50
Our cyber security strategy		50
Dynamic Trust, Identity and Insider.		50
Proactive Health and Real-time Response.		50
Cyber Health and Adaptive Risk Method (‘CHARM’).		50
Securing Networks, Products & Services.		50
Supplier and Society Ecosystem.		50
Year ahead		50
New technologies and industry collaboration		50
Mobile networks		50
Quantum computing		50
Artificial intelligence (‘AI’)		50
Industry collaboration		51
Risk management		51
Identification of vulnerabilities and risks		51
Risk and control approach		51
Adaptive risk and control methodology (‘CHARM’)		51
Assurance		52
Supply chain		52
Regulatory landscape		52
Operating model		52
Our approach to cyber security		52
Governance		53
Management		53
Board		53
Culture, training and awareness		53
Training and awareness		53
Growing our skills		53
The Cyber Code		54
Threats and incidents		54
Threat landscape and intelligence		54
Cyber operations and incidents		54
Asset resilience		54
Non-financial information		55
Principal risks and uncertainties		57
Risk Management		62
Climate-related risk		63
Chair’s governance statement		70
Governance at a glance		69
Governance		72
Our Board		75
Our Executive Committee		79
Culture and the Board		80
Board activities and key areas of focus during the year		81
Board effectiveness and improving our performance		84
Nominations and Governance Committee		85
Audit and Risk Committee		88
Technology Committee		94
ESG Committee		95
Key responsibilities		94
Letter from Committee Chair		94
Focus during the year		94
May 2024		94
July 2024		94
November 2024		94
January 2025		94
Key focus for the next year		94
Key responsibilities		95
Letter from Committee Chair		95
Focus during the year		95
July 2024		95
November 2024		95
January 2025		95
March 2025		95
Key focus for the next year		95
Remuneration Committee		96
Remuneration Committee		96
Annual Report on Remuneration		99
Remuneration Policy		109
Remuneration Policy		109
Our US listing requirements		115
Directors’ Report		116
Reporting on our financial performance		118
Directors’ statement of responsibility		119
Independent auditor’s report to the members of Vodafone Group Plc		121
Shareholder information		225
Shareholder information		225
History and development		231
Regulation		231
Form 20-F cross reference guide		238
Forward-looking statements		242
Definition of terms		243
Contact details		248
Certificate of Reforestation		247
Notes		245
Vodafone_AR25_23b_FinancialStatements_SUPPLIED_2024-05-19 Fix Pitstopped PRINT DIGITAL.pdf		129
Untitled		129
Financials Vodafone Group Plc Annual Report 2025 127		129
Consolidated income statement for the years ended 31 March		129
Consolidated statement of comprehensive (expense)/income for the years ended 31 March		129
Financials 128 Vodafone Group Plc Annual Report 2025		130
Consolidated statement of financial position at 31 March		130
Financials Vodafone Group Plc Annual Report 2025 129		131
Consolidated statement of changes in equity for the years ended 31 March		131
Financials 130 Vodafone Group Plc Annual Report 2025		132
Consolidated statement of changes in equity (continued) for the years ended 31 March		132
Financials Vodafone Group Plc Annual Report 2025 131		133
Consolidated statement of cash flows for the years ended 31 March		133
1. Basis of preparation		133
1. Basis of preparation (continued)		134
Critical accounting judgements and key sources of estimation uncertainty		134
Revenue recognition		134
Gross versus net presentation		134
Allocation of revenue to goods and services provided to customers		134
Lease accounting		134
Lease identification		134
Lease term		135
Taxation		135
Recognition of deferred tax assets		135
Uncertain tax positions		136
Business combinations and goodwill		136
Finite lived intangible assets		136
Estimation of useful life		136
Customer bases		136
Capitalised software		136
Property, plant and equipment		136
Estimation of useful life		136
Post employment benefits		136
Contingent liabilities		136
Impairment reviews		137
Climate change		137
Significant accounting policies applied in the current reporting period that relate to the financial statements as a whole		137
Accounting convention		137
Basis of consolidation		137
Hyperinflationary economies		137
Foreign currencies		138
Current or non-current classification		138
Inventory		138
New accounting pronouncements adopted on 1 April 2024		139
Amendments to IAS 1 ‘Presentation of Financial Statements’		139
New accounting pronouncements to be adopted on or after 1 April 2025		139
New accounting pronouncements to be adopted on or after 1 April 2026		139
Financials 138 Vodafone Group Plc Annual Report 2025		140
2. Revenue disaggregation and segmental analysis		140
Accounting policies		140
Revenue		140
Contract-related costs		140
Segmental analysis		141
Revenue disaggregation and segmental income statement analysis		141
Financials 140 Vodafone Group Plc Annual Report 2025		142
2. Revenue disaggregation and segmental analysis (continued)		142
Segmental assets		142
Financials		143
3. Operating (loss)/profit		143
Detailed below are the key amounts recognised in arriving at our operating (loss)/profit		143
Auditor remuneration		143
142 Vodafone Group Plc Annual Report 2025 Financials		144
4. Impairment losses		144
Accounting policies		144
Goodwill		144
Property, plant and equipment, finite-lived intangible assets and equity-accounted investments		144
Impairment review		144
Goodwill		144
Financials		145
4. Impairment losses (continued)		145
Key assumptions used in the value in use calculations		145
Assumption How determined		145
Projected adjusted EBITDAaL		145
Projected capital expenditure		145
Projected licence and spectrum payments		145
Assumption How determined		145
Long-term growth rate		145
Pre-tax discount rate		145
Financials		146
4. Impairment losses (continued)		146
Year ended 31 March 2025		146
Value in use assumptions		146
Sensitivity analysis		146
Year ended 31 March 2024		146
Indus Towers Limited		146
Value in use assumptions		146
Financials		147
4. Impairment losses (continued)		147
Sensitivity analysis		147
Year ended 31 March 2023		147
Indus Towers Limited		147
Value in use assumptions		147
Sensitivity analysis		147
Financials		148
5. Investment income and financing costs		148
6. Taxation		148
Accounting policies		148
Financials		149
6. Taxation (continued)		149
Factors affecting the tax expense in the year		149
Financials		150
6. Taxation (continued)		150
Deferred tax		150
Financials		151
6. Taxation (continued)		151
Factors affecting the tax charge in future years		151
Deferred tax assets on losses in Luxembourg		151
Financials		152
6. Taxation (continued)		152
Deferred tax assets in the UK		152
Deferred tax assets on losses in Germany		152
Unremitted earnings		152
Pillar Two -Global Minimum Tax		152
Financials		153
7. Discontinued operations and assets held for sale		153
Discontinued operations		153
Segment analysis of discontinued operations		153
Financials		154
7. Discontinued operations and assets held for sale (continued)		154
Vodafone Italy		154
Assets held for sale		154
Financials		155
8. Earnings per share		155
9. Equity dividends		155
Financials		156
10. Intangible assets		156
Accounting policies		156
Goodwill		156
Finite lived intangible assets		156
Licence and spectrum fees		156
Software		156
Other intangible assets		156
Estimated useful lives		156
Financials		157
10. Intangible assets (continued)		157
Financials		158
10. Intangible assets (continued)		158
11. Property, plant and equipment		158
Accounting policies		158
Financials		159
11. Property, plant and equipment (continued)		159
Financials		160
12. Associates and joint arrangements		160
Accounting policies		160
Joint operations		160
Joint ventures		160
Associates		160
Financials		161
12. Associates and joint arrangements (continued)		161
Joint ventures		161
Oak Holdings 1 GmbH		161
OXG Glasfaser Beteiligungs GmbH		161
Vodafone Idea Limited		161
TPG Telecom Limited		161
Dividends received from joint ventures		161
Aggregated financial information		161
Financials		162
12. Associates and joint arrangements (continued)		162
Summarised financial information		162
Financials		163
12. Associates and joint arrangements (continued)		163
Summarised financial information below.		163
Financials		164
12. Associates and joint arrangements (continued)		164
Associates		164
Aggregated financial information		164
Indus Towers Limited		164
Dividends received from associates		164
Summarised financial information		164
Financials		165
13. Other investments		165
Accounting policies		165
Financials		166
14. Trade and other receivables		166
Accounting policies		166
Financials		167
15. Trade and other payables		167
Accounting policies		167
Supplier financing arrangements		167
Supply chain financing arrangements		167
Payment terms		167
Financials		168
16. Provisions		168
Accounting policies		168
Asset retirement obligations		168
Legal and regulatory		168
Restructuring		168
Other		168
Financials		169
17. Called up share capital		169
Accounting policies		169
18. Reconciliation of net cash flow from operating activities		169
Financials		170
19. Cash and cash equivalents		170
Accounting policies		170
20. Leases		170
Accounting policies		170
As a lessor		170
Financials		171
20. Leases (continued)		171
The Group’s leasing activities as a lessee		171
Optional lease periods		171
Sale and leaseback		171
Amounts recognised in the primary financial statements in relation to lessee transactions		171
Financials		172
20. Leases (continued)		172
Lease liabilities		172
The Group’s leasing activities as a lessor		172
Financials		173
21. Borrowings		173
Accounting policies		173
Borrowings		173
Commercial paper programmes		173
Bonds		173
Treasury shares		173
Financials		174
22. Capital and financial risk management		174
Accounting policies		174
Financial liabilities and equity instruments		174
Derivative financial instruments and hedge accounting		174
Capital management		174
Dividends from joint ventures and associates and to non-controlling shareholders		174
Financials		175
22. Capital and financial risk management (continued)		175
Sale of trade receivables		175
Supply chain financing arrangements		175
Financial risk management		175
Credit risk		175
Financials		176
22. Capital and financial risk management (continued)		176
Financing activities		176
Operating activities		176
Financials		177
22. Capital and financial risk management (continued)		177
Liquidity risk		177
Market risk		177
Financials		178
22. Capital and financial risk management (continued)		178
Risk management strategy of hedge relationships		178
Financials		179
22. Capital and financial risk management (continued)		179
Financials		180
22. Capital and financial risk management (continued)		180
Changes in assets and liabilities arising from financing activities		180
Financials		181
22. Capital and financial risk management (continued)		181
Fair value and carrying value information		181
Level 3 financial instruments		181
Net financial instruments		181
Financials		182
23. Directors and key management compensation		182
Directors		182
Key management compensation		182
24. Employees		182
Financials		183
25. Post employment benefits		183
Accounting policies		183
Background		183
Income statement expense/(income)		183
Defined benefit plans		183
Financials		184
25. Post employment benefits (continued)		184
Actuarial assumptions		184
Financials		185
25. Post employment benefits (continued)		185
Duration of the benefit obligations		185
Fair value of the assets and present value of the liabilities of the plans		185
Financials		186
25. Post employment benefits (continued)		186
Fair value of plan assets		186
Sensitivity analysis		186
Financials		187
26. Share based payments		187
Accounting policies		187
Share options		187
Share plans		187
Movements in outstanding ordinary share options		187
Summary of options outstanding		187
Share awards		187
Other information		187
Financials		188
27. Acquisitions and disposals		188
Accounting policies		188
Acquisition of interests from non-controlling shareholders		188
Disposals		188
Purchase of subsidiaries		188
Other transactions with non-controlling shareholders in subsidiaries		188
Disposals		188
Vodafone Spain		188
Financials		189
27. Acquisitions and disposals (continued)		189
Vodafone Italy		189
M-Pesa Holdings		189
Merger of Vodafone and Three in the UK		189
Financials		190
28. Commitments		190
Capital commitments		190
29. Contingent liabilities and legal proceedings		190
UK pension schemes		190
Financials		191
29. Contingent liabilities and legal proceedings (continued)		191
Vodafone Idea		191
Indus Towers		191
Legal proceedings		191
Tax cases		191
Financials		192
29. Contingent liabilities and legal proceedings (continued)		192
Other cases in the Group		192
Financials		193
29. Contingent liabilities and legal proceedings (continued)		193
Financials		194
29. Contingent liabilities and legal proceedings (continued)		194
30. Related party transactions		194
Transactions with joint arrangements and associates		194
Transactions with Directors other than compensation		194
Financials		195
31. Related undertakings		195
A full list of all of our subsidiaries, joint arrangements and associated undertakings is detailed below.		195
Subsidiaries		195
Financials		196
31. Related undertakings (continued)		196
Financials		197
31. Related undertakings (continued)		197
Financials		198
31. Related undertakings (continued)		198
Financials		199
31. Related undertakings (continued)		199
Financials		200
31. Related undertakings (continued)		200
Financials		201
31. Related undertakings (continued)		201
Financials		202
31. Related undertakings (continued)		202
Associated undertakings and joint arrangements		202
Financials		203
31. Related undertakings (continued)		203
Financials		204
31. Related undertakings (continued)		204
Financials		205
31. Related undertakings (continued)		205
Financials		206
31. Related undertakings (continued)		206
Selected financial information		206
Financials		207
32. Subsidiaries exempt from audit		207
33. Subsequent events		207
Merger of Vodafone and Three in the UK		207
Share buyback programme		207
Financials		208
Company statement of financial position of Vodafone Group Plc		208
Margherita Della Valle Group Chief Executive		208
Luka Mucic Group Chief Financial Officer		208
Company statement of changes in equity of Vodafone Group Plc		208
Financials		209
1. Basis of preparation		209
Critical accounting judgements and key sources of estimation uncertainty		209
Significant accounting policies applied in the current reporting period that relate to the financial statements as a whole		209
Foreign currencies		209
Borrowing costs		209
Financials		210
1. Basis of preparation (continued)		210
Taxation		210
Financial instruments		210
Financial liabilities and equity instruments		210
Derivative financial instruments and hedge accounting		210
Cash flow hedges		210
New accounting pronouncements		210
Financials		211
2. Fixed assets		211
Accounting policies		211
Shares in Group undertakings		211
Financials		212
3. Debtors		212
Accounting policies		212
4. Other investments		212
Accounting policies		212
5. Creditors		212
Accounting policies		212
Capital market and bank borrowings		212
Financials		213
6. Called up share capital		213
Accounting policies		213
7. Share based payments		213
Accounting policies		213
8. Reserves		213
9. Equity dividends		213
Accounting policies		213
Financials		214
10. Guarantees, contingent liabilities and legal proceedings		214
Legal proceedings		214
11. Other matters		214
Financials		215
Non GAAP measures Unaudited information		215
Financials		216
Non GAAP measures Unaudited information (continued)		216
Performance metrics		216
Adjusted EBITDAaL margin		216
Organic growth		216
Service revenue growth in Trkiye excluding the impact of the hyperinflationary adjustments		216
Financials		217
Non GAAP measures Unaudited information (continued)		217
Financials 216 Vodafone Group Plc Annual Report 2025		218
Non GAAP measures Unaudited information (continued)		218
Financials Vodafone Group Plc Annual Report 2025 217		219
Non GAAP measures Unaudited information (continued)		219
Other metrics		219
Adjusted EBITDAaL and Adjusted profit attributable to owners of the parent		219
Financials 218 Vodafone Group Plc Annual Report 2025		220
Non GAAP measures Unaudited information (continued)		220
Adjusted basic earnings per share		220
Cash flow, funding and capital allocation metrics		220
Financials Vodafone Group Plc Annual Report 2025 219		221
Non GAAP measures Unaudited information (continued)		221
Cash flow and funding		221
Return on Capital Employed		221
Financials 220 Vodafone Group Plc Annual Report 2025		222
Non GAAP measures Unaudited information (continued)		222
ROCE using GAAP measures		222
Return on Capital Employed (‘ROCE’) : Non-GAAP basis		222
Financials Vodafone Group Plc Annual Report 2025 221		223
Non GAAP measures Unaudited information (continued)		223
Financing and Taxation metrics		223
Adjusted tax metrics		223
Financials 222 Vodafone Group Plc Annual Report 2025		224
Non GAAP measures Unaudited information (continued)		224
Adjusted share of results of equity accounted associates and joint ventures		224
Additional information Unaudited information		224
Analysis of depreciation and amortisation		224
Analysis of tangible and intangible additions		224

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