UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rules 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

Dated January 25, 2019

Commission File Number: 001-10086

VODAFONE GROUP

PUBLIC LIMITED COMPANY

(Translation of registrant’s name into English)

VODAFONE HOUSE, THE CONNECTION, NEWBURY, BERKSHIRE RG14 2FN, ENGLAND

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F   x     Form 40-F   o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  o                    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-   

This report on Form 6-K contains Vodafone Group Plc’s (‘Vodafone’) Trading update for the quarter ended 31 December 2018.

Trading update for the quarter ended 31 December 2018

25 January 2019

IFRS 15 was adopted on 1 April 2018 for our statutory reporting, without restating prior year figures. As a result, the discussion of our operating results is primarily on an IAS 18 basis for all periods presented.

Highlights

·      Group revenue of €11.0 billion, down by €0.8 billion due to the adoption of IFRS15, the sale of Qatar and FX headwinds

·      Q3 organic service revenue growth (excluding UK handset financing, IAS 18 basis) of 0.1%** (Q2: 0.5%**); on an IFRS15 basis, growth was 0.4%* (Q2: 0.3%*)

·      Similar performance to Q2 in Europe, with service revenues -1.1%**, reflecting improving customer and financial trends in Italy, robust retail growth in Germany, reduced churn in Spain and a consistent performance in the UK

·      Rest of World grew 4.9%* (Q2: 7.7%*), as a decline in South Africa was offset by good growth in other markets

·      Robust commercial momentum across the Group: mobile contract churn reduced by 2.0 percentage points year-on-year; 747,000 mobile contract and 341,000 broadband net additions, converged base up by 190,000 in Q3

·      Intention to extend our existing UK network sharing agreement with Telefonica O2 to include 5G services

·      Guidance reiterated: underlying organic adjusted EBITDA growth of c.3%; free cash flow (pre-spectrum) c.€5.4 billion

Nick Read, Group Chief Executive, commented:

“We have executed at pace this quarter and have improved the consistency of our commercial performance. Lower mobile contract churn across our markets and improved customer trends in Italy and Spain are encouraging, however these have not yet translated into our financial results, with a similar revenue trend in Europe to Q2. We enjoyed good growth across our emerging markets with the exception of South Africa, which was impacted by our pricing transformation initiatives and a challenging macroeconomic environment. Overall, this performance underpins our confidence in our full year guidance.

We are moving to implement a radically simpler operating model and to accelerate our digital transformation, as demonstrated by the organisational changes we have announced in Spain and the UK. We are also assessing opportunities across our markets to improve asset utilisation through partnering. This week we announced the intention to extend our existing network sharing agreement with Telefonica O2 in the UK to include 5G services. This will enable us to deploy 5G services to more customers over a wider geographic area, and to do so at a lower cost. After these arrangements have been finalised, we also intend to explore opportunities to monetise our UK tower assets”.

OPERATING REVIEW

Strategic progress

During Q3 the Group made further progress on its strategy to deepen customer engagement in each customer segment (Europe Consumer, Vodafone Business and Emerging Consumer), to accelerate digital transformation and to improve asset utilisation, in order to drive sustainable revenue and free cash flow growth.

Europe Consumer: Selling ‘one more product’ per customer, lowering churn through convergence

Europe Consumer service revenues excluding UK handset financing declined by 1.3%** in Q3 (Q2: -1.2%**). Excluding Spain and Italy, which were impacted by price competition, European Consumer service revenues grew by 2.4%**. Fixed grew 1.4%*, slower than in Q2 (3.0%*) following our strategic decision not to renew unprofitable football rights in Spain. Mobile declined by 2.4%** (Q2: -2.7%**).

We improved our commercial momentum during the quarter, particularly in Italy and Spain where competitive intensity moderated as the quarter progressed. This contributed to stable mobile prepaid portability in Italy, and to stable mobile contract and fixed portability in Spain, during the month of December.

In Q3 fixed contributed 29% of segment revenues. We added 226,000 broadband customers, including 414,000 NGN customers, and our converged base increased by 188,000. 34% of our broadband customers are now integrated into converged bundles, an increase of 5 percentage points compared to the prior year quarter. On a pro-forma basis for the acquisition of Liberty Global’s cable assets in Germany and CEE (announced in May 2018), our leading NGN footprint covered 120 million households at the end of the period, of which 54 million are ‘on-net’ (including VodafoneZiggo).

In mobile, contract churn improved by 1.4 percentage points in Q3 compared to the same period last year, with single digit churn rates achieved in four markets. We added 184,000 contract customers, and data growth remained strong at 52%, with average smartphone usage increasing to 3.3 GB per month.

In Q3, Europe Consumer accounted for 49% of Group service revenues.

Vodafone Business: A leading international challenger in fixed, ‘industrialising’ IoT

Vodafone Business service revenues declined by 0.5%* in Q3 (Q2: 1.1%*). Fixed, which represents 32% of segment revenues, grew 3.5%* (Q2: 4.7%*) due to ongoing market share gains and strong growth in Cloud services. This was offset by a mobile decline of 2.2%* (Q2: -0.5%*). Slower mobile growth reflected a weaker performance at Vodacom and increased pricing pressure in Europe, particularly in the SoHo segment, as well as a slowdown in the Automotive part of our IoT business. However, IoT connectivity revenues continued to grow strongly, supported by our leading global IoT platform, with 27% growth in SIM connections to 80.9 million.

In Q3, Vodafone Business accounted for 30% of Group service revenues.

Emerging Consumer4: Driving data penetration, growing digital and financial services

During Q3, Emerging Consumer service revenues grew at 6.4%* (Q2: 9.0%*). Growth in South Africa slowed sharply as a result of our pricing transformation strategy to reduce out-of-bundle revenues. Customers utilised our promotional summer offers to optimise their bundle spend amid a challenging macroeconomic environment. However, good growth continued in Turkey, Egypt and other African markets. In euro terms, service revenues declined by 7.4%, mainly due to the devaluation of the Turkish lira.

Data users grew by 8% in Q3, and 69% of customers now use data. Together with rising 4G penetration (now 33%, up 10 percentage points compared to the prior year quarter), this supported 53% growth in data usage. Our African payments platform M-Pesa (including Safaricom) also maintained good momentum, with active customers growing 14% to 37 million, and transaction volumes up 27% in Q3.

In Q3, Emerging Consumer accounted for 16% of Group service revenues.

Digital Transformation: A new radically simpler, ‘digital first’ operating model, leveraging Group scale

We continued to make rapid progress in the adoption of new digital technologies, which have the potential to improve all aspects of our business. Combined with the impact of our ‘Fit for Growth’ programme, we remain on track to achieve our target of a €400 million net reduction in operating expenses in Europe and Common Functions during FY19 and a €1.2 billion reduction in operating expenses by FY21, compared to FY18 on an absolute organic basis.

Improving asset utilisation

We announced two important partnership agreements after the quarter ended which aim to improve the utilisation of the Group’s network and technology assets.

On 23 January 2019 we announced the intention to extend our existing network sharing agreement with Telefonica O2 in the UK to include 5G. This would enable us to offer 5G services to more customers over a wider geographic area, and to do so at a lower cost. We also plan to extend greater network autonomy in a number of larger cities by deploying our own radio equipment on approximately 2,500 sites, providing us with greater flexibility to meet the needs of customers in these areas.

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In addition, we intend to explore options around the future operating model for our transmission networks, which could drive further synergies. After the new network sharing agreements have been finalised, we will explore a potential monetisation of CTIL, the 50:50 joint venture company which owns and manages our passive tower infrastructure.

On 17 January 2019 we announced a strategic commercial partnership with IBM for cloud services. Under the terms of the eight year managed services agreement, Vodafone Business customers will immediately have access to IBM’s leading multi-cloud offering. We also intend to co-develop new digital solutions, combining the strengths of Vodafone’s leadership in IoT and 5G with IBM’s multi-cloud, industry and professional services capabilities. The partnership enables the Group to move to a variable cost model for cloud services, and to reduce our dependence on capital intensive legacy datacentres.

Outlook

Trading during the third quarter was in-line with management’s expectations underlying the outlook statement for the 2019 financial year. The Group therefore confirms its expectation that organic adjusted EBITDA on an underlying basis (excluding settlements and UK handset financing, IAS 18 basis) will grow by around 3%, with free cash flow generation (pre-spectrum) of around €5.4 billion.

Under IFRS 15, we expect our organic service revenue growth will be slightly higher and our absolute adjusted EBITDA will be slightly lower, primarily due to the elimination of the impact of UK handset financing under IAS 18, with no impact on FCF.

Notes:

*           All amounts in this document marked with an “*” represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. Organic growth is a non-GAAP performance measure. See “Non-GAAP financial information” on page 9 for further details and reconciliations to the respective closest equivalent GAAP measure.

**      Organic growth excluding the impact of UK handset financing and settlements (see page 12 for further details).

1.     Following the adoption of IFRS 15 “Revenue from Contracts with Customers” on 1 April 2018, the Group’s statutory results for the quarter ended 31 December 2018 are on an IFRS 15 basis, whereas the statutory results for the quarter ended 31 December ended 2017 are on an IAS 18 basis as previously reported. The operating review discussion is primarily performed on an IAS 18 basis. 2018 information and percentage movements on an IAS 18 basis are non-GAAP financial information performance measures. See “Non-GAAP financial information” on page 9 for more information and reconciliations to the closest respective equivalent GAAP measure and “Definitions of terms” on page 14 for further details.

2.     The Group revised its reporting segments on 1 October 2018 to reflect changes to its organisational structure. The Rest of the World region (previously Africa, Middle East and Asia Pacific) comprises the Vodacom, Turkey and Other Markets operating segments. Current period results are reported under this new organisational structure and comparative periods have been restated accordingly.

3.     Non-GAAP financial information is presented to provide readers with additional financial information that is regularly reviewed by management and should not be viewed in isolation or as an alternative to the equivalent GAAP measure. See “Non-GAAP financial information” on page 9 for more information and reconciliations to the closest equivalent GAAP measure.

4.     Emerging Consumer includes Consumer revenues from our Rest of World region, excluding New Zealand.

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Group1,2

Following the adoption of IFRS 15 “Revenue from Contracts with Customers” on 1 April 2018, the Group’s statutory results for the quarter ended 31 December 2018 are on an IFRS 15 basis, whereas the statutory results for the quarter ended 31 December 2017 are on an IAS 18 basis as previously reported, with any comparison between the two bases of reporting not being meaningful. As a result, the discussion of our operating results is primarily on an IAS 18 basis for all periods presented. See “Non-GAAP financial information” on page 9 for more information and reconciliations to the closest respective equivalent GAAP measures.

On a statutory basis, Group revenue decreased by €0.8 billion to €11.0 billion, reflecting foreign exchange headwinds of €0.2 billion, a €0.4 billion decrease due to the adoption of IFRS 15 (which nets certain components of dealer commissions from service revenues) and the sale of Vodafone Qatar (an impact of €0.1 billion).

On an IAS 18 basis, Group organic service revenue declined by 0.8%* (Q2: -0.5%*), but grew 0.1%** (Q2: 0.5%**) excluding the impact of UK handset financing. Growth in the majority of markets was offset by declines in Italy and in Spain, which were impacted by increased competition; however, commercial performance improved in both of these markets during the quarter. The slowdown in quarterly trends was driven by lower data revenue growth in South Africa.

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Europe1

On a statutory basis, revenue decreased by €0.5 billion to €8.1 billion, including a €0.3 billion decrease due to the adoption of IFRS 15.

On an IAS 18 basis, revenue decreased 1.6%. On an organic basis, service revenue excluding the drag from UK handset financing decreased 1.1%** (Q2: -1.1%**), as growth in most markets was offset by declines in Spain and Italy. The pace of service revenue decline moderated in Italy during the quarter, reflecting improved commercial performance and ‘more for more’ actions. This was offset by slightly lower growth in Germany.

Germany

Service revenue grew 1.1%* (Q2: 1.7%*) driven by strong customer base growth in mobile and fixed line, partially offset by a reduction in wholesale MVNO revenues. Excluding the drag from wholesale, service revenue grew 1.9%* (Q2: 2.5%*). The slowdown in quarterly trends was driven by mobile ARPU pressure in Business.

Mobile service revenue grew 0.2%* (Q2: 0.9%*) as a higher contract customer base was largely offset by a decline in MVNO revenue. We added 165,000 contract customers in Q3. This was supported by strong sales performances in both branded and indirect channels, the continued success of our GigaCube proposition and a reduction in mobile contract churn of 1.7 percentage points compared to the prior year. Contract ARPU declined, driven by the mix shift towards SIM-only, multi-SIM family contracts and convergence. Our Consumer segment continued to perform well, however Business ARPU continued to decline.

Fixed service revenue grew 2.5%* (Q2: 3.0%*) driven by customer base growth. We added 73,000 broadband customers in Q3 (Q2: 69,000), reflecting growing demand for our high speed offers. We also maintained good momentum in convergence supported by our GigaKombi proposition, adding 95,000 consumer converged customers which took our total converged customer base to 1.3 million. Our Gigabit investment plan is progressing well: we successfully switched off analogue TV services for over 70% of our cable customers, supporting the efficient rollout of DOCSIS 3.1. This Gigabit capable technology has now been activated across 50% of our cable footprint, reaching over 6 million households.

Italy

Service revenue declined 4.6%* (Q2: -6.3%*), reflecting significant price competition in Consumer mobile following the arrival of a new entrant. Business revenues remained stable, as price pressure in mobile was offset by strong fixed growth. The improvement in quarterly trends was principally driven by ‘more for more’ actions in mobile and fixed.

Mobile service revenue declined 8.4%* (Q2: -9.6%*). Price competition in the prepaid market remained challenging, however competitive intensity reduced compared to the prior quarter. As a result, mobile number portability (‘MNP’) market volumes declined throughout the quarter, and in December were 50% lower than at their peak in Q2, supporting a 15 percentage point reduction in prepaid churn quarter-on-quarter. Our secondary brand (‘ho.’), which was launched in June to specifically address the value segment of the market, continued to enjoy good momentum and we now have around one million customers. Overall, our active prepaid customer base declined 122,000 in Q3, with losses reducing as the quarter progressed. Prepaid ARPU declined 3.3% as customers migrated to lower tariff plans, partially offset by the introduction of more-for-more propositions.

Fixed service revenue grew 11.3% (Q2: 8.6%*). This was driven by strong Consumer customer base growth and a price increase on October 1st, as well as by strong growth in Business. We maintained our commercial momentum in Q3, adding 78,000 broadband households (Q2: 60,000). Through our owned NGN footprint and our rapidly expanding strategic partnership with Open Fiber, we now cover 6.2 million households. We also added 62,000 converged customers, taking our total converged customer base to 896,000.

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UK

Excluding the drag from handset financing, service revenue grew 0.9%** (Q2:1.1%**), driven by growth in Consumer mobile and fixed line, as well as in Business fixed. On a reported basis service revenue declined 4.5%* (Q2: -5.1%*), with the drag from handset financing reducing to 5.4 percentage points from 6.2 percentage points in Q2.

Mobile service revenue excluding the impact of handset financing declined by 1.1%** (Q2: -0.6%**), with growth in Consumer being offset by lower Business and MVNO revenue. The growth in Consumer was driven by a higher contract customer base and RPI-linked price increases. This was partially offset by new spending cap regulation in Q3, which enables customers to set a limit on out of bundle charges. Our commercial momentum remained strong. Excluding Talkmobile, our low-end mobile brand which is being phased out, we added 109,000 contract customers (Q2: 104,000*). This was supported by a 2.3 percentage point year-on-year improvement in contract churn.

Fixed service revenue grew 7.3%* (Q2: 7.0%*) driven by continued strong momentum in Consumer broadband and by ongoing growth in Business. We added 46,000 broadband customers in Q3, increasing our total base to 525,000. 59% of our Consumer broadband base also take a Vodafone mobile product.

Spain

Service revenue declined 7.4%* (Q2: -7.2%*). This reflects the commercial actions we took in May 2018 to improve the competitiveness of our Consumer offers, particularly in the value segment, and the impact of our decision not to renew unprofitable football content rights. Business revenues declined modestly, with fixed stable and pricing pressure in mobile. Quarterly trends began to stabilise, with the impact of a lower customer base mostly offset by reduced promotional activity in the market and an improved commercial performance.

Following a highly promotional summer period in which TV/football offers were discounted by the incumbent, competitive intensity in the market reduced in Q3 as these offers ended. There were also fewer seasonal promotions in Q3 compared to the prior year. As a result, market portability volumes across both mobile and fixed were down 2% and 7% respectively year-on-year. Our porting performance improved sharply as the quarter progressed, with broadly stable porting ratios achieved in December in both mobile contract and fixed. Customer churn also improved, with both mobile contract and broadband churn improving by over 2 and 5 percentage points respectively quarter-on-quarter. Consequently, our commercial performance also improved, with broadband customer losses reducing to 6,000 (Q2: -69,000) and TV customers growing by 13,000 (Q2: -66,000). Mobile contract customer losses continued (Q3: -94,000, Q2: -106,000), however these were mainly low-value secondary SIMs.

Other Europe

Other Europe, which represents 12.1% of Group service revenue, grew 2.2%* (Q2: 2.3%*) with all major markets growing during Q3.

In Ireland, service revenue grew 1.4%* (Q2: 3.3%*) driven by mobile base growth and prepaid ARPU increases, partially offset by promotional discounting in fixed line. Portugal service revenue grew 2.9%* (Q2: 1.1%*) supported by strong contract customer base growth and higher ARPU in fixed line. In Greece, service revenue grew by 3.0%* (Q2: 1.2%*) driven by ARPU growth in Consumer mobile.

VodafoneZiggo joint venture

VodafoneZiggo will report its calendar Q4 2018 results in February 2019.

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Rest of the World1,2

On a statutory basis, revenue decreased by €0.3 billion to €2.5 billion, including a €0.1 billion decrease due to the adoption of IFRS 15.

On an IAS 18 basis, revenue decreased 9.6% including a 7.2 percentage point negative impact from foreign exchange movements and a 5.0 percentage point negative impact arising from the disposals of Vodafone Qatar at the end of FY18. On an organic basis, service revenue grew 4.9%* (Q2: 7.7%*) supported by good growth in Turkey and Egypt. The slowdown in quarterly trends was driven by lower data revenue growth in South Africa.

Vodacom

Vodacom Group service revenue grew 1.5%* (Q2: 6.3%*), reflecting strong growth in International markets. The slowdown in quarterly trends was principally driven by South Africa.

In South Africa, service revenue declined by 0.9%* (Q2: grew by 4.3%*, or 2.2%* excluding a one-off). This reflected a sharp slowdown in data revenue growth, which declined 0.4%* (Q2: 3.9%* excluding a one-off), impacted by our pricing transformation strategy which aims to lower the cost to communicate and reduce our exposure to out-of-bundle revenues. Amid a challenging macroeconomic environment, customers utilised our more generous promotional summer offers to optimise their bundle spend. Voice revenues declined by 0.5%*, a similar pace to prior quarters. National roaming revenue was also lower as we phased out an existing wholesale contract and transitioned slowly into a new agreement. In total, our prepaid customer base declined by 34,000 to 47.2 million. This reflects initiatives taken in the quarter to reduce ‘one-off use’ of SIM cards in order to improve the longevity and quality of our customer base. We added 86,000 contract customers, principally in the Business segment.

Vodacom’s International operations outside of South Africa, which represent 26.1% of Vodacom Group service revenue, grew 11.1%* (Q2: 15.0%*), driven by strong data growth and M-Pesa. The slowdown in quarterly trends follows the benefit of an easier prior year comparator in the DRC in Q2. Service revenue trends in Tanzania improved, and growth in both Mozambique and the DRC remained strong.

Turkey

Service revenue grew 14.8%* (Q2: 15.2%*) driven by higher Consumer contract customer base, increased mobile data revenue, and strong fixed line customer growth.

Other Markets

Service revenue grew 5.3%* (Q2: 5.6%*), supported by continued good growth in Egypt and Ghana. In Egypt, service revenue grew 14.4%* (Q2: 17.0%*) with successful segmented campaigns, rising data penetration and price increases supporting ARPU.

Vodafone Idea joint venture

Vodafone Idea will report its third quarter results in February 2019.

Notes:

*           All amounts in this document marked with an “*” represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. Organic growth is a non-GAAP performance measure. See “Non-GAAP financial information” on page 9 for further details and reconciliations to the respective closest equivalent GAAP measure.

**      Organic growth excluding the impact of UK handset financing and settlements (see page 12 for further details).

1.     Following the adoption of IFRS 15 “Revenue from Contracts with Customers” on 1 April 2018, the Group’s statutory results for the quarter ended 31 December 2018 are on an IFRS 15 basis, whereas the statutory results for the quarter ended 31 December ended 2017 are on an IAS 18 basis as previously reported. The operating review discussion is primarily performed on an IAS 18 basis. 2018 information and percentage movements on an IAS 18 basis are non-GAAP performance measures. See “Non-GAAP financial information” on page 9 for more information and reconciliations to the closest respective equivalent GAAP measure and “Definitions of terms” on page 14 for further details.

2.     The Group revised its reporting segments on 1 October 2018 to reflect changes to its organisational structure. The Rest of the World region (previously Africa, Middle East and Asia Pacific) comprises the Vodacom, Turkey and Other Markets operating segments. Current period results are reported under this new organisational structure and comparative periods have been restated accordingly.

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ADDITIONAL INFORMATION

Revenue — quarter ended 31 December 20181

Note:

8

NON-GAAP FINANCIAL INFORMATION

In the discussion of the Group’s reported operating results, non-GAAP performance measures are presented to provide readers with additional financial information that is regularly reviewed by management. However, this additional information presented is not uniformly defined by all companies including those in the Group’s industry. Accordingly, it may not be comparable with similarly titled measures and disclosures by other companies. Additionally, certain information presented is derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted GAAP measure. Such measures should not be viewed in isolation or as an alternative to the equivalent GAAP measure.

Further information on the use of non-GAAP performance measures is outlined on pages 207 to 217 of the Group’s annual report for the financial year ended 31 March 2018.

IFRS 15 basis and IAS 18 basis

Following the adoption of IFRS 15 “Revenue from Contracts with Customers” on 1 April 2018, the Group’s statutory results for the quarter ended 31 December 2018 are on an IFRS 15 basis, whereas the statutory results for the quarter ended 31 December 2017 are on an IAS 18 basis as previously reported, with any comparison between the two bases of reporting not being meaningful. As a result, the discussion of our operating results in the Financial Results section is primarily performed on an IAS 18 basis for all periods presented.

We believe that the IAS 18 basis metrics for the quarter ended 31 December 2018, which are not intended to be a substitute for, or superior to, our reported metrics on an IFRS 15 basis, provide useful information to allow comparable growth rates to be calculated. A reconciliation of service revenue and revenue to the statutory IFRS 15 basis for the quarters ended 31 December 2018 and 30 September 2018 are set out on pages 10 to 12.

In addition, to assist investors and other stakeholders in understanding the impact of IFRS 15 on the Group’s results, page 13 includes pro forma results for the quarters ended 31 December 2017 and 30 September 2017 on an IFRS 15 basis, associated IFRS 15 and organic growths and a reconciliation to the statutory IAS 18 basis for those periods.

Further information on the impact of adopting IFRS 15 is outlined in note 1 ‘Basis of Preparation’ of the Group’s interim results announcement for the six months ended 30 September 2018.

Service revenue

Service revenue comprises all revenue related to the provision of ongoing services including, but not limited to, monthly access charges, airtime usage, roaming, incoming and outgoing network usage by non-Vodafone customers, interconnect charges for incoming calls and, with effect from 1 April 2018, excludes international wholesale voice transit revenues. We believe that it is both useful and necessary to report this measure for the following reasons:

·      It is used for internal performance reporting;

·      It is used in setting director and management remuneration; and

·      It is useful in connection with discussion with the investment analyst community.

A reconciliation of reported service revenue to the respective closest equivalent GAAP measure, revenue, is provided where used in the Operating Review on pages 4 to 7.

Organic growth

All amounts in this document marked with an “*” represent “organic growth”, which presents performance on a comparable basis in terms of merger and acquisition activity and foreign exchange rates. Whilst organic growth is neither intended to be a substitute for reported growth, nor is it superior to reported growth, we believe that these measures provide useful and necessary information to investors and other interested parties for the following reasons:

·      They provide additional information on underlying growth of the business without the effect of certain factors unrelated to its operating performance;

·      They are used for internal performance analysis; and

·      They facilitate comparability of underlying growth with other companies (although the term “organic” is not a defined term under IFRS and may not, therefore, be comparable with similarly titled measures reported by other companies).

The Group’s organic growth rates for all periods exclude the results of Vodafone India Limited, which were reported in discontinued operations prior to the completion of the merger with Idea Cellular Limited on 31 August 2018, and the results of Vodafone Qatar following its disposal in the 2018 financial year. In addition, operating segment organic service revenue growth rates for all quarters have been amended to exclude the impact of changes to intercompany interconnect rates and the impact of excluding international wholesale voice transit revenues from service revenue with effect from 1 April 2018.

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 news release. If comparatives were provided, significant sections of the commentary from the news release for prior periods would also need to be included, reducing the usefulness and transparency of this document.

Reconciliations of organic growth to reported growth on an IAS 18 basis are shown where used or in the tables below.

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