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18      Vodafone Group Plc
                 Annual Report 2013

         Key performance indicators

         Our performance

         over the year

         We track our performance against 12 key inancial,

         operational and commercial metrics which we judge
         to be the best indicators of how we are doing.

          Organic service revenue growth                                                      More work to do

          Target:         2011                       2.1% *  Growth in the top line demonstrates our ability to grow our
          To maximise service                              customer base and stabilise or increase ARPU. It also helps
          revenue growth.
                          2012                   1.5% *    to maintain margins. As we anticipated at the start of the year,
                                                           we missed our service revenue target because of ongoing
                          2013  -1.9% *                    macroeconomic and regulatory pressures in Europe.

          EBITDA margin                                                                             On-track

          Target:         2011                       32.0%  Trends in our EBITDA margin demonstrate whether our revenue
          EBITDA margin to                                 growth is generating a good return and whether we can offset
          stabilise by March                               underlying cost pressures in our business with cost eficiencies.
          2014.           2012                      31.2%
                                                           This year excluding M&A and restructuring costs, margins fell only
                          2013                     29.9%   0.1  percentage point year-on-year.

          Adjusted operating proit (‘AOP’)                                                         Achieved

          Target:         2011                     £11.8bn  Due to the signiicant contribution made to our overall proitability
          £11.1–£11.9 billion in                           by our US associate, VZW, AOP is a better indicator of overall
          2013 inancial year.
                          2012                    £11.5bn  proitability than EBITDA. We exceeded our target for the year
                                                           due to a strong performance from VZW.
                          2013                      £12.0bn

          Free cash low                                                                            Achieved

          Target:         2011                      £7.0bn  Our regular dividend is paid out of free cash low, so maintaining
          £5.3–£5.8 billion in                             a high level of cash generation (even after signiicant continued
          2013 inancial year.   2012             £6.1bn    investment in capital expenditure) is key to delivering strong
                                                           shareholder returns. Free cash low of £5.6 billion was within
                          2013                 £5.6bn      our guidance range for the year.

          % of consumer contract revenue from integrated plans (Europe)                            Achieved

          Target:         2011        27%                  Our strategic push towards integrated plans allows us both
          To increase                                      to defend our revenue base from voice and SMS substitution,
          signiicantly                                     and to monetise future data demand growth.
          each year.      2012              44%
                          2013                        67%

          Smartphone penetration (Europe)                                                           On-track

          Target:         2011           19%               Smartphones are the key to giving our customers access to the
          To increase to over                              mobile internet; the more our customers have them, the bigger
          50% by 2015.                                     our data opportunity becomes. In 2010, we set a target of at least
                          2012                 27%
                                                           35% smartphone penetration by March 2013, which we achieved.
                          2013                        36%  We now have a new ambition of over 50% by March 2015.
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