Vodafone announces future dividend intentions

On May 18th, 2010 Vodafone Plc announced its future dividend intentions, targeting annual growth of 'no less than 7%' for the next three years.

RNS Number : 0867M
Vodafone Group Plc
18 May 2010


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  • Final dividend +9%; 3 year dividend per share growth target of 7% per annum(*)

  • Final dividend per share 5.65 pence up 9% making total dividends 8.31 pence per share, up 7% reflecting strong underlying business performance and cash generation

  • Expect free cash flow to be between £6.0 billion and £7.0 billion per annum for the next three financial years, reflecting strong operational performance and delivery in emerging markets over this time period

  • Annual dividend per share growth target of no less than 7% for the next three financial years

  • We expect that total dividends per share will be no less than 10.18 pence per share for the 2013 financial year

Vittorio Colao, Chief Executive, commented: "Vodafone's financial results exceeded our upgraded guidance on all measures. Revenue trends have improved again in Q4 driven by growth in mobile data and fixed broadband. Cost reduction targets were delivered ahead of schedule enabling commercial reinvestment to improve market share and further strengthen our technology platforms.

Free cash flow of £7.2 billion and confidence in Vodafone's prospects have enabled us to increase dividends by 7% and to target 7% per annum growth in total dividends per share for the next three years.

We are creating a stronger Vodafone, which is positioned to return to revenue growth during the 2011 financial year, as economic recovery should benefit our key markets."

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Three year free cash flow and dividend per share growth target

We expect that annual free cash flow will be between £6.0 billion and £7.0 billion, in each of the financial years in the period ending 31 March 2013, underpinning a dividend per share growth target of at least 7% per annum for each of these financial years. We therefore expect that total dividends per share will be no less than 10.18p for the 2013 financial year.


Guidance is based on our current assessment of the global economic outlook and assumes foreign exchange rates of £1:€1.15 and £1:US$1.50 throughout this three year period. It excludes the impact of licence and spectrum purchases, if any, material one-off tax settlements and restructuring costs and assumes no material change to the current structure of the Group.

With respect to the dividend growth target, as the Group's free cash flow is predominantly generated by companies operating within the euro currency zone, we have assumed that the euro to sterling rate remains within 10% of the above guidance exchange rate.

A 1% change in the euro to sterling exchange rate would impact adjusted operating profit by approximately £70 million and free cash flow by approximately £60 million.

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The above mentioned announcement is an abridged version of the full announcement which can be found HERE

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