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 May 19, 2015

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.

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.

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 a news release dated 19 May 2015 entitled ‘VODAFONE ANNOUNCES RESULTS FOR THE YEAR ENDED 31 MARCH 2015’

Vodafone announces results for the year ended 31 March 2015

19 May 2015

Highlights

·                  Group revenue up 10.1% to £42.2 billion; full year organic service revenue declined 1.6%*

·                  Return to growth in Q4: organic service revenue up 0.1%*; Europe -2.4%*, AMAP 6.0%*

·                  EBITDA down 6.9%* at £11.9 billion; H2 EBITDA down 3.6%*

·                  EBITDA on a guidance basis £11.7 billion, in line with £11.6 - £11.9 billion guidance range

·                  Free cash flow £1.1 billion; capital expenditure £9.2 billion, up 45.7% year-on-year

·                  £5.5 billion deferred tax assets recognised and reported in H1

·                  Net debt of £22.3 billion, or £18.7 billion including $5.2 billion Verizon loan notes

·                  Final dividend per share of 7.62 pence, up 2.0%, giving total dividends per share of 11.22 pence

·                  Strong progress on Project Spring: 63% through mobile build, European 4G coverage 72%; 28 million homes reached with next generation network; significant development of Enterprise products and services

·                  20.2 million 4G customers in 18 markets; data volumes up 81% year-on-year in Q4

·                  Continued take-up of data in emerging markets: 115.5 million data customers in AMAP, 3G coverage in India now at 90% of target urban areas

·                  Further strong progress on unified communications strategy: 12.0 million broadband customers, improving revenue trend, fixed line now 25.2% of European service revenue

·                  Integration of KDG and Ono on track, synergies in line with expectations

·                  Continued enhancement of Enterprise capabilities, with return to growth in Q4: acquisition of Cobra Automotive, international expansion of IP-VPN to 62 countries, good momentum in machine-to-machine revenue (+24.7%*)

Vodafone Group Plc

Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England

vodafone.com

Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679

Guidance for the 2016 financial year(4)

·            Organic EBITDA growth: EBITDA in the range of £11.5 billion to £12.0 billion

·            Positive free cash flow after all capex, before M&A, spectrum and restructuring costs

·            Capex of £8.5 billion to £9.0 billion, reflecting the second year of Project Spring investment

·            Intention to grow dividends per share annually, demonstrating confidence in future cash flow generation

Vittorio Colao, Group Chief Executive, commented:

“It has been a year of continued progress, culminating with a return to organic growth in Q4. We have seen increasing signs of stabilisation in many of our European markets, supported by improvements in our commercial execution and very strong demand for data. In fixed line, revenue trends are improving supported by accelerating customer growth, and our recent cable acquisitions provide a strong platform for further growth. In emerging markets, our good growth trend has continued, driven by rising data penetration and leading network quality and distribution.

“Our Project Spring investment programme is on plan, delivering a significantly improved experience to customers. In Europe, 4G coverage now extends to over 70% of our footprint, and voice quality and reliability have improved noticeably. We now reach 28 million homes with our own, next generation cable and fibre networks. In India, our 3G footprint now reaches 90% of target areas, with 3G data revenue up 125% year-on-year in Q4.

“We have significant opportunities ahead of us, with only 13% of our European mobile customers using 4G, and our market share in fixed services only a fraction of our share in mobile. In addition, businesses around the world are increasingly looking to put mobility at the centre of their own strategies. With the assets and skills we have today, further enhanced by the completion of Project Spring, we will be strongly positioned to provide ever improving services to customers and seize these opportunities.”

Note:

*                   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. See page 28 for “Use of non-GAAP financial information”.

(1)         Free cash flow for the year ended 31 March 2015 excludes £336 million of restructuring costs (2014: £210 million), a £365 million UK pensions contribution payment, £359 million of Verizon Wireless tax distributions received after the completion of the disposal, £328 million of interest paid on the settlement of the Piramal option, £116 million of KDG incentive scheme payments in respect of liabilities assumed on acquisition and a £100 million (2014: £100 million) payment in respect of the Group’s historical UK tax settlement.

(2)         Year ended 31 March 2015 includes the recognition of £5,468 million of deferred tax assets in respect of tax losses in Luxembourg. Year ended 31 March 2014 included the recognition of a deferred tax asset in respect of tax losses in Germany (£1,916 million) and Luxembourg (£17,402 million) and the tax liability related to the rationalisation and reorganisation of our non-US assets prior to the disposal of our stake in Verizon Wireless (£2,210 million). Basic earnings per share for the year ended 31 March 2014 also includes the gain on disposal, results and related tax charge of the Group’s former investment in Verizon Wireless.

(3)         Adjusted earnings per share from continuing operations excludes the gain on disposal, results and related tax charge of the Group’s former investment in Verizon Wireless in the prior year and the recognition of deferred tax assets in both years.

(4)         See “Guidance” on page 8.

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REVIEW OF THE YEAR

Financial review of the year

It has been a year of continued strong growth in most of our emerging markets, and signs of stabilisation in many European ones. A slight easing of aggressive price competition in some countries, combined with a clear inflection point in the growth of data usage, has underpinned our performance. In addition, the increased commercial investments which we began to make in the prior year have translated into an improved performance relative to our competitors in Europe, with revenue trends improving in each of the last three quarters.

Across our markets we have witnessed an acceleration in consolidation both within the mobile sector and between fixed and mobile, as operators look to gain scale and position themselves to seize the opportunity to deliver customers an enhanced experience as demand for high speed data takes off. This mirrors our own important strategic moves with the acquisitions of Kabel Deutschland (‘KDG’) and Grupo Corporativo Ono, S.A. (‘Ono’), and our continued fixed infrastructure build in a number of markets. In our core European markets, we are increasingly positioning Vodafone as a top tier, fully integrated provider of high speed fixed and mobile communications to consumers and businesses.

We have continued to make good progress with our strategic priorities:

·                  We have completed 63% of the mobile network element of Project Spring, with 72% 4G coverage in Europe and 90% 3G coverage in target areas of India;

·                  We now have 20.2 million 4G customers across the Group, who are on average using twice the data of 3G customers;

·                  We have significantly strengthened our unified communications capabilities, with extended fibre builds in several European markets, and the ongoing integrations of KDG and Ono;

·                  We continue to invest in key growth areas in Enterprise, with machine-to-machine (‘M2M’) revenue growing 24.7% and our proposition enhanced by the acquisition of Cobra Automotive, and our IP-VPN footprint expanded to 62 countries;

·                  We have consolidated our position as an industry leader in mobile financial services, with 19.9 million M-Pesa customers; and

·                  We continue to grow the dividend per share and maintain a strong balance sheet.

Group

Group revenue for the year increased by 10.1% to £42.2 billion, with Group organic service revenue down 1.6%* (down 0.8% excluding the impact of regulated mobile termination rate (‘MTR’) cuts). The Group returned to organic service revenue growth in Q4 at +0.1%* (+0.9% excluding MTRs), reflecting a steady recovery in Europe and continued good growth in Africa, Middle East and Asia Pacific (‘AMAP’).

Group EBITDA rose 7.5% to £11.9 billion, with organic EBITDA down 6.9%*, mainly affected by revenue declines in Europe. The Group EBITDA margin fell 0.7 percentage points to 28.2%, or 1.8* percentage points on an organic basis. This reflects ongoing revenue declines in Europe and the growth in operating expenses as a result of Project Spring, partially offset by operating efficiencies. H2 EBITDA fell 3.6%*, with the improved trend supported by the better revenue performance and continued good cost control.

Adjusted operating profit fell by 18.6% to £3.5 billion as the increase in reported EBITDA year-on-year was offset by the increase in depreciation and amortisation resulting from the acquisitions of KDG and Ono.

The adjusted effective tax rate for the year was 29.4%, including the impact of foreign exchange losses. Excluding this impact, the adjusted effective tax rate was 27.2%. We recognised an additional deferred tax asset of £5.5 billion in the first half of the financial year taking our total deferred tax assets to £23.8 billion.

Adjusted earnings per share(1) from continuing operations fell 27.8% to 5.55 pence, mainly reflecting the decline in adjusted operating profit.

Free cash flow(2) was £1.1 billion (2014: £4.4 billion), this decline reflecting higher reported EBITDA offset by the increase in capital expenditure under the Project Spring programme. Total capital expenditure was £9.2 billion (2014: £6.3 billion).

Net debt as at 31 March 2015 was £22.3 billion (March 2014: £13.7 billion), or £18.7 billion taking into account the $5.2 billion Verizon loan notes. Net debt includes the impact of the acquisitions of Ono in July 2014 for £5.8 billion and Cobra Automotive in August 2014 for £0.2 billion. In addition, we renewed or acquired spectrum in India, Italy, Greece, Hungary and New Zealand, for a cash cost in the year of £0.4 billion. The remaining liability of £2.7 billion relating to the March 2015 India spectrum auction is expected to be recognised in the 2016 financial year.

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The Board is recommending a final dividend per share of 7.62 pence, up 2.0% year-on-year, in line with our intention to increase the full year dividend per share annually.

Europe

Organic service revenue in Europe declined 4.7%* year-on-year, reflecting ongoing pressures from competition, regulation and the macroeconomic environment. Excluding the impact of MTR cuts, service revenue fell 4.1%*. Performance in H2 began to stabilise in most markets.

Mobile service revenue declined 5.5%*, with a better trend in H2 (Q3 -3.9%*, Q4 -3.4%*). The main factors supporting this recovery were consistent growth in the contract customer base in a number of markets, some evidence of ARPU stability, and accelerating demand for data stimulated by the roll-out of 4G coverage. The UK, Netherlands and the Czech Republic all returned to growth in H2, while Germany, Italy, Spain, Greece and Romania all reduced their rate of decline in H2. Hungary grew strongly throughout the year.

Fixed service revenue declined 0.7%*, but also showed an improving trend in H2 (Q3 +2.3%*, Q4 +1.6%*). Growth in Spain, Italy and Portugal was offset by continued declines in Germany and the UK. KDG continued to grow strongly with service revenue up 7.1%(3) on a local GAAP basis in Q4. Broadband net additions for the year, including KDG, were 0.9 million, taking the European base to 11.3 million.

Organic EBITDA fell 12.3%* to £7.9 billion, and the EBITDA margin was flat at 28.2%, or a decline of 2.4* percentage points on an organic basis. This reflects the decline in revenue and the growth in operating expenses as a result of Project Spring, partially offset by operating efficiencies. The trend in H2 was better, with organic EBITDA down 7.6% and the margin down 1.8* percentage points.

AMAP

Organic service revenue in AMAP was up 5.8%* year-on-year (or 7.1%* excluding the impact of MTR cuts), with continued good growth in most major markets. India, Turkey and Egypt achieved service revenue growth of 12.6%*, 9.4%* and 2.8%* respectively. Performance at Vodacom (-1.0%*) was affected by price competition and a significant MTR cut in South Africa, but the trend improved in Q4 (-0.2%*).

The region continues to benefit from strong customer growth, increased usage of voice and data services, and effective marketing and distribution. During the year the mobile customer base grew 6.6% to 323.7 million, driven by strong momentum in India. Voice and data usage were up 8% and 106% respectively, and there are now 115.5 million data users in the region.

Organic EBITDA rose 5.8%* and the EBITDA margin was 30.4%. The EBITDA margin fell 0.4* percentage points on an organic basis, as increased operating costs from Project Spring and inflationary pressures in some markets offset the scale benefits of revenue growth.

Strategic progress

Project Spring

First communicated in detail in November 2013, Project Spring is our two-year, £19 billion investment programme designed to place Vodafone at the forefront of the growth in mobile data and the increasing trend towards the convergence of fixed and mobile services. The key elements of the Spring infrastructure build are:

·                  Building 4G to 90% of the population in our European markets and 3G to up to 95% of targeted areas of India;

·                 Modernising our mobile network, with high speed backhaul giving us the capacity to provide a consistently good network experience to our customers;

·                  Making calls more reliable — still the number one priority for most customers;

·                  Upgrading our retail presence, to offer customers modern shops focused on service as well as sales;

·                  Increasing our next-generation fixed line infrastructure in Spain, Italy and Portugal; and

·                  Enhancing our suite of Enterprise products and services, and taking them into new geographical areas.

We have made significant progress on all of these elements during the year, and are on track to hit our key March 2016 targets. Highlights of our progress include:

·                  Extending our European 4G footprint to 72% population coverage, up from 32% in September 2013;

·                  Adding a further 33,000 2G and 42,000 3G sites, to deepen our existing coverage and improve voice reliability;

·                  Reaching 90% of targeted urban areas with 3G in India; and

·                  Covering an additional 3.9 million homes across Europe with our own fibre.

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These investments have already seen the customer experience improve significantly, with 88% of customers’ data sessions in Europe now at 3 Mbps or better (the level required to watch uninterrupted high-definition video), and dropped call rates in Europe falling by 34%.

Data

We have witnessed exceptional demand for data this year, whether 4G in Europe or 3G in emerging markets, with data growth totalling 80% for the full year, and accelerating every quarter in Europe. As video and music services proliferate, and data coverage widens and becomes more consistent, customers are increasingly using their smartphones and tablets for entertainment, work and social interaction.

We now provide 4G services in 18 countries, with a further four countries launched during the year. Our 4G customer base has quadrupled to 20.2 million. While progress has been rapid, still only 13% of our European customer base is on 4G, providing us with a very substantial opportunity for future growth.

With quicker network response times, better in-building penetration and higher peak speeds, 4G is stimulating significant growth in data, with usage typically doubling when customers migrate from 3G to 4G. In addition, our successful commercial approach of bundling content packages with 4G in a number of European markets is boosting data consumption further, and enabling us to introduce larger data bundles to customers. Our ability to translate this strong data demand into revenue growth will be a key driver of our financial performance in the years ahead.

In emerging markets, the data story is equally positive. In India, for example, we already have 19 million 3G customers (up from 7 million a year ago), smartphone penetration in urban areas is already 44%, and 3G data usage per customer is at similar levels to Europe. For many, their first experience of the internet will be on mobile, given the lack of fixed line infrastructure. Our rapid roll-out of 3G networks this year is generating a rapid payback, with 3G browsing revenues growing at 140% during the year.

Unified communications

We are well on the way to becoming a full service, integrated operator in our main markets. Through organic investment and acquisition, we now cover 28 million households (and thousands of businesses) across Europe with our own fibre or cable infrastructure. In addition, we can reach a further 21 million households by accessing the incumbent operators’ networks. In the 2015 financial year, 25% of our service revenue in Europe came from fixed line, compared to just 10% five years ago. We now have 11.3 million broadband customers and 9.1 million TV customers in Europe.

During the year we completed the acquisition of Ono, Spain’s number one cable operator covering 7 million homes. We made strong progress on the integration of both Ono and KDG in Germany, combining our fixed and mobile networks and beginning to migrate Vodafone broadband customers to our new infrastructure.

We are also demonstrating strong commercial momentum. We increased our European broadband customer base by over 850,000 (excluding acquisitions) during the year, with revenue trends improving through the year. In the coming weeks, we will launch our consumer broadband proposition in the UK, with TV to follow later in 2015, and as a result will be offering integrated fixed and mobile services in all of our major European markets.

Enterprise

Services to business comprise around 27% of our Group service revenue, and 32% in Europe. Vodafone has a strong position in mobile enterprise, leveraging our trusted brand and network reliability. We are increasingly using this strong platform to win more international business and move more deeply into fixed line, which is a rapidly growing trend within Enterprise as well. Half of all new proposal requests in Vodafone Global Enterprise (‘VGE’) ask for converged solutions, and fixed is now 25% of Enterprise service revenue. At the same time, through Project Spring, we are investing in strategic growth areas such as Cloud & Hosting and M2M, which promise to be significant growth drivers in the future.

VGE, which provides services to our biggest international customers, achieved revenue growth of 1.8%*, as multi-national corporations continued their trend of seeking a single provider of services across borders. In M2M, we increased the number of connections to 21.5 million from 16.1 million last year, and acquired Cobra Automotive, a provider of value-added security and telematics services to the automotive industry. M2M revenue grew 24.7%*.

Unified communications continues to be a rapidly growing trend within Enterprise. Vodafone One Net, our cloud-based integrated fixed/mobile service, now has 3.9 million users across 11 markets — up 13% year-on-year.

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Prospects for the 2016 financial year(4)

The coming year will be another very important one for execution, as we complete the Project Spring build programme and continue the integration of KDG and Ono. At the same time, we will take further measures to stabilise ARPU as usage continues to grow strongly.

Our priority is to ensure that we give customers — whether individuals or businesses, mobile or fixed — the best possible service. This is not just about providing the best coverage and connectivity, but also about making everything about being a Vodafone customer easier, clearer and more reliable. Signing a contract, adding more services, understanding or challenging a bill, seeking help and advice online, over the phone or in one of our shops: we aim to improve every aspect of the customer relationship with Vodafone.

By the end of the coming financial year we expect that the clear improvements in network performance delivered by Project Spring, combined with a more consistent customer service experience, will begin to be reflected in stronger customer satisfaction. This in turn should reduce churn and, combined with continued strong growth in data usage, stabilise average revenue per user (‘ARPU’). Although cash flow will continue to be depressed in the coming year given the high levels of investment, our intention to continue to grow dividends per share annually demonstrates our confidence in strong future cash flow generation.

We expect EBITDA to be in the range of £11.5 billion to £12.0 billion for the 2016 financial year, and free cash flow to be positive, after all capex, before M&A, spectrum and restructuring costs.

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. See page 28 for “Use of non-GAAP financial information”.

(1)         Adjusted earnings per share from continuing operations excludes the results and related tax charge of the Group’s former investment in Verizon Wireless in the prior year and the recognition of deferred tax assets in both years.

(2)         Free cash flow for the year ended 31 March 2015 excludes £336 million of restructuring costs (2014: £210 million), a £365 million UK pensions contribution payment, £359 million of Verizon Wireless tax distributions received after the completion of the disposal, £328 million of interest paid on the settlement of the Piramal option, £116 million of KDG incentive scheme payments in respect of liabilities assumed on acquisition and a £100 million (2014: £100 million) payment in respect of the Group’s historical UK tax settlement.

(3)         Revenue growth for KDG is reported using local GAAP, not Vodafone IFRS accounting policies, and is therefore not directly comparable to Vodafone’s revenue growth.

(4)         See “Guidance” on page 8.

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GROUP FINANCIAL HIGHLIGHTS

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. See page 28 for “Use of non-GAAP financial information”.

(1)         Statutory basis prepared in accordance with IFRS accounting principles, including the results of the Group’s joint ventures using the equity accounting basis and the profit contribution from Verizon Wireless to 2 September 2013 and gain on disposal as discontinued operations.

(2)         Year ended 31 March 2015 includes the recognition of £5,468 million of deferred tax assets in respect of tax losses in Luxembourg. Year ended 31 March 2014 included the recognition of a deferred tax asset in respect of tax losses in Germany (£1,916 million) and Luxembourg (£17,402 million) and the tax liability related to the rationalisation and reorganisation of our non-US assets prior to the disposal of our stake in Verizon Wireless (£2,210 million). Basic earnings per share for the year ended 31 March 2014 also includes the gain on disposal, results and related tax charge of the Group’s former investment in Verizon Wireless.

(3)         See page 28 for “Use of non-GAAP financial information” and page 35 for “Definitions of terms”.

(4)         The adjusted effective tax rate for the year ended 31 March 2014 has been restated to exclude results and related tax expense of Verizon Wireless and to show the adjusted tax rate as calculated on the same basis as the current year.

(5)         Adjusted earnings per share from continuing operations excludes the gain on disposal, results and related tax charge of the Group’s former investment in Verizon Wireless in the prior year and the recognition of deferred tax assets in both years.

(6)         Free cash flow for the year ended 31 March 2015 excludes £336 million of restructuring costs (2014: £210 million), a £365 million UK pensions contribution payment, £359 million of Verizon Wireless tax distributions received after the completion of the disposal, £328 million of interest paid on the settlement of the Piramal option, £116 million of KDG incentive scheme payments in respect of liabilities assumed on acquisition and a £100 million (2014: £100 million) payment in respect of the Group’s historical UK tax settlement.

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GUIDANCE

Please see page 28 for “Non-GAAP financial information”, page 35 for “Definitions of terms” and page 36 for “Forward-looking statements”.

Performance against 2015 financial year guidance

Based on guidance foreign exchange rates, EBITDA for the 2015 financial year was £11.7 billion, in line with the £11.6 billion to £11.9 billion range set in November 2014. On the same basis our free cash flow was £1.3 billion, in line with our positive free cash flow guidance.

2016 financial year guidance

We expect EBITDA to be in the range of £11.5 billion to £12.0 billion. We expect free cash flow to be positive after all capex, before the impact of M&A, spectrum purchases and restructuring costs. Total capex is expected to be around £8.5 billion to £9.0 billion (including Ono). In the following year, we anticipate capital intensity normalising to a level of 13-14% of annual revenue.

Dividend policy

The Board intends to grow dividends per share annually.

Assumptions

We have based guidance for the 2016 financial year on our current assessment of the global macroeconomic outlook and assume foreign exchange rates of £1:€ 1.37, £1:INR 95.2 and £1:ZAR 18.1. It excludes the impact of licences and spectrum purchases, material one-off tax-related payments, restructuring costs and any fundamental structural change to the Eurozone. It also assumes no material change to the current structure of the Group.

Actual foreign exchange rates may vary from the foreign exchange rate assumptions used. A 1% change in the euro to sterling exchange rate would impact EBITDA by £60 million and free cash flow by £10 million. A 1% change in the Indian rupee to sterling exchange rate would impact EBITDA by £10 million and would have no impact on free cash flow. A 1% change in the South African rand to sterling exchange rate would impact EBITDA by £15 million and free cash flow by £5 million.

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CONTENTS

FINANCIAL RESULTS

Group(1)

9

Revenue

Group revenue increased by 10.1% to £42.2 billion and service revenue increased 9.4% to £38.5 billion. Reported growth rates reflect the acquisitions of KDG in October 2013 and of Ono in July 2014, as well as the consolidation of Italy after we increased our ownership to 100% in February 2014.

In Europe, organic service revenue declined by 4.7%* as growing demand for 4G and data services continues to be offset by challenging competitive and macroeconomic pressures and the impact of MTR cuts.

In AMAP, organic service revenue increased by 5.8%* driven by continued growth in India, Turkey, Ghana, Qatar and Egypt, partially offset by declines in Vodacom and New Zealand.

EBITDA and operating profit

Group EBITDA increased 7.5% to £11.9 billion primarily reflecting the acquisitions of KDG and Ono. On an organic basis, EBITDA fell 6.9%* and the Group’s EBITDA margin fell 0.7 percentage points to 28.2% (or 1.8* percentage points on an organic basis), reflecting ongoing revenue declines in Europe and the growth in operating expenses as a result of the Project Spring programme, offset by operating efficiencies.

Operating profit increased to £2.0 billion from a £3.9 billion operating loss in the prior year primarily as a result of the £6.6 billion impairment charge in the year ended 31 March 2014.

Discontinued operations

On 2 September 2013 the Group announced it had reached an agreement with Verizon Communications Inc. to dispose of its US group whose principal asset was its 45% interest in Verizon Wireless. The Group ceased recognising its share of results in Verizon Wireless on 2 September 2013, and classified its investment as a held for sale asset and the results as a discontinued operation. The transaction completed on 21 February 2014.

Net financing costs

Net financing costs includes £437 million of foreign exchange gains (2014: £21 million gain), £134 million of mark to market losses (2014: £118 million gain) and in the prior year, a £99 million loss on US bond redemption. Excluding these items, net financing costs decreased by 7.4% primarily due to the impact of lower average net debt levels following the disposal of the Group’s investment in Verizon Wireless and the acquisition of Ono.

10

Taxation

The adjusted effective tax rate for the year ended 31 March 2015 was 29.4%. The rate is in line with our expectation of a high twenties tax rate. The adjusted effective tax rate includes a £185 million impact from foreign exchange losses for which we are unable to take a tax deduction. Excluding this impact the adjusted effective tax rate would be 27.2%. The adjusted effective tax rate is expected to remain in the high twenties over the medium term.

This tax rate does not include the impact of the recognition of an additional £3,341 million deferred tax asset in respect of the Group’s historical tax losses in Luxembourg. The losses have been recognised as a consequence of the financing arrangements for the acquisition of Ono. The rate also excludes the deferred tax impact of the use of Luxembourg losses in the year (£439 million) and an additional asset in the year of £2,127 million arising from the revaluation of investments based upon the local GAAP financial statements.

The adjusted effective tax rate for the year ended 31 March 2014 has been restated to exclude the results and related tax expense of Verizon Wireless and to show the adjusted tax rate as calculated on the same basis as the current year. The rate excludes the recognition of an additional deferred tax asset in respect of the Group’s historical tax losses in Germany of £1,916 million and Luxembourg of £17,402 million, the US tax liability of £2,210 million relating to the rationalisation and reorganisation of our non-US assets prior to the disposal of our interest in Verizon Wireless and excludes the deferred tax impact of the use of Luxembourg losses in the year (£113 million).

11

Earnings per share

Adjusted earnings per share from continuing operations, which excludes the results and related tax charge of the Group’s former investment in Verizon Wireless in the prior year and the recognition of deferred tax assets in both years, was 5.55 pence, a decrease of 27.8% year-on-year, reflecting the Group’s lower adjusted operating profit.

Basic earnings per share decreased to 21.75 pence (2014: 223.84 pence) due to the prior year impact of the disposal of the Group’s investment in Verizon Wireless and the recognition of a higher deferred tax assets in the prior year compared to the current year, as described above.

Earnings per share

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Europe