Interim Results - Part 3

Vodafone Group Plc
18 November 2003

VODAFONE GROUP PLC 
INTERIM RESULTS
PART 3

In Egypt, turnover increased by 52% when measured in local currency driven
mainly by strong customer and ARPU growth. Data revenue grew by 66% when
measured in local currency as a result of the increase in popularity of SMS
messaging and the take up of Vodafone live! since its launch in March 2003. The
customer base improved by 14% over the six months ended 30 September 2003 to
2,581,000. Sterling results were, however, affected by the weakness of the
Egyptian Pound against sterling.

The Group has reached a preliminary understanding with Telecom Egypt for the
proposed disposal of a 16.9% stake in Vodafone Egypt, reducing its stake to
50.1%. The remaining 33.0% stake is currently owned by minority interests. It is
planned that Vodafone Egypt will list on the Cairo and Alexandria Stock Exchange
before the year end.

The Group's associated undertakings in the region reported greatly improved
operating performance for the period. This was a result of strong customer
growth of 8.2% in Vodacom, in which the Group increased its stake from 31.5% to
35% in December 2002, and 37.1% growth in Safaricom, in which the Group
increased its stake to an effective 35% in January 2003.

Other Operations

Financial highlights                            Six months to
                                                 30 September
                                                2003       2002       % change
                                                  £m         £m

Turnover                 Europe                  449        441              2
                         Asia Pacific            897      1,017            (12)
                                              ------     ------
                                               1,346      1,458             (8)
                                              ------     ------
Total Group operating    Europe                  (41)       (94)           (56)
profit/(loss)(1)         Asia Pacific             79         59             34
                                              ------     ------
                                                  38        (35)             -
                                              ------     ------

Proportionate EBITDA     Europe                 11.0%      (0.5%)
margin(2)                Asia Pacific           29.4%      26.3%

(1)  before goodwill amortisation
(2)  see pages 31 and 32 for details of proportionate turnover and EBITDA

The Group's other operations during the period mainly comprised interests in
fixed line telecommunications businesses, including Arcor in Germany, Cegetel in
France and Japan Telecom, which has subsequently been disposed of, and Vodafone
Information Systems, an IT and data services business based in Germany.

In Europe, the German fixed line market continues to be dominated by intensive
competition, principally driven by the market leader. Notwithstanding this,
Arcor furthered its position as the main competitor to the dominant fixed line
operator, increasing its contract voice customers by 268,000 to 2.9 million,
including a rise in its ISDN customers by 44% to 284,000 since 31 March 2003.
Activity levels improved and consequently traffic volume increased by 31% to
14.8 billion minutes.

Excluding the results of the Telematik business, which was disposed of in June
2002, turnover increased by 12%, measured in local currency, due to customer
growth partially offset by tariff decreases caused by the competitive market.
This revenue growth, combined with the disposal of the lower margin Telematik
business, resulted in a significantly improved EBITDA margin.

Cegetel has the second largest residential customer base in France and made a
positive contribution to operating profit before goodwill amortisation compared
to a loss in the six months ended 30 September 2002. The Group increased its
stake in Cegetel from 15% to 30% in the second half of the previous financial
year.

Since 30 September 2003, the Group's 66.7% controlled entity Japan Telecom
Holdings Co., Ltd. has completed the disposal of its 100% interest in Japan
Telecom. Receipts resulting from this transaction are Y261.3 billion (£1.4
billion), comprising Y228.8 billion (£1.2 billion) of cash and Y32.5 billion
(£0.2 billion) of transferable redeemable preferred equity. The Group ceased
consolidating the results of Japan Telecom from 1 October 2003.

Global Services

The Group's vision is to be the world's mobile communications leader. A major
focus of the Group's strategy is to offer innovative services within
Vodafone-branded, end-to-end customer propositions which utilise the Group's
global footprint and global brand to offer customers a unique mobile experience
with seamless international services.

To achieve this objective requires a highly focused, increasingly integrated and
operationally efficient business providing the best products and services across
the greatest number of markets. As a result, the Group established two new
central functions in July 2003, Group Marketing and Group Technology and
Business Integration.

Group Marketing

Group Marketing provides leadership and co-ordination across the full range of
marketing and commercial activities including product, content, brand management
and development, Partner Networks and global accounts. These activities include
the design and rollout of segmented service propositions to consumer and
business customers such as Vodafone live! and the Group's business offerings.

Vodafone live!

Vodafone live!, which was launched across Europe in October 2002, is the Group's
first global offering aimed at specific market segments. Vodafone live!
customers can take and send picture messages, download and play the latest
mobile games and polyphonic ringtones, send and receive voice, text and emails,
instant message with friends and gain access to certain information services.
Since launch, the Group has connected more than 3 million active Vodafone live!
customers across the 15 countries in which the service is now available.

The range of services available on Vodafone live! continues to be improved,
integrating the most up to date services and technologies as well as broadening
the range of handsets available. During the period, video and audio streaming
services, on existing 2.5G technology, were launched in Italy, Germany, Portugal
and the Netherlands.

The Group has recently acquired the mobile rights in 12 countries for the UEFA
Champions League for the three successive seasons ending in 2005/6 and announced
exclusive agreements with Eidos, for content based on the highly successful Tomb
Raider series, and THQ, for 'The Simpsons' branded content. Games downloads,
picture messaging and other content services are proving particularly popular
and generating extra revenue.

On 29 October 2003, SFR, the Group's French associated undertaking, launched
Vodafone live!, and on 13 November 2003, Swisscom Mobile launched this service
in Switzerland.

With the rebranding of J-Phone Vodafone to the single Vodafone brand on 1
October 2003, Vodafone Japan's J-Sky service, which had 12.6 million customers
at 30 September 2003, has been rebranded as Vodafone live!.

Business services

Vodafone Mobile Connect Card, a high speed data card enabling customers to
access their normal business applications when out of the office, is aimed at
all business users, from large corporate customers to those in the small and
medium sized enterprise sector, and is marketed and sold by the Group as well as
partner channels for leading personal computer brands. By 30 September 2003, the
Group had 127,000 active Vodafone Mobile Connect Card customers. An upgraded
card, incorporating Wireless LAN technology, is expected to be launched by the
beginning of 2004 and a 3G capable card in due course.

On 1 August 2003, the Group and Verizon Wireless announced their intention to
develop a dual branded 'Verizon Vodafone' laptop data card service. The data
card will be based on the Vodafone Mobile Connect Card, which Verizon Wireless
will develop and market under licence from Vodafone. The service will enable
Verizon Wireless and Vodafone business customers to seamlessly access their
e-mail, the Internet and corporate applications on their laptops within
Vodafone's territories and Verizon Wireless' network in the US, with customers
experiencing the same service environment when travelling abroad.

During the period, the Group commenced rollout of Vodafone Wireless Office
across its controlled networks. Vodafone Wireless Office is a single handset
solution delivering all telephony needs, removing the need for fixed line
phones. The service enables corporate customers to work away from the office,
manage priority calls and utilise services such as SMS and Voicemail, creating
opportunities to work more flexibly and improve productivity.

On 3 November 2003, the Group announced the launch of its global Blackberry from
Vodafone offering, which delivers phone, email, SMS, browser and organiser
functions in a single mobile device.

Brand

The strength of the Vodafone brand continues to improve, with brand awareness
and preference continuing to grow in countries where it has been launched. The
Group's continued sponsorship of Manchester United Football Club and the Ferrari
Formula 1 team, supported by individual sponsorship contracts and combined with
the continued brand rollout and other marketing communications programmes, have
significantly improved awareness and perception of the brand.

Migration to the single Vodafone brand in the Group's subsidiary companies has
been completed, with Vodafone Omnitel in Italy and J-Phone Vodafone in Japan
migrating to the single brand in May 2003 and October 2003 respectively. A
consistently implemented brand across the Group's markets greatly assisted the
execution of the Vodafone live! campaign, with Vodafone live! itself
contributing significantly to the brand in terms of brand equity and
positioning.

Partner Network Strategy

The Group's Partner Network strategy is becoming increasingly successful in
enabling the Group to implement its global services in new territories, extend
its brand reach into new markets and create additional revenue without the need
for equity investment.

The Group now has Partner Network Agreements covering 10 countries, an increase
of three countries from 31 March 2003. In the period, agreements have been
signed with Og-Vodafone (formerly Islandssimi hf), in Iceland and Bite GSM in
Lithuania. In addition, since 30 September 2003, an agreement has been signed
with M1 in Singapore.

Other business initiatives

On 13 October 2003, the Group announced with Microsoft an intention to use
mobile SIM based authentication and billing to help create open Web services
standards that will enable new business opportunities for application developers
and mobile network operators and deliver new integrated services for customers
across fixed and mobile networks.

On 22 October 2003, the Group announced a joint initiative with Oracle to offer
enterprise customers integrated mobility solutions enabling mobile access to
business systems.

Group Technology and Business Integration

Group Technology and Business Integration underpins the Group strategy by
providing underlying terminal and platform technologies on a global basis.

Technology

A key focus of Group Technology activities in the current period has been the
management and control of Group wide projects in relation to the continued
rollout and enhancement of Vodafone live! and the Group's business offerings.
This work spans the continued development of technical specifications, creation
and management of global contracts with suppliers as well as testing of
terminals.

Together Vodafone live! and the Group's business offerings lay the foundations
for the Group's next stage of growth, through creating demand for new data
services. Both currently use 2.5G technology and will be upgraded in due course
to 3G technology to enable faster download speeds and improved quality, which in
turn will enhance customer experience and productivity.

The Group expects to commence friendly user trials shortly and then to start
offering some 3G-powered services around the beginning of the next financial 
year when the first commercially viable handsets are expected to become 
available.  The Group currently anticipates significant volumes of commercially
viable handsets to become available from the middle of the next financial year.

Business Integration

Following the successful Vodafone brand migration and the creation of Group wide
product platforms such as Vodafone live! and Vodafone Mobile Connect Card, the
Group is now entering the phase of creating Group wide business processes.

The Group's business integration programme is named 'One Vodafone' and its focus
is to further leverage the scale and scope of the Vodafone footprint.

A first set of initiatives covering key areas of the business such as network
development and operations, information technology and supply chain management
is underway to identify business integration opportunities. In parallel, the
development of future operating models for these areas should create the
necessary structures for realising opportunities to build operational excellence
across the Group. This programme should enable the Group to improve its
time-to-market for new products and its strategic cost position.

Corporate Social Responsibility

The Group reports in detail on its approach to Corporate Social Responsibility
('CSR') through annual CSR reports. Reports for the years ending 31 March 2001,
2002 and 2003 are available through the Group's web-site www.vodafone.com. Since
1 April 2003, the Group's focus has been on strengthening its internal
performance reporting on CSR as well as continuing to rollout a series of
practical initiatives relating to environmental and social issues. The Group is
moving forward as planned against the commitments set out in its 2003 CSR
Report.

Real progress is being made in a number of areas. This includes the launch of
further handset recycling programmes and further development on working with key
suppliers on environmental and social matters. The Group has launched new
Foundations this financial year in Ireland and Hungary. Vodafone Greece has
become the latest operating company to prepare a CSR report for its national
market.

The Group has retained its position in both the FTSE4Good and Dow Jones
Sustainability indices.

FINANCIAL UPDATE

PROFIT AND LOSS ACCOUNT

Total Group operating profit/loss

Before goodwill amortisation and exceptional items, total Group operating profit
increased 23% to £5,722 million in the six months ended 30 September 2003 from
£4,640 million in the six months ended 30 September 2002.

After goodwill amortisation and exceptional items, the Group reported a total
operating loss of £1,578 million, compared with a loss of £2,197 million for the
comparable period. The £619 million reduction in the total operating loss arose
as a result of a £351 million credit in respect of exceptional items in the six
months to September 2003 and a £1,082 million increase in operating profit
before goodwill amortisation and exceptional items, partly offset by a £814
million increase in the goodwill amortisation charge. The charges for goodwill
amortisation, which do not affect the cash flows of the Group or the ability of
the Company to pay dividends, increased by 12% to £7,651 million, principally as
a result of the impact of foreign exchange movements. Translating at prior year
rates would have reduced reported growth in the goodwill amortisation charge to
3% which arose due to a full year's charge for prior year acquisitions and
charges in respect of current year acquisitions.

Exceptional items

Exceptional operating income for the six months ended 30 September 2003
comprises £351 million of expected recoveries and provision releases in relation
to a contribution tax levy on Vodafone Italy that is not now expected to be
payable. There were no exceptional operating items for the six months ended 30
September 2002.

Exceptional non-operating charges for the period of £58 million principally
relate to a loss on disposal of the Japan Telecom fixed line operations, which
has been partially offset by a profit on disposal of Grupo Iusacell. In the
comparable period exceptional non-operating income of £267 million mainly
represents a profit on disposal of fixed asset investments, principally relating
to the disposal of the Group's interest in Bergemann GmbH.

Interest

Total Group net interest payable, including the Group's share of the net
interest expense of joint ventures and associated undertakings, decreased from
£390 million for the six months ended 30 September 2002 to £356 million for the
six months ended 30 September 2003. The Group interest cost increased to £251
million from £239 million for the comparable period and was covered 27.4 times
by operating cash flow plus dividends received from joint ventures and
associated undertakings. The Group's share of the net interest expense of joint
ventures and associated undertakings decreased from £151 million to £105
million, principally as a result of the sale of the Group's stake in Grupo
Iusacell.

Taxation

The effective tax rate before goodwill amortisation and exceptional items for
the period to 30 September 2003, which is based on the expected effective tax
rate for the year ending 31 March 2004, was 30.9% compared to 35.5% for the year
ended 31 March 2003. The rate has fallen due to further benefits arising out of
the restructuring of the Group's Italian operations, a fall in the Group's
weighted average tax rate, calculated by reference to local statutory taxation
rates and accounting profits, the resolution of certain outstanding prior year
issues and benefits from other tax incentives. These benefits outweighed the
absence of the one-off benefit arising from the restructuring of the German
group last year.  Next year's effective tax rate is expected to be higher than
this year's subject to the resolution of open issues and changes in tax 
legislation.  Please see 'Forward-Looking Statements' on page 34.

Earnings per share

Earnings per share, before goodwill amortisation and exceptional items,
increased 46% from 3.28p to 4.78p for the period to 30 September 2003.

Basic loss per share, after goodwill amortisation and exceptional items,
improved from a loss per share of 6.36p to a loss per share of 6.24p for the
period to 30 September 2003. The loss per share of 6.24p includes a charge of
11.22p per share (30 September 2002: 10.03p per share) in relation to the
amortisation of goodwill and a credit of 0.20p per share (30 September 2002:
0.39p per share) in relation to exceptional items.

Dividends

Vodafone Group Plc has historically paid dividends semi-annually, with the
regular interim dividend in respect of the first six months of the financial
year payable in February. The directors expect that the Company will continue to
pay dividends semi-annually.

In considering the level of dividends, the Board takes account of the outlook
for earnings growth, operating cash flow generation, capital expenditure
requirements, acquisitions and divestments, together with the possibilities for
debt reductions and share repurchases. Accordingly, the directors have announced
an interim dividend of 0.9535 pence per share, representing a 20% increase over
last year's interim dividend. The Board expects progressively to increase the
payout ratio in the future.

The ex-dividend date is 26 November 2003 (25 November 2003 for ADR holders), the
record date for the interim dividend is 28 November 2003 and the dividend is
payable on 6 February 2004.

Share repurchase

The Board has reviewed the anticipated cash requirements and gearing of the
Group. In order to provide increased cash returns to shareholders the directors
have decided to introduce a share repurchase programme. £2.5 billion has been
allocated to this programme. Shares will be purchased on market on the London
Stock Exchange in accordance with shareholder approval obtained at this year's
Annual General Meeting ('AGM') in July and which expires at the earlier of the
conclusion of the Group's AGM in 2004 or 30 October 2004. The maximum share
price payable for any shares will be no greater than 105% of the average of the
middle market closing price of the Company's share price on the London Stock
Exchange for the five business days immediately preceding the trade date on
which any shares are purchased. Purchases will only be made if accretive to
adjusted basic earnings per share. In line with the expected introduction of the
Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003 on 1
December 2003, it is anticipated that any shares repurchased after this date
will be held in treasury.

CASH FLOWS AND FUNDING

The growth in operating profit before goodwill amortisation and exceptional
items in the six month period ended 30 September 2003 increased operating cash
flows by 7% over the comparable period to £6,081 million.

During the six months ended 30 September 2003, the Group increased its operating
free cash flow by 32% to £3,877 million and generated £4,641 million of free
cash flow, as analysed below:

                                                   Six months to
                                                    30 September
                                                 2003          2002   % change
                                                   £m            £m

Net cash inflow from operating
activities (Note 7)                             6,081         5,676          7

Purchase of intangible fixed assets                (2)          (59)
Purchase of tangible fixed assets              (2,255)       (2,705)
Disposal of tangible fixed assets                  53            35
                                               -------       -------
Net capital expenditure on intangible and
tangible fixed assets                          (2,204)       (2,729)       (19)
                                               -------       -------
Operating free cash flow                        3,877         2,947         32
Dividends received from joint ventures
and associated undertakings(1)                    805           314        156
Taxation                                         (283)         (154)        84
Interest on group debt(2)                         257          (211)
Dividends from investments                         25            19
Dividends paid to minority interests              (40)          (37)
                                               -------       -------
Net cash inflow/(outflow) for returns on
investments and servicing of finance              242          (229)         -
                                               -------       -------
Free cash flow                                  4,641         2,878         61
                                               =======       =======

(1) Six months ended 30 September 2003 includes £324 million (2002: £250
    million) from Verizon Wireless and £370 million (2002: £nil) from the
    Group's direct and indirect interests in Cegetel and SFR.
(2) Six months ended 30 September 2003 includes £572 million (2002: £60 million)
    of cash receipts from the closure of financial instruments related to 
    interest rate management activities, including those in connection with
    bond repurchases in subsidiaries.

The Group also invested a net £997 million in merger and acquisition activities
in the period and an analysis of the significant transactions is shown below:

                                                                     Impact on
                                                                      net debt
                                                                     £ million
Significant stake increases in subsidiary companies:
Vodafone Portugal from 94.4% to 100% including £0.3 billion to
settle consideration payable in relation to the public offer in
the previous financial year                                                410

Vodafone Netherlands from 97.2% to 99.8%                                   142

Other:
The Singlepoint Group                                                      417
Other acquisitions                                                         133
Disposal of subsidiary and associated undertakings and 
trade investments                                                         (105)
                                                                         -------
                                                                           997
                                                                         =======

Group consolidated net debt at 30 September 2003 decreased to £10,906 million,
from £13,839 million at 31 March 2003, as a result of the significant level of
free cash flow generated and after merger and acquisition activity, Group
dividend payments of £612 million and £95 million of foreign exchange movements.
This represented approximately 13% of the Group's market capitalisation at 30
September 2003 compared with 18% at 31 March 2003. A further analysis of net
debt can be found in Note 8 of the interim results.

The Group remains committed to maintaining a solid credit profile, as
demonstrated by its stable single A credit ratings. On 21 August 2003, Standard
& Poor's re-affirmed the Group's stable outlook and long term credit ratings at
A and short term credit ratings at A1. On 7 March 2003, Moody's affirmed the
Group's stable outlook and long term credit ratings at A2 and short term credit
ratings at P1. Fitch affirmed Vodafone's stable outlook and long term credit
ratings at A and short term credit ratings at F1 on 16 October 2002.

The Group's credit ratings enable it to have access to a wide range of debt
finance, including commercial paper, bonds and committed bank facilities. The
Group currently has US and euro commercial paper programmes of US$15 billion and
£5 billion, respectively, which are used to meet short-term liquidity
requirements. The commercial paper facilities are supported by US$10.4 billion
of committed bank facilities, which replace the Group's previous US$11.025
billion committed bank facility. The facilities are comprised of a US$5.5
billion Revolving Credit Facility, which matures in June 2004 but can be
extended for one year, and a US$4.9 billion Revolving Credit Facility which
matures in June 2006. As at 30 September 2003 no amounts had been drawn under
either facility. The Group also has a JPY225 billion committed bank facility
which was fully drawn on 30 September 2003 and matures in January 2007. At 30
September 2003, the Group had approximately £13.4 billion (pounds sterling
equivalent) of capital market debt in issue, with maturity dates from October
2003 to January 2032 and £2.1 billion (pounds sterling equivalent) of term
funding, including the JPY225 billion bank facility.

SIGNIFICANT TRANSACTIONS

The Group undertook the following significant transactions in the six months to
30 September 2003:

Acquisitions

The Group increased its interests in a number of subsidiary companies in the
period. These were:

                                       % interest at            % interest at
                                       31 March 2003        30 September 2003
Vodafone Portugal                               94.4                    100.0
Vodafone Netherlands                            97.2                     99.8
Vodafone Greece                                 64.0                     65.4
Vodafone Malta                                  80.0                    100.0
Vodafone Albania                                82.4                     83.0
Vodafone Hungary                                83.8                     87.9
Vodafone Egypt                                  60.0                     67.0

On 19 September 2003, the Company's £155 million cash offer for the UK service
provider Project Telecom plc was declared unconditional.

On 22 September 2003, the Group's wholly owned subsidiary, Vodafone UK,
completed the acquisition of the Singlepoint Group for a cash consideration of
£417 million.

Disposals

The Group completed the disposals of its interests in its Indian and Mexican
associates, RPG Cellular and Grupo Iusacell, during the period.

SUBSEQUENT EVENTS

On 14 October 2003, the Group and Vivendi Universal ('Vivendi') announced a
number of agreements in principle designed to further improve the performance of
Cegetel Groupe ('Cegetel') and optimise the cash flows between Cegetel and its
shareholders. These agreements cover:

• increased co-operation in relation to the development and roll out of new
  products and services, including Vodafone live!, and operational synergies,
  including procurement;
• the simplification of the legal structure of Cegetel;
• the payment of quarterly dividends and the ability for Vivendi to access up to
  €250m through a cash pooling agreement as advances on quarterly dividends
  payable; and,
• the merger of Cegetel's fixed line business with Telecom Developpement.

On 14 November 2003 Japan Telecom Holdings Co., Ltd. completed the disposal of
its fixed line business.










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