<strong>Vodafone</strong> – Financials Notes to <strong>the</strong> Consolidated Financial Statements continued 3. Segment analysis The Group has a single group of related services and products, being <strong>the</strong> supply of communications services and products. Segment information is provided on <strong>the</strong> basis of geographic areas, being <strong>the</strong> basis on which <strong>the</strong> Group manages its world wide interests. Revenue is attributed to a country or region based on <strong>the</strong> location of <strong>the</strong> Group company <strong>report</strong>ing <strong>the</strong> revenue. Inter-segment sales are charged at arms length prices. The Group uses adjusted operating profit for internal performance analysis and, <strong>the</strong>refore, <strong>the</strong> Group’s measure of segment profit is adjusted operating profit, being operating profit excluding non-operating income of associates, impairment losses and o<strong>the</strong>r income and expense. During <strong>the</strong> year ended 31 March 2008, <strong>the</strong> Group early adopted IFRS 8 “Operating Segments”. The Group also changed its organisation structure such that <strong>the</strong> Group’s associated undertaking in France, SFR, is now managed within <strong>the</strong> Europe region and <strong>report</strong>ed within O<strong>the</strong>r Europe. As a result, prior period disclosures have been amended to conform to <strong>the</strong> current year presentation. Segment Common Intra-region Regional Inter-region Group Adjusted operating revenue functions revenue revenue revenue revenue profit £m £m £m £m £m £m £m 31 March 2008 Germany 5,397 (128) 5,269 (10) 5,259 1,265 Italy 4,435 (33) 4,402 (6) 4,396 1,573 Spain 5,063 (96) 4,967 (4) 4,963 1,282 UK 5,424 (46) 5,378 (10) 5,368 431 Arcor 1,632 (86) 1,546 (1) 1,545 225 O<strong>the</strong>r Europe (1) 4,583 (64) 4,519 (3) 4,516 1,430 Europe 26,534 (453) 26,081 (34) 26,047 6,206 Eastern Europe 3,154 – 3,154 (35) 3,119 332 Middle East, Africa & Asia (2) 4,547 (1) 4,546 (24) 4,522 769 Pacific 1,645 – 1,645 (14) 1,631 181 Associates – US – – – – – 2,447 EMAPA 9,346 (1) 9,345 (73) 9,272 3,729 Common functions (3) – 170 – 170 (11) 159 140 Group 35,880 170 (454) 35,596 (118) 35,478 10,075 31 March 2007 Germany 5,443 (123) 5,320 (9) 5,311 1,354 Italy 4,245 (44) 4,201 (5) 4,196 1,575 Spain 4,500 (106) 4,394 (3) 4,391 1,100 UK 5,124 (54) 5,070 (9) 5,061 511 Arcor 1,441 (27) 1,414 – 1,414 171 O<strong>the</strong>r Europe (1) 4,275 (82) 4,193 (4) 4,189 1,448 Europe 25,028 (436) 24,592 (30) 24,562 6,159 Eastern Europe 2,477 – 2,477 (31) 2,446 184 Middle East, Africa & Asia (2) 2,565 – 2,565 (9) 2,556 694 Pacific 1,399 – 1,399 (11) 1,388 159 Associates – US – – – – – 2,077 Associates – O<strong>the</strong>r – – – – – 130 EMAPA 6,441 – 6,441 (51) 6,390 3,244 Common functions (3) – 168 – 168 (16) 152 128 Group 31,469 168 (436) 31,201 (97) 31,104 9,531 31 March 2006 Germany 5,754 (143) 5,611 (9) 5,602 1,496 Italy 4,363 (39) 4,324 (4) 4,320 1,672 Spain 3,995 (100) 3,895 (2) 3,893 968 UK 5,048 (50) 4,998 (10) 4,988 698 Arcor 1,320 (34) 1,286 – 1,286 139 O<strong>the</strong>r Europe (1) 4,697 (78) 4,619 (3) 4,616 1,452 Europe 25,177 (444) 24,733 (28) 24,705 6,425 Eastern Europe 1,435 – 1,435 (14) 1,421 176 Middle East, Africa & Asia (2) 1,784 – 1,784 (15) 1,769 523 Pacific 1,335 – 1,335 (14) 1,321 140 Associates – US – – – – – 1,732 Associates – O<strong>the</strong>r – – – – – 192 EMAPA 4,554 – 4,554 (43) 4,511 2,763 Common functions (3) – 145 – 145 (11) 134 211 Group 29,731 145 (444) 29,432 (82) 29,350 9,399 Notes: (1) Adjusted operating profit includes £425 million (2007: £517 million; 2006: £479 million), representing <strong>the</strong> Group’s share of results in associated undertakings. (2) Adjusted operating profit includes £2 million (2007: £nil; 2006: £nil), representing <strong>the</strong> Group’s share of results in associated undertakings. (3) Adjusted operating profit includes £2 million (2007: £1 million; 2006: £8 million), representing <strong>the</strong> Group’s share of results in associated undertakings. 96 <strong>Vodafone</strong> Group Plc Annual Report 2008
A reconciliation of adjusted operating profit to operating profit/(loss) is shown below. For a reconciliation of operating profit/(loss) to profit/(loss) before taxation, see <strong>the</strong> Consolidated Income Statement on page 88. 2008 2007 2006 £m £m £m Adjusted operating profit 10,075 9,531 9,399 Impairment losses – (11,600) (23,515) O<strong>the</strong>r items (28) 505 32 Operating profit/(loss) 10,047 (1,564) (14,084) Capitalised O<strong>the</strong>r expenditure Depreciation Non-current fixed asset on intangible and Impairment assets (1) additions (2) assets amortisation of goodwill £m £m £m £m £m 31 March 2008 Germany 18,267 392 14 1,067 – Italy 16,215 411 1 582 – Spain 14,589 533 – 500 – UK 7,930 465 – 973 – Arcor 862 221 – 100 – O<strong>the</strong>r Europe 8,303 469 11 616 – Europe 66,166 2,491 26 3,838 – Eastern Europe 6,879 633 – 665 – Middle East, Africa & Asia 11,958 1,554 7 954 – Pacific 1,346 212 – 245 – EMAPA 20,183 2,399 7 1,864 – Common functions 717 185 8 207 – Group 87,066 5,075 41 5,909 – 31 March 2007 Germany 16,233 425 – 1,063 6,700 Italy 13,722 421 26 556 4,900 Spain 12,289 547 – 449 – UK 8,483 661 – 930 – Arcor 627 189 – 144 – O<strong>the</strong>r Europe 7,187 489 6 586 – Europe 58,541 2,732 32 3,728 11,600 Eastern Europe 6,235 435 – 349 – Middle East, Africa & Asia 3,079 574 276 272 – Pacific 1,249 251 – 194 – EMAPA 10,563 1,260 276 815 – Common functions 612 216 – 568 – Group 69,716 4,208 308 5,111 11,600 31 March 2006 Germany 592 – 1,167 19,400 Italy 541 1 588 3,600 Spain 502 – 395 – UK 665 11 924 – Arcor 129 – 140 – O<strong>the</strong>r Europe 511 4 645 515 Europe 2,940 16 3,859 23,515 Eastern Europe 280 – 231 – Middle East, Africa & Asia 426 – 216 – Pacific 247 – 209 – EMAPA 953 – 656 – Common functions 112 – 189 – Group 4,005 16 4,704 23,515 Notes: (1) Includes goodwill, o<strong>the</strong>r intangible assets and property, plant and equipment. (2) Includes additions to property, plant and equipment and computer software, <strong>report</strong>ed within intangible assets. <strong>Vodafone</strong> Group Plc Annual Report 2008 97