Contents

Introduction.................................................................................................................................................3
Company Background..............................................................................................................................3
Key Attractions........................................................................................................................................3
Five-Year Trend........................................................................................................................................4
Vodafone’s Revenue Trend for last 5 years.............................................................................................4
Standard Deviation..................................................................................................................................4
Revenues by Geographical Location....................................................................................................5
Exchange Rate Risks....................................................................................................................................6
Impact.....................................................................................................................................................6
Political Risk.................................................................................................................................................6
Impact.....................................................................................................................................................7
risk management strategy...........................................................................................................................7
Conclusion...................................................................................................................................................8
References:................................................................................................................................................10
INTRODUCTION
To determine the Risk that significant changes represent to the company, this study will examine
the 5-year revenue patterns of Vodafone Group Plc by geographic region and business category.
To assess the effectiveness of the company's risk management strategies and the impact of its
regulations on the company's business, Vodafone also monitors its political Risk and exchange
rate risks.

COMPANY BACKGROUND
An organization known as Vodafone is a "multinational British telecommunications" company.
The business operates in Europe, Oceania, and Africa, with its registered office and headquarters
in London. Mobile network provider Vodafone Group Plc. is based in Newbury, Berkshire,
England. It is the top mobile telecommunications firm globally, having mobile activities in 25
different countries, more than 260 million consumers worldwide, 38 partner networks, and a £31
billion revenue in 2007. Nearly every continent has a Vodafone network, including Europe, the
Middle East, Africa, Asia, the Pacific, and the United States. The company's name, "Vodafone,"
is derived from the words "voice data fone," and was chosen to "represent the offering of voice
and data services over mobile phones." The company's mission is to lead communications in a
more connected society. To accomplish so, Vodafone provides a wide range of cutting-edge
services in addition to the essential telecommunications services (calls and SMS4), including
Vodafone Citizenship allows consumers to "take there own domestic import tax internationally,"
providing more price discovery and assurance to customers while using roaming services
internationally.

KEY ATTRACTIONS
Using 5G, Big Data and cloud technology are revolutionizing the wireless industry. The
Telecommunication Market had a value of USD 1,638.78 Million in 2021, and it is anticipated to
reach a value of USD 2,346.69 Billion by 2028, with a CAGR of 4.95% over the forecast period
(2022–2028). Vodafone saw this as an opportunity to invest abroad, broaden its product offering,
and satisfy global demand. Following this new foreign direct investment (FDI) in India by
Vodafone Idea (Vi) of up to INR 15 billion in 2021 has been authorised by the telecoms
department and will shortly be put into effect. Vodafone benefits from the booming business
environment brought on by foreign direct investment. As a social market economy, Spain's
economy is quite advanced. With this in mind, Vodafone has decided to set up the nerve centre
for its first global data platform in Spain, attracting foreign direct investment from a total of
eleven different nations. There will be an initial investment of 225 million Euros spread out over
the first five years, and it is expected that this would yield substantial financial returns for
Vodafone. The taxation policy and the regulatory framework are two separate facets of this. For
instance, the United States offers an appealing alternative to countries with stricter regulations
for foreign direct investment. Vodafone may find it financially advantageous to open offices in
countries with relatively low corporate taxes, such as Hungary. Vodafone India Services Pvt Ltd
(VISPL) recently triumphed in a $690 million tax dispute against the nation's income tax
authority.

FIVE-YEAR TREND

VODAFONE’S REVENUE TREND FOR LAST 5 YEARS

Revenue
70000
60000
50000
40000 Revenue
30000
20000
10000
0
2018 2019 2020 2021 2022

Years Revenue Trend

2018 $61785.75 -
2019 $50565.23 81.83%
2020 $50011.09 98.90%
2021 $51168.91 102.32%
2022 $52986.75 103.55%

Globally, Vodafone's revenue has increased during the preceding five years. The roughly $900
million boost in sales in 2021 was particularly startling. In addition, Vodafone outperformed
Telecom (79.5) and O2 (79.5) by receiving an 80.7 on a scale of 100 for Voice App Experience
(78.5). In 2021, Vodafone will generate more than 30% of the world's revenue. In other terms,
the business is highly vulnerable to changes in the market. As of June 30, 2021, Vodafone
Report indicates reporting a maximum of 272.401 million company wireless connections, up
from over 265 million the previous year. Of this total, 108.181 million were attributed to its
European businesses, up from 107.9 million in June 2020. The company had 24.738 million
fixed broadband users overall at the end of the quarter, a slight rise from the previous year.

STANDARD DEVIATION
X X-X (X-X)^2
61785.75 8482.204 71947,784.6976
50565.23 -2738.546 7499634.1941

50011.09 -3292.456 10840266.5119

51168.91 -2134.636 4556670.8525

52986.75 -316.796 100359.7056

X= 61785.75+50565.23+50011.09+51168.91+52986.75/ 5

=266517.73/5

=53303.546

s= √94944715.9617/5

s= √18988943.19234

s= 5357.63

Revenues by Geographical Location

As we can see in 2022, Germany was Vodafone's most profitable market, with sales of almost 13 billion
euros. With projected revenue of 6.59 billion euros in 2022, the United Kingdom (UK) is Vodafone's
second largest market. This has lead Vodafone to invest further through FDI in Germany.
By the end of the calendar year 2022, Vodafone Germany will have invested approximately €2 billion mo
re in Gigabit ultrafast fibre broadband services, which is expected to provide around 13.7 million new gig
abit connections to German consumers and businesses.
EXCHANGE RATE RISKS
Multinational corporations are vulnerable to fluctuations in currency behaviour and foreign
exchange rates due to their global activities, which can significantly affect their net earnings.
Since Vodafone is a multinational company with operations in nearly thirty nations, it is
constantly subject to monetary system risks. As a result, foreign exchange rate fluctuations are
always considered when formulating strategic decisions and assessing the company's financial
situation. For instance, Vodafone had a net loss of £4.1 million in 2014 due to unfavourable
exchange rates. In reaction to adverse economic market conditions, the company uses several
derivative financial products, including foreign exchange agreements and pass interest rate
swaps, to control the risks. As the relationship between the United Kingdom and the European
Union deteriorated in 2015, Vodafone Group Plc abandoned the pound and began reporting its
financial results in euros in 2016. In July 2022, however, the euro's value versus the dollar
reached a 20-year low, dipping below parity. The persistent devaluation of the euro has
repercussions for the economy as a whole. This raises the company's risk when converting
foreign-currency revenues from USD to Euro. Euro has also declined against the Indian Rupee in
the recent days reaching the lowest of around 79.3 INR in September 2022, exposing the
company further to exchange rate risks.

IMPACT
Due to the volatility in earnings per share concerning the pound, these risks currently have
applicable repercussions for Vodafone. The conversion of financial statements into pounds
impacted the balance sheet and cash flow. However, such vulnerabilities could not be protected
against. Unmodified profitability may have an effect on earnings. The primary ratio that is
considered by credit rating organizations will change as a result of changes in the overall debt to
earnings ratio. The vulnerability to transactions raised costs and uncertainty.

POLITICAL RISK
In a given nation or market, Vodafone Group Plc's long-term income is extremely vulnerable to a
number of variables, many of which are greatly influenced by political difficulties. Due to its
participation in wireless communications in more than a dozen countries, Vodafone Group Plc is
exposed to a variety of political environments and political system risks. Spreading out the
structural risks involved with operating in many countries with differing levels of political
stabilization is necessary for success in the quickly developing wireless communications industry
across international markets. The importance of wireless communications to the nation's
reasonably stable economy and government systems. The organization was frequently obliged to
air viewpoints with which it profoundly disagree because of the political unrest in Egypt.
Vodafone has always faced a political risk from corruption, particularly in the government
agencies in the countries where it conducts business that are in charge of overseeing the
technology sector. The complexity of the state, its interference in the wireless communications
industry, the legislative basis for enforcing compliance, and the protection of intellectual
property are all constant threats to Vodafone. Antimonopoly rules apply to any restrictions on the
prices at which cellular services may be offered. For Vodafone, taxes and incentives present
another another difficulty. Labeling requirements for wireless communications products as well
as other requirements. Effective cyber security is more important than ever in a world where
digital data is everywhere and illicit activity is rampant. That is true for anything that is linked to
the Internet, including the billions of individuals who use mobile phones and other gadgets
throughout the world. Vodafone utilizes data in the same way as other internet companies.
Vodafone had a network outage as a result of a deliberate and destructive cyber-attack that was
intended to cause damage and inconvenience.

IMPACT
This political Risk's effects on the company were as follows: Damage to the business brand as a
result of people's negative views of its incapability to safeguard its workers, poor governance,
and inadequate safeguards for ESG accreditation because of sophisticated security precautions,
costs are growing. The building of new facilities or the maintenance of outdated facilities
resulted in an increase in costs. Possibility of loss of life, property, and disruption of the supply
system. Buyers may start to question Vodafone's capacity to protect their private or sensitive
information, which could end up costing the company a lot as a result of hacks and user privacy
violations.

RISK MANAGEMENT STRATEGY

The risk management procedures used by Vodafone were outmoded. To manage Risk, the
multinational British telecommunications corporation used a patchwork of several GRC systems,
spreadsheets, and documents. Risk was categorized in a certain manner that was a description of
each business unit. The organization-wide consolidation of risk data is being hampered by
inconsistent application. Furthermore, the static nature of the systems prevented the organization
from having access to up-to-date data. Additionally, new risk management was necessary due to
changes to the UK Corporate Code. The new risk management framework, Risk and mitigation
library, or standardized risk hierarchy couldn't be supported by Vodafone's current technologies.
Inconsistencies in risk definitions and categorization were a problem for Vodafone.
Consolidating risk information from several GRC systems is impossible without access to real-
time data. Making accurate reports in a timely manner. The organization needed to find a new
solution to give it the information it required to make better educated risk decisions, and now
was the perfect time because new requirements will shortly be put into place. Vodafone chose
Riskonnect to provide the most modern Enterprise Risk Management software. In order to
determine current procedures and reporting requirements across 26 local markets, Riskonnect
worked with users. The team reviewed the existing risk hierarchies, Risk and mitigation libraries,
and Key Risk Indicators to determine the technical requirements for the suggested data model.
The development of well-built interfaces, filter criteria, and colors were all carefully considered
in order to enhance the user experience. Vodafone now has a single source of truth for all risk
data across the whole organization thanks to Riskonnect. Heat maps to show risks and their
implications, a standardized risk hierarchy, a risk and mitigation library, and KRIs better user
experience. In order to facilitate the transfer to Riskonnect, extensive user acceptance testing and
communication were implemented. For all 26 countries, training was given both on-site and via
video conference. And it took six months to complete the full project. Vodafone was able to see
all hazards clearly throughout the entire organization thanks to Riskonnect. Data from all 26
nations is collected, and risks are similarly defined and categorized. The company's decision-
making has improved as a result of its ability to see the linkages between risks, mitigations, and
important indicators. Reports that used to require several weeks to compile can now be produced
with only a few clicks with real-time data. For simple documentation, the reports are also in line
with the necessary framework for group risk management. Vodafone has also been able to
reassign one full-time employee to strategic duties that provide far greater value to the company
by streamlining and automating procedures and reporting. Vodafone was able to centralize risk
data across all locations thanks to Riskonnect. Gain access to current facts to make smarter
decisions. Create reports with a few clicks as opposed to taking weeks to do so. Make the
connections between risks, mitigations, and KRIs visually clear. Reduce costs and time.

CONCLUSION
The corporation, a 46-billion-pound revenue producer and 78-billion-pound FTSE 100 member,
generated a pre-tax profit of 9.6-billion-pound last year. The corporation, a 46-billion-pound
revenue producer and 78-billion-pound FTSE 100 member, generated a pre-tax profit of 9.6-
billion-pound last year. Furthermore, with margins like this, it makes sense why many investors
favor this defensively positioned company. The company is rated on a tiny P/E of 9.8, and it
provides income investors a very alluring anticipated dividend yield of 7.6%. What's more, its
shares are currently trading at almost a 12-month low of 158 pence. One thing I'm looking for
right away is an admission that dangers do exist and that they need to be managed. No less than
14 hazards are listed by Vodafone as potentially having a substantial influence on the company's
financial performance. They range from malicious network attacks to emerging technology, from
a decline in consumer confidence to a significant market leaving the eurozone.

We discovered that profit is increasing yearly by looking at the trend rate over the last five years.
The profit rate is 3% lower in 2019 than it was in 2018, but they still make a lot of money that
year—17% more than they did in 2019. From that point on, the profit rate keeps rising, and they
don't experience any losses. If we make a decision based on patterns, we must conclude that
Vodafone is prepared to take a chance because it will probably make a sizable profit. It is
suggested that if we look at the standard deviation, the rate of profit is quite high and the rate of
Risk is not very high. Even if Vodafone experiences a loss due to a risk they took, their
reputation or capital would not suffer, and they would not go bankrupt. Vodafone serves about
150 countries and makes a sizable amount of profit every year. Vodafone will benefit
significantly if they make a profit even if they take a risk and suffer a loss with a smaller dollar
amount. Because the danger of loss is low and the probability of reward is high, Vodafone
should take a chance.
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