Notes to the consolidated financial statements (continued) 158 Vodafone Group Plc Annual Report 2024 2020 158 Vodafone Group Plc Annual Report 2024 Strategic report Governance
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4. Impairment losses (continued) For the Group’s operations in Germany, Italy, the UK and Spain management has considered the following reasonably possible changes in pre-tax discount rate, long-term growth rate and projected adjusted EBITDAaL CAGR 1 assumptions, leaving all other assumptions unchanged. The sensitivity analysis presented is prepared on the basis that the reasonably possible change in each key assumption would not have a consequential impact on other assumptions used in the impairment review. The associated impact on the impairment assessment is presented in the table below. Management has concluded that no reasonably possible or foreseeable change in projected capital expenditure 2 would cause the difference between the carrying value and recoverable amount for any cash generating unit to be materially different to the base case disclosed below. Recoverable amount less carrying value Germany Italy UK Spain €bn €bn €bn €bn Base case as at 31 March 2022 7.3 0.4 1.3 0.1 Change in pre-tax discount rate Decrease by 1pps 14.9 1.7 2.8 1.0 Increase by 1pps 1.7 (0.7) 0.3 (0.6) Change in long-term growth rate Decrease by 1pps 1.6 (0.6) 0.4 (0.5) Increase by 1pps 15.6 1.7 2.8 0.9 Change in projected adjusted EBITDAaL CAGR 1 Decrease by 5pps (1.4) (1.6) (0.7) (1.1) Increase by 5pps 17.9 2.8 3.8 1.5 Notes: 1 Projected adjusted EBITDAaL CAGR is expressed as the compound annual growth rates in the initial five years for all cash-generating units of the plans used for impairment testing. For the purposes of this disclosure, Italy’s adjusted EBITDAaL for the year ended 31 March 2022 excludes the TIM settlement. 2 Projected capital expenditure, which excludes licences and spectrum, is expressed as capital expenditure as a percentage of revenue in the initial five years for all cash-generating units of the plans used for impairment testing. 5. Investment income and financing costs Investment income comprises interest received from short-term investments and other receivables. Financing costs mainly arise from interest due on bonds and commercial paper issued, bank loans and the results of hedging transactions used to manage foreign exchange and interest rate movements. Re-presented 1 Re-presented 1 2024 2023 2022 €m €m €m Investment income Financial assets measured at amortised cost 327 196 246 Financial assets measured at fair value through profit and loss 254 36 5 581 232 251 Financing costs Financial liabilities measured at amortised cost Bonds 1,596 1,711 1,546 Lease liabilities 440 355 320 Bank loans and other liabilities 2 712 392 425 Interest on derivatives (395) (561) (428) Mark-to-market on derivatives 100 (423) (341) Financial assets measured at fair value through profit and loss – – 36 Foreign exchange 173 135 284 2,626 1,609 1,842 Net financing costs 2,045 1,377 1,591 Notes: 1 The results for the years ended 31 March 2023 and 31 March 2022 have been re-presented to reflect that the results of Vodafone Spain and Vodafone Italy are now reported as discontinued
operations. See note 7 ‘Discontinued operations and assets held for sale’ for more information. 2 Interest capitalised for the year ended 31 March 2024 was €nil (2023: €5 million, 2022: €17 million).
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