Our 2022 Results

Financial performance

Delivering all our financial guidance 

Despite broader macroeconomic challenges, we ended 2022 on a positive note and delivered on all of our 2022 guidance with stable revenue and Adjusted EBITDA AL. Through disciplined cost control, we managed to absorb significant cost inflation in primarily energy and wage costs. As a result, our Adjusted EBITDA AL increased by 0.4% year-on-year. We invested nearly €950 million (23.3% of our revenue) into our networks, product and services to expand our network capacity and coverage as well as to continuously improve customer experience. Through a healthy free cash flow generation and strong financial position, we delivered shareholder cash distributions of €602 million.

2022 Results 

2022 Guidance 

Adjusted EBITDA AL growth 


Stable to modest growth 

Capex-to-revenue ratio 


22% - 24% 

Shareholder cash distributions 

€602 mln 

€550 - 650 mln 


Our revenue was stable year-on-year in 2022, as higher ARPU and strong B2C and B2B mobile and B2B fixed performance largely offset the decline in our B2C fixed customer base. We added 179,200 organic mobile postpaid SIMs for the year and recorded the 5th million postpaid SIM early in 2022. The decline in our B2C fixed customer base is driven by increased promotional activities in the market and the impact of the loss of Formula 1 sports rights at the start of the new Formula 1 season. 

Revenue in B2C fixed declined by 3.0% year-on-year, driven by customer base decline and lower out of bundle usage, partially offset by the effect of our inflation adjustment. Despite continued promotional intensity in the market, our B2C fixed customer base decline has reduced considerably in the last quarter of 2022.

Revenue in B2C mobile grew by 2.1% year-on-year, primarily driven by 97,800 mobile postpaid SIMs growth and 0.6% postpaid ARPU growth as roaming revenue started to recover post the coronavirus pandemic.

Revenue in B2B fixed grew by 1.3% year-on-year, primarily driven by growth in SoHo, small business and our unified communication portfolio. 

Revenue in B2B mobile grew by 8.5% year-on-year, primarily driven by (i) higher roaming and visitor revenue, (ii) higher handset sales, (iii) higher IoT revenue, and (iv) 81,400 mobile postpaid SIMs growth, partially offset by (v) price pressure in the large Corporate segment. 

Adjusted EBITDA AL 

Adjusted EBITDA AL increased by €7.6 million or 0.4% year-on-year during 2022, supported by stable revenue whereby incremental cost efficiency measures more than offset the €26.5 million impact from higher energy- and average wage costs. Cost of outsourced work and other external costs decreased by €5.2 million, primarily driven by the net effect of lower programming costs following contract renewals and expirations and higher energy prices. Our personnel expenses decreased by €14.5 million, primarily driven by lower number of FTEs, partially offset by higher average costs per FTE.

Operating profit 

Our operating profit (EBIT) increased from €294.9 million in 2021 to €378.8 million in 2022, representing an increase of €83.9 million. The increase in our operating profit is primarily driven by (i) a decrease of our amortisation and depreciation expenses (excl. lease related depreciation) by €51.5 million, (ii) a decrease in our impairment, restructuring and other operating items, net by €25.0 million and (iii) the aforementioned increase of our Adjusted EBITDA AL by €7.6 million. 

In 2022 and 2021, we recognised impairment, restructuring and other operating items, net, of €12.5 million and €37.5 million, respectively. These charges primarily relate to (i) restructuring charges of €10.4 million and €25.4 million, (ii) acquisition and disposition costs of €2.2 million and €10.2 million, (iii) impairment charges related to property & equipment of €0.8 million and €2.5 million and (iv) a gain from disposal of assets of €0.9 million and €0.6 million, respectively. 

Net finance result 

Our net finance result increased from net finance costs of €385.7 million in 2021 to net finance income of €186.8 million in 2022, representing an increase of €572.5 million. This increase is mainly driven by an increase of €664.8 million in realised and unrealised gains on derivative instruments due to the appreciation of the USD compared to the euro and an increase in interest rates. Our derivative results are partially offset by foreign currency transaction losses, which decreased by €35.5 million compared to 2021. Our third-party debt interest expenses increased by €58.4 million due to an increase in interest expenses on debt with a variable interest rate and appreciation of the USD. We recorded losses on debt extinguishment of €71.1 million in 2022 as compared to €7.6 million in 2021. The losses on debt extinguishment in 2022 are primarily associated with the redemption of our senior secured notes due in 2027, which were refinanced by issuing sustainability-linked senior secured notes due in 2032. 

Income taxes 

In 2022 and 2021, we recognised income tax expenses of €200.9 million and €57.0 million, respectively. The effective tax rate (ETR) is 35.2% (2021: 62.8%) compared to a nominal tax rate of 25.8% (2021: 25.0%). The ETR is higher than the nominal tax rate as interest deduction is limited to 20% of fiscal EBITDA as of January 1, 2022 (previously 30% of fiscal EBITDA). This limits our ability to recover non-deductible interest and losses on debt extinguishment.

Net profit 

In 2022, our net result increased by €517.1 million compared to 2021. The increase in our net result is primarily driven by (i) an increase in net finance result by €572.5 million caused by results on our derivative portfolio and (ii) an increase in our operating profit by €83.9 million. These increases are partially offset by an increase of our income tax expenses by €143.9 million. 

Capex additions 

We continue to be committed to long term success for VodafoneZiggo and hence our customers through investments in innovate products and services and our high-quality future proof infrastructure. In 2022, we reinvested €948.2 million or 23.3% (2021: €830.4 million or 20.4%) of our revenue into, among others, expanding our network capacity and coverage through the realisation of nationwide 1 Gigabit speed coverage in our fixed network and 5G coverage on our mobile network. We also invested heavily into our products, by delivering the next generation of our TV platform Mediabox Next and its smaller and more sustainable version, Next Mini as well as Wi-Fi signal amplifier SmartWifi pods to our customer homes. By the end of 2022, 1.2 million customers have a Mediabox Next or Next Mini and nearly half of our fixed customer base have SmartWiFi pods at home. 

Operational Free Cash Flow 

Operational Free Cash Flow is defined as Adjusted EBITDA AL minus Capex additions. In 2022, our Operational Free Cash Flow decreased by €110.2 million compared to 2021. The decrease in our Operational Free Cash Flow is primarily attributable to our aforementioned increase in Capex additions. 

Cash flows 

Net cash provided by operating activities decreased by €53.3 million compared to 2021. The decrease is primarily driven by higher cash paid for income taxes and interest, partially offset by an increase in our Adjusted EBITDA AL and working capital changes.

Net cash used in investing activities decreased by €16.4 million compared to 2021. The decrease is primarily driven by a decrease by €207.9 million in cash payments for spectrum licenses. This decrease more than offsets the increase in property and equipment and software additions, the decrease in current liabilities related to capital expenditures and the decrease in assets acquired under capital-related vendor financing arrangements. 

Net cash used by financing activities increased by €56.8 million compared to 2021. The decrease in net borrowings of debt and higher payments of financing costs and debt premiums more than offset the decrease in equity distributions to our shareholders and lower net repayments of vendor financing. 

Resilient balance sheet 

We have a resilient balance sheet and liquidity position at the end of 2022 and managed to maintain our covenant leverage ratio[1] well within our capital structure policy of 4.5x - 5x. Furthermore, our capital structure policy is to provide for an economic hedge, ensuring that we are hedged against foreign currency exchange rate movements and increases in interest rates on our variable-rate debt. For an overview of our risk management and exposure to credit risk and counterparty credit risk, liquidity and cash flow risk and market risk, refer to note 18.2 to our consolidated financial statements. 

On December 31, 2022, our total third-party debt (excluding vendor financing, handset financing and lease obligations) was €10.2 billion, which is an increase of €0.4 billion from December 31, 2021, all due to the strengthening of the US Dollar against the euro. When taking into consideration the projected principal-related cash flows associated with our cross-currency derivative instruments, the total covenant amount of third-party gross debt was €9.1 billion at December 31, 2022, which is unchanged compared to December 31, 2021. 

At December 31, 2022, our covenant leverage ratio was 4.49x. This was calculated in accordance with our most restrictive covenants and reflecting the Credit Facility Excluded Amount as defined in the respective credit agreements. Vendor and handset financing obligations are not included in the calculation of our leverage covenants.

On December 31, 2022, our fully-swapped third-party debt borrowing cost was 3.8% and average tenor of our third-party debt (including vendor and handset financing obligations) was 6.6 years, which is in line with our capital structure policy to maximise our tenor and proactively term-out our debt. €9.6 billion of our third-party debt is not due until 2028 and thereafter. 

Our group equity on December 31, 2022 amounts to €2.6 billion, a decrease of €0.1 billion compared to December 31, 2021. The decrease in our equity is driven by our comprehensive income for the period of €369.3 million and equity distributions to our shareholders of €500.0 million. 

Sustainable capital structure 

We continued our efforts to build a sustainable capital structure. In January 2022, we expanded our Green Bond Framework introduced in 2021 into a new Sustainable Finance Framework, further integrating our People Planet Progress target of halving our CO2 emissions by 2025 into our financial strategy.

In 2022, through the issuance of our first €2.1 billion Sustainability Linked Bonds, we introduced a first-of-its-kind, innovative call-feature into the sustainable bond market. If one or more of our sustainability performance targets (absolute reduction of our Scope 1 and Scope 2 emissions by 50% against a 2018 baseline and absolute reduction of our Scope 3 emissions by 50% against a 2018 baseline) are not achieved, we will pay an increased coupon rate not exceeding 0.25% and increased optional redemption prices of 0.125% from 2026 onwards, until the maturity date in 2032. But, if we achieve both targets, we will benefit from a reduction of optional redemption prices by 0.125% if the loan is repaid before its maturity date. This feature, in itself, is an innovation within the global bond market for sustainable investments.

Shareholder cash distributions

In line with our capital structure policy to distribute any excess cash back to our shareholders, in 2022, we distributed €602.2 million to our shareholders, Vodafone Group and Liberty Global. The distribution consisted of equity distributions of €500.0 million and interest payments on the Shareholder Notes of €102.2 million. The distributions were funded from our own healthy free cash flow generation, without increasing debt nor limiting investments in our business. 


Our underlying performance remains healthy and we expect to return to revenue growth in 2023, supported by continued commercial momentum in mobile and B2B. However, we will face significant cost inflation, in particular in our energy costs. Nonetheless, we remain committed to reinvest more than 20% of our revenue in our networks, products and services in 2023, positioning the business for mid-term and long-term growth. 

In January 2022, we issued our first Sustainability Linked Bonds.

Our 2023 guidance reflects the expected impact of cost inflation and an increase in income tax payments: 

  • Low to mid-single digit decline in Adjusted EBITDA AL, with revenue growth expected to be offset by elevated cost inflation, with around €100 million year-on-year cost growth, of which around €65 million relates to higher energy costs 

  • 21% to 23% of Capex additions as % of revenue 

  • €300 to €400 million shareholder cash distributions, primarily reflecting an anticipated increase in income tax payments due to timing differences related to the final payment of our 2022 corporate income taxes and tax legislation changes effective per January 1, 2022 

  • 1Calculated as Total Net Debt to Last 2 Quarters Annualised Covenant EBITDA.

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