Vodacom Group Limited · JSE:VOD
Vodacom — FY2008 Earnings Presentation
75 slides from Vodacom's earnings presentation, Mar 31, 2008
Slide 1: Annual Financial Results March 31, 2008
Vodacom Group (Pty) Ltd 2 Za_ Annual Financial Results March 31, 2008 ay vodacom NIVERSE
Slide 2: Operational highlights
Operational highlights Alan Knott-Craig Chief Executive Officer
Slide 3: Notes
Notes
Slide 4: Group highlights
Group highlights For the year ended March 31, 2008 vs. prior year Total customers Revenue Profit from operations (Statutory operating profit) 34.0 million rs R48.2 billion yo. R12.5 billion > 12.7% 17.1% 15.0% EBITDA Net profit after tax Dividends R16.5 billion cs R8.0 billion os R52 billion Po. 15.
Slide 5: Notes
Notes
Slide 6: Group shareholder distributions
Group shareholder distributions 20.0% year on 32.4% = > 2006 2007 Minterim dividend 1 Final dividend Gy To date R23.0 billion in dividends has been distributed to shareholders
Slide 7: Notes
Notes
Slide 8: Group shareholder returns (after tax)
Group shareholder returns (after tax) March 2008 and results for the past 4 years 76.0 2004 2005 2006 2007 2008 u Return on assets m Return on equity
Slide 9: Notes
Notes
Slide 10: Profit from operations and net profit after tax
Profit from operations and net profit after tax March 2008 and results for the past 4 years R million 2004 2005 2006 2007 2008 Profit from operations 1 Net profit after tax
Slide 11: Notes
Notes
Slide 12: Profit from operations margin and net profit after tax margin
Profit from operations margin and net profit after tax margin March 2008 and results for the past 4 years 26.0 264 25.9 2004 2005 2006 2007 2008 1 Profit from operations margin 1 Net profit after tax margin
Slide 13: Notes
Notes
Slide 14: South Africa
South Africa * Total customers * Profit from operations * Supplementary disconnection rule implemented during September 2007
Slide 15: Notes
Notes
Slide 16: Tanzania
Tanzania * Profit from operations 329% oe
Slide 17: Notes
Notes
Slide 18: Tanzania churn and profit from operations
* Churn % ae * Profit from operations 314% oe
Slide 19: Notes
Notes
Slide 20: Lesotho
Lesotho * Total customers
Slide 21: Notes
Notes
Slide 22: Mozambique
Mozambique * Churn % * Loss from operations
Slide 23: Notes
Notes
Slide 24: New acquisitions and investments
New acquisitions and investments » Acquired the customer base from Global Telematics SA (Pty) Ltd, effective April 1, 2008 » Increased equity interest in Smartphone SP (Pty) Ltd and Cointel VAS (Pty) Ltd from 70% to 100% during September 2007 » Effective September 13, 2006, Vodacom Service Provider
Slide 25: Notes
Notes
Slide 26: Vodacom Business
Vodacom Business * Vodacom Business was launched in February 2008 — To offer the market a full set of converged communications services » Developed a service portfolio that includes: — Next-generation Internet Protocol ISP and voice services — Managed networks and infrastructure services — Access se
Slide 27: Notes
Notes
Slide 28: Innovative South Africa non-voice products
Innovative South Africa non-voice products Data revenue Vodafone live!, 3G / HSDPA * Over 1.4 million Vodafone live! users (2007: 899 thousand) i 3,113 * 370 thousand data card and modem users = ae (2007: 149 thousand) a [| Mobile TV / DVB-H sucs goer Tobe * 31 thousand Mobile TV users * 22 TV chann
Slide 29: Notes
Notes
Slide 30: New products, services and customer care outlets — South Africa
New products, services and customer care outlets — South Africa » Mobile TV Playa: provides TV streaming » Music station: live radio streaming » Prepaid data bundles: data usage for prepaid » MEEP: 18,666 PC and 7,665 handset users » Reverse charge: call charged to receiving party * Mobile advertisi
Slide 31: Notes
Notes
Slide 32: New innovative products and services
New innovative products and services » Commercially launched 3G / HSDPA » Commercially launched WiMax » Launched a consumer loyalty program, Tuzo points and Tuzo draws Say it with FREE sms! <Q Tass estest 36 y Roam with Vodacom and enjoy mobile internet. the beauty of Tanzania.
Slide 33: Notes
Notes
Slide 34: New innovative products and services
New innovative products and services » 500MT: Free on-net calls for December upon recharging with a 500MT voucher » Vodakool: a WAP Portal that enables customers to access services like vodamail and jokes +» Market leader in data services: Voted best cellular network for the second consecutive year
Slide 35: Notes
Notes
Slide 36: Broad Based Black Economic Empowerment (BBBEE)
Broad Based Black Economic Empowerment (BBBEE)
Slide 37: Notes
Notes
Slide 38: Notes
Notes
Slide 39: Financial review
Financial review Johan van der Watt Acting Chief Financial Officer
Slide 40: Notes
Notes
Slide 41: Group income statement
Group income statement Extract for the years ended March 31, % R million 2007 change Revenue 41,146 48,178 17.1% Operating expenses excluding depreciation, amortisation, impairment and other (26,919) (31,715) (17.8%) EBITDA 14,227 16,463 15.7% Depreciation, amortisation, impairment and (3,367) (3,97
Slide 42: Notes
Notes
Slide 43: Group operational indicators Gross connections
Group operational indicators Gross connections * Gross connections up 15.4% year on year to 18.0 million ] * Customers up 12.7% year on year to 34.0 million * Total traffic in South Africa increased by 11.7% year on 'SA_ M Non-South African operations. year to 22.8 billion minutes as j 4358 2006 §SA
Slide 44: Notes
Notes
Slide 45: ARPU by country
ARPU by country ARPU per month * SA remained stable at R125 + DRC decreased 23.4% to R59 i 125 125 * Lesotho decreased 2.7% to R73 * Tanzania decreased 5.8% to R49 } i " rf) ae e —,_ ‘ — increased 3.6% to [2 a * Vodacom Group consolidated ——— ARPU decreased 4.5% year on a : had : ad year from R111 t
Slide 46: Notes
Notes
Slide 47: South Africa ARPU
South Africa ARPU * Contract ARPU decreased 6.0% year on year to R486 » Prepaid ARPU decreased 1.6% year on year to R62 * Total ARPU remained stable year on year at R125 + Prepaid ARPU stable as a result of implementation of supplementary disconnection rule * Increase in bulk sms + Customer mix kept
Slide 48: Notes
Notes
Slide 49: Group revenue by country
Group revenue By country R million 2006 South Africa, including holding companies 31,069 Tanzania 1,312 DRC 1,334 Lesotho 170 Mozambique 158 34,043 @ Revenue driven by strong customer growth gy Non-South African operations contributing 11.2% (2007: 10.1%) ge Data revenue increased by 49.7% or R1.7 b
Slide 50: Notes
Notes
Slide 51: Group revenue composition
Group revenue Revenue composition % Airtime, connection and access 20,085 23,708 27,095 14.3% Data revenue 2,038 3,342 5,002 49.7% Interconnection 6,697 7,835 8,887 13.4% Equipment sales 3,986 4,699 5,052 7.5% International airtime 971 1,306 1,836 40.6% Other sales and services 266 256 306 19.5% 34,
Slide 52: Notes
Notes
Slide 53: Group revenue (excluding equipment sales) by revenue type
eae | Group revenue (excluding equipment sales) By revenue type Revenue analysis ~ 2007 Revenue analysis — 2008 R36,447 million (excluding equipment sales) R43,126 million (excluding equipment sales) 36% 07% 43% 07% 215% 206% oy 65.0% 116% 62.8% ‘Airtime, connection and access ™ Data revenue interco
Slide 54: Notes
Notes
Slide 55: EBITDA and margin analysis
EBITDA and margin analysis * Group EBITDA performance - Increased 15.7% year on year to R16.5 billion 14,227 — EBITDAmargin decreased 0.4% points year on year 11,809 to 34.2% — EBITDAmargin 39.3%, when excluding cellular phone and equipment sales + South Africa EBITDA 2006 2007 = Increased 14.1% yea
Slide 56: Notes
Notes
Slide 57: Group profit from operations
Group profit from operations By country % 2007 change R million 2006 South Africa 8,602 10,293 11,669 13.4% Tanzania 263 346 460 32.9% DRC 117 277 364 31.4% Lesotho 51 75 123 64.0% Mozambique (144) (177) (157) 11.3% Holding companies (23) 46 32 (30.4%) 8,866 10,860 12,491 15.0% Profit from operation
Slide 58: Notes
Notes
Slide 59: Factors affecting trends and margins
Factors affecting trends and margins Total South Africa traffic 20,383 : | 7 | t 2006 (2007 * South Africa traffic mix — Outgoing traffic increased 12.4% year on year to 15.3 billion minutes — Incoming traffic increased 10.4% year on year to 7.5 billion minutes — Total traffic increased 11.7% year o
Slide 60: Notes
Notes
Slide 61: Productivity measures
Productivity measures * Consolidated customers per employee Increased 6.9% year on year to 5,442 based on 6,247 employees * Consolidated gross capex additions as a % of revenue decreased to 12.3% from 16.4% in the previous financial year * Gross capex additions was R5.9 billion vs. R6.7 billion in t
Slide 62: Notes
Notes
Slide 63: Cash generation
Cash generation » EBITDA increased by R2.2 billion » Cash generated from operations increased 17.8% to R16.3 billion » Free cash flow decreased 8.0% to R3.4 billion * Current facilities amount to R5.8 billion * Utilisation after final dividend - R65.7 billion * Taxation increased by 43.0% to R4.7 bi
Slide 64: Notes
Notes
Slide 65: Capex additions and composition
Capex additions and composition Including software Capex gross additions - 2007 Capex gross additions - 2008 R6,748 million R5,916 million way 75% 718% ™ South Africa Tanzania morc ™ Mozambique lM Lesotho and holding companies ey South Africa capex gross additions decreased by 14.8% to R4.3 billion
Slide 66: Notes
Notes
Slide 67: Debt composition
Debt composition Gross debt composition Gross debt composition including bank overdrafts — 2007 including bank overdrafts - 2008 R3,435 million R6,131 million 45.5% 32.9% = ZAR denominated = Foreign denominated ee Net debt (excluding dividends and STC): R5,154 million (2007: R2,664 million) oy Net d
Slide 68: Notes
Notes
Slide 69: Group balance sheet
Group balance sheet Extract at March 31, R million 2006 ASSETS Non-current assets 16,079 20,844 24,468 17.4% Current assets 8,689 7,626 9,707 27.3% Total assets 24,768 28,470 34,175 20.0% EQUITY AND LIABILITIES Capital and reserves 8,672 9,647 11,805 22.4% Non-current liabilities 2,236 3,812 4,788 2
Slide 70: Notes
Notes
Slide 71: Group cash flow statement
Group cash flow statement Extract for the years ended March 31, R milion 200s 2007/00 chance Cash generated from operations 11,090 13,866 16,334 17.8% Net cash flows from operating activities 4,501 4,858 5,125 5.5% h fl il ini het coal 2 lows utilised in investing (4,791) (6,584) (7,502) (13.9%) eis
Slide 72: Notes
Notes
Slide 73: Disclaimer
Disclaimer * This presentation has been prepared and published by Vodacom Group (Pty) Ltd. * Vodacom Group (Pty) Ltd is a private company and as such is not required by the Companies Act 61 of 1973, as amended, to publish its results. » Vodacom Group (Pty) Ltd makes no guarantee, assurance, represen
Slide 74: Notes
Notes
Slide 75: www.vodacom.com