Vodacom Group Limited · JSE:VOD
Vodacom — H1 2015 Earnings Presentation
22 slides from Vodacom's earnings presentation, Nov 7, 2014
Slide 1: Vodacom interim results presentation
07/11/2014 Vodacom interim results presentation for the six months ended 30 September 2014 Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentations may lawfully be communicated (‘relevant persons’). Any person who is not a relevant pers
Slide 2: Highlights
07/11/2014 Highlights 1993 Vodacom was awarded a licence to operate a GSM cellular network in South Africa and switched on its operations in March 1994, just in time for the country’s first democratic elections highlights 3 Performance Group revenue Group data revenue Group active customers 2.3% 24.
Slide 3: Operating review
07/11/2014 Challenging environment Regulatory challenges Intensifying competition Challenging macro environment Pressure on SA consumer spending Pressure on costs 5 Operating review 1996 Vodacom launched the world’s first prepaid service on Intelligent Network platforms 6 3
Slide 4: South Africa and International key indicators
07/11/2014 South Africa: Growth impacted by steep MTR cuts • Service revenue up 2.9% excluding impact of 50% cut in MTRs Key indicators H1 2015 % change • Data revenue up 21.6% • 8.2% growth in active customers Service revenue (Rm) 23 437 (1.3) Revenue (Rm) 30 171 0.1 EBITDA (Rm) 10 844 (5.1) Active
Slide 5: Strategic review
07/11/2014 Strategic review 2001 Vodacom continued its impressive growth, reaching 5 MILLION customers 9 Strategic pillars Customer Growth Operations People Reputation Clear NPS leadership Diversify revenue to Deliver cost and Best talent, best Transform society and deliver growth process efficiency
Slide 6: SA customer: pricing transformation and network experience
07/11/2014 SA customer: Successful pricing transformation Prepaid: Reducing PPM Postpaid: Migration to new plans Data: Driving bundles H1 2014 H2 2014 H1 2015 Contract million 82.2 FY 2014 H1 2015 69.6% Top-up 56.3% 51.6 41.8% 36.7% 27.9% 30.5 12.6% 23.6% 18.6% H2 2013 H1 2014 H2 2014 H1 2015 Data b
Slide 7: SA customer: Best service and improved efficiency; driving data uptake
07/11/2014 SA customer: Best service and improved efficiency …in store …online …customer care 56.3 43.7 • > 50% new store format • 1.1 million MyVodacom app users • IVR Voice verification • 10% uplift overall retail experience • In app biometric verification • Call volumes reduced 11.1% • 71% of bas
Slide 8: SA growth: Expanding new services; International contribution
07/11/2014 SA growth: Expanding new services m-pesa: revamped Insurance: expanded products mCommerce: more to come ‘000 H1 2014 H1 2015 375 338 Handset insurance policies • Easier registration • +35% yoy growth in revenue • 1.5 million customers • Wider distribution • Vodacom Life cover • >R60 milli
Slide 9: International growth: customers and m-pesa
07/11/2014 International growth: Continued solid execution of strategy Active customers ‘000 • Active customers up 19.8% TZN DRC MOZ LES • 61.2% growth in outgoing traffic 1 135 1 171 1 344 4 913 • 32.4% of active customers using data 3 688 8 790 10 08 11 003 • First to launch LTE in Lesotho 10 023
Slide 10: Group Enterprise; People transformation
07/11/2014 Group Enterprise: Gaining credibility and scale Enterprise service revenue • 2 000 m2 data centre capacity 5.5% • FTTB accelerating R5.3bn • MPLS network to 28 countries 17.4% of Group • Neotel Service revenue - Competition Commission and ICASA review - Target March 2015 close • 18% growt
Slide 11: Reputation: Mobiles for good
07/11/2014 Reputation: Mobiles for good Connecting SCHOOLS Training TEACHERS Content for LEARNERS Education Education Education 893 60 Free Schools connected ICT centres by March 2015 Educational portal for Another 1 500 planned in partnership with DBE Vodacom customers Stationery for learners Eradi
Slide 12: Financial review: Group income statement
07/11/2014 Financial review 2005 Vodacom was the first operator to launch BlackBerry® push email, enabling South Africans to join the worldwide e-mail and Internet-on-the-move revolution 23 Group income statement R million H1 2015 H1 2014 % change % change* Revenue 37 546 36 688 2.3 1.0 Service reve
Slide 13: Service revenue growth by category
07/11/2014 Strong data growth offsets declines in voice and interconnect Group service revenue normalised growth by category R million 1.7% (0.2*) 214 463 (778) (713) 1 441 (115) 30 213 30 676 30 725 H1 2014 Translation FX H1 2014 Mobile Mobile voice* Mobile Mobile data* Other service H1 2015 servic
Slide 14: Cost efficiency; Group EBITDA impacted by MTRs
07/11/2014 Cost efficiency program mantaining stable opex SA opex as % of service revenue * International opex as % of service revenue ** % 23.2% % 22.6% 37.6% 37.6% 37.8% 22.4% 22.3% H1 2013 H1 2014 H1 2015 H1 2013 H1 2014 H1 2015 Opex to service revenue Opex to service revenue Opex to service reve
Slide 15: Adequate debt capacity; effective tax rate
07/11/2014 Adequate debt capacity Group net finance charges Group net debt R million H1 2015 H1 2014 R million H1 2015 H1 2014 Net finance costs (486) (315) Bank and cash balances 2 858 3 392 Bank overdrafts (1 802) (720) Remeasurement of loans (14) (13) Gain on remeasurement 34 44 Borrowings and ne
Slide 16: Group HEPS; statement of financial position
07/11/2014 Group HEPS impacted by MTRs and higher depreciation Group HEPS R million (5.5%) (19) 8 (40) 26 (9) 10 439 415 H1 2014 HEPS MTR impact Trading FX SA Ebitda International Depreciation Other H1 2015 HEPS EBITDA 31 Group statement of financial position R million H1 2015 FY 2014 Movement Asset
Slide 17: Capex program; Group free cash flow
07/11/2014 Good progress with accelerated capex program Group capital expenditure SA capex breakdown R million Properties & 15.7% Shops 5% IT 19% 13.7% 13.2% Radio Access Network 45% Other 2% 4 713 4 850 5 881 Intelligent Networks H1 2013 H1 2014 H1 2015 7% Capital expenditure Capital intensity Core
Slide 18: Dividend policy unchanged; medium term guidance
07/11/2014 Dividend policy unchanged Dividend per share Cents per share 825 785 • Interim dividend declared of 375 cents per share 710 • Pay-out ratio of at least 90% of HEPS maintained 430 430 450 260 355 395 375 FY2012 FY2013 FY2014 FY2015 Interim dividend Final dividend 35 Group medium term (3 ye
Slide 19: H2 priorities; Thank you
07/11/2014 H2 priorities • 3G where we have voice, LTE acceleration Capex acceleration program • FTTB scale up • International coverage • Postpaid migration, top-up transformation Pricing transformation • Increase prepaid bundles • Worry free usage of data • m-pesa acceleration New products • More d
Slide 20: Country data; Impact of foreign exchange
07/11/2014 Country data South Africa Tanzania DRC Mozambique Lesotho Population (million) 54 51 69 27 2 GDP per capita* (USD) 6 520 678 329 621 1 090 GDP growth estimate* 2014 (%) 2.0 7.1 8.7 7.3 4.8 Estimated mobile penetration (%) 145 60 40 45 70 Ownership (%) 93.75 82.15 51 85 80 License expiry p
Slide 21: Definitions; Forward-looking statements
07/11/2014 Definitions Active customers Active customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly fee that entitles them to use the service even if they do not actually use the service and those custome
Slide 22: Contact details
07/11/2014 www.vodacom.com [email protected] +27 11 653 5055 facebook.com/vodacom @vodacom Results for the six months ended 30 September 2014 43 22