Slide 1: Vodacom interim results presentation
12/11/2016 Vodacom interim results presentation for the six months ended 30 September 2016 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: Operating review
12/11/2016 Operating review Interim results | 30 September 2016 Strategy | Delivering on our strategy Customer Clear NPS leadership Customer Growth Operations People Reputation Clear NPS leadership Diversify revenue to network Deliver cost and Best talent, best Transform society and Best experience
Slide 3: Highlights
12/11/2016 Highlights +4.1% +4.1% -% Group revenue Group EBITDA HEPS R40 151 million R15 278 million 440 cents per share R5.7bn +39.4% -% Group capital Group operating Dividend per expenditure free cash flow share 14.2% of revenue R8 128 million 395 cents per share Interim results | 30 September 201
Slide 4: Customer | Best network promise
12/11/2016 Customer | Best network promise Network NPS Data coverage (4G) % % Gap +19 ppts 58 39 21 69 55 28 27 Vodacom Operator A Operator B Vodacom SA Operator A Operator B Operator C Benchmark data performance (4G)1 38 43 40 7 904 5 683 4 676 3 826 29 14 406 8 922 9 580 8 835 Vodacom Operator A O
Slide 5: Contract and prepaid customer growth
12/11/2016 Segmentation | Targeted customer propositions • 638 000 customers • Strong ARPU uplift • Age restricted price plans • Search select job sites FREE • Exclusive rewards • Targeted digital content Interim results | 30 September 2016 9 Customer | “Best value” driving customer and ARPU growth
Slide 6: Enhancing the customer experience | NPS leadership
12/11/2016 Enhancing the customer experience | NPS leadership Consumer NPS points differentiation +16ppts lead 53 NPS score • Just 4 You on app • Dropped call compensation • Improved notifications Top Brands Grand Prix – Sunday Times My Broadband War Drive Best customer service telecoms – Ask Afrika
Slide 7: Content to drive data adoption | Enterprise
12/11/2016 Content | To drive data adoption Video Play • Delayed download (affordability) • Mobile and fixed • Predominantly local content • iOS, Android and Web • Simplified billing, data inclusive • Watch now and Watch later (discounted) • Unlimited Subscription Offers • Widest choice platform: Th
Slide 8: New services | International
12/11/2016 New services | Capturing new revenue shares Insurance • Insurance revenue +16.7% • Device insurance policies +34.7% IoT Fibre • IoT revenue up +17.1%1 • Connections +27.7% • Over 30 300 homes and businesses passed • GDSP platform delivery • Wholesale partnership agreements additional acce
Slide 9: International | M-Pesa
12/11/2016 International | M-Pesa Transforming lives M-Pawa Launched April 2008 Savings and loans Business integrations Transfer money Merchant payments Buy airtime Bill payments IMT International money transfer +36.8% YoY growth in M-Pesa revenue Interim results | 30 September 2016 17 Financial rev
Slide 10: Group income statement
12/11/2016 Group income statement R million 1H17 1H16 % change % Normalised* Revenue1 40 151 38 552 4.1 3.5 Service revenue 33 968 32 244 5.3 4.5 EBITDA 15 278 14 681 4.1 5.6 Depreciation and amortisation (4 523) (4 177) 8.3 EBIT 10 847 10 567 2.6 Operating profit 10 717 10 169 5.4 Net finance charg
Slide 11: Service revenue | Group expenses
12/11/2016 Service revenue | SA strong, International short-term headwinds South Africa International R million/% R million/% 24.1% 7.2% 6.5% 15.2% 13.5% 5.6% 5.6% 1.8% 9.8% 7.9% 3.8% (2.0%) 12 707 12 503 12 426 13 037 4 581 4 903 4 479 4 246 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 Service revenue R
Slide 12: Group EBITDA | Basic earnings
12/11/2016 Group EBITDA | Grew by +4.1% and margin maintained Group EBITDA EBITDA margin R million % 26 (232) +4.1% (96) [+5.6%*] 899 1H17 41.4% 38.1% 26.0% (2.2) Flat +0.9 ppts ppts 1H16 28.2% 40.5% 38.1% 14 681 15 278 1H16 South International Foreign Corporate 1H17 EBITDA Africa exchange and EBITD
Slide 13: Group tax | Financing costs
12/11/2016 Group tax | Effective tax rate impacted by Tanzania adjustment Group effective tax % 0.5% 0.2% (0.1%) 0.1% 0.8% 3.8% 28.0% 33.3% 1H17 Prior year Irrecoverable Non-deductible Non-deductible Net unrecognised Other 1H17 statutory tax rate adjustment foreign taxes operating finance costs tax
Slide 14: Headline earnings per share | Balance sheet
12/11/2016 Headline earnings per share | Adjusted HEPS +3.5% Group HEPS Cents 1H16 HEPS 1H17 HEPS HEPS 440 HEPS 440 0.0% Remeasurement of Remeasurement of foreign currency foreign currency 8 20 denominated intergroup denominated intergroup loan loan Loss from associate 10 Tanzania tax adjustment 14
Slide 15: Cash flow | Improving shareholder returns
12/11/2016 Cash flow | Strong cash flow generation Group free cash flow R million +4.1% (1 340) +21.8% (5 810) +39.4% ( 958) (3 111) 45 +84.0% 15 278 13 938 8 128 4 014 EBITDA Working capital & Cash Cash capital Operating Net finance Tax paid Net dividends Free cash other generated from expenditure
Slide 16: Customer registration | South Africa data journey
12/11/2016 Customer registration | Improvements on the horizon DRC customer net additions (‘000) 706 718 196 (304) (3 287) (41) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Mozambique customer net additions (‘000) 154 170 433 (224) (414) (9) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Tanzania customer net additions (‘000) 525
Slide 17: M-Pesa benefits | Medium-term targets
12/11/2016 M-Pesa | Mobile money benefits Revenue growth Cost savings Customer loyalty R million % +36.8% M-pesa customers have a lower propensity to +12.5% 36.2% +29.7% 29.8% 25.9% churn 642 722 988 1H15 1H16 1H17 1H15 1H16 1H17 Tanzania airtime recharges via M-Pesa • MNO service revenue contributi
Slide 18: Outlook | Key priorities
12/11/2016 Outlook Customer registration Competitive environment in SA and Tanzania Data Mozambique and DRC macroenvironment Tanzania listing Interim results | 30 September 2016 35 Key priorities Strategic Spectrum White paper Fibre investment Growth Commercial Content/Video Enterprise Segmentation
Slide 19: Q&A | Country data
12/11/2016 Q&A Interim results | 30 September 2016 Country data South Africa Tanzania DRC Mozambique Lesotho PopulationŦ (million) 55 55 73 29 2 GDP per capitaŦ (USD) 77 281η 814 445 382 923 GDP growth estimateŦ 2016 (%) -0.2 6.4 3.8 3.6 2.1 Ownership (%) 100# 82.2 51 85 80 License expiry period 202
Slide 20: Impact of foreign exchange | Definitions
12/11/2016 Impact of foreign exchange Revenue Average exchange YoY % growth rates 1H17 Reported Normalised* 1H17 1H16 % change South Africa 3.8 3.8 USD/ZAR 14.54 12.54 15.9 ZAR/MZN 4.38 3.06 43.1 International 6.1 3.0 ZAR/TZS 150.72 166.43 (9.4) Group 4.1 3.5 EUR/ZAR 16.33 13.92 17.3 Service revenue
Slide 21: Forward-looking statements | More information
12/11/2016 Forward-looking statements This presentation which sets out the interim results for Vodacom Group Limited for the six months ended 30 September 2016 contains 'forward-looking statements‘, which have not been reviewed or reported on by the Group’s auditors, with respect to the Group’s fina