Slide 1: Preliminary Results 2005/6 Analyst Presentation
Vodafone Group Plc Preliminary Results 2005/6 Analyst Presentation 30 May 2006
Slide 2: Arun Sarin, Chief Executive
Arun Sarin Chief Executive Vodafone Group Plc The following presentation is being made only to, and are only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of
Slide 3: Agenda and Key highlights
Agenda Results presentation: • Full year highlights Arun Sarin Chief Executive • Financial review Andy Halford Chief Financial Officer Strategy update: • Update to strategy Arun Sarin • Cost reduction and revenue stimulation Bill Morrow CEO, Europe • Emerging markets Paul Donovan CEO, EMAPA • New Bu
Slide 4: Group highlights; Meeting FY 05/06 expectations
Group highlights Continuing operations FY 05/06 Growth** Proportionate customers 170.6m 14.9% Proportionate revenue £41.4bn 9.6% Proportionate mobile EBITDA margin* 40.2% (0.3)pp Adjusted operating profit* £9.4bn 11.4% Operating free cash flow £7.7bn 21.3% Free cash flow £6.4bn (2.6%) Adjusted EPS*
Slide 5: One Vodafone – on track to deliver
Focus on regional performance for FY 05/06 Proportionate mobile Proportionate mobile organic organic EBITDA revenue growth margin change* Europe 4.9% (0.3)pp EMAPA subsidiaries & JVs 18.2% (1.3)pp US 16.4% 0.5pp Other associates and investments 13.1% (3.1)pp * Adjusted to remove impact of royalty ra
Slide 6: 3G provides platform for growth; Key country review
3G provides platform for growth Delivery to date Future developments • 7.7 million as at 31 March • Wider HSDPA commercial launch in Summer 06 • Usage on key 3G services (FTMD, Mobile TV etc) >20% higher in Q4 than Q3 • Embedded 3G broadband from Vodafone launching in Summer 2006 • 3G Coverage now a
Slide 7: Significant increase in dividends; Increasing returns to shareholders
Significant increase in dividends Dividends 6.07p • Full year dividend of 6.07 pence per share +49.1% • 60% payout of FY 05/06 adjusted earnings 4.07p per share • 60% target payout of future adjusted earnings per share • Growth in line with underlying earnings per share FY 04/05 FY 05/06 11 30th May
Slide 8: Outlook for FY 06/07; Summary
Outlook for FY 06/07 Proportionate organic mobile revenue growth 5% to 6.5% Proportionate organic mobile EBITDA margin Around 1pp lower Free cash flow before tax settlements £5.2 - 5.7bn Expected tax settlement and interest £1.2bn Reported free cash flow £4.0 – 4.5bn Capitalised fixed asset addition
Slide 9: Summary (Andy Halford, CFO)
Andy Halford Chief Financial Officer Vodafone Group Plc Summary Year ended 31 March 2006 2005 Increase Organic £m £m % % Revenue 29,350 26,678 10.0 7.5 ––––––––– ––––––––– Adjusted operating profit 9,399 8,353 12.5 11.4 Net financing costs (606) (521) Tax (2,380) (1,866) Minority interests (85) (41)
Slide 10: Mobile summary; Mobile revenue
Mobile summary Year ended 31 March 2006 2005 Increase Organic £m £m % % Total controlled mobile revenue 28,137 25,740 9.3 6.7 ––––––––– ––––––––– Service revenue 25,881 23,547 9.9 7.2 Operating costs1 (14,351) (12,978) ––––––––– ––––––––– EBITDA2 11,530 10,569 Depreciation & amortisation (4,685) (4,
Slide 11: Mobile service revenue; Voice revenue
Mobile service revenue Year ended 31 March Analysis of FY 05/06 Service Revenue 2006 Organic £m % Messaging Controlled service revenue: & Data 17.0% Voice - Outgoing 14,365 8.3 Voice - Other - Incoming 4,575 (0.9) 9.8% - Other 2,553 0.8 ––––––––– ––––––––– Total voice 21,493 5.3 Messaging 3,556 10.6
Slide 12: Other voice revenue; Messaging and data revenues
Other voice revenue Other voice revenue : £2.6 billion Roaming voice revenue 1.8 (0.1) 1.6 0.2 0.0 1.4 1.2 Organic growth +5.2% £ Billions 1.0 0.8 1.6 1.5 0.6 0.4 0.2 0.0 62% Roaming 27% Visitors 11% Other FY 04/05 Minutes Rate per M&A / FX FY 05/06 grow th minute 21 30th May 2006Financial Results M
Slide 13: Mobile EBITDA margin; One Vodafone
Mobile EBITDA margin Year ended 31 March Net acquisition costs 50 50 2006 Organic £m % 40 40 Interconnect costs (4,210) 7.2 30 30 20 20 Other direct costs (1,936) 7.5 10 10 Net acquisition costs1 (1,541) 4.2 0 0 Net retention costs1 (1,444) 15.5 H1 FY04/05 H2 FY04/05 H1 FY05/06 H2 FY 05/06 Gross add
Slide 14: Adjusted operating profit; Tax
Adjusted operating profit1 Year ended 31 March Sources of adjusted operating profit Organic 2006 growth2 £m % 24.3% 26.2% Controlled mobile: Germany 1,496 5.2 Italy 1,672 1.3 Spain 968 29.5 UK 698 (3.9) Other mobile 1,808 9.5 75.7% 73.8% Common functions 203 - –––––––– –––––––– 6,845 8.0 Associate m
Slide 15: Free cash flow; Net debt
Free cash flow Year ended 31 March Continuing operations: 2006 2005 Increase £m £m % Net cash flows from operations • £6.4bn excluding Japan 11,902 10,417 14.3 before tax Capital expenditure (4,207) (4,073) 3.3 Taxation (1,712) (1,258) 36.1 • £7.1bn including Japan Net interest paid (390) (378) 3.2
Slide 16: Fixed asset additions; Summary
Fixed asset additions Year ended 31 March 2006: £4.0 billion Geographic analysis Category analysis £1.3bn £0.7bn £0.6bn £0.5bn £0.5bn £0.3bn £0.1bn 26% 3G radio network 33% IT and other mobile 19% 2G radio network Germ any Italy Spain UK Other Other Other 4% Other operations m obile m obile JVs oper
Slide 17: Forward-Looking Statements
Forward-Looking Statements These presentations contain “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Group’s financial condition, results of operations and businesses and certain of the Group’s plans and objectives. In