Vodacom Group Limited · JSE:VOD
Vodacom — Merger or Acquisition (June 2018)
20 slides from Vodacom's merger presentation, Jun 11, 2018
Slide 1: Vodacom Group Limited BEE transaction
Vodacom Group Limited BEE transaction June 2018
Slide 2: Disclaimer
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 person should not act or rely on this presentation or any of its contents. Information in the f
Slide 3: Overview
Overview Up to R17.5bn Committed to transformation BBBEE ownership transaction Largest in the ICT sector in South Africa Thebe is controlled by the YeboYethu with c.85 000 black Batho Batho Trust with a 52% shareholders and Vodacom ESOP shareholding True broad-based empowerment Royal Bafokeng Holdin
Slide 4: Current BEE Status amongst South Africa's network operators
Current BEE Status amongst South Africa’s network operators Relative scorecard points Vodacom SA BBBEE points Level 3 4 6 4 105.0 110.6 112.3 110.6 102.7 96.3 100.9 2017 2018 Post transaction (Pro forma) • Vodacom SA has the highest BEE score and rating amongst South Africa’s network operators • Thi
Slide 5: BEE transaction guiding principles
BEE transaction guiding principles Principle How implemented? • Preserve Vodacom SA's BEE ownership level by ensuring that black Unwind of the existing BEE structure and the implementation of ownership is not diluted the proposed BEE transaction with minimum a 10-year period • Provide significant
Slide 6: Pre-transaction structure
Pre-transaction structure Vodacom SA BEE effective ownership of 16.9% • Vodacom SA implemented its R7.5bn broad-based BEE deal with RBH, Thebe and YeboYethu in 2008 YeboYethu BEE Other • 6.25% deal at the Vodacom SA level facilitated by Black public Vodafone ESOP shareholders shareholders Vodacom Gr
Slide 7: Sources and uses of funds
Sources and uses of funds Sources of funds Rm % Economic value of Vodacom Group discount of Uses of funds Rm % 1 750 10.0 subscription price Equity contribution – Vodacom SA BEE Acquisition of 4 500 25.6 Vodacom Group 17 500 99.6 shareholders (including YeboYethu shareholders) shares Equity contribu
Slide 8: New BEE structure
New BEE structure Vodacom SA BEE effective ownership of c.20.0% YeboYethu YeboYethu Vodacom ESOP black public ESOP 29% 12% 28% 11% 20% YeboYethu Other Vodafone Investments shareholders 6% 61% 33% Vodacom Group 100% Vodacom SA BEE | June 2018 8
Slide 9: Vodacom Group dividend policy
Vodacom Group dividend policy Dividend policy 90% of pre-Safaricom headline earnings Vodacom Group intends to add back the + Flow through of Safaricom = day one non-recurring share-based Total Vodacom Group cash dividend payment charge (c.R2.7bn) relating to (net of withholding tax) dividend YeboYet
Slide 10: Financial effects based on 31 March 2018
Financial effects based on 31 March 2018 After, excl non- recurring Before IFRS 2 charge After % change % change Based on 31 March 2018 (A) (B) (C) (B/A) (C/A) Basic earnings per share (cents) 947 904 734 (4.5) (22.5) Diluted basic earnings per share (cents) 919 881 716 (4.1) (22.1) Headline earning
Slide 11: Key benefits
Key benefits Largest BEE deal in the ICT sector Significant value realised from the Vodacom SA BEE transaction and recommitted to the transaction 10 year funding term ensures Vodacom Group can count YeboYethu as a BEE investor for at least 10 years Consolidation and “flip-up” through YeboYet
Slide 12: More information
More information Visit our website for more information Contact us VodacomIR@vodacom.co.za Follow us on social media @vodacom Facebook.com/vodacom http://www.vodacom.com BEE | June 2018 12
Slide 13: Forward-looking statements
Forward-looking statements This presentation contains 'forward-looking statements‘, which have not been reviewed or reported on by the Group’s auditors, with respect to the Group’s financial condition, results of operations and businesses and certain of the Group’s plans and objectives. In particula
Slide 14: Q&A
Q&A The future is exciting. Ready?
Slide 15: Appendices
Appendices
Slide 16: Transaction steps
Transaction steps Unwind existing BEE deal Consol of VSA BEE in YeboYethu YeboYethu declares a special dividend • BEE shareholders (incl YeboYethu ESOP) settle • RBH and Thebe exchange their Vodacom SA • YeboYethu declares a special dividend of c.R3bn or outstanding NVF through a share repurchase or
Slide 17: Transaction parameters
Transaction parameters Funding and Listing, Pricing date trading and dividends facilitation Pricing date • Pricing date of the Transaction will happen post announcement to minimise the time between locking in the Vodacom Group share price and Vodacom Group/Vodacom SA, equity swap ratio and the date
Slide 18: Transaction parameters
Transaction parameters Funding and Listing, Pricing date trading and dividends facilitation Funding terms • YeboYethu is raising preference share funding on the following basis: Term R’m Ratio Funding rate Third party funding (non recourse preference shares) 5 years 5 833 55.6% 68% of prime Vendor f
Slide 19: Transaction parameters
Transaction parameters Funding and Listing, Pricing date trading and dividends facilitation Listing and trading • YeboYethu to remain listed on the BEE Exchange, now holding Vodacom Group shares. • YeboYethu shareholders will be able to continue trading their YeboYethu shares from day 1 and througho
Slide 20: YeboYethu timelines and regulatory requirements
YeboYethu timelines and regulatory requirements Date Key Events 11 June 2018 Announce new BEE transaction July 2018 Pricing date July 2018 Circular distribution August 2018 Shareholders meeting August 2018 YeboYethu shareholders to vote September 2018 Special dividend September 2018 Implementation o