Slide 1: Interim Results for the Six Months Ended September 30, 2007
VODACOM GROUP (PROPRIETARY) LIMITED INTERIM RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2007
Slide 2: Operational highlights
Operational highlights Alan Knott-Craig Chief Executive Officer
Slide 3: Group highlights
Group highlights For the six months ended September 30, 2007 vs. prior year Total customers Revenue Profit from operations 31.6 million R22.8 billion R5.7 billion 22.6% 17.2% 15.1% EBITDA Net profit after tax Interim dividend (declared October 2007) R7.6 billion R3.7 billion R2.75 billion 15.5% 17.5
Slide 4: Inactive customers – South Africa
Inactive customers – South Africa • Current rule – Call forwarding to voicemail is classified as a revenue generating activity – Disconnect inactive prepaid SIM cards after (6 + 1) months with no revenue generating activity on the network • Supplementary rule – Disconnect inactive prepaid SIM cards
Slide 5: South Africa
South Africa For the six months ended September 30, 2007 vs. prior year H1 2008 • Total customers 15.3% 23.3 million • Gross connections 10.1% 5.8 million • Churn % 2.9 pts 45.9% • Mobile penetration % 14.6 pts 86.8% • Profit from operations 13.6% R5.4 billion
Slide 6: Tanzania
Tanzania For the six months ended September 30, 2007 vs. prior year H1 2008 • Total customers 41.8% 3.7 million • Gross connections 36.6% 1.2 million • Churn % 11.6 pts 46.8% • Mobile penetration % 4.7 pts 17.3% • Profit from operations 34.3% R180 million 3G has been launched in Dar es Salaam on Mar
Slide 7: Democratic Republic of Congo (DRC)
Democratic Republic of Congo (DRC) For the six months ended September 30, 2007 vs. prior year H1 2008 • Total customers 56.8% 3.2 million • Gross connections 63.3% 1.2 million • Churn % 13.3 pts 43.3% • Mobile penetration % 4.4 pts 11.0% • Profit from operations 29.3% R172 million
Slide 8: Lesotho
Lesotho For the six months ended September 30, 2007 vs. prior year H1 2008 • Total customers 39.5% 332 thousand • Gross connections 45.5% 80 thousand • Churn % 2.6 pts 17.9% • Mobile penetration % 7.4 pts 22.1% • Profit from operations 64.7% R56 million
Slide 9: Mozambique
Mozambique For the six months ended September 30, 2007 vs. prior year H1 2008 • Total customers 55.5% 1.1 million • Gross connections 19.6% 391 thousand • Churn % 15.5 pts 57.3% • Mobile penetration % 3.0 pts 13.7% • Loss from operations 59.4% R56 million • Loss from operations 25.0% R75 million (ex
Slide 10: Innovative non-voice products in South Africa
Innovative non-voice products in South-Africa Vodafone live! / 3G / HSDPA Mobile TV / DVB-H • Over 1.2 million Vodafone live! users • More than 35 thousand unique Mobile TV users • Over 265 thousand data card and USB • 26 TV channels modem users • More than 4 thousand DSTV pay TV customers New produ
Slide 11: Acquisitions of subsidiaries
Acquisitions of subsidiaries • On August 31, 2007 the Group increased its interest in the equity of Smartphone SP (Proprietary) Limited from 70% to 100% • On September 1, 2007 the Group increased its interest in the equity of Smartcom (Proprietary) Limited from 88% to 100%
Slide 12: Vodacom BEE equity transaction
Vodacom BEE equity transaction • Our envisaged BEE transaction has been impacted by pending shareholder activity for the past four months • We are now pleased to announce that the Vodacom Group Board has given the go ahead to proceed with the envisaged BEE equity transaction of R7.5 billion
Slide 13: Regulatory
Regulatory • Regulatory environment affecting the future potential earnings of the company: – Convergence Bill – Interconnect and wholesale rate regulations / mobile termination rates – Customer registrations (RICA) • EASSY cable delayed due to uncertainty as to landing rights
Slide 14: Current affairs
Current affairs • Vodacom Converged Solutions in place – Converged network services; managed hosting services; mobile and application services – Integrated into Vodacom South Africa • WiMax launch due early next year • Self provisioning of fiber rings underway. As at end October 2007, 15 km complete
Slide 15: Financial review
Financial review Leon Crouse Chief Financial Officer
Slide 16: Group income statement
Group income statement For the six months ended September 30 R million H1 2006 H1 2007 H1 2008 % change Revenue 16,175 19,466 22,815 17.2% Operating expenses excluding depreciation, amortisation and impairment (10,612) (12,888) (15,215) (18.1%) EBITDA 5,563 6,578 7,600 15.5% Depreciation and amortis
Slide 17: Group revenue by country
Group revenue By country R million H1 2006 H1 2007 H1 2008 % change South Africa, including holding companies 14,764 17,580 20,299 15.5% Tanzania 611 775 1,086 40.1% DRC 649 898 1,108 23.4% Lesotho 77 105 139 32.4% Mozambique 74 108 183 69.4% 16,175 19,466 22,815 17.2% Revenue driven by strong custo
Slide 18: Group revenue composition
Group revenue Composition R million H1 2006 H1 2007 H1 2008 % change Airtime, connection & access 9,581 11,313 12,947 14.4% Data 893 1,443 2,096 45.3% Interconnection 3,186 3,723 4,304 15.6% Equipment sales 1,910 2,312 2,393 3.5% International airtime 485 555 952 71.5% Other sales and services 120 1
Slide 19: Group revenue (excluding equipment sales)
Group revenue (excluding equipment sales) By revenue type Revenue analysis – H1 2007 Revenue analysis – H1 2008 R17,154 million (excluding equipment sales) R20,422 million (excluding equipment sales) 3.2% 0.7% 4.7% 0.6% 21.7% 21.1% 8.4% 66.0% 10.3% 63.3% Airtime, connection and access Data Interconn
Slide 20: Group operational indicators
Group operational indicators Gross connections • Gross connections up 2,895 19.4% year on year to a high of Thousand 2,015 8.7 million 1,142 • Customers up 22.6% year on 4,181 5,308 5,845 year to 31.6 million H1 2006 H1 2007 H1 2008 SA Non-SA operations Closing customers • Total traffic in South Afr
Slide 21: Factors affecting trends and margins
Factors affecting trends and margins 14.0% year on year • South Africa traffic mix Total South Africa traffic 11,024 – Outgoing traffic increased 14.2% year on 9,669 year to 7.4 billion minutes: 8,038 – Outgoing fixed increased by 3.8% to 624 million Million – Outgoing mobile increased by 15.3% to 6
Slide 22: ARPU by country
ARPU by country • Declining ARPUs ARPU per month 147 • SA decreased 4.0% to R119 124 119 • DRC decreased 22.9% to R64 • Lesotho decreased 5.3% to R72 Rand 89 83 • Tanzania decreased 9.4% to R48 77 76 72 64 • Mozambique stable at R27 73 53 • Vodacom Group consolidated 41 48 ARPU decreased 7.2% year o
Slide 23: South Africa ARPU
South Africa ARPU • Contract ARPU decreased South Africa ARPU per month 7.8% year on year to R487 588 528 487 • Prepaid ARPU decreased Rand 3.3% year on year to R59 147 124 119 • Total ARPU decreased 4.0% year on year to R119 71 61 59 H1 2005 H1 2006 H1 2007 Contract Total Prepaid
Slide 24: EBITDA and margin analysis
EBITDA and margin analysis 15.5% year on year • EBITDA performance EBITDA – Increased 15.5% year on year to R7.6 billion 7,600 – EBITDA margin decreased 0.5% points year on year to 6,578 5,563 R million 33.3% – EBITDA margin 38.3%, when excluding cellular phone and equipment sales • South Africa EBI
Slide 25: Group profit from operations
Group profit from operations By country R million H1 2006 H1 2007 H1 2008 % change South Africa 4,060 4,745 5,389 13.6% Tanzania 115 134 180 34.3% DRC 47 133 172 29.3% Lesotho 26 34 56 64.7% Mozambique (25) (138) (56) 59.4% Holding companies 2 57 (27) (147.4%) 4,225 4,965 5,714 15.1% Profit from ope
Slide 26: Productivity measures
Productivity measures • Consolidated customers Gross capex additions as a % of revenue per employee 16.1 15.3 Increased 8.0% year on year to 5,058 based on 6,240 employees 10.0 • Consolidated gross capex % additions as a % of revenue decreased to 10.0% from 16.1% for the same period in the H1 2006 H
Slide 27: Capex additions and composition
Capex additions and composition Including software Capex gross additions – H1 2007 Capex gross additions – H1 2008 R3,142 million R2,289 million 1.6% 6.2% 1.6% 0.9% 8.6% 11.3% 9.1% 11.1% 70.5% 79.1% South Africa Tanzania DRC Mozambique Lesotho and holding companies South Africa capex gross additions
Slide 28: Cash generation
Cash generation 26.1% year on year • EBITDA increased by R1.0 billion Cash generated from operations 6,879 • Cash generated from operations 5,454 increased by 26.1% to R6.9 billion 4,922 R million • Free cash flow decreased from R837 million to negative R582 million – Net investments increased by R9
Slide 29: Debt composition
Debt composition Gross debt composition Gross debt composition including bank overdrafts – H1 2007 including bank overdrafts – H1 2008 R3,873 million R6,949 million 75.3% 51.5% 48.5% 24.7% ZAR denominated Foreign denominated Net debt: R6,150 million (H1 2007: R3,006 million) Net debt to adjusted equ
Slide 30: Group shareholder distributions
Group shareholder distributions 10.0% year on 2,900 year R million 2,800 2,500 2,750 1,700 2006 2007 H1 2008 Interim dividend Final dividend Interim dividend declared in October 2007
Slide 31: Questions?
Questions? vodacom
Slide 32: Group balance sheet
Group balance sheet Extracts as at % R million H1 2007 March 2007 H1 2008 change ASSETS Non-current assets 18,524 20,844 21,859 4.9% Current assets 8,062 7,626 9,125 19.7% Total assets 26,586 28,470 30,984 8.8% EQUITY AND LIABILITIES Equity 9,368 9,647 13,222 37.1% Non-current liabilities 3,705 3,81
Slide 33: Group cash flow statement
Group cash flow statement Extracts for the six months ended % R million H1 2006 H1 2007 H1 2008 change Cash generated from operations 4,922 5,454 6,879 26.1% Net cash flows from operating activities 1,477 647 1,069 65.2% Net cash flows utilised in investing (2,231) (2,646) (4,641) (75.4%) activities
Slide 34: Disclaimer
Disclaimer • This presentation has been prepared and published by Vodacom Group (Proprietary) Limited. • Vodacom Group (Proprietary) Limited 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 (Proprietary) Limited mak