Slide 1: Vodacom Group 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 31.6 million 22.6% High gross connections: increase of 19.4% year on year to 8.7 million Revenue R22.8 billion 17.2% Profit from operations R5.7 billion 15.1% EBITDA R7.6 billion 15.5% Net profit after tax R3
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 after (12
Slide 5: South Africa
15.3% 10.1% 14.6 pts 13.6% 2.9 pts South Africa For the six months ended September 30, 2007 vs. prior year 5.8 million Gross connections 45.9% Churn % 86.8% Mobile penetration % R5.4 billion Profit from operations 23.3 million Total customers H1 2008
Slide 6: Tanzania
41.8% 36.6% 4.7 pts 34.3% 11.6 pts Tanzania For the six months ended September 30, 2007 vs. prior year 1.2 million Gross connections 46.8% Churn % 17.3% Mobile penetration % R180 million Profit from operations 3.7 million Total customers H1 2008 3G has been launched in Dar es Salaam on March 1, 2007
Slide 7: Democratic Republic of Congo (DRC)
56.8% 63.3% 4.4 pts 29.3% 13.3 pts Democratic Republic of Congo (DRC) For the six months ended September 30, 2007 vs. prior year 1.2 million Gross connections 43.3% Churn % 11.0% Mobile penetration % R172 million Profit from operations 3.2 million Total customers H1 2008
Slide 8: Lesotho
39.5% 45.5% 7.4 pts 64.7% Lesotho For the six months ended September 30, 2007 vs. prior year 80 thousand Gross connections 17.9% Churn % 22.1% Mobile penetration % R56 million Profit from operations 332 thousand Total customers H1 2008
Slide 9: Mozambique
55.5% 19.6% 3.0 pts 15.5 pts Mozambique For the six months ended September 30, 2007 vs. prior year R56 million Loss from operations 391 thousand Gross connections 57.3% Churn % 13.7% Mobile penetration % R75 million Loss from operations (excluding impairment) 1.1 million Total customers H1 2008
Slide 10: Innovative non-voice products in South-Africa
Innovative non-voice products in South-Africa Voted no 1 brand in telecommunication Voted no 3 brand overall Voted no 1 advertising company Brand and marketing More than 35 thousand unique Mobile TV users 26 TV channels More than 4 thousand DSTV pay TV customers Mobile TV / DVB-H Changing media land
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 completed and as a
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 n/a (445) (383) Net finance (costs) / income n/a (38) Impairment 17.5% 3,658 3,114 2,387 Net profit 13.2% (1,611) (1,855) (1,455) Taxation (18.1%) (15,215) (12,888) (10,612) Operating expenses excluding depreciation, amortisation and impai
Slide 17: Group revenue by country
Group revenue By country 23.4% 1,108 DRC 15.5% 20,299 17,580 14,764 South Africa, including holding companies 17.2% 22,815 19,466 16,175 69.4% Mozambique 32.4% Lesotho 40.1% 1,086 Tanzania H1 2007 % change H1 2008 H1 2006 R million Revenue driven by strong customer growth Non-South African operation
Slide 18: Group revenue composition
Group revenue Composition 71.5% International airtime 3.5% 2,393 2,312 1,910 Equipment sales 15.6% 4,304 3,723 3,186 Interconnection 14.4% 12,947 11,313 9,581 Airtime, connection & access 17.2% 22,815 19,466 16,175 2.5% Other sales and services 45.3% 2,096 1,443 Data H1 2007 % change H1 2008 H1 2006
Slide 19: Group revenue (excluding equipment sales)
Group revenue (excluding equipment sales) By revenue type Revenue analysis – H1 2008 R20,422 million (excluding equipment sales) Revenue analysis – H1 2007 R17,154 million (excluding equipment sales) Airtime contribution down 2.7% points to 63.3% Interconnect contribution down 0.6% points to 21.1% D
Slide 20: Group operational indicators
Group operational indicators Gross connections up 19.4% year on year to a high of 8.7 million Customers up 22.6% year on year to 31.6 million Total traffic in South Africa increased by 14.0% year on year to 11.0 billion minutes vs. customer growth of 15.3% Gross connections Closing customers
Slide 21: Factors affecting trends and margins
Factors affecting trends and margins South Africa traffic mix Outgoing traffic increased 14.2% year on year to 7.4 billion minutes: Outgoing fixed increased by 3.8% to 624 million Outgoing mobile increased by 15.3% to 6.8 billion Incoming traffic increased 13.6% year on year to 3.6 billion minutes:
Slide 22: ARPU by country
ARPU by country Declining ARPUs SA decreased 4.0% to R119 DRC decreased 22.9% to R64 Lesotho decreased 5.3% to R72 Tanzania decreased 9.4% to R48 Mozambique stable at R27 Vodacom Group consolidated ARPU decreased 7.2% year on year from R111 to R103 ARPU per month
Slide 23: South Africa ARPU
South Africa ARPU Contract ARPU decreased 7.8% year on year to R487 Prepaid ARPU decreased 3.3% year on year to R59 Total ARPU decreased 4.0% year on year to R119 South Africa ARPU per month
Slide 24: EBITDA and margin analysis
EBITDA and margin analysis EBITDA margin by country EBITDA performance Increased 15.5% year on year to R7.6 billion EBITDA margin decreased 0.5% points year on year to 33.3% EBITDA margin 38.3%, when excluding cellular phone and equipment sales South Africa EBITDA Increased 14.9% year on year to R6.
Slide 25: Group profit from operations
Group profit from operations By country 29.3% DRC (147.4%) (27) Holding companies 34.3% Tanzania (0.5% pts) 25.0% 25.5% 26.1% Profit from operations margin (%) 15.1% 5,714 4,965 4,225 59.4% (56) (138) (25) Mozambique 64.7% Lesotho 13.6% 5,389 4,745 4,060 South Africa H1 2007 % change H1 2008 H1 2006
Slide 26: Productivity measures
Productivity measures Consolidated customers per employee Increased 8.0% year on year to 5,058 based on 6,240 employees Consolidated gross capex additions as a % of revenue decreased to 10.0% from 16.1% for the same period in the previous financial year Gross capex additions at R2.3 billion vs. R3.1
Slide 27: Capex additions and composition
Capex additions and composition Including software Capex gross additions – H1 2008 R2,289 million Capex gross additions – H1 2007 R3,142 million South Africa capex gross additions decreased by 35.1% to R1.6 billion Non-South African capex additions decreased by 10.7% to R551 million
Slide 28: Cash generation
Cash generation EBITDA increased by R1.0 billion Cash generated from operations increased by 26.1% to R6.9 billion Free cash flow decreased from R837 million to negative R582 million Net investments increased by R948 million Capex payments increased by R1.0 billion or 39.9% Cash generated from opera
Slide 29: Debt composition
Debt composition Gross debt composition including bank overdrafts – H1 2008 R6,949 million Gross debt composition including bank overdrafts – H1 2007 R3,873 million Net debt: R6,150 million (H1 2007: R3,006 million) Net debt to adjusted equity ratio of 56.6% (H1 2007: 37.5%); 118.4% when including t
Slide 30: Group shareholder distributions
Group shareholder distributions Interim dividend declared in October 2007 10.0% year on year
Slide 31: Questions?
Questions?
Slide 32: Group balance sheet
Group balance sheet Extracts as at (5.7%) 14,155 15,011 13,513 Current liabilities 8.8% 30,984 28,470 26,586 Total equity and liabilities (5.4%) 3,607 3,812 3,705 Non-current liabilities 37.1% 13,222 9,647 9,368 EQUITY AND LIABILITIES Equity 8.8% 30,984 28,470 26,586 Total assets 19.7% 9,125 7,626 8
Slide 33: Group cash flow statement
Group cash flow statement Extracts for the six months ended n/a (261) 1,372 Cash and cash equivalents at the end of the year (116.7%) (15) (12) Effect of foreign exchange rate changes (106.1%) (108) 1,760 2,173 Cash and cash equivalents at the beginning of the period 142.0% (2,111) (789) Net increas
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 makes no