Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Vodafone Group — Q1 FY18/19 Earnings Presentation
28 slides from Vodafone Group Public's earnings presentation, Jul 25, 2018
Slide 1: Vodafone Group Results: quarter ended 30 June 2018
Vodafone Group Results: for the quarter ended 30 June 2018 25 July 2018
Slide 2: Disclaimer
Disclaimer By reading these slides you agree to be bound by the following conditions. disclosed by other companies, including those in the Vodafone Group’s industry. Although these measures are important in the assessment and Information in the following presentation relating to the price at which m
Slide 3: Overview and Strategic progress
Overview and Strategic progress Vittorio Colao Group Chief Executive 3
Slide 4: Q1 18/19 highlights: ongoing momentum
Q1 18/19 highlights: ongoing momentum Service revenue Leading Strong data Fastest growing Leveraging scale Clear NPS growth network growth fixed broadband and reach in leadership provider Enterprise 0.3%/1.1% 94% 57% 196k 0.9% 17/20 (IAS 18/IFRS 15 basis) 4G population coverage1 growth in mobile fix
Slide 5: Solid commercial momentum
Solid commercial momentum Europe: customer net adds (000s) AMAP: customer net adds (m) Mobile contract1 Fixed broadband Mobile contract Mobile prepaid4 0.6 0.5 0.4 0.6 0.5 342 234 224 453 173 3.1 3.1 3.2 2.8 2.4 316 237 262 255 351k NGN 128 net adds Q1 17/18 Q2 17/18 Q3 17/18 Q4 17/18 Q1 18/19 Q1 17
Slide 6: Reducing churn in most markets
Reducing churn in most markets Q1 18/19 mobile contract churn improvement YoY (pp) 5.9 3.4 2.1 1.5 1.2 0.8 0.6 0.4 0.4 0.3 0.2 (3.4) (4.4) Turkey Egypt Portugal UK¹ Hungary² Greece Czech Ireland Germany Romania South Italy Spain Republic Africa Annualised Churn (%) 18.9 9.7 9.6 13.2 8.3 10.4 8.9 9.3
Slide 7: All three growth engines contributing
All three growth engines contributing Q1 18/19 organic service revenue growth contribution (pp) Data Fixed/ Enterprise Convergence 0.6 (0.6) 0.6 (0.8) 1.1 (0.4) 0.31 0.3 (0.2) European AMAP Consumer Enterprise² EU regulation UK handset Carrier, Q1 18/19 consumer consumer fixed line financing wholesa
Slide 8: EU Electronic Communication Code: a clear positive for Vodafone
EU Electronic Communication Code: a clear positive for Vodafone Fixed access Other areas Passive infrastructure access as 20 years minimum spectrum licences / a key priority harmonisation of availability De-regulation of FTTH/P only possible Intra-EU international calls subject to a cap of with cred
Slide 9: India: revenue declines moderating, merger on-track to close shortly
India: revenue declines moderating, merger on-track to close shortly Customer and ARPU growth Service revenue growth Vodafone-Idea merger Net adds (m) Prepaid ARPU (% change) Service revenue Service revenue MTR impact growth ex MTRs (%) (INR) X (INR) (13.9) (17.8) (14.2) (9.4) (9.6) 10 A scaled lead
Slide 10: Financial review
Financial review Nick Read Group Chief Financial Officer 10
Slide 11: Adopting IFRS 15
Adopting IFRS 151 IFRS 15 vs. IAS 18 revenue analysis Q1 18/19 (€bn) IFRS 15 impacts vs. IAS 18: 11.2 Total revenue 10.9 • Total revenue decreased vs. IAS 18 due to 1.3 Other revenue accounting treatment for dealer commissions 1.7 • Higher service revenue growth due to reduced drag from UK handset f
Slide 12: Service revenue growth
Service revenue growth Group service revenue growth (%) IFRS 15 impact on service revenue growth (%) Reported Underlying1 IFRS 15 basis IFRS 15 IAS 18 2.0 2.9 Germany 2.4 2.5 2.4 2.3 (6.7) Italy (6.5) 1.7 1.7 0.3 2.2 UK (4.9) UK 1.3 1.1 1.4 handset 1.1 financing (1.7) 0.3 Spain (2.2) Q1 17/18 Q2 17/
Slide 13: Healthy growth across most markets
Healthy growth across most markets Q1 18/19 service revenue growth (%) 16.7 14.0 5.4 5.4 5.1 3.6 2.4 2.1 1.8 1.7 - (2.2) (6.5) Egypt Turkey Hungary Czech Vodacom Portugal Germany Greece UK¹ Ireland Romania Spain Italy Republic Share of Group FY 17/18 EBITDA (%)2 3 4 1 1 15 2 27 2 12 2 1 10 16 1. Exc
Slide 14: Germany: consistent growth in a stable competitive environment
Germany: consistent growth in a stable competitive environment Consumer NPS (points) Customer net adds (000s) Service revenue growth (%) Gap to next best Gap to third Mobile contract Fixed broadband 258 26 217 2.5 212 2.4 18 1.8 144 1.6 100 94 84 89 79 46 0.6 2 - Q1 17/18 Q1 18/19 Q1 17/18 Q2 17/18
Slide 15: Italy: intense mobile competition
Italy: intense mobile competition Commercial actions Customer net adds (000s) Service revenue growth (%) Mobile prepaid Mobile prepaid Fixed registered active1 broadband 95 100 3.2 58 54 61 1.5 0.7 16 Monthly (0.4) billing (33) (43) (37) (40) (76) (121) (139) (156) (156) (6.5) Q1 17/18 Q2 17/18 Q3 1
Slide 16: Spain: early impact of commercial repositioning
Spain: early impact of commercial repositioning Mobile contract net portability (000s) Customer net adds (000s) Service revenue growth (%) Mobile contract Fixed broadband Reported Ex. MTRs (16) 141 (8) 3.9 (12) (31) 68 2.0 55 1.6 1.8 (55) 39 42 40 1.0 30 (65) 15 (90) (16) (1.0) (49) (2.2) Q2 17/18 Q
Slide 17: UK: improving trends, strong momentum in consumer fixed
UK: improving trends, strong momentum in consumer fixed Customer Experience Customer net adds (000s) Service revenue growth (%) Consumer Enterprise Mobile contract1 Fixed broadband Reported Ex. handset financing and regulation NPS (points) 22 1.8 20 77 1.4 0.6 0.4 16 66 53 11 41 38 9 (1.2) 33 33 29
Slide 18: AMAP: good growth, ahead of inflation in key markets
AMAP: good growth, ahead of inflation in key markets Vodacom South Africa Turkey Egypt Int. Consumer NPS rank #1 #11 #2 #1 Environment Stable Stable Rising inflation Stable Q1 customer net adds 1,646 330 126 945 (000s) 76 6 40 24 Mobile Mobile Mobile Mobile Mobile Broadband Mobile Broadband Contract
Slide 19: Summary of the quarter
Summary of the quarter • In line with our expectations • Majority of markets showing solid growth, including good Germany and UK performances • Competitive markets in Italy and Spain, but commercial actions taken • Revenue declines moderating, plans to ensure a fast start to synergy capture in India
Slide 20: Priorities for FY 18/19: Focus on execution
Priorities for FY 18/19 Focus on execution Enhance customer Drive fixed Secure EC Accelerate Close India JV (fast experience and momentum to approvals for Digital Vodafone start on synergy commercial capture acquisition of Unity transformation and capture) and Indus performance to convergence Media
Slide 21: Q&A
Q&A 21
Slide 22: Appendix
Appendix 22
Slide 23: IFRS 15 impacts
IFRS 15 impacts IAS 18 IFRS 15 Service revenue growth Service Other Revenue Service Other Revenue IAS 18 IFRS 15 revenue revenue revenue revenue Q1 18/19 (€m) (€m) (€m) (€m) (€m) (€m) (%) (%) Germany 2,550 118 2,668 2,292 274 2,566 2.4 2.0 Italy 1,231 200 1,431 1,245 180 1,425 (6.5) (6.7) UK 1,459 2
Slide 24: Customer experience and commercial KPIs
Customer experience and commercial KPIs Europe AMAP Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 17/18 17/18 17/18 17/18 18/19 17/18 17/18 17/18 17/18 18/19 4G customers (m) 1 50.6 53.3 56.8 58.9 60.7 4G customers (m) 2 33.4 40.1 53.4 62.8 68.4 Broadband customers (m) 1 16.8 17.1 17.5 17.8 17.9 Broadband customers
Slide 25: Vodafone pro forma NGN footprint by country
Vodafone pro forma NGN footprint by country1 Household coverage (m)2 72% 61% 73% 93% 56% 93% 39% 4.6 11.0 10.6 28.0 12.1 6.4 12.7 10.3 0.2 2.2 7.2 6.4 3.3 2.6 Germany Italy Spain UK Portugal VodafoneZiggo NLJV CEE¹ Owned Strategic partnership³ Acquired assets Wholesale 115m Households passed with NG
Slide 26: Service revenue bridge
Service revenue bridge (€ millions) 10,282 Mobile 21 9,850 (268) 88 (193) (51) (7) (22) Q1 17/18 FX One-off items¹ Mobile Incoming Voice MTR Fixed line and Other Q1 18/19 reported service customer carrier reported service revenue revenue revenue 26 1. Excludes the results of both Vodafone Qatar and
Slide 27: Forward-looking statements
Forward-looking statements This presentation, along with any oral statements made in connection therewith, contains “forward-looking the Vodafone Group’s ability to secure the timely delivery of high quality products from suppliers; loss of suppliers, statements” within the meaning of the US Private
Slide 28: More information
More information Visit our website for more information Upcoming FY 18/19 dates AGM H1 18/19 Q3 18/19 results results 27 July 13 Nov 25 Jan www.vodafone.com/investor Contact us ir@vodafone.co.uk +44 (0) 7919 990 230 For definitions of terms please see www.vodafone.com/content/index/investors/glossar