Slide 1: Vodacom Group Interim Results for the Six Months Ended September 30, 2008
VODACOM GROUP (PTY) LTD INTERIM RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2008
Slide 2: Operational highlights
Operational highlights Pieter Uys Chief Executive Officer
Slide 3: Group highlights
Group highlights For the six months ended September 30, 2008 vs. prior year Total customers 35.7 million 13.1% Gross connections increased by 7.7% year on year to 9.4 million EBITDA margin: 33.3% (H1 2008: 33.3%) Revenue R26.0 billion 14.0% Profit from operations (Statutory operating profit) R6.4 bi
Slide 4: South Africa
South Africa For the six months ended September 30, 2008 vs. prior year H1 2009 Total customers 25.2 million Gross connections 5.7 million Churn % 42.3% Estimated SIM card penetration % 100% Revenue R22.7 billion Profit from operations R6.0 billion 8.4% 13 pts 11.9% 2.6% 3.6 pts 12.2%
Slide 5: Improved BEE status
Improved BEE status BBBEE transaction to the value of R7.5 billion, equating to 6.25% of Vodacom South Africa's equity Strategic partners, Royal Bafokeng Holdings ("RBH") and Thebe Investment Corporation ("Thebe") own 1.97% and 0.84% of Vodacom South Africa respectively Vodacom employees own 1.55% o
Slide 6: Tanzania
Tanzania For the six months ended September 30, 2008 vs. prior year H1 2009 Total customers 4.9 million Gross connections 1.7 million Churn % 44.2% Estimated SIM card penetration % 27% Revenue R1.5 billion Profit from operations R294 million 34.1% 38.7% 10 pts 34.8% 2.6 pts 63.3%
Slide 7: Democratic Republic of Congo (DRC)
Democratic Republic of Congo (DRC) For the six months ended September 30, 2008 vs. prior year H1 2009 Total customers 3.8 million Gross connections 1.4 million Churn % 53.9% Estimated SIM card penetration % 15% Revenue R1.4 billion Profit from operations R101 million 18.8% 20.6% 4 pts 10.6 pts 41.3%
Slide 8: Lesotho
Lesotho For the six months ended September 30, 2008 vs. prior year H1 2009 Total customers 450 thousand Gross connections 97 thousand Churn % 20.0% Estimated SIM card penetration % 30% Revenue R180 million Profit from operations R79 million 35.5% 21.3% 29.5% 8 pts 2.1 pts 41.1%
Slide 9: Mozambique
Mozambique For the six months ended September 30, 2008 vs. prior year H1 2009 Total customers 1.3 million Gross connections 476 thousand Churn % 72.7% Estimated SIM card penetration % 15% Revenue R296 million Loss from operations R99 million Loss from operations excluding impairment R78 million 19.3
Slide 10: Delivery as a total communications provider
Delivery as a total communications provider 1. Mobile business 2. Broadband data and connectivity services Continued market leadership through innovation Leverage synergies across the Group Economies of scale and cost containment strategies Continue to drive broadband technology leadership Fixed mob
Slide 11: 1. Maintaining market leadership in mobile
1. Maintaining market leadership in mobile Maintain leading market share in all countries, except Mozambique Uplifting ARPU through new innovative products and services launched Yebo4Less R5 voucher SVS (short voice service) Callback service Mobile advertising (H1 revenue +-R40 million) Retention of
Slide 12: 2. Broadband data and connectivity services
2. Broadband data and connectivity services Range of consumer broadband services offered: 3G/HSDPA, iBurst, WiFi Half a million wireless broadband customers Substantial lead in geographical coverage HSUPA launched Business-orientated connectivity solutions launched WiMax launched in August 2008 Micr
Slide 13: Data revenue
Data revenue H1 2007 H1 2008 H1 2009 1443 2096 3004 Tanzania 74 108 146 Other 20 44 83 Data revenue as a % of service revenue Group data revenue H1 2007 H1 2008 H1 2009 Data revenue 8.6 10.5 13.1 Group data revenue as a % of service revenue 43.3% year on year South Africa: Nearly 1 million email acc
Slide 14: 3. Offering a full set of converged services
3. Offering a full set of converged services Vodacom Business offering: managed network services, IT services (hosting, security, storage and applications) and voice services Infrastructure development New 1,000m2 Tier 4 data centre launched in Johannesburg Cape Town data centre to be launched durin
Slide 15: 4. Africa expansion
4. Africa expansion Vodafone's vehicle for expansion in sub-Saharan Africa Vodacom Business Africa to lead IP services in Africa Acquisition of 100% of Gateway Carrier service, access and business network solutions business Approximately US$675 million Subject to Competition Commission and SARB appr
Slide 16: Way forward
1. Mobile business Revenue uplift through new products and targeted campaigns Improve operational performance Improve synergies across Vodacom operating companies (and Vodafone) 3. Horizontal expansion 4. Africa expansion Continued investment in key infrastructure assets Consider value-adding acquis
Slide 17: Financial review
Financial review Johan van der Watt Acting Chief Financial Officer
Slide 18: Group income statement
Group income statement For the six months ended September 30, R million H1 2007 H1 2008 H1 2009 % change Revenue 19,466 22,815 26,016 14.0% Operating expenses excluding depreciation, amortisation, impairment and other (12,888) (15,215) (17,362) (14.1%) EBITDA 6,578 7,600 8,654 13.9% Depreciation, am
Slide 19: Profit from operations and net profit after tax
Profit from operations and net profit after tax For the six months ended September 30, 2008 vs. prior year Profit from operations increased by 12.5% Profit from operations margin decreased by 0.3% points Net profit increased by 3.2% Financial income, costs and related gains and losses increased by 4
Slide 20: Group operational indicators
Group operational indicators Gross connections up 7.7% year on year to 9.4 million Customers up 13.1% year on year to 35.7 million Total traffic in South Africa increased by 7.0% year on year to 11.8 billion minutes 2001 2003 H1 2007 H1 2008 H1 2009 SA 2990 3495 5308 5845 5693 Non-South African oper
Slide 21: Group revenue by country
Group revenue By country R million H1 2007 H1 2008 H1 2009 % change South Africa, including holding companies 17,580 20,299 22,716 11.9% Tanzania 775 1,086 1,464 34.8% DRC 898 1,108 1,360 22.7% Lesotho 105 139 180 29.5% Mozambique 108 183 296 61.7% 19,466 22,815 26,016 14.0% Non-South African operat
Slide 22: Group revenue composition
Group revenue Revenue composition R million H1 2007 H1 2008 H1 2009 % change Airtime, connection and access 11,313 12,947 14,608 12.8% Data 1,443 2,096 3,004 43.3% Interconnection 3,723 4,304 4,744 10.2% Equipment sales 2,312 2,393 2,490 4.1% International airtime 555 952 974 2.3% Other sales and se
Slide 23: Group revenue (excluding equipment sales) by revenue type
Group revenue (excluding equipment sales) By revenue type Airtime, connection and access Data Interconnection International airtime Other sales and services East Revenue analysis - H1 2009 R23,526 million (excluding equipment sales) Revenue analysis - H1 2008 R20,422 million (excluding equipment sal
Slide 24: ARPU by country
ARPU by country SA increased 8.2% to R132 DRC increased 6.6% to R65 Lesotho decreased 5.5% to R69 Tanzania increased 6.0% to R53 Mozambique increased 35.7% to R38 Vodacom Group consolidated ARPU increased 5.7% year on year from R105 to R111 With effect from April 1, 2008, ARPU calculations include r
Slide 25: South Africa ARPU
South Africa ARPU Contract ARPU decreased 1.2% year on year to R481 Prepaid ARPU increased 11.9% year on year to R66 Total ARPU increased 8.2% year on year to R132 South Africa ARPU per month 2001 2002 2003 H1 2007 H1 2008 H1 2009 Contract 493 560 629 528 487 481 Total 208 182 183 126 122 132 Prepai
Slide 26: Factors affecting trends and margins
Factors affecting trends and margins H1 2007 H1 2008 H1 2009 1026 1118 1084 H1 2007 H1 2008 H1 2009 9669 11024 11793 South Africa traffic mix Outgoing traffic increased by 7.7% year on year to 8.0 billion minutes Incoming traffic increased by 5.5% year on year to 3.8 billion minutes Total traffic in
Slide 27: EBITDA and margin analysis
2003 2004 H1 2007 H1 2008 H1 2009 6703 7757 6578 7600 8654 EBITDA and margin analysis Group EBITDA Increased 13.9% year on year to R8.7 billion EBITDA margin stable at 33.3% EBITDA margin 38.1%, when excluding cellular phone and equipment sales (H1 2008: 38.3%) South Africa EBITDA Increased 12.2% ye
Slide 28: Group profit from operations by country
Group profit from operations By country R million H1 2007 H1 2008 H1 2009 % change South Africa 4,745 5,389 6,048 12.2% Tanzania 134 180 294 63.6% DRC 133 172 101 (41.3%) Lesotho 34 56 79 41.1% Mozambique (138) (56) (99) (76.8%) Holding companies 57 (27) 7 125.9% 4,965 5,714 6,430 12.5% Profit from
Slide 29: Productivity measures
SA Tanz DRC Les Moz H1 2008 8 23.3 23.4 13.6 10.6 H1 2009 8.9 41.4 17.9 24.5 17.6 2003 2004 H1 2007 H1 2008 H1 2009 East 17.5 12.6 16.1 10 11.4 Productivity measures Consolidated customers per employee increased 7.1% year on year to 5,417 based on 6,588 employees Consolidated gross capex additions a
Slide 30: Capex additions and composition
Capex additions and composition Including software South Africa Tanzania DRC Mozambique Lesotho and holding companies Legend here 70.5 11.1 11.3 0.9 6.2 Capex gross additions - H1 2009 R2,976 million Capex gross additions - H1 2008 R2,289 million South Africa Tanzania DRC Mozambique Lesotho and hold
Slide 31: Cash generation
Cash generation EBITDA increased by R1.1 billion Cash generated from operations increased by 15.6% to R8.0 billion Free cash flow increased by R1.9 billion to R1.4 billion Taxation paid decreased by 10.2% to R2.2 billion Net capex additions increased by 4.7% to R3.8 billion Net finance costs increas
Slide 32: Debt composition
ZAR denominated Foreign denominated ZAR denominated Legend here 75.3 24.7 544 Debt composition Gross debt composition including bank overdrafts - H1 2009 R6,884 million Net debt: R6,061 million (H1 2008: R6,150 million) Net debt to equity ratio 93.2% (H1 2008: 56.6%) Net debt to EBITDA ratio 54.1% (
Slide 33: Group shareholder distributions
Group shareholder distributions 2002 2003 2006 2007 2008 2009 Interest 144 168 Interim dividend 1700 2500 2750 3000 Final dividend 600 600 2800 2900 3190 10.0% year on year To date R26.0 billion in dividends have been distributed to shareholders 20.0% year on year 32.4% year on year 9.1% year on yea
Slide 34: Questions?
vodacom Questions?
Slide 35: Group balance sheet
Group balance sheet Extract as at R million H1 2008 March 2008 H1 2009 % change ASSETS Non-current assets 21,859 24,468 25,859 5.7% Current assets 9,125 9,707 10,360 6.7% Total assets 30,984 34,175 36,219 6.0% EQUITY AND LIABILITIES Capital and reserves 13,222 11,805 12,700 7.6% Non-current liabilit
Slide 36: Group cash flow statement
Group cash flow statement Extract for the six months ended September 30, R million H1 2007 H1 2008 H1 2009 % change Cash generated from operations 5,454 6,879 7,952 15.6% Net cash flows from operating activities 647 1,069 2,055 92.2% Net cash flows utilised in investing activities (2,646) (4,641) (3
Slide 37: Disclaimer
Disclaimer This presentation has been prepared and published by Vodacom Group (Pty) Ltd. Many of the statements included in this presentation are forward-looking statements that involve risks and/or uncertainties and caution must be exercised in placing any reliance on these statements. The statemen
Slide 38: Vodacom
vodacom www.vodacom.com, MeOHHecTeD UNivense