Slide 1: Vodacom Group (Pty) Ltd Annual Financial Results March 31, 2008
Vodacom Group (Pty) Ltd Annual Financial Results March 31, 2008
Slide 2: Operational highlights
Operational highlights Alan Knott-Craig Chief Executive Officer
Slide 3: Group highlights
Total customers 34.0 million 12.7% High gross connections: increase of 15.4% year on year to 18.0 million Revenue R48.2 billion 17.1% Profit from operations (Statutory operating profit) R12.5 billion 15.0% EBITDA R16.5 billion 15.7% Net profit after tax R8.0 billion 21.3% Dividends R5.9 billion 10.0
Slide 4: Group shareholder distributions
10.0% year on year To date R23.0 billion in dividends has been distributed to shareholders 20.0% year on year 32.4% year on year Group shareholder distributions
Slide 5: Group shareholder returns
(after tax) Group shareholder returns March 2008 and results for the past 4 years
Slide 6: Profit from operations and net profit after tax
Profit from operations and net profit after tax March 2008 and results for the past 4 years
Slide 7: Profit from operations margin and net profit after tax margin
Profit from operations margin and net profit after tax margin March 2008 and results for the past 4 years
Slide 8: South Africa
7.9% 10.9% 10 pts 13.4% 8.5 pts 2008 • Total customers 24.8 million • Gross connections 12.0 million • Churn % * 42.3% • Estimated SIM card penetration % 94% • Profit from operations R11.7 billion * Supplementary disconnection rule implemented during September 2007
Slide 9: Tanzania
29.6% 26.4% 4 pts 32.9% 9.9 pts 2008 • Total customers 4.2 million • Gross connections 2.6 million • Churn % 45.5% • Estimated SIM card penetration % 20% • Profit from operations R460 million
Slide 10: Democratic Republic of Congo (DRC)
25.0% 26.8% 3 pts 31.4% 17.6 pts 2008 • Total customers 3.3 million • Gross connections 2.1 million • Churn % 48.0% • Estimated SIM card penetration % 12% • Profit from operations R364 million Democratic Republic of Congo (DRC)
Slide 11: Lesotho
1.2 pts 41.6% 47.9% 64.0% 9 pts 2008 • Total customers thousand • Gross connections thousand • Churn % 17.8% • Estimated SIM card penetration % 26% • Profit from operations R123 million Lesotho
Slide 12: Mozambique
11.3% 17.5% 29.8% 19.3% 2 pts 17.0 pts 2008 • Total customers 1.3 million • Gross connections thousand • Churn % 58.7% • Estimated SIM card penetration % 16% • Loss from operations R157 million • Loss from operations excluding impairment R127 million Mozambique
Slide 13: New acquisitions and investments
New acquisitions and investments • In order to ensure horizontal growth within our area of focus, Vodacom made investments in the following companies: – Increased investments in G-Mobile Holdings Ltd (Wi-Fi business) – Invested in Xlink Communications (Pty) Ltd (service provider of wireless data tra
Slide 14: Vodacom Business
Vodacom Business • Vodacom Business was launched in February 2008 – To offer the market a full set of converged communications services • Developed a service portfolio that includes : – Next-generation Internet Protocol ISP and voice services – Managed networks and infrastructure services – Access s
Slide 15: Innovative South Africa non-voice products
Mobile TV / DVB-H • 31 thousand Mobile TV users • 22 TV channels Vodafone live!, 3G / HSDPA • Over 1.4 million Vodafone live! users (2007: 899 thousand) • 370 thousand data card and modem users (2007: 149 thousand) Data revenue Data revenue as a % of service revenue 50.0% year on year Innovative Sou
Slide 16: New products, services and customer care outlets - South Africa
• Mobile TV Playa: provides TV streaming • Music station: live radio streaming • Prepaid data bundles: data usage for prepaid • MEEP: 18,666 PC and 7,665 handset users • Reverse charge: call charged to receiving party • Mobile advertising: R24.1 m in revenue to date New products and services • Vodaw
Slide 17: Tanzania: new innovative products and services
• Commercially launched 3G / HSDPA • Commercially launched WiMax • Launched a consumer loyalty program, Tuzo points and Tuzo draws Tanzania New innovative products and services
Slide 18: Mozambique: new innovative products and services
• 500MT : Free on-net calls for December upon recharging with a 500MT voucher • Vodakool: a WAP Portal that enables customers to access services like vodamail and jokes • Market leader in data services: Voted best cellular network for the second consecutive year Mozambique New innovative products an
Slide 19: Broad Based Black Economic Empowerment (BBBEE)
• Vodacom plans to have the deal concluded and implemented by the fourth quarter of 2008 • Royal Bafokeng Holdings (Pty) Ltd and Thebe Investment Corporation (Pty) Ltd chosen as preferred partners in R7.5 billion BBBEE deal • Grouping structure of deal: - 25% for all South African employees of Vodac
Slide 20: Way forward
• Focus on horizontal growth and expansion • Seek out new associated business opportunities in South Africa • Further expansion into television and radio • To play a significant role in international data transmission (Seacom, Eassy Cable, etc) • Focus on improving customer service and loyalty • Foc
Slide 21: Financial review
Financial review Johan van der Watt Acting Chief Financial Officer
Slide 22: Group income statement
(106.4%) (609) (295) (116) Net finance costs 21.3% 7,958 6,560 5,143 Net profit (7.1%) (4,109) (3,836) (3,084) Taxation (17.8%) (31,715) (26,919) (22,234) Operating expenses excluding depreciation, amortisation, impairment and other 15.7% 16,463 14,227 11,809 EBITDA (18.0%) (3,972) (3,367) (2,943) D
Slide 23: Group operational indicators
Gross connections Customers Group operational indicators • Gross connections up 15.4% year on year to 18.0 million • Customers up 12.7% year on year to 34.0 million • Total traffic in South Africa increased by 11.7% year on year to 22.8 billion minutes
Slide 24: ARPU by country
ARPU per month ARPU by country • SA remained stable at R125 • DRC decreased 23.4% to R59 • Lesotho decreased 2.7% to R73 • Tanzania decreased 5.8% to R49 • Mozambique increased 3.6% to R29 • Vodacom Group consolidated ARPU decreased 4.5% year on year from R111 to R106
Slide 25: South Africa ARPU
South Africa ARPU per month South Africa ARPU • Contract ARPU decreased 6.0% year on year to R486 • Prepaid ARPU decreased 1.6% year on year to R62 • Total ARPU remained stable year on year at R125 • Prepaid ARPU stable as a result of implementation of supplementary disconnection rule • Increase in
Slide 26: Group revenue by country
20.0% 2,297 1,914 1,334 DRC 15.6% 42,784 37,007 31,069 South Africa, including holding companies 17.1% 48,178 41,146 34,043 61.3% Mozambique 36.1% Lesotho 36.1% 2,354 1,729 1,312 Tanzania 2007 % change 2008 2006 R million Revenue driven by strong customer growth Non-South African operations contribu
Slide 27: Group revenue composition
40.6% 1,836 1,306 International airtime 7.5% 5,052 4,699 3,986 Equipment sales 13.4% 8,887 7,835 6,697 Interconnection 14.3% 27,095 23,708 20,085 Airtime, connection and access 17.1% 48,178 41,146 34,043 19.5% Other sales and services 49.7% 5,002 3,342 2,038 Data revenue 2007 % change 2008 2006 R mi
Slide 28: Group revenue by revenue type
Revenue analysis - 2008 R43,126 million (excluding equipment sales) Revenue analysis - 2007 R36,447 million (excluding equipment sales) Interconnection contribution down 0.9% points to 20.6% Data revenue contribution up 2.4% points to 11.6% Group revenue (excluding equipment sales) By revenue type
Slide 29: EBITDA and margin analysis
EBITDA margin by country • Group EBITDA performance – Increased 15.7% year on year to R16.5 billion – EBITDA margin decreased 0.4% points year on year to 34.2% – EBITDA margin 39.3%, when excluding cellular phone and equipment sales • South Africa EBITDA – Increased 14.1% year on year to R14.8 billi
Slide 30: Group profit from operations by country
31.4% DRC (30.4%) (23) Holding companies 32.9% Tanzania (0.5% pts) 25.9% 26.4% 26.0% Profit from operations margin (%) 15.0% 12,491 10,860 8,866 11.3% (157) (177) (144) Mozambique 64.0% Lesotho 13.4% 11,669 10,293 8,602 South Africa 2007 % change 2008 2006 R million Customer growth of 12.7% to 34.0
Slide 31: South Africa net interconnect
South Africa net interconnect 11.7% year on year 1.1% year on year Factors affecting trends and margins • South Africa traffic mix – Outgoing traffic increased 12.4% year on year to 15.3 billion minutes – Incoming traffic increased 10.4% year on year to 7.5 billion minutes – Total traffic increased
Slide 32: Productivity measures
Gross capex additions as a % of revenue Gross capex additions as a % of revenue Productivity measures • Consolidated customers per employee Increased 6.9% year on year to 5,442 based on 6,247 employees • Consolidated gross capex additions as a % of revenue decreased to 12.3% from 16.4% in the previo
Slide 33: Cash generation and free cash flow
Cash generated from operations Free cash flow • Taxation increased by 43.0% to R4.7 billion • Net capex additions increased by 11.5% to R6.5 billion • Net finance costs increased by 130.2% to R746 million • Buy-out of all minority shareholders in the Smartphone group for R956.5 million Cash generati
Slide 34: Capex additions and composition
Capex gross additions - 2008 R5,916 million Capex gross additions - 2007 R6,748 million South Africa capex gross additions decreased by 14.8% to R4.3 billion Non-South African capex gross additions decreased by 3.5% to R1.5 billion At March 31, 2008, capex contracted but not yet incurred amounted to
Slide 35: Debt composition
Gross debt composition including bank overdrafts - 2008 R6,131 million Gross debt composition including bank overdrafts - 2007 R3,435 million Net debt (excluding dividends and STC): R5,154 million (2007: R2,664 million) Net debt to equity ratio 93.1% (2007: 72.8%) (including dividends and STC) Net d
Slide 36: Group balance sheet
17.1% 17,582 15,011 13,860 Current liabilities 20.0% 34,175 28,470 24,768 Total equity and liabilities 25.6% 4,788 3,812 2,236 Non-current liabilities 22.4% 11,805 9,647 8,672 EQUITY AND LIABILITIES Capital and reserves 20.0% 34,175 28,470 24,768 Total assets 27.3% 9,707 7,626 8,689 Current assets 1
Slide 37: Group cash flow statement
>200.0% (108) 1,760 Cash and cash equivalents at the end of the year 51.7% (16) Effect of foreign exchange rate changes (106.1%) (108) 1,760 2,173 Cash and cash equivalents at the beginning of the year 144.5% (1,926) (397) Net increase in cash and cash equivalents >200.0% 3,234 (200) (107) Net cash
Slide 38: Disclaimer
Disclaimer • This presentation has been prepared and published by Vodacom Group (Pty) Ltd. • Vodacom Group (Pty) Ltd 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 (Pty) Ltd makes no guarantee, assurance, represen
Slide 39: Vodacom
Sot vodacom