Vodacom Group Limited · JSE:VOD
Vodacom — Merger or Acquisition (November 2021)
20 slides from Vodacom's merger presentation, November 2021
Slide 1: Vodafone Egypt acquisition: Enhancing Vodacom's growth and returns
Vodafone Egypt acquisition Enhancing Vodacom’s growth and returns November 2021 Further together
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentations may lawfully be communicated (‘relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the f
Slide 3: Vodafone Egypt: A quality asset and the clear leader in a growing market
Vodafone Egypt | A quality asset and the clear leader in a growing market 100.9 million Attractive real ICT growth > GDP GDP growth large and (Egypt’s Digital Agenda) growing population (5.2% FY21-FY26 CAGR1) #1 43.0 43% 61% Telecom operator million Mobile revenue smartphone in Egypt customers2 mark
Slide 4: Vodafone Egypt: Market leader with strong growth potential
Vodafone Egypt | Market leader with strong growth potential Growth outlook supported by: Multiple high growth opportunities: From Upside scenario Enablers #1 across consumer (FY21 (FY26) & enterprise Fintech revenue ) Align with Group 1% >20% of service M-Pesa Africa & global of revenue tech partner
Slide 5: Transaction rationale: A single transaction to enhance Vodacom's growth and returns
Transaction rationale | A single transaction to enhance Vodacom’s growth and returns What we like about Vodafone Egypt Market leader, Strong growth Material fintech Asset owners, with >30% ROCE outlook supported by opportunity, with market leading tower ICT sector growth across with >80% of populati
Slide 6: Transaction in context: Scaling our System of Advantage
Transaction in context | Scaling our System of Advantage >500m Egypt Ethiopia Population supporting scalable • High quality asset • Unique telecom partnerships growth opportunity • Constructive sector outlook • Safaricom-led consortium • Material financial with our 6% direct stake 51% services oppor
Slide 7: Group growth outlook: Diversifying and enhancing growth outlook
Group growth outlook | Diversifying and enhancing growth outlook Before Vodafone Egypt deal After Vodafone Egypt deal Growth and diversification FY21 Service revenue1 • Vodafone Egypt’s market 18.5% position, supported by its leading brand, network and 24.2% 47.1% 11.0% advanced segmentation 61.5% 1
Slide 8: Transaction summary: Acquiring a quality asset with mix of equity and debt
Transaction summary | Acquiring a quality asset with mix of equity and debt Overview • Independent sub-committee of the Board appointed Process • External advisors hired for due-diligence (KPMG) and advisory (UBS) followed • PwC appointed as independent expert to sub-committee and ENS as legal advis
Slide 9: Strategy unchanged: Leading African TechCo with clear System of Advantage
Strategy unchanged | Leading African TechCo with clear System of Advantage Footprint finalised Secure leadership in Mobile and Fixed Diversify and differentiate with our digital ecosystem Scale Financial Digital Partner World class Personalisation and Digital of choice for loyalty and through CVM an
Slide 10: South Africa fibre: Aligned with our System of Advantage
South Africa fibre | Aligned with our System of Advantage Proposed structure Strategic alignment: Consumer System of Advantage Vodacom CIVH Further together, growing with our customers 70% • Enhancing our home connectivity 30 % Vumatel offering • Addressing South Africa’s digital divide FTTH market
Slide 11: Capital structure: Accelerating our System of Advantage
Capital structure | Accelerating our System of Advantage Accelerate Utilising Simplify Enhance System of Advantage debt capacity dividend policy shareholder value M&A – VE debt impact Capacity to Disciplined and strong Vodafone Egypt around R23 billion accelerate growth M&A track record M&A – Fibre
Slide 12: Summary: A quality asset that will enhance the Group's growth and returns
Summary | A quality asset that will enhance the Group’s growth and returns Acquiring a controlling stake in a Egypt’s telecom market leader with a track record of high growth and high returns Growth outlook supported by the #1 position across network, spectrum, brand and digital Material fintech opp
Slide 13: Appendix slides
Appendix slides Further together
Slide 14: Egypt telecom market: Vodafone Egypt is a clear #1
Egypt telecom market | Vodafone Egypt is a clear #1 FY21 Mobile telecom revenue market share Leading spectrum position (unpaired MHz) Vodafone Egypt 25 20 40 40 43.4% Orange 25 30 30 24.7% Etisalat 20 40 20 20 4.1% 27.8% Telecom Egypt 20 10 20 Vodafone Egypt Orange Etisalat Telecom Egypt 700MHz 900M
Slide 15: Vodafone Egypt: Consistent track record of growth and strong FCF generation
Vodafone Egypt | Consistent track record of growth and strong FCF generation Total mobile customers (m) Strong revenue growth Sim card levy introduced 17.7% 20.3% 14.3% 15.0% 7.6% 17.3%* 6.3% 3.4% -7.6% 2.9% 3.6% 6.4% 40.9 42.3 39.1 40.2 41.7 43.0 16,652 20,025 22,891 26,333 28,341 32,186 FY17 FY18
Slide 16: Egypt macro: Supportive environment providing growth backdrop
Egypt macro | Supportive environment providing growth backdrop Egypt society High GDP growth despite Covid Normalising inflation environment in Egypt Age distribution Real GDP growth Source: IMF, CBE 9% 8% 6% 6% 6% 13.9% 5% 4% < 24 25-34 35-49 > 50 4% 3% 3% 3% 2% 2% 2% 51% 16% 17% 16% 5.7% 5.9% (0%)
Slide 17: Transaction structure: Acquiring a controlling stake
Transaction structure | Acquiring a controlling stake Current structure Proposed structure Vodafone Minority Vodafone Minority Group PLC shareholders Group PLC shareholders 60.5 % 39.5% 65.1% 34.9% Vodacom Vodacom Telecom Unlisted Group Group Egypt minorities c.55% c.45% c.0.05% Vodafone Telecom Unl
Slide 18: Vodacom Group: Market leading position to >500 million people
Vodacom Group | Market leading position to >500 million people South Africa Tanzania Ownership 100% Ownership 75% Population1 58.0 million Population1 59.6 million Customers (90-day active) 44.1 million Customers (90-day active) 14.9 million Market position 1st Market position 1st Lesotho DRC Mozamb
Slide 19: Timetable and key requirements
Timetable and key requirements Key Dates 10 Nov 15 Nov 15 Dec 18 Jan Before 31 March Deal announced Interim results announced Publication of circular General meeting Target closing Key milestones and requirements • Egyptian regulatory approvals • SARB approval • Ordinary resolution approving the tra
Slide 20: Thank you
Thank you Further together
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