Slide 1: Vodacom annual results presentation for the year ended 31 March 2016
16/05/2016 Vodacom annual results presentation for the year ended 31 March 2016 Annual results | 31 March 2016 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
Slide 2: Operating review: Highlights
16/05/2016 Operating review Annual results | 31 March 2016 Highlights +7.5% R12.9bn +2.7% Group Group capital HEPS revenue1 expenditure R 80 077 million 16.1% of revenue 883 cents per share +12.8% +21.8% +2.6% Group EBITDA Group Dividend per operating free share cash flow R30 345 million R17 054 mil
Slide 3: Strategy | South Africa: strong demand for data underpins growth
16/05/2016 Strategy | Driving consistent focus across all markets Lead in customer Grow data through Deliver on experience network differentiation cost programme Brand leadership and Lead and grow in Focus on tight capital segmented Enterprise discipline propositions Improve customer Deploy FTTx and
Slide 4: Customer experience | Investing to be best network
16/05/2016 Customer experience | Highest competitive differentiation Consumer NPS points differentiation % Network Value +6 ppts Service +15 ppts FY15 FY16 • Only operator with increased score • Network drives differentiation Vodacom Competitor A Competitor B • Value perception improved Annual resul
Slide 5: Customer | Best value driving ARPU and customer growth
16/05/2016 Customer | “Best value” driving ARPU and customer growth Contract revenue ARPU R million/% R • 85.1% contract Contract 70.8% 71.8% 68.9% 69.8% customers on new plans 10 521 10 771 11 039 11 548 380 380 387 407 • ARPU +4.5% yoy 1H15 2H15 1H16 2H16 1H15 2H15 1H16 2H16 In bundle revenue as %
Slide 6: Data growth | Enterprise double digit growth
16/05/2016 Data growth | Device, pricing and network supporting demand Data progression Device sales 2.5m Vodacom Million Thousand branded • Average usage devices per smart device - 572MB +22.3% • 2G to 3G ARPU uplift +20.5% 2.8 32.1 34.2 16.6 18.7 11.6 14.2 1.5 10 450 5 322 10 485 6 508 • 3G to 4G
Slide 7: New services | International double digit growth
16/05/2016 New services | Capturing new revenue shares Insurance revenue Internet of Things revenue Fibre R million R million +20.7%1 +18.8% 441 524 493 556 FY15 FY16 FY15 FY16 • Insurance revenue +18.8% • IoT revenue +20.7%1 • 25 725 homes and businesses • Device insurance policies +25.0% • Connect
Slide 8: International | Contribution to Group and data take-up
16/05/2016 International | Contribution to Group International service revenue contribution International EBITDA contribution % % FY16 FY16 FY15 FY15 17.7% 26.6% 15.3% 24.6% • 26.6% of Group service revenue +2.0ppts • 17.7% of Group EBITDA +2.4ppts • Margin expansion +3.2ppts to 29.3% Annual results
Slide 9: Growth | M-Pesa and Vodacom Business Africa
16/05/2016 Growth | M-Pesa take-up remains strong M-Pesa revenue M-Pesa customers R million Thousand +15.4% +19.3% 1 071 1 365 1 629 5 953 7 991 9 224 FY14 FY15 FY16 FY14 FY15 FY16 • 24.5% of Tanzania service revenue • Expanding agents to improve distribution • 15.2% M-Pesa customers using • Expandi
Slide 10: People and BEE | Level 2 contributor
16/05/2016 People | Attracting and retaining the best talent Driving people transformation through Enhancing diversity Growing talent Developing skills • 73% black and 39% female staff • 123 graduates in 2015 Graduate • R103 million spent in SA on skills • 55% of EXCO black programme development • V
Slide 11: Reputation | Mobile for good; Financial review
16/05/2016 Reputation | Mobile for good R106m +600k Vodacom spent by TZN subscribers: eSchool Vodacom Healthy free education Foundation pregnancy portal 105k Healthy baby registered learners 20 24 hour 3 087 volunteers for call center for schools Change the World victims of gender- connected - based
Slide 12: Group income statement | Group service revenue
16/05/2016 Group income statement R million FY16 FY15 % change % Normalised* Revenue1 80 077 74 500 7.5 6.0 Service revenue 66 763 62 167 7.4 5.8 EBITDA 30 345 26 905 12.8 10.2 EBIT 21 696 19 516 11.2 8.2 Operating profit 21 059 19 235 9.5 Net finance charges (2 215) (1 384) 60.0 Profit before tax 1
Slide 13: Service revenue | Group expenses
16/05/2016 Service revenue | Strategy delivering growth South Africa International R million/% R million/% 19.7% 6.8% 13.0% 12.4% 4.3% 7.4% 1.5% 10.3% 0.1% 9.1% 2.9% 5.6% 4.0% (1.3%) (4.0%) 23 437 23 595 24 110 25 210 7 366 7 925 8 279 9 484 1H15 2H15 1H16 2H16 1H15 2H15 1H16 2H16 Service revenue Re
Slide 14: Group EBITDA | Financing costs
16/05/2016 Group EBITDA | Grew strongly by +12.8% Group EBITDA EBITDA margin R million % +12.8% 660 (26) [+10.2%*] 1 272 1 534 FY16 40.2% 37.9% 29.3% +3.2 +1.6 +1.8 ppts ppts ppts FY15 26.1% 38.6% 36.1% 26 905 30 345 FY15 South International Foreign Corporate FY16 EBITDA Africa exchange and EBITDA I
Slide 15: Group tax | Balance sheet
16/05/2016 Group tax | Increased profit and prior year deferred tax one-off Group tax Group tax reconciliation R million +11.1% R million FY16 Rate (%) Profit before tax 18 844 Normal tax 5 276 28.0 Non-deductible operating 229 1.2 expenditure Non-deductible finance costs 106 0.6 Unrecognised tax as
Slide 16: Cash flow | Dividend per share up 2.6%
16/05/2016 Cash flow | Strong cash flow generation Group free cash flow R million +12.8% (545) +13.7% (12 746) +21.8% (1 713) (5 456) (78) +26.3% 30 345 29 800 17 054 9 807 FY16 Working capital & Cash Cash capital Operating Net finance Tax paid Net dividends FY16 EBITDA other generated from expendit
Slide 17: Group capex | Accelerated investment
16/05/2016 Group capex | Two years of accelerated investment Group capital expenditure Group sites added R million/% FY16 17.9% 16.1% 14.7% +3 471 +5 243 +5 198 4 654 4 090 3 919 FY14 2G 3G LTE 6 858 8 646 8 747 • 788 ULC sites deployed FY14 FY15 FY16 • Customer management and billing transformation
Slide 18: Fit for growth | Targets
16/05/2016 Fit for growth South Africa | Culture change and focus areas Number 30.5% of SR 6.6% of SR of sites (FY15: 31.6%) (FY15: 6.7%) +9% Direct expenses1 Staff expenses2 • Channel efficiencies • Hire in key growth areas • Sophisticated IBRO • Attract and retain talent Actively managing costs En
Slide 19: In Summary | Outlook
16/05/2016 In Summary 1. Markets remain competitive, macroeconomic pressure and regulatory pressure with currency volatility 2. Executed well on strategy 3. Strong commercial momentum 4. Maintained a healthy balance sheet 5. Good service revenue growth with EBITDA margin expanding 6. Generated stron
Slide 20: Key priorities | Q&A
16/05/2016 Key priorities Strategic Growth Commercial • Spectrum • Content/Video • Segmentation • Fibre investment • Enterprise • CARE • M-Pesa • Data monetisation international • Pricing • Financial services transformation • Cost efficiency Annual results | 31 March 2016 39 Q&A Annual results | 31
Slide 21: Country data | Impact of foreign exchange
16/05/2016 Country data South Africa Tanzania DRC Mozambique Lesotho PopulationŦ (million) 55 55 71 29 2 GDP per capitaŦ (USD) 4 770 855 495 456 887 GDP growth estimateŦ 2016 (%) 0.7 6.5 5.0 4.8 2.0 Ownership (%) 100# 82.2 51 85 80 License expiry period 2029 2031 2028/2032μ 2018/2026μ 2036 Active cu
Slide 22: Definitions | Forward-looking statements
16/05/2016 Definitions Active customers Active customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly fee that entitles them to use the service even if they do not actually use the service and those custome
Slide 23: More information
16/05/2016 More information Visit our website for more information FY17 upcoming dates Integrated report AGM Q1 results Interim results 17 June 19 July 21 July 14 November http://www.vodacom.com/about-us/investors/investors-home Contact us Follow us on social media VodacomIR@vodacom.co.za @vodacom +