Slide 1: Interim Results
Interim Results 15 November 2005 Presentation
Slide 2: Arun Sarin, Chief Executive
Arun Sarin Chief Executive Vodafone Group Plc © Vodafone Group 2005 1 The following presentation is being made only to, and are only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on thi
Slide 3: Agenda and Key highlights
Agenda • Half Year Highlights Arun Sarin Chief Executive • Financial Review Andy Halford Chief Financial Officer • Q&A 3 Key highlights • European businesses performing well with stable margins Strong operational • Investing in the Japanese turnaround performance • Verizon Wireless winning significa
Slide 4: Group highlights
Group highlights H1 05/06 Growth** Proportionate Customers 171.0m 12.9% Proportionate Revenue £23.9bn 8.1% Proportionate EBITDA* £8.9bn 4.2% Proportionate Mobile EBITDA Margin* 37.9% (1.3pp) Operating Free Cash Flow £4.2bn 12.1% Free Cash Flow £3.7bn (8.1%) Adjusted EPS* 5.37p 8.5% * Before items no
Slide 5: Progress in Japan and strong customer growth
Progress in Japan Turnaround Plan Update • Return during the second half to sustained monthly • On track to hit key milestones positive net adds 05/06 • Improve basic handset functionality • Margin decline reflects investment • New management in customers • Returning to positive • Wholesale business
Slide 6: One Vodafone – market share and reinvesting in growth
One Vodafone – market share Proportionate mobile revenues grew by 7.7% Increase in Revenue Market Share* 2.4% 1.1% 0.8% 0.3% (0.1%) (0.4%) Germany Italy Japan Spain UK US * Relative to principal competitors based on publicly available data and, where necessary, broker estimates 9 One Vodafone - rein
Slide 7: Strong progress in 3G and Dividends
Strong progress in 3G Coverage • Targeting around 60% by March 2006 and 65% by March 2007 Handsets • 30% cheaper year on year with further reductions to come Customers • 60% more 3G net additions in Q2 than in Q1 ARPU uplift • 10-15% like for like increase for 3G compared to 2.5G Data impact • 85% h
Slide 8: Share purchases and balance sheet; Investing in growth
Share purchases and balance sheet Net debt Share purchases: >£17bn • Additional £2bn targeted for this year • £6.5bn total targeted by end of March 2006 • Total cash return during FY 05/06 in excess £11bn of £9bn Net debt: • March 2005 of £11.1bn • Net effect of announced M&A of £4bn • Free cash flo
Slide 9: Outlook for FY 05/06 and strategy for growth
Outlook* for FY 05/06 In middle of 6% - 9% range, on an Proportionate mobile revenue organic basis At lower end of flat to down 1 Proportionate mobile EBITDA margin percentage point, on an organic basis £5.0 to £5.4 billion, including Romania Capitalised fixed asset additions and the Czech Republic*
Slide 10: Operating environment and outlook for FY 06/07
Operating environment for FY 06/07 • Continued focus on building market leading customer franchises Customers • Returning to net customer growth trajectory in Japan • Continued migration of 2G and 2.5G customers onto 3G • Increasing competitive intensity from existing players and new entrants Compet
Slide 11: Summary
Summary • Good operational momentum • Continued outperformance versus peer group • Investment in customer growth • Leveraging scale to deliver future growth • Executing on focused inorganic strategy • Increasing returns to shareholders 19 Andy Halford Chief Financial Officer Vodafone Group Plc © Vod
Slide 12: Proportionate results: Group highlights and revenue growth
Proportionate results Group highlights Six months to 30 September 2005 2004 Change Organic £m £m % % Revenue: - Mobile 23,415 20,787 12.6% 7.7% - Other* 519 392 32.4% 29.6% –––––––– –––––––– –––––––– –––––––– Group 23,934 21,179 13.0% 8.1% –––––––– –––––––– –––––––– –––––––– EBITDA: - Mobile 8,878 8
Slide 13: Proportionate results: organic mobile revenue growth
Proportionate results Organic mobile revenue growth Six months to 30 September 2005 Analysis of mobile revenue Total Service £23.4 billion revenue revenue % % Germany 2.0 3.0 Italy 5.3 6.0 Spain 24.6 24.0 Europe & other: 59% UK 0.2 1.5 Other 8.4 9.6 ––––– ––––– 6.8 7.5 Japan (0.4) (5.0) Japan: 16% A
Slide 14: Mobile EBITDA margin reconciliation and operating highlights
Proportionate results Mobile EBITDA margin reconciliation Absolute Contribution change in organic to total mobile EBITDA margin EBITDA margin Europe & other – – Japan (6.0%) (0.9%) Associates & investments (2.2%) (0.3%) Mix variance 0.2% –––––––– Underlying performance (1.0%) France voice interconne
Slide 15: Statutory results: mobile trading and revenue
Statutory results Mobile trading results Six months to 30 September 2005 2004 Increase Organic £m £m % % Revenue 17,700 16,315 8.5 5.8 –––––––– –––––––– –––– –––– EBITDA 6,628 6,247 6.1 3.1 –––––––– –––––––– –––– –––– Associate operating profit 1,185 1,084 9.3 8.3 –––––––– –––––––– –––– –––– Adjuste
Slide 16: Mobile revenue – outgoing and incoming voice
Statutory Results Mobile revenue – outgoing voice Organic growth Outgoing traffic analysis 1.8% +0.0pp 1.8% 27.9% -0.2pp 27.7% • Average customers: +12.4% • Minutes: +16.3% 47.0% +2.7pp 49.7% 23.3% -2.5pp 20.8% • Revenues: +5.2% H1 04/05 H1 05/06 To fixed On network Other mobile International 29 Sta
Slide 17: Data revenue and mobile EBITDA margin
Statutory results Data Data revenues Quarterly organic data revenue growth (YoY) £0.52bn 29.1% £0.47bn 27.0% £0.45bn £0.41bn £0.39bn £0.37bn Q1 04/05 Q2 04/05 Q3 04/05 Q4 04/05 Q1 05/06 Q2 05/06 Q1 FY 05/06 Q2 FY 05/06 31 Statutory results Mobile EBITDA margin Mobile EBITDA +6.4% Organic cost growth
Slide 18: Customer costs and mobile associated undertakings
Statutory results Customer costs Net acquisition costs Net retention costs 35 60 10 140 9 30 120 50 8 25 100 7 40 20 6 80 30 5 15 60 4 20 10 3 40 10 2 5 20 1 - - - - H1 FY 04/05 H2 FY 04/05 H1 FY 05/06 H1 FY 04/05 H2 FY 04/05 H1 FY 05/06 Gross additions (Millions) Gross upgrades (Millions) Net cost
Slide 19: Statutory results and fixed asset additions
Statutory results Six months to 30 September 2005 2004 Increase £m £m % Adjusted operating profit: - Mobile 4,952 4,748 4.3 - Other 21 11 90.9 –––––––– –––––––– –––––––– 4,973 4,759 4.5 Other income & expense (515) - - • £515 million Sweden impairment Non-operating income 20 16 25.0 Net financing co
Slide 20: Cash flow and summary
Cash flow Six months to 30 September 2005 2004 Increase £m £m % Net cash flows from operations 6,084 5,827 4 Add: taxation 667 417 60 • Higher tax instalment payments Capital expenditure (2,570) (2,515) 2 –––––––– –––––––– ––––– Operating free cash flow 4,181 3,729 12 • Lower dividends from: Taxatio
Slide 21: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Group’s financial condition, results of operations and businesses and certain of the Group’s