Vodacom Group Limited · JSE:VOD
Vodacom — H1 FY2013 Earnings Presentation
39 slides from Vodacom's earnings presentation, November 2012
Slide 1: Interim results presentation for the six months ended 30 September 2012
Interim results presentation For the six months ended 30 September 2012
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: Highlights
Highlights 2 Interim results: Vodacom Group Limited 30 September 2012
Slide 4: Salient features
Salient features Group service revenue Group data revenue Group EBITDA 6.9% 20.2% 14.5% R29 675 million R4 715 million R12 060 million Group operating FCF HEPS Dividend per share 11.2% 22.2% 36.5% R6 156 million 396 cents per share 355 cents per share 3 Interim results: Vodacom Group Limited 30 Sept
Slide 5: South Africa: Solid performance in competitive market
South Africa: Solid performance in competitive market • Pricing pressure led slowdown in SA Key financial indicators o Effective price per minute down to R1.00 HY 2013 % change o Effective price per MB down 24.2% Service revenue (Rm) 23 800 1.3 • Demand for data remains strong o Data revenue growth
Slide 6: International: Continues to drive growth
International: Continues to drive growth • Strong customer and traffic growth Key financial indicators o Stable pricing environment HY 2013 % change • Data adoption increasing Service revenue (Rm) 5 992 32.41 o Data revenue up 140.7% o Active M-Pesa customers almost doubled in EBITDA (Rm) 1 269 76.7
Slide 7: Strategic review
Strategic review 6 Interim results: Vodacom Group Limited 30 September 2012
Slide 8: Our integrated strategy
Our integrated strategy An unmatched customer experience * Grow our people * Best network to accelerate mobile data opportunity * Process and cost efficiency focus * Focus areas for growth 7 Interim results: Vodacom Group Limited 30 September 2012
Slide 9: Strategic priorities
Strategic priorities 1 Competitive Best network value to our customers 2 Network Best networkexcellence as a key differentiator 3 Unmatched Best network customer experience 4 Accelerate Best network mobile data opportunity 5 Focus Best areas for growth network 6 Process Best and cost efficiency focu
Slide 10: Competitive value to our customers
Competitive value to our customers Price plans Devices • Bundle offers – talk more for fixed price • Leading choice in all price points • Re-launched dynamic pricing platform in SA • Device exclusivity and Vodafone scale • Voucher bonuses benefits • Airtime bonus when recharging with M-Pesa • 258k a
Slide 11: Network excellence as a key differentiator
Network excellence as a key differentiator Data where we have voice Fastest speeds Future proofing Group 3G base stations Mbps (in SA) SA self-provided sites 6 201 4.4 5 077 5 055 3.8 3.5 3.1 4 035 2.8 3 239 2.4 1 717 HY 2011 HY 2012 HY 2013 iOS download Android download HY 2011 HY 2012 HY 2013 spee
Slide 12: Unmatched customer experience
Unmatched customer experience Self-care/M-care Retail • USSD increased from 12 million to • New concept store trial 14 million in last three months in SA • Tech zones in 67 shops • Over-the-air settings reducing call volumes • Internet-training cafés rolled out and improving customer experience • Ne
Slide 13: Accelerate mobile data opportunity
Accelerate mobile data opportunity Group data revenue Group active data customers R million Thousand 20.2% 42.3% 4 715 17 580 3 924 12 356 2 993 8 947 HY 2011 HY 2012 HY 2013 HY 2011 HY 2012 HY 2013 • Expansion of data coverage • Driving smartphone and tablet penetration • Ensuring data attachment S
Slide 14: Focus areas for growth
Focus areas for growth International Enterprise New services • Service revenue growth of • Building 5th data centre • Welcome Tone users 36.5% (32.4%1) • Converged services doubled to 1m in a year • EBITDA growth of 92.3% revenue up 55.3% • 21 000 funeral policies in (76.7%1) • New pan-African deals
Slide 15: Process and cost efficiency focus
Process and cost efficiency focus South Africa opex1 International opex1 R million/% R million/% 1 786 5 491 5 363 1 592 5 166 1 236 23.4 23.0 43.6 22.5 41.9 36.9 HY 2011 HY 2012 HY 2013 HY 2011 HY 2012 HY 2013 Opex1 Opex1 to service revenue Opex1 Opex1 to service revenue • Network opex stable, desp
Slide 16: Financial review
Financial review 15 Interim results: Vodacom Group Limited 30 September 2012
Slide 17: Group income statement
Group income statement R million HY 2013 HY 2012 % change Service revenue 29 675 27 752 6.9 Revenue 34 426 31 747 8.4 EBITDA 12 060 10 535 14.5 Operating profit before impairment losses 8 970 7 620 17.7 Impairment losses - (318) n/a Operating profit after impairment losses 8 970 7 302 22.8 Profit on
Slide 18: Strong growth in mobile voice and data usage
Strong growth in mobile voice and data usage Group service revenue growth by category R million (83) 6.9% 757 29 675 51 864 733 28 485 (399) 27 752 HY 2012 Translation HY 2012 Mobile Mobile voice 2 Mobile Mobile data 2 Other service HY 2013 service revenue foreign service revenue 1 interconnect 2 me
Slide 19: Service revenue growth trends
Service revenue growth trends SA service revenue International service revenue R million/% yoy growth R million/% yoy growth 12 755 12 167 12 031 3 028 11 769 2 905 2 964 2 848 7.0 45.2 46.7 4.8 4.0 36.9 5.6 3.3 28.4 36.4 35.4 36.9 2.6 1.8 27.4 0.7 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2012 Q4 2012 Q1
Slide 20: Group operating expenses well contained
Group operating expenses well contained Group operating expenses1 by category Group operating expenses1 by segment R million HY 2013 % change R million HY 2013 % change Direct expenses 15 102 5.8 South Africa 17 677 0.1 Staff expenses 2 260 9.7 International 4 889 26.7 Publicity expenses 923 (12.6)
Slide 21: Group EBITDA increased 14.5%
Group EBITDA increased 14.5% Group EBITDA R million (41) 14.5% 531 12 060 1 110 (97) 242 10 777 (220) 10 535 HY 2012 Trading and HY 2012 Trading foreign South Africa South Africa International Corporate and HY 2013 EBITDA translation EBITDA1 exchange MTR impact EBITDA EBITDA2 eliminations EBITDA for
Slide 22: Positive EBITDA margin trends
Positive EBITDA margin trends SA EBITDA International EBITDA R million/% R million/% 9.7% 92.3% 10 789 1 269 9 832 9 225 38.3 37.9 660 587 25.6 36.5 19.0 35.9 20.6 20.6 35.8 35.9 14.7 14.6 HY 2011 HY 2012 HY 2013 HY 2011 HY 2012 HY 2013 EBITDA EBITDA EBITDA margin EBITDA margin 1 EBITDA margin exclu
Slide 23: Group finance charges
Group finance charges Group net finance charges Group net debt R million HY 2013 HY 2012 R million HY 2013 FY 2012 Net finance costs (409) (250) Bank and cash balances 1 533 3 781 Remeasurement of loans (10) (18) Bank overdrafts (1 788) (409) Borrowings and derivative Gain/(loss) on remeasurement 21
Slide 24: Taxation expense impacted by change in STC
Taxation expense impacted by change in STC Group tax Group tax reconciliation R million/% R million HY 2013 Rate (%) 2 668 2 722 Normal tax 2 475 28.0 Non-deductible interest 26 0.3 2 234 Withholding tax 55 0.6 37.8 Other disallowed expenditure 89 1.0 34.4 Other 77 0.9 30.8 Total tax expense/effecti
Slide 25: Headline earnings per share increased 22.2%
Headline earnings per share increased 22.2% HY 2012 headline earnings per share HY 2013 headline earnings per share Cents per share Cents per share Adjusted HEPS 352 12.5% Adjusted HEPS 396 STC (28) STC HEPS 324 22.2% HEPS 396 Impairment Profit on disposal losses (23) of subsidiary and 14 and other
Slide 26: Group statement of financial position
Group statement of financial position R million HY 2013 FY 2012 Movement Assets Property, plant and equipment 26 115 24 367 1 748 Intangible assets 5 245 5 123 122 Other non-current assets 1 096 1 188 (92) Current assets 16 874 17 552 (678) Total assets 49 330 48 230 1 100 Equity and liabilities Tot
Slide 27: Movement in Group PPE and intangible assets
Movement in Group PPE and intangible assets Property, plant and equipment Intangible assets R million R million 3 869 (2 509) 528 (140) 680 (545) 39 (53) 26 115 24 367 5 245 5 123 FY 2012 Net Depreciation Foreign Other HY 2013 FY 2012 Net Amortisation Foreign Other HY 2013 net book additions exchang
Slide 28: Investment in working capital and network expansion
Investment in working capital and network expansion Group free cash flow R million • Handset financing impacting working capital 14.5% • Accelerated HY 2013 capex in International operations 12 060 (2 195) 2.4% 9 865 (3 709) 11.2% (299) (12) 6 156 (2 413) 11.8% 3 432 HY 2013 Working Cash Cash capita
Slide 29: Interim dividend declared of 355 cents
Interim dividend declared of 355 cents Dividend per share Total shareholder returns Cents per share % return for the twelve months ended 30 September 2012 710 450 460 38.5 FY 2012 280 27.7 355 21.8 24.0 260 180 10.1 3.7 FY 2011 FY 2012 HY 2013 (13.4) Interim dividend Final dividend FY 2012 (45.1) •
Slide 30: Wrap-up
Wrap-up 29 Interim results: Vodacom Group Limited 30 September 2012
Slide 31: Group medium-term targets maintained
Group medium-term targets maintained EBITDA Market position Improve our NPS position in all measured markets Service revenue Low single digit growth in service revenue Capital expenditure EBITDA Improve EBITDA margin through operational efficiencies Capital expenditure Capital expenditure between 11
Slide 32: In summary
In summary 1 Push Best bundle and segmented offers network 2 Accelerate Best network data network rollout 3 Invest Best in new retail and online experience network 4 Increase Best smartphone and data adoption network 5 Continued Best network focused investment in growth areas 6 Realise Best further
Slide 33: Thank you
Thank you 32 Interim results: Vodacom Group Limited 30 September 2012
Slide 34: Senior leadership team
Senior leadership team Shameel Joosub Ivan Dittrich Johan Dennelind Andries Delport Chief Executive Officer Chief Financial Officer Chief Executive Officer: International Chief Technology Officer Joined Vodacom in March 1994 Joined Vodacom in June 2012 Joined Vodacom in December 2010 Joined Vodacom
Slide 35: Country data
Country data South Africa Tanzania DRC Mozambique Lesotho Population (million) 51 48 70 25 2 GDP per capita* (USD) 8 200 655 255 563 1 050 GDP growth estimate* 2012 (%) 2.3 6.9 6.5 7.4 4.7 Estimated mobile penetration (%) 147 42 25 30 51 Ownership (%) 93.75 65 51 85 80 License expiry period 2029 203
Slide 36: Impact of foreign exchange
Impact of foreign exchange Revenue Operating expenses Yoy % growth Yoy % growth HY 2013 Reported Normalised1 HY 2013 Reported Normalised1 South Africa 3.7 3.7 South Africa 0.1 0.5 International 36.4 31.0 International 26.7 16.4 Group 8.4 7.0 Group 5.2 3.3 EBITDA Average exchange rates Yoy % growth H
Slide 37: Definitions
Definitions Active customers Active customers are based on the total number of mobile customers using any service during the 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 customers who are activ
Slide 38: Forward-looking statements
Forward-looking statements This presentation which sets out the interim results for Vodacom Group Limited for the six months ended 30 September 2012 contains 'forward-looking statements‘, which have not been reviewed or reported on by the Group’s auditors, with respect to the Group’s financial condi
Slide 39: Contact details
www.vodacom.com investorrelations@vodacom.co.za +27 11 653 5055 facebook.com/vodacom @vodacom Interim results for the six months ended 30 September 2012 38 Interim results: Vodacom Group Limited 30 September 2012