Slide 1: Vodacom Group Interim Results for the Six Months Ended September 30, 2008
VODACOM GROUP (PTY) LTD INTERIM RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2008
Slide 2: Operational highlights
Operational highlights Pieter Uys Chief Executive Officer
Slide 3: Group highlights
Group highlights For the six months ended September 30, 2008 vs. prior year Total customers Revenue Profit from operations (Statutory operating profit) 35.7 million R26.0 billion R6.4 billion 13.1% 14.0% 12.5% EBITDA Cash generated from Interim dividend operations (declared September 2008) R8.7 bill
Slide 4: South Africa
South Africa For the six months ended September 30, 2008 vs. prior year H1 2009 • Total customers 8.4% 25.2 million • Gross connections 2.6% 5.7 million • Churn % 3.6 pts 42.3% • Estimated SIM card 13 pts 100% penetration % • Revenue 11.9% R22.7 billion • Profit from operations 12.2% R6.0 billion
Slide 5: Improved BEE status
Improved BEE status • BBBEE transaction to the value of R7.5 billion, equating to 6.25% of Vodacom South Africa’s equity – Strategic partners, Royal Bafokeng Holdings (“RBH”) and Thebe Investment Corporation (“Thebe”) own 1.97% and 0.84% of Vodacom South Africa respectively – Vodacom employees own 1
Slide 6: Tanzania
Tanzania For the six months ended September 30, 2008 vs. prior year H1 2009 • Total customers 34.1% 4.9 million • Gross connections 38.7% 1.7 million • Churn % 2.6 pts 44.2% • Estimated SIM card 10 pts 27% penetration % • Revenue 34.8% R1.5 billion • Profit from operations 63.3% R294 million
Slide 7: Democratic Republic of Congo (DRC)
Democratic Republic of Congo (DRC) For the six months ended September 30, 2008 vs. prior year H1 2009 • Total customers 18.8% 3.8 million • Gross connections 20.6% 1.4 million • Churn % 10.6 pts 53.9% • Estimated SIM card 4 pts 15% penetration % • Revenue 22.7% R1.4 billion • Profit from operations
Slide 8: Lesotho
Lesotho For the six months ended September 30, 2008 vs. prior year H1 2009 • Total customers 35.5% 450 thousand • Gross connections 21.3% 97 thousand • Churn % 2.1 pts 20.0% • Estimated SIM card 8 pts 30% penetration % • Revenue 29.5% R180 million • Profit from operations 41.1% R79 million
Slide 9: Mozambique
Mozambique For the six months ended September 30, 2008 vs. prior year H1 2009 • Total customers 19.3% 1.3 million • Gross connections 21.7% 476 thousand • Churn % 15.4 pts 72.7% • Estimated SIM card 1 pts 15% penetration % • Revenue 61.7% R296 million • Loss from operations 76.8% R99 million • Loss
Slide 10: Delivery as a total communications provider
Delivery as a total communications provider • Continued market leadership through innovation 1. Mobile • Leverage synergies across the Group business • Economies of scale and cost containment strategies 2. Broadband • Continue to drive broadband technology leadership data and • Fixed mobile converge
Slide 11: 1. Maintaining market leadership in mobile
1. Maintaining market leadership in mobile • Maintain leading market share in all countries, except Mozambique • Uplifting ARPU through new innovative products and services launched – Yebo4Less – R5 voucher – SVS (short voice service) – Callback service – Mobile advertising (H1 revenue ±R40 million)
Slide 12: 2. Broadband data and connectivity services
2. Broadband data and connectivity services • Range of consumer broadband services offered: 3G/HSDPA, iBurst, WiFi – Half a million wireless broadband customers – Substantial lead in geographical coverage – HSUPA launched • Business-orientated connectivity solutions launched – WiMax launched in Augu
Slide 13: Data revenue
Data revenue Group data revenue as a % of service revenue Group data revenue 43.3% year on year 13.1 R million 10.5 3,004 8.6 2,096 % 1,443 H1 2007 H1 2008 H1 2009 H1 2007 H1 2008 H1 2009 South Africa: • Nearly 1 million email accounts • 4.3 Million unique GPRS/data users (H1 2008: 3.5 million) • 1.
Slide 14: 3. Offering a full set of converged services
3. Offering a full set of converged services • Vodacom Business offering: managed network services, IT services (hosting, security, storage and applications) and voice services • Infrastructure development – New 1,000m2 Tier 4 data centre launched in Johannesburg – Cape Town data centre to be launch
Slide 15: 4. Africa expansion
4. Africa expansion • Vodafone’s vehicle for expansion in sub-Saharan Africa • Vodacom Business Africa to lead IP services in Africa • Acquisition of 100% of Gateway – Carrier service, access and business network solutions business – Approximately US$675 million – Subject to Competition Commission a
Slide 16: Way forward
Way forward • Revenue uplift through new products and targeted campaigns 1. Mobile • Improve operational performance business • Improve synergies across Vodacom operating companies (and Vodafone) • Increase broadband data and access offer 2. Broadband • Improve mobile broadband products data and fix
Slide 17: Financial review
Financial review Johan van der Watt Acting Chief Financial Officer
Slide 18: Group income statement
Group income statement For the six months ended September 30, % R million H1 2007 H1 2008 H1 2009 change Revenue 19,466 22,815 26,016 14.0% Operating expenses excluding depreciation, amortisation, impairment and other (12,888) (15,215) (17,362) (14.1%) EBITDA 6,578 7,600 8,654 13.9% Depreciation, am
Slide 19: Profit from operations and net profit after tax
Profit from operations and net profit after tax For the six months ended September 30, 2008 vs. prior year • Profit from operations increased Profit from operations and net profit 6,430 by 12.5% 5,714 4,965 • Profit from operations margin R million 3,658 3,776 decreased by 0.3% points 3,114 • Net pr
Slide 20: Group operational indicators
Group operational indicators • Gross connections up 7.7% year on Gross connections year to 9.4 million • Customers up 13.1% year on year to Thousand 2,895 3,721 35.7 million 2,015 • Total traffic in South Africa increased 5,308 5,845 5,693 by 7.0% year on year to 11.8 billion minutes H1 2007 H1 2008
Slide 21: Group revenue by country
Group revenue By country % R million H1 2007 H1 2008 H1 2009 change South Africa, including holding companies 17,580 20,299 22,716 11.9% Tanzania 775 1,086 1,464 34.8% DRC 898 1,108 1,360 22.7% Lesotho 105 139 180 29.5% Mozambique 108 183 296 61.7% 19,466 22,815 26,016 14.0% Non-South African operat
Slide 22: Group revenue composition
Group revenue Revenue composition % R million H1 2007 H1 2008 H1 2009 change Airtime, connection and access 11,313 12,947 14,608 12.8% Data 1,443 2,096 3,004 43.3% Interconnection 3,723 4,304 4,744 10.2% Equipment sales 2,312 2,393 2,490 4.1% International airtime 555 952 974 2.3% Other sales and se
Slide 23: Group revenue (excluding equipment sales)
Group revenue (excluding equipment sales) By revenue type Revenue analysis – H1 2008 Revenue analysis – H1 2009 R20,422 million (excluding equipment sales) R23,526 million (excluding equipment sales) 4.7% 0.6% 4.1% 0.8% 21.1% 20.2% 10.3% 63.3% 12.8% 62.1% Airtime, connection and access Data Intercon
Slide 24: ARPU by country
ARPU by country • SA increased 8.2% to R132 ARPU per month • DRC increased 6.6% to R65 126 122 132 • Lesotho decreased 5.5% to R69 • Tanzania increased 6.0% to R53 79 73 Rand 69 • Mozambique increased 35.7% to 76 61 65 R38 53 54 50 • Vodacom Group consolidated 38 30 28 ARPU increased 5.7% year on ye
Slide 25: South Africa ARPU
South Africa ARPU • Contract ARPU decreased South Africa ARPU per month 1.2% year on year to R481 • Prepaid ARPU increased 528 487 11.9% year on year to R66 481 R and • Total ARPU increased 8.2% year on year to R132 132 126 122 61 59 66 H1 2007 H1 2008 H1 2009 Contract Total Prepaid
Slide 26: Factors affecting trends and margins
Factors affecting trends and margins 7.0% • South Africa traffic mix Total South Africa traffic year on year – Outgoing traffic increased by 7.7% year Millions of minutes on year to 8.0 billion minutes 11,024 11,793 9,669 – Incoming traffic increased by 5.5% year on year to 3.8 billion minutes – Tot
Slide 27: EBITDA and margin analysis
EBITDA and margin analysis 13.9% year on year • Group EBITDA Increased 13.9% year on EBITDA 8,654 year to R8.7 billion 7,600 6,578 – EBITDA margin stable at 33.3% R million – EBITDA margin 38.1%, when excluding cellular phone and equipment sales (H1 2008: 38.3%) • South Africa EBITDA – Increased 12.
Slide 28: Group profit from operations
Group profit from operations By country % R million H1 2007 H1 2008 H1 2009 change South Africa 4,745 5,389 6,048 12.2% Tanzania 134 180 294 63.6% DRC 133 172 101 (41.3%) Lesotho 34 56 79 41.1% Mozambique (138) (56) (99) (76.8%) Holding companies 57 (27) 7 125.9% 4,965 5,714 6,430 12.5% Profit from
Slide 29: Productivity measures
Productivity measures • Consolidated customers Gross capex additions as a % of revenue per employee increased 7.1% 16.1 year on year to 5,417 based on 11.4 6,588 employees 10.0 % • Consolidated gross capex additions as a % of revenue increased to 11.4% from 10.0% H1 2007 H1 2008 H1 2009 • Gross cape
Slide 30: Capex additions and composition
Capex additions and composition Including software Capex gross additions – H1 2008 Capex gross additions – H1 2009 R2,289 million R2,976 million 6.2% 1.8% 1.5% 0.9% 8.4% 11.3% 11.1% 20.5% 70.5% 67.8% South Africa Tanzania DRC Mozambique Lesotho and holding companies South Africa capex gross addition
Slide 31: Cash generation
Cash generation Cash generated from operations • EBITDA increased by R1.1 billion • Cash generated from operations increased by 15.6% to R8.0 billion R million 7,952 • Free cash flow increased 6,879 5,454 by R1.9 billion to R1.4 billion • Taxation paid decreased by 10.2% to R2.2 billion H1 2007 H1 2
Slide 32: Debt composition
Debt composition Gross debt composition Gross debt composition including bank overdrafts – H1 2008 including bank overdrafts – H1 2009 R6,949 million R6,884 million 68.4% 75.3% 24.7% 31.6% ZAR demoninated Foreign denominated Net debt: R6,061 million (H1 2008: R6,150 million) Net debt to equity ratio
Slide 33: Group shareholder distributions
Group shareholder distributions 10.0% year on 20.0% year year on year 32.4% year on year 9.1% 3,190 year on 2,900 year R million 2,800 2,750 3,000 2,500 1,700 2006 2007 2008 2009 Interim dividend Final dividend To date R26.0 billion in dividends have been distributed to shareholders
Slide 34: Questions?
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Slide 35: Group balance sheet
Group balance sheet Extract as at March % R million H1 2008 2008 H1 2009 change ASSETS Non-current assets 21,859 24,468 25,859 5.7% Current assets 9,125 9,707 10,360 6.7% Total assets 30,984 34,175 36,219 6.0% EQUITY AND LIABILITIES Capital and reserves 13,222 11,805 12,700 7.6% Non-current liabilit
Slide 36: Group cash flow statement
Group cash flow statement Extract for the six months ended September 30, % R million H1 2007 H1 2008 H1 2009 change Cash generated from operations 5,454 6,879 7,952 15.6% Net cash flows from operating activities 647 1,069 2,055 92.2% Net cash flows utilised in investing (2,646) (4,641) (3,887) 16.2%
Slide 37: Disclaimer
Disclaimer • This presentation has been prepared and published by Vodacom Group (Pty) Ltd. • Many of the statements included in this presentation are forward-looking statements that involve risks and/or uncertainties and caution must be exercised in placing any reliance on these statements. • The st
Slide 38: www.vodacom.com
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