Slide 1: FY23 Results
FY23 Results May 2023 CUSTOMERS ⫶ SIMPLICITY ⫶ GROWTH 1 Turnaround FY23planning Results⫶⫶ April May 2023
Slide 2: A new roadmap for Vodafone
A new roadmap for Vodafone A ⫶ Vodafone must change p3 B ⫶ Our transformation p7 C ⫶ The action plan p10 FY23 financial performance p14 Appendices p25 2 FY23 Results ⫶ May 2023
Slide 3: Vodafone must change | The market context
A ⫶ Vodafone must change | The market context We invest more & earn less than other sectors… … and shareholder returns reflect it 25% TSR rebased to 100 ROCE (10-year average) 170 Cons prod. & servives 20% Retail 150 Tech 15% 130 Food / Bev / Tob Cap Gds Chemicals Energy Europe ex - 110 fin Material
Slide 4: Vodafone must change | The performance context
A ⫶ Vodafone must change | The performance context Relative service revenue performance not good enough… … partly driven by customer satisfaction Vodafone less local incumbent mobile service revenue growth Indexed consumer NPS score 10% 200 8% 6% 4% 150 2% - (2%) 100 (4%) (6%) 50 (8%) (10%) (12%) 0
Slide 5: Vodafone must change | The performance context
A ⫶ Vodafone must change | The performance context Diverging performance by geography… … and even more so by segment Higher -1.1% Low EBITDAaL Europe SR growth ROCE Consumer margin (51% Group SR) Lower 2.6% Good EBITDAaL SR growth ROCE margin Business Market FY23 SR growth ROCE Market FY23 SR growth
Slide 6: Vodafone must change | The internal context
A ⫶ Vodafone must change | The internal context We have a unique set of strengths… … but some limitations to overcome Strong mobile networks Structural complexity Leading B2B & IoT position Reduced commercial agility Market-leading African operations Insufficient customer focus Engaged & experienced
Slide 7: Our transformation | Strategic shifts to drive growth
B ⫶ Our transformation | Strategic shifts to drive growth Where we are now What will change Target outcomes Consumer dominated Balanced focus on Maximise Business organisation Business + Consumer potential Inconsistent consumer Consumer back-to-basics Customer-driven experience to win in the market
Slide 8: Our transformation | A new roadmap for Vodafone
B ⫶ Our transformation | A new roadmap for Vodafone Balanced focus on Best-in-class telco Business + Consumer in Europe & Africa CUSTOMERS Consumer back-to-basics to win in the market Action Ambition plan Leaner organisation SIMPLICITY focused on value Europe’s Portfolio right-sized for growth leadi
Slide 9: Our transformation | Structure redesign
B ⫶ Our transformation | Structure redesign Future structure Priority transformation actions Lean corporate services Lean corporate services & ‘HoldCo’ Finance | HR | Legal | External Affairs | Brand 1 governance model for investments Establish commercial model for UK Vodacom 2 shared operations Vod
Slide 10: The action plan | Near-term actions
C ⫶ The action plan | Near-term actions CUSTOMERS SIMPLICITY GROWTH • Leverage new in-market • ‘Commercialise’ shared • Continue pricing actions autonomy for local agility operations • Germany turnaround • Enhance B2B sales • Local markets restructuring execution management execution • Commercial tr
Slide 11: The action plan | Early execution examples
C ⫶ The action plan | Early execution examples CUSTOMERS SIMPLICITY GROWTH • €150m investment • 11k Europe role reductions • Capex reallocated from reallocated in FY24 towards in ‘Group’ & markets lower to higher ROCE customer experience embedded in 3-yr plan markets • Brand spend increased • First
Slide 12: The action plan | Evaluating our progress
C ⫶ The action plan | Evaluating our progress CUSTOMERS SIMPLICITY GROWTH • Net promoter scores • Europe net Opex savings • Service revenue • ‘Deep detractor’ reduction • Industry productivity • Adjusted EBITDAaL benchmarking • Network reliability • Shared operations NPS • Free cash flow • Revenue m
Slide 13: A new roadmap for Vodafone
A new roadmap for Vodafone Consumer back-to-basics to win in the market Best-in-class telco in Europe & Africa Maximise potential of Vodafone Business Leaner organisation focused on value Europe’s leading platform Execution through Customers, Simplicity & Growth for Business 13 FY23 Results ⫶ May 20
Slide 14: Financial performance
FY23 Results Financial performance 14 Turnaround FY23planning Results⫶⫶ April May 2023
Slide 15: FY23 performance | Slowing in line with expectations
FY23 performance ⫶ Slowing in line with expectations Service revenue Adjusted ROCE growth EBITDAaL Group Group excl. Turkey -1.3%1 Post-tax ROCE2 Pre-tax ROCE2 2.7% €15.2bn 2.5% 2.5% 7.0% €14.9bn 6.8% 2.0% €14.7bn 6.4% 1.8% 1.9% €14.4bn 2.0% 1.6% 33.4% 5.3% 5.1% 1.4% 1.4% 5.0% 33.1% 32.8% 32.1% 4.0%
Slide 16: Germany | Further slowdown
Germany ⫶ Further slowdown Service Adj. Key drivers revenue EBITDAaL • Cumulative customer losses impacting performance Germany • Partially offset by broadband ARPU growth and roaming recovery 36% of Group -1.6% -6.1% EBITDAaL1 • Q3 / Q4 pricing actions supporting inflow ARPU, trade-off with near-te
Slide 17: Germany | Commercial actions underway
Germany ⫶ Commercial actions underway Accelerating network capacity upgrades • Broadband retail price increase in Nov’22 # incremental node segmentations with fibre 4,029 • Segmented broadband back-book price increase started in Mar’23 1,829 2,799 • 2.5x upstream capacity upgrade run-rate 1,544 1,53
Slide 18: Vodafone Business | Growth acceleration
Vodafone Business ⫶ Growth acceleration Strong financial Unique scale & Attractive performance capabilities addressable markets Business service revenue growth (%) Digital services2 revenue growth (%) 2.6% Germany UK Italy Spain Other1 19.3% €54bn €37bn €18bn €17bn €18bn 18.2% 16.9% 15.6% 0.7% 0.8%
Slide 19: Europe | Mixed performance
Europe ⫶ Mixed performance Service Adj. Organic service revenue Key drivers revenue EBITDAaL growth (%) • Continued pricing pressure in mobile -2.3% Italy • Strong Business growth in fixed connectivity & digital -0.8% -3.4% -3.3% -2.7% 10% of Group -2.9% -14.5%2 services EBITDAaL1 Q4 Q1 Q2 Q3 Q4 • E
Slide 20: Africa & Turkey | Sustained growth
Africa & Turkey ⫶ Sustained growth Service Adj. Organic service revenue Key drivers revenue EBITDAaL growth (%) 3.2% 3.0% 3.0% 3.0% • Resilient prepaid performance South Africa 1.4% 12% of Group +2.6% +1.7% • Good demand for financial services EBITDAaL1 • Cost efficiencies offsetting inflationary pr
Slide 21: Adjusted EBITDAaL & FCF | Impacted by macro environment
Adjusted EBITDAaL & FCF ⫶ Impacted by macro environment Adjusted EBITDAaL Adjusted Free cash flow 0.2 €14.7bn (2.4) 0.3 (0.4) 0.2 0.2 €14.8bn (0.3) €14.6bn FY22 (7.9) +5.0% FY23 Organic YoY growth -1.3% Organic YoY growth €4.8bn (2.5) (0.6) (0.5) 0.2 €1.4bn Organic Direct EU net opex Europe inflatio
Slide 22: Capital allocation | Robust balance sheet a priority
Capital allocation ⫶ Robust balance sheet a priority Investing in growth & infrastructure Deleveraging 2.5 €41.6bn (4.8) €40.0bn €7.8bn €7.9bn €7.8bn 3.1 (8.7) New products & €7.5bn digital services 2 €35.0bn 1.9 (2.2) €1.0bn €1.0bn €1.1bn €1.2bn FY22 €33.4bn 2.7x €30.0bn €2.1bn €2.1bn €1.9bn €1.7bn
Slide 23: FY24 guidance
FY24 guidance FY24 Adjusted EBITDAaL FY24 Adjusted FCF (€billion) (€billion) €14.7bn (1.0) broadly flat (0.5) (0.4) €4.8bn (0.1) c.€3.3 €13.3bn €4.2bn billion FY23 Vantage, FX FY23 Extraordinary Europe Growth Underlying FY24 FY23 Vantage, FX FY23 Germany MDU Interest & FY24 reported Hungary, re-base
Slide 24: A new roadmap for Vodafone
A new roadmap for Vodafone Consumer back-to-basics to win in the market Best-in-class telco in Europe & Africa Maximise potential of Vodafone Business Leaner organisation focused on value Europe’s leading platform Execution through Customers, Simplicity & Growth for Business 24 FY23 Results ⫶ May 20
Slide 25: Appendices
Appendices I More information p26 II FY23 financial summary p27 ESG reporting & III p28 performance Net debt, liquidity & III p29 total funding obligations IV Importance notice p30 Provide investor feedback here ⫶ investors.vodafone.com/feedback 25 Turnaround FY23planning Results⫶⫶ April May 2023
Slide 26: More information
Appendix I More information Vodafone Business ⫶ Virtual investor briefing Vodafone Technology ⫶ Virtual investor briefing Connecting people, places & things for a better future A globally scaled operator • We operate in attractive markets • Our customer demand continues to accelerate • We have uniqu
Slide 27: FY23 financial summary
Appendix II FY23 financial summary FY22 FY23 Organic €m €m change2 • Service revenue growth maintained with Europe -0.4% Group service revenue 38,203 37,969 2.2% & Africa growing Adjusted EBITDAaL 15,208 14,665 (1.3%) • Decline in Europe largely reflecting the underperformance Adjusted EBITDAaL marg
Slide 28: ESG reporting & performance
Appendix III ESG reporting & performance Extensive suite of ESG disclosures Strong ESG performance Annual Report ⫶ vodafone.com/ar2022 ESG Addendum ⫶ investors.vodafone.com/esgaddendum ESG Ratings ⫶ • Integrated reporting covering • >1,200 datapoints in investos.vodafone.com/esg-ratings ESG strategy
Slide 29: Net debt, liquidity & total funding obligations
Appendix IV Net debt, liquidity & total funding obligations Net debt progression (€billion) Total funding obligations FY23 FY22 2.5 €m €m €41.6bn (4.8) €40.0bn 3.1 (8.7) €35.0bn 1.9 (2.2) Bonds (44,116) (48,031) Bank loans (795) (1,317) €30.0bn FY22 €33.4bn Other borrowings including spectrum (1,744
Slide 30: Important notice
Appendix V Important notice You have been provided access to this presentation on the basis that you are an investment professional for the References to Vodafone are to Vodafone Group Plc and references to Vodafone Group are to Vodafone Group Plc purposes of Article 19 or a member of the press for
Slide 31: Investor Relations contacts and upcoming events
Vodafone Group investors.vodafone.com Upcoming events Investor Relations ir@vodafone.co.uk 1 Kingdom Street, London, W2 6BY 25 July Annual General Meeting Matt Johnson 2023 Director matthew.johnson@vodafone.com Group IR Daniel Morris Deputy Director daniel.morris@vodafone.com 27 July FY24 Q1 Results