Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Vodafone Group — Q3 2019 Earnings Presentation
24 slides from Vodafone Group Public's earnings presentation, Jan 25, 2019
Slide 1: Vodafone Group Plc Trading Update
Vodafone Group Plc Trading Update for the quarter ended 31 December 2018 25 January 2019
Slide 2: Disclaimer
Disclaimer By watching this webcast, you agree to be bound by the following conditions. You This presentation also contains non-GAAP financial information which the may not disseminate these slides or this recording, in whole or in part, without the Vodafone Group’s management believes is valuable i
Slide 3: Q3 18/19 highlights: ongoing momentum in value drivers
Q3 18/19 highlights: ongoing momentum in value drivers Accelerating Deepening customer engagement digital Improving Service revenue transformation asset utilisation 5G active 0.1% +201k +226k +8% On track network growth ex. UK handset financing Europe mobile contract net adds1 Europe broadband net a
Slide 4: Deepening customer engagement: reducing mobile churn
Deepening customer engagement: reducing mobile churn Q3 18/19 mobile contract churn improvement YoY (pp)1 2.3 2.2 1.7 1.6 0.9 0.3 UK Spain Germany Turkey South Africa Other Europe Annualised 15.3 23.5 13.4 17.3 3.9 10.7 Churn (%) 4 1. Excludes Italy which is predominantly a prepaid market
Slide 5: Europe Consumer: improving commercial momentum
Europe Consumer: improving commercial momentum Europe customer net adds (000s) Europe4 customer quality indicators (Q3 17/18 – Q3 18/19) Mobile contract1 Fixed broadband 234 NGN base (m) 12.3 14.0 224 201 260 On-net/strategic wholesale 185 NGN users (m) 10.3 10.7 316 414k NGN 255 226 net adds 128 12
Slide 6: Vodafone Business: growth from IoT and fixed; ongoing mobile price pressure
Vodafone Business: growth from IoT and fixed; ongoing mobile price pressure Service revenue growth Q3 18/19 YTD (%)1 Strategic Cloud partnership with IBM Mobile IoT Fixed Total Improves capability: Mobile: pricing pressure full access to IBM’s Multicloud offering • 4% customer growth, 10.22 offset b
Slide 7: Emerging Consumer: continued customer growth, Data momentum
Emerging Consumer: continued customer growth, Data momentum Customer net adds (m) Customer quality indicators Q3 18/19 (m) Mobile contract Mobile prepaid1 Penetration (YoY improvement) +8% YoY 0.5 0.5 0.6 0.5 79 +48% YoY +14% YoY 3.1 0.5 2.8 2.6 Vodafone 2.3 14 38 Safaricom 1.2 23 Q3 17/18 Q4 17/18
Slide 8: Improving asset utilisation: 5G active network sharing
Improving asset utilisation: 5G active network sharing Group principles UK agreement with O21 Vodafone Managed Passive and active sharing for 5G Active 5G sharing across 14k2 sites; Telefonica Managed exploring transmission options Unwind 5G rollout at lower costs and capex High quality partners mai
Slide 9: Improving asset utilisation: towers update
Improving asset utilisation: towers update Number of sites (tenancy ratio)1 Virtual TowerCo planning Controlled operations JVs Sites (Tenancy Ratio) Masts (Ratio) • Further due diligence into operational, Rooftops (Ratio) 1,500 (1.4) strategic & financial considerations 700 (1.8) 14,000 (1.1) 3,100
Slide 10: Financial review
Financial review Margherita Della Valle Group Chief Financial Officer
Slide 11: Service revenue growth
Service revenue growth Group1 (%) Regions (%) Ex. UK handset financing Reported (IAS18) IFRS 15 basis Europe ex. UK handset financing Rest of World 2.1 7.8 7.7 1.6 7.0 6.8 1.1 0.9 4.9 1.4 0.5 0.4 1.1 0.3 0.1 0.3 1.4 1.0 (0.5) (0.3) (1.1) (1.1) (0.8) Q3 17/18 Q4 17/18² Q1 18/19 Q2 18/19 Q3 18/19 Q3 1
Slide 12: Italy: competitive intensity moderating
Italy: competitive intensity moderating -4.6% Service revenue growth (Q2 -6.3%) Vodafone mobile net ports (000s) Market porting activity returning to ‘pre-new entrant’ levels (5) 50% lower in December than Q2 peak (13) Good progress on 2nd brand to address value segment ~1 million customers on ‘ho.’
Slide 13: Spain: commercial performance stabilising
Spain: commercial performance stabilising -7.4% Service revenue growth (Q2 -7.2%) Vodafone mobile contract net ports (000s) Mobile Fixed 8 Market portability volumes reducing YoY Cessation of 50%-off, 12 month promos (5) (13) (20) (20) Vodafone port neutral in December (28) (38) Lowest ports to MásM
Slide 14: Vodacom: slowdown in South Africa, strong growth in Internationals
Vodacom: slowdown in South Africa, strong growth in Internationals +1.5% Service revenue growth (Q2 +4.6%1) Service revenue growth (%) South Africa Internationals 15.0 Data pricing transformation initiatives in South Africa Including aggressive summer promotions 11.1 11.1 10.4 9.4 Macro weighs on us
Slide 15: Germany: retail revenue growth, wholesale decline
Germany: retail revenue growth, wholesale decline +1.1% Service revenue growth (Q2 +1.7%) Service revenue growth (%) Service revenue Retail (service revenue ex. wholesale) Robust retail revenue growth Masked by wholesale MVNO/ FVNO decline 2.6 2.5 2.5 2.4 2.5 2.3 Revenue slowdown due to business ARP
Slide 16: UK: maintaining commercial and financial momentum
UK: maintaining commercial and financial momentum +0.9%1 Service revenue growth (Q2 +1.1%1) Mobile contract and broadband net adds (000s) Mobile contract2 Fixed broadband 109 104 Good customer growth in mobile and broadband Consumer service revenue +2.1%1 77 66 Successful commercial initiatives 53 C
Slide 17: Other Europe: continued strong growth
Other Europe: continued strong growth +2.2% Service revenue growth (Q2 +2.3%) Customer net adds (000s) Mobile contract Fixed broadband 165 The fifth European Opco1 125 12% of Group service revenue 110 115 Consistent service revenue growth 73 Portugal +2.9%, Ireland +1.4%, Greece +3.0% Romania under
Slide 18: Summary: executing with pace
Summary: executing with pace Q3 18/19 progress € Commercial momentum Digital transformation Asset utilisation • Lower mobile contract churn • On track to deliver €400m net • 5G active network sharing opex savings in FY 19 in the UK • Strong mobile and broadband customer growth • Initiatives for a ra
Slide 19: Q&A
Q&A 19
Slide 20: Appendix
Appendix 20
Slide 21: Pro-forma European NGN footprint
Pro-forma European NGN footprint1 Household coverage (m)2 Owned Strategic partnership3 Acquired assets Wholesale % Household coverage 73% 67% 76% 88% 62% 93% 38% 6.1 11.0 11.8 28.1 12.8 12.8 10.2 0.3 3.2 7.2 2.8 6.4 3.0 Germany Italy Spain UK Portugal VodafoneZiggo NLJV CEE¹ 120m Households passed w
Slide 22: Impacts of IFRS 15
Impacts of IFRS 15 Q3 18/19 (%) IAS 18 (ex. UK handset financing) IFRS 15 1.1 Germany 1.5 (4.6) Italy (4.2) 0.9 UK 0.5 (7.4) Spain (6.7) 1.5 Vodacom 1.4 (1.1) Europe (0.8) 4.9 RoW 5.4 0.1 Group 0.4 22
Slide 23: Forward-looking statement
Forward-looking statement This presentation, along with any oral statements made in connection therewith, contains “forward-looking expected synergies and associated benefits; the Group’s ability to secure the timely delivery of high-quality statements” including within the meaning of the US Private
Slide 24: More information
More information Visit our website for more information 2019 upcoming dates Interim dividend paid Prelim results Q1 IMS 1 Feb 14 May 22 July Contact us ir@vodafone.co.uk +44 (0) 7919 990 230 www.vodafone.com/investor For definitions of terms please see www.vodafone.com/content/index/investors/glossa