Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Investor Presentation (April 2023)
40 slides from Vodafone Group Public's investor presentation, April 2023
Slide 1: Our Social Contract: Shaping the Digital Society
Our Social Contract Shaping the Digital Society April 2023
Slide 2: Taking a leadership role in shaping the Digital Society
Our Social Contract ⫶ Taking a leadership role in shaping the Digital Society In 2019, we recognised the need for a fundamental reset of the broader telecoms sector’s relationship with society. As an industry we need to work closely with governments and policymakers to establish a more sustainable,
Slide 3: Why is a reset of the regulatory framework so important?
Why is a reset of the regulatory framework so important? 1⫶ Historical policy choices have impacted the European telecoms sector Our Social Contract - Shaping the Digital Society April 2023 3
Slide 4: Highlights
Highlights A The telecoms sector plays a unique role in enabling the Digital Decade B EU regulation has adversely impacted the sector for the last 10 years C How did we get here? Three key policy areas that led to this outcome D We aim to rebalance these competing objectives Our Social Contract - Sh
Slide 5: The telecoms sector plays a unique role in enabling the Digital Decade
A ⫶ The telecoms sector plays a unique role in enabling the Digital Decade The last few years have seen enormous shifts in society and the direct role telecoms plays within it. Digital is now a top priority for European governments. The political spotlight is on us in three important ways: Economic
Slide 6: Concrete political ambitions and a new set of actions
A ⫶ This is translating into concrete political ambitions & a new set of actions The EU’s ‘three-pronged’ approach: paving the way towards a broader reset of the telecoms framework The EU Commission’s policy roadmap 1 2020 2 2022 2021 3 2023 2020 2022 2023 2023 EU Recovery & EU’s Digital EU’s Future
Slide 7: Broad recognition that EU regulation is not fit for the future
B ⫶ There is now broad recognition that EU regulation is not fit for the future However, the gap between policymakers’ newly formulated digital ambitions and Europe’s current situation is significant. EU telecoms has experienced more deflation than any other sector over the last 10 years. EU policy
Slide 8: Estimated €300bn investment gap vs. the EU's digital agenda
B ⫶ There is an estimated €300bn investment gap vs. the EU’s digital agenda Policy-driven deflation + extractive taxation has led to European telecoms ROCE is lower than other sectors, while financially unattractive investments: ROCE < WACC capital investment requirements are the highest European Wi
Slide 9: A unique European phenomenon
B ⫶ This is a unique European phenomenon This situation comes not only at a hefty price for telecoms, but for European economies at large 5G rollout in Europe is now significantly behind other regions… … leading to structurally lower 5G adoption 5G stand-alone population coverage (2022)1 5G connecti
Slide 10: How did we get here? Three key policy choices
C ⫶ How did we get here? Three key policy choices that led to this outcome The telecoms sector is uniquely regulated Governments now face a ‘trilemma’ With a changing external environment, the current approach is not serving c.40-50% Europe’s interests well. Digital acceleration, 5G investments, sec
Slide 11: Spectrum policy
C ⫶ How did we get here? Three key policy choices that led to this outcome Spectrum policy Industry outcome Past spectrum policies have been too focused on extracting the maximum amount • 1 Value destructive for the industry & created long-term headwinds (i.e. of money from the industry Vodafone UK
Slide 12: Competition policy
C ⫶ How did we get here? Three key policy choices that led to this outcome Competition policy Industry outcome The singular focus of most competition authorities has been the number of operators and short-term pricing. 1 EU network operators have been unable to achieve scale Outcome Average subs per
Slide 13: Technology regulation
C ⫶ How did we get here? Three key policy choices that led to this outcome Technology regulation Industry outcome Policymakers have applied a ‘light touch’ approach to over-the-top (‘OTT’) tech giants despite them benefitting massively from operator’s network investments. 1 Lack of a ‘level playing
Slide 14: We aim to rebalance these competing objectives
D ⫶ We aim to rebalance these competing objectives A rebalancing of objectives is required to meet governments’ & regulators’ own digital objectives Facing up to the trilemma Policymakers’ digital priorities Rebalancing the policy myopia of the past 1 Roll-out of fast & secure next generation networ
Slide 15: Summary
Summary A The telecoms sector plays a unique and critical role in delivering Europe’s digital ambitions • B The EU has set out a clear vision – empowering businesses and people for a more sustainable and prosperous digital future C• However, to achieve its ambitions, Europe needs to acknowledge the
Slide 16: How are we achieving this?
How are we achieving this? 2⫶ Our ‘Social Contract’ – enabling a digital society Our Social Contract - Shaping the Digital Society April 2023 16
Slide 17: Highlights
Highlights A A reset of our relationship with society B Improving our broader reputation is essential C Our Social Contract directly helps governments meet their objectives D Central relationship between industry ROCE & infrastructure investment Our Social Contract - Shaping the Digital Society Apri
Slide 18: A reset of our relationship with society
A ⫶ A reset of our relationship with society In 2019, we announced our Social Contract – representing a fundamental reset of our relationship with society. The aim was to establish a more collaborative, partnership approach that addresses societies’ needs, enables governments & regulators to achieve
Slide 19: Supporting the societies within which we operate
A ⫶ Supporting the societies within which we operate Address societal needs 1. The COVID-19 pandemic was a major catalyst for us …we continue to respond to major crises and in turn, this has to build on the Social Contract... deepened our relationships with governments and policymakers 2019 2020 202
Slide 20: UK example: everyone.connected plan
A ⫶ Supporting the societies within which we operate Address societal needs 1. UK example - our everyone.connected plan in response to the cost-of-living crisis How are we getting everyone connected 1 Creating affordable & accessible products We have Providing good value offers & social tariffs for
Slide 21: Improving our broader reputation is essential
B ⫶ Improving our broader reputation is essential Improve our reputation 2. Our reputation is improving through our Social Contract, deepening our relationship with customers and encouraging governments to partner with us Telecoms sector Though our Social Contract • When we launched our Social Contr
Slide 22: Our Social Contract directly helps governments meet their objectives
C ⫶ Our Social Contract directly helps governments meet their objectives Reset policy environment 3. Therefore it makes us an essential digital enabler, and a bridge between what governments need and what is needed by the industry Policymakers’ digital priorities Our priorities are aligned What we n
Slide 23: Central relationship between industry ROCE and investment
D ⫶ Central relationship between industry ROCE & investment Earning a fair return & ability to invest 4-5. Addressing societal needs, improving our reputation, and the way we engage and align with governments and their objectives, delivers value not only to society but also to us as a company and ou
Slide 24: Summary
Summary A Through our Social Contract we will continue to demonstrate leadership in our sector – as genuine partners to society, to governments and to the economies in which we operate B We will further improve our reputation, not just with politicians and policymakers, but with our customers & so
Slide 25: What is needed?
What is needed? 3⫶ Pro-investment policy reform is essential for EU to meet its digital objectives Our Social Contract - Shaping the Digital Society April 2023 25
Slide 26: Highlights
Highlights A Europe is at a crossroads on delivering its digital ambitions B We have made strong progress but it’s not enough C The Social Contract is essential to enable Europe’s Digital Decade D It is a fundamental part of our DNA Our Social Contract - Shaping the Digital Society April 2023 26
Slide 27: Europe is at a crossroads on delivering its digital ambitions
A ⫶ Europe is at a crossroads on delivering its digital ambitions The route thatthat The route policymakers choose policymakers choosewill willhave significantlong-term have significant long-term consequences…. consequences... “As is” … continue down a similar path to before OR “To be” … globally co
Slide 28: Our vision: addressing the present and building for the future
A ⫶ Our vision – addressing the present and building for the future The telecommunications policy framework was created 20 years ago and is no longer fit for purpose Major technological evolutions are taking …where Europe will continue to be left Major technological trends …enabling a new wave of in
Slide 29: Further action is needed across key policy areas
A ⫶ Further action is needed across key policy areas Further policy reform will be needed to ensure a effective balance of objectives and deliver Europe's digital ambitions How to achieve further policy reform Establishing a policy environment that is pro-investment & supportive of returns Spectrum
Slide 30: We have made strong progress but it's not enough
B ⫶ We have made strong progress but it’s not enough There have been positive shifts in policymaking…. Regulatory focus of the past ✓ >€1 billion compared to benchmark More efficient & Spectrum costs reduced by Revenue-maximising spectrum non-discriminatory auctions & incentivising market entry spec
Slide 31: Spectrum: clear shift in governments' thinking on auctions
B ⫶ We have made strong progress but it’s not enough Reset policy environment 3. Spectrum: Seen a clear shift in governments’ thinking on auctions & how they are used to achieve optimal outcomes What more is needed? Fairer balance ✓ Non-discriminatory ✓ Efficient allocation/auction structure Short-t
Slide 32: Competition: biggest revamp of competition law
B ⫶ We have made strong progress but it’s not enough Reset policy environment 3. Competition: The European Commission is undertaking its biggest revamp of competition law What more is needed? Fairer balance ✓ Changes made to State Aid rules ✓ Network sharing now fully accepted Short-term ✓ Infrastru
Slide 33: Technology: progress on a more level playing field
B ⫶ We have made strong progress but it’s not enough Reset policy environment 3. Technology: Significant progress has been made on achieving a more level playing field ✓ European Electronic Code of What more is needed? Communications – begun to level the Fairer balance playing field Short-term ✓ to
Slide 34: New Connectivity Package published by the European Commission
B ⫶ We have made strong progress but it’s not enough Reset policy environment 3. Short term wins leading to a longer term reset: New Connectivity Package published by the European Commission Draft Gigabit Infrastructure Act – harmonised EU rules removing Consultation on the future of the connectivit
Slide 35: The Social Contract is essential to enable Europe's Digital Decade
C ⫶ The Social Contract is essential to enable Europe’s Digital Decade Delivering sustainable, inclusive and resilient societies that meet the needs of… Consumers Governments, regulators Bridging the connectivity divide – ensuring & policymakers fast, reliable & secure next generation connectivity a
Slide 36: It is a fundamental part of our DNA
D ⫶ It is a fundamental part of our DNA Address societal needs 1. Social Contract – accelerating our Purpose & ESG initiatives… … and creating value for all • Digitalising business, especially SMEs €2.5bn Shareholder dividend ⫶ €2.5bn Our Purpose ⫶ To connect for a better future Connecting €2.1bn •
Slide 37: Summary
Summary A Europe remains at a crossroads. More pro-investment policy reform is essential to support the reset necessary to drive growth & scale in order to achieve Europe’s Digital ambitions B Progress has been made in a number of areas of policy reform with governments & regulators now more willing
Slide 38: Embedding the Social Contract is critical for the Digital Decade
Conclusion ⫶ Embedding the Social Contract is critical for the Digital Decade Consumers Businesses Our ongoing contribution to society Shareholders Continued …to create a more sustainable, ‘Social Contract’ partnerships and healthy economy & policy reform are toenabling shape the society, and meet E
Slide 39: Disclaimer: Important notice
Disclaimer⫶ Important notice By accessing these slides, you agree to be bound by the following conditions. You may not sector; the relationship between industry ROCE and investment; the expected disseminate these slides or any related recording, in whole or in part, without the prior reduction in Vo
Slide 40: Upcoming events and investor relations contacts
Vodafone Group investors.vodafone.com Upcoming events Investor Relations ir@vodafone.co.uk 1 Kingdom Street, London, W2 6BY 16 May FY23 Results 2023 Matthew Johnson Director matthew.johnson@vodafone.com Group IR 27 July FY24 Q1 Results Daniel Morris 2023 Deputy Director daniel.morris@vodafone.com Gr
Vodafone Group Public Limited Company — Investor Presentation (April 2023) on 6ix