Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Vodafone Group — Investor Day (June 2015)
40 slides from Vodafone Group Public's investor day presentation, Jun 16, 2015
Slide 1: Vodafone Spain Investors' meeting
Vodafone Spain Investors’ meeting Madrid June 16th 2015
Slide 2: Disclaimer
Disclaimer You are invited to join this conference on the basis that you are an investment professional for the purposes of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. No other person should act or rely on the information presented. The presentation co
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Page intentionally left blank VF-Spain 3
Slide 4: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration
Slide 5: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration
Slide 6: Economy and market overview
Economy and market ( overview
Slide 7: Spanish economy growing at 2.7% and with positive prospects
DRAFT Spanish economy growing at 2.7% and with positive prospects Final Consumption Expenditure of Spain GDP, Growth rate (YoY%) (1) Households (YoY%) (1) 2,7% 2,0% 3,4% 3,5% 2,5% 2,6% -2,5% -3,8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 20152016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 12 12 12 12 13 1
Slide 8: €24bn Telco market, starting to stabilise after decreasing at -6.8% CAGR
€24bn Telco market, starting to stabilise after decreasing at -6.8% CAGR Market drivers moving in the right direction to Telco Market by business (1) return to growth -6.8% 27.8 “Spain: LTE and fiber deployment to drive 25.6 24.1 growth as market consolidates” CAGR Pyramid Research (2) (12/13 – 14/1
Slide 9: Consolidation is concentrating the market in three main players
DRAFT Consolidation is concentrating the market in three main players… Incumbent Incumbent MNOs Alternative (light fixed NW operator) unified players Potential Fixed players alternative (light mobile) unified players Regional Regional CableCos CableCos (Mobile MVNOs) (Mobile MVNOs) Pure MVNOs Pure M
Slide 10: ...that account for 91% of the market
...that account for 91% of the market Total Revenues Value Share (Fixed & Mobile Total Turnover) 1 YoY +0.0pp +0.1pp -0.1pp 19,8% 20,7% 20,6% 21,1% 20,8% 20,8% +0.1pp 21,2% 21,2% 20,7% 20,7% 20,8% 21,3% +0.1pp 49,5% 49,1% 49,8% 49,4% 49,4% 48,9% -0.2pp Q3 13/14 Q4 13/14 Q1 14/15 Q2 14/15 Q3 14/15 Q4
Slide 11: Vodafone Strategy
Vodafone Strategy C3 - CONFIDENTIAL
Slide 12: Vodafone Spain strategic objectives
Vodafone Spain strategic objectives Be a next generation unified communications growth company Provide the best service delivering the best Customer experience in all touchpoints Be the most efficient and agile Company in the market among its peers. Improve profitability Be the most admired Company
Slide 13: Strategic objectives; 3 year plan
Strategic objectives; 3 year plan 3 15/16 2 14/15 Build differentiation 1 13/14 Consolidate and back to growth Transform & regain improvements competitiveness The third year of our strategic plan is key to ensure we get back to growth and to consolidate Vodafone as the preferred operator by our cust
Slide 14: Ready for growth
Ready for growth The best Customer Experience Consolidation as a total telco provider, UHBB leadership, NPS Consumer* strenghtened with Ono acquisition thanks to Spring investments March’15 1,7 M customers +9 p.p 0 gap Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 13/14 13/14 13/14 13/14 14/15 14/15 14/15 14/15 >2,9 M cu
Slide 15: Our key initiatives: ONO integration, project Spring and Customer Experience Excellence
Our key initiatives: ONO integration, project Spring and Customer Experience Excellence A new next generation unified communications company is born 1 Vodafone Network differentiation ONE and PoS transformation 5 2 Differentiation in Customer thanks to Spring Customer Experience increasing gap to in
Slide 16: Vodafone ONE is more than a product, is a new positioning for the Company
Vodafone ONE is more than a product, is a new positioning for the Company Unified solutions VS only tariff + handset 16 VF-Spain 16
Slide 17: ONE big change. ONE new positioning.
ONE big change. ONE new positioning. 17 VF-Spain 17
Slide 18: And we keep on innovating
And we keep on innovating HFC + VoLTE LTE-A: up to 300 Mbps Technology evolution: Speed > 1Gbps LTE broadcast FTTH Unified solutions for Interactive TV Enterprise | Cloud & TV Online Hosting | M2M | NFC | Big Data VF-Spain 18
Slide 19: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration C3 - CONFIDENTIAL
Slide 20: Market environment
Market environment Consumer market (EOPs) 26% Convergence & FBB only MS Mobile only (53% FBB+mobile || 7% FBB only) 22% 30% 31% Convergence FBB only Mini Smart Red Best mobile network:: 4G, 4G+ Multibrand approach in low end All telco services under same provider No frills new brand: Lowi Differenti
Slide 21: Price erosion
Market starting to focus on value rather than price 2012 2013 2014 2015 + TEF launches Fusión TV Monthly fee rounding up including low entry TV for free Call set up fee & ppm increase Monthly fees increase TEF launches Fusión Price erosion (40% discount) Handset Subsidies reduction Movistar Fusión P
Slide 22: Consumer performance
Consumer performance Convergence penetration UHBB & TV Customer Base 71% 71% 38% 40% 1.463,716 1.541,542 35% 66% 784 776 1.406,465 4.780 4.752 4.615 780 Non 765,373 772,086 759,935 Fixed BB convergent Mobile UHBB 2.563 2.963 3.052 1.536 1.885 1.914 Convergent TV Penetration Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q
Slide 23: Vodafone ONE preliminary results
Vodafone ONE preliminary results Customers in Vodafone One: 1 month after launch Significant improvement in Vodafone fiber awareness 300 (.000) (+15 p.p. from March to April) 250 72% 75% 200 54% 150 100 50 19% 0 April 25th April 30th May 10th May 17th May 24th May 31st Dec 13 Mar 14 Jul 14 Sep 14 De
Slide 24: Strategic plan; maximise delivery in each segment based on four pillars
Strategic plan; maximise delivery in each segment based on four pillars Maximise revenue Become a totalcom provider New data model: Out of bundle Leverage Vodafone One to own total comms in households Speed up data usage Family approach and second lines 4G acceleration plan: content & VAS Shift comm
Slide 25: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration C3 - CONFIDENTIAL
Slide 26: Market & Competitive Positioning in Enterprise
Market & Competitive Positioning in Enterprise Market revenue size and share (2014) (€bn) Areas of pressure 3,0 12,4 23,9 MACROECONOMIC ENVIRONMENT & PRICE SENSITIVENESS 12,1% 30,6% 19,7% Enterprise Mobile Total Fixed Market Total Telco Market Vodafone’s key differentiation drivers VF-Spain 26
Slide 27: Enterprise Strategy
Enterprise Strategy 1 Outstanding Business Fundamentals 2 Mobile Data as growth engine NPS at the core Lead 4G Continuous churn improvement Data democratisation ARPC increase Increase data usage (OoB & Apps) Proactive Base Management M2M Leadership 3 Scale up Convergence & UC 4 Cloud, Hosting & Mana
Slide 28: Enterprise performance
Enterprise performance NPS evolution – Leading Customer Experience Mobile Net Portability - Winning Comm Battle 0 -5 -10 -15 -20 -25 -30 Q1 1314 Q2 1314 Q3 1314 Q4 1314 Q1 1415 Q2 1415 Q3 1415 Q4 1415 Q1 1314 Q2 1314 Q3 1315 Q4 1314 Q1 1415 Q2 1415 Q3 1415 Q4 1415 * Net promoter score based on VF me
Slide 29: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration C3 - CONFIDENTIAL
Slide 30: Key Topics
Key Topics 1. Orange / Jazztel Merger 2. Telefónica / DTS Canal + 3. CNMC’s proposal on Wholesale Broadband Access (NGA) 4. Vertical Access 5. Telecommunications operators’ actions in the digital dividend band 6. Telecommunications contracts with Public Administrations 7. Mobile wholesale access mar
Slide 31: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration C3 - CONFIDENTIAL
Slide 32: Best Network | Coverage & Performance
Best Network | Coverage & Performance Performance 7.168 eNodesB Download Tput Upload Tput Call Accessibility (Mbps) (Mbps) (%) Vodafone 22.822 11.639 99,6 74,5% out 58,5% in Competitor #1 15.216 6.271 99,0 Competitor #2 15.422 6.345 99,3 1.278 # mun % 4G Coverage 1Mbps, March 2015 Mobile & Fixed Cov
Slide 33: Best Customer Perception | Network NPS
Best Customer Perception | Network NPS Consumer (NSS) Enterprise (NSS) Q2 14/15 Q3 14/15 Q4 14/15 3MR April'15 Q1 14/15 Q2 14/15 Q3 14/15 Q4 14/15 3MR April'15 VF-Spain 33 33
Slide 34: Network Innovation
Network Innovation VoLTE 1st in Spain LTE – Advanced DATA CORE 1st in Spain available in High performance & Capacity 8 top cities ONO Integration & Intelligent TV IT Convergence Powered by TiVo Taking the best of both eMBMS 1st LTE Broadcasting launch in Spain VF-Spain C3 Vodafone Confidential 34 34
Slide 35: Technology Financials
Technology Financials Total Company Capex: €3,3bn in 5 years Achieved Technology Costs efficiency: -16% reduction in 5 years *14/15 includes Spring investments and consolidates ONO since acquisition (July 14) *1,1 -16% 0,6 0,6 0,5 0,5 10/11 11/12 12/13 13/14 14/15 10/11 14/15 VF-Spain 35 35
Slide 36: Agenda
Agenda Strategy overview & competitive landscape Consumer Business Unit Enterprise Business Unit Regulation Network / Technology Ono integration C3 - CONFIDENTIAL
Slide 37: Ono integration roadmap
Ono integration roadmap Q1 Aug ‘14 FY1516 FY1617 FY1516 1 2 3 Jul’14 Full Cross-sell Convergent launch offer launch One Company integration Regulatory IT & processes approval “Day 1” Standalone business plans Integrated business plan & synergies Synergies 37 37 VF-Spain
Slide 38: Costs synergies: ahead of plans; c.50% of synergies secured
Costs synergies: ahead of plans; c.50% of synergies secured Run-rate in Key categories Description year 4 (€m)1 NPV (€bn)2 • Renegotiation of FTTH contract with Orange: reduction of deployment to 1M + redirection to avoid overlap • Ono fibre connecting 503 mobile radio sites; avoid backhaul Network
Slide 39: The New Offer Will Reinforce Vodafone's Market Positioning Towards Full Convergent Player
Revenue synergies: Started with cross-sell and launched a new convergent offer launched in April August to April: Cross-sell of Fiber and Mobile April: Putting in Value a Differential Infrastructure • Cross-sell launched 1 month after acquisition • 90k Vodafone mobile lines sold to Ono customers • 4
Slide 40: Vodafone Spain Investors' meeting
Vodafone Spain Investors’ meeting Madrid June 16th 2015