Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Vodafone Group — Investor Presentation (September 2012)
29 slides from Vodafone Group Public's investor presentation, Sep 27, 2012
Slide 1: Vodafone Group Plc Open Office - Enterprise
Vodafone Group Plc Open Office - Enterprise 27 September 2012 1
Slide 2: Disclaimer
Disclaimer Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute an offe
Slide 3: Agenda
Agenda 1. Enterprise Overview 2. Introduction to Cable & Wireless Worldwide (“CWW”) – About CWW – Integration costs and synergies – Integration plan 3
Slide 4: Enterprise
Enterprise Enterprise revenues as % of service revenues FY 11/12 • Enterprise grew 2.2%2 in FY 11/12 32% 27% 24% • Vodafone’s key points of differentiation: 10% – Global footprint – Consolidated enterprise service platforms Group1 Northern Europe Southern Europe AMAP 1 – Network quality – High level
Slide 5: Key market trends
Key market trends Increasing demand Employee mobility Multi device usage Increasing data penetration Cloud adoption IT outsourcing Focus on security M2M 5
Slide 6: 'Vodafone 2015': Enterprise services
‘Vodafone 2015’: Enterprise services Expand VGE Increase One Net penetration • World class and seamless customer experience • Launch Vodafone One Net for VGE, the core of our multi-country MNC converged offer • Co-ordinated experience to truly integrated global offer • Drive One Net in all Europe ma
Slide 7: Cable & Wireless Worldwide
Cable & Wireless Worldwide 7
Slide 8: A clear rationale for the acquisition
A clear rationale for the acquisition 1. Creates the only UK integrated fixed/mobile player • Future of Enterprise Communications is converged • Gives scale & credibility to exploit Unified Communications opportunities • Strong & complementary customer base A unique asset and an 2. CWW has a deep UK
Slide 9: Reinforces Vodafone's Group strategy
Reinforces Vodafone’s Group strategy Leadership focus Europe, Africa, India Mobile data: accelerate across footprint Enterprise: exploit opportunity across footprint A growth strategy from data Emerging markets: drive penetration and data adoption Total Communications: continue to develop services i
Slide 10: Breakdown of consideration
Breakdown of consideration £bn Equity 1.05 Meets our financial investment criteria Convertible bond 0.25 Cash / finance leases 0.01 Expected to be accretive to EPS and FCF per share Total consideration 1.31 within the first 12 months post completion, after synergies and before integration costs • Pe
Slide 11: Overview of CWW
Overview of CWW Services FY 11/12 revenue by product1 IP and Data Hosting and Applications IP and data • Wide area networks • Managed hosting solutions Traditional voice and legacy 14% • Local area networks • Co-location Hosting and applications • IP voice solutions • Server and website hosting Serv
Slide 12: CWW reported financial results
CWW reported financial results1 2010 2011 2012 Year to March • Revenue under pressure for some time (£m) (£m) (£m) – Poor pipeline and declining legacy business Revenue 2,265 2,257 2,149 – Underinvestment in new services EBITDA2 431 442 378 • Business case assumes further EBITDA margin 19% 20% 18% d
Slide 13: Financial implications and synergy benefits
Financial implications and synergy benefits • We expect integration costs of £500m • We aim to deliver annual cash flow synergies of £150 - £200m by FY 15/16 • Operating free cash flow in FY 15/16 of £250 - £300m from the acquisition 13 13
Slide 14: Integration costs, £500m over three years
Integration costs, £500m over three years • Network – Invest to connect base stations – Over 1/3 of UK base stations within 100m of CWW fibre – Consolidation to a single IP network • IT integration – Integration of IT stacks – Roll-out of Vodafone’s Group-wide ERP system • Hosting and applications i
Slide 15: Cost saving opportunities: UK network and IT
Cost saving opportunities: UK network and IT CWW UK network footprint Cost saving opportunities • Extensive fibre network, fits well with the location of Vodafone’s mobile base stations – Backhaul to support demand for data traffic at considerably lower cost – Network rationalisation and consolidati
Slide 16: Cost saving opportunities: benefits across Vodafone's global footprint
Cost saving opportunities: benefits across Vodafone’s global footprint CWW international network and Vodafone footprint CWW network Vodafone operating companies Verizon Wireless Partner markets • CWW’s high IP traffic volumes and peering status will provide further cost efficiencies • International
Slide 17: Other UK synergies
Other UK synergies UK G&A cost saving opportunities UK growth opportunities • Payroll savings • Commercial bundling of fixed and mobile services – Use of Vodafone Shared Service centres – Increase in addressable market – Cross sell into existing customer base – Customer operations efficiencies • Cor
Slide 18: Now a leading integrated enterprise operator in the UK
Now a leading integrated enterprise operator in the UK UK telecoms operators’ latest reported full year domestic revenue (£m) 16,00 12,000 £m CWW UK 10,000 15,000 14,766 Vodafone UK 8,000 6,984 6,784 6,000 1,587 5,769 5,397 3,992 4,000 5,397 2,000 1,687 387 288 0 (Pro forma) • Combined entity will b
Slide 19: Complementary customer portfolio
Complementary customer portfolio Vodafone CWW National Public Sector SoHo/SME Multinational Corporate Corporate • Significant enhancement of Vodafone’s position in National Corporate and Public Sector • Adds to Vodafone’s existing strength in SoHo, SME and Multinational Corporates 19
Slide 20: Global growth opportunities
Global growth opportunities Vodafone Enterprise tomorrow CWW products / platforms Leading UK integrated fixed and Vodafone Enterprise today mobile operator + investment Leading provider of managed Market leading unified mobility services to MNCs Fixed line products and services communications offeri
Slide 21: The CWW Integration Plan has three guiding principles
The CWW Integration Plan has three guiding principles Principle Implication 1. Maintain value of underlying CWW Retain current CWW structure and stabilise BEFORE business progressive integration into Vodafone 2. Early integration with Vodafone UK only FY 12/13 integration with Vodafone UK focusing o
Slide 22: Experience of the first 60 days
Experience of the first 60 days Better than expected Worse than expected Immediate actions • Opportunities for growth • Customer service • Stop loss making activities & • Customer relationships • Some operational customers • Synergy potential performance • Accelerate differentiated & • Focus of cost
Slide 23: The integration programme and governance are up and running
The integration programme and governance are up and running Integration Steering Committee • Over 100 people across Vodafone and CWW Implementation Management Office (IMO) • SteerCo chaired by Group CTO, with Group HR Director, CIO and CEOs of UK and CWW Integration Workstreams • Monthly operational
Slide 24: We are taking a phased approach to integration
We are taking a phased approach to integration Integration FY 12/13 FY 13/14 FY 14/15 FY 15/16 Workstream H2 H1 H2 H1 H2 FY Customer Service Ops Stabilise Customer Services Combined Vodafone & CWW customer service teams Immediate cross-sell CWW rebranded to Vodafone Go to market opportunities action
Slide 25: Summary
Summary Great assets, good fit with Vodafone’s strategy Generating strong interest from enterprise customers Significant and certain network cost savings Focused investment to simplify and refresh platforms Solid platform for a scale carrier services business 25
Slide 26: Q&A
Q&A 26
Slide 27: Glossary
Glossary BSS: Billing Support System Carrier service: The sale or lease of bandwidth to another provider for reselling to their own customers ERP system: Enterprise Resource Planning system G&A: General & Administration costs Hosting: providing users space on a server, typically in a data centre IPV
Slide 28: Forward-looking statements
Forward-looking statements This presentation contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Group’s financial condition, results of operations and businesses and certain of the Group’s plans and objectives. In p
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