Sir Christopher Gent Sir Christopher Gent Chief Executive Chief - - PowerPoint PPT Presentation

Sir Christopher Gent Sir Christopher Gent Chief Executive Chief Executive Vodafone Group Plc Vodafone Group Plc

Agenda Agenda

• Overview of the results

Overview of the results

• Analysis of results

Analysis of results

• Group funding

Group funding

• KPIs

KPIs and business drivers and business drivers

• Major operational initiatives

Major operational initiatives

• Global products and services

Global products and services

• Vodafone’s prospects

Vodafone’s prospects

Sir Christopher Gent Sir Christopher Gent Ken Hydon Ken Hydon Julian Horn-Smith Julian Horn-Smith Thomas Thomas Geitner Geitner Sir Christopher Gent Sir Christopher Gent

Results Overview Results Overview

• Statutory results:

Statutory results:

– Exclude full consolidation of JT and J-Phone

Exclude full consolidation of JT and J-Phone

– Control only acquired after period close

Control only acquired after period close

• Proportionate results:

Proportionate results:

– Include JT and J-Phone at levels of ownership

Include JT and J-Phone at levels of ownership throughout period throughout period

Excellent financial performance and very Excellent financial performance and very strong growth strong growth

Financial Highlights Financial Highlights

Proportionate Half-Year to September 2001 Proportionate Half-Year to September 20011

Mobile Only Mobile Only Sept 2001 Sept 2001 Change Change Turnover Turnover £13.492 bn £13.492 bn +33% +33% EBITDA EBITDA £4.778 bn £4.778 bn +46% +46% Group ope Group operating profit rating profit £3.321 bn £3.321 bn +44% +44% Registere Registered customers customers 95.6 m 95.6 m +15% 15%

1 Includes performance of Japane 1 Includes performance of Japanese entities at se entities at level o level of owne

• wnerships thr

hips throughout the period ughout the period 2 Before exception 2 Before exceptional items al items 3 Before g 3 Before goodwill a

• dwill and ex

nd exceptional ceptional items items 4 At 31 March 2001 4 At 31 March 2001 2 3 4

Financial Highlights Financial Highlights

Statutory Half-Year to September 2001 Statutory Half-Year to September 20011

Sept 2001 Sept 2001 Change nge Group Turnover Group Turnover £8.906 bn £8.906 bn +27% +27% Group Operating Profit Group Operating Profit £3.392 bn £3.392 bn +40% +40% Profit Before Taxation Profit Before Taxation £3.011bn £3.011bn +65% 65% Adjusted EPS Adjusted EPS 2.5 .51 pence 1 pence +63% 63%

1 Excludes 1 Excludes consolidation of consolidation of Japan Tel Japan Telecom and com and J-Phone J-Phone 2 Before g 2 Before goodwill and exception

• dwill and exceptional items

al items 2 2 2 2

Financial Highlights Financial Highlights

H1 Margin Performance & Cash Flow H1 Margin Performance & Cash Flow

• Mobile EBITDA margin of 35.4%; +3.1pp

Mobile EBITDA margin of 35.4%; +3.1pp

– Changes in commercial policies

Changes in commercial policies

– Increased focus on overhead management

Increased focus on overhead management

• Group EBITDA* margin of 32.9%; +3.0pp

Group EBITDA* margin of 32.9%; +3.0pp

• Capex

Capex of £1.8 billion - f £1.8 billion - 20% below original plans 0% below original plans

• Free cash flow generation of over £600m

Free cash flow generation of over £600m

* After Exception * After Exceptionals als

Improved Margin Performance Improved Margin Performance

i Lower acquisition costs i Better overhead management

Rise in Data Revenues Rise in Data Revenues

i 9.1% in controlled subsidiaries i 9.9% in month of September i Up 3pp on last financial year

Stabilisation in ARPU Stabilisation in ARPU

i After years of decline

Customer Growth Customer Growth

i Net growth moderated i But higher rate than expected i Better mix of contract to prepaid

Operational Highlights Operational Highlights

Geographic Expansion Geographic Expansion

• Presence achieved in all geographic territories

Presence achieved in all geographic territories

• Achieved control of

Achieved control of Eircell Eircell in Ireland n Ireland

• Final cash payment for 25%

Final cash payment for 25% Swisscom wisscom Mobile

• bile
• Completed

Completed Iusacell usacell transaction in Mexico ransaction in Mexico

• Disposed of 11.7% stake in

Disposed of 11.7% stake in Shinsegi, South Shinsegi, South Korea Korea

Geographic Expansion Geographic Expansion

Japan Japan

• Conclusion of tender offer in Japan

Conclusion of tender offer in Japan

• 66.7% control of JT secured

66.7% control of JT secured

• Control of J-Phone with ~70% interest

Control of J-Phone with ~70% interest

• World leading wireless internet market

World leading wireless internet market

– Data at 14.6% of service revenues

Data at 14.6% of service revenues

– World’s highest mobile internet adoption levels

World’s highest mobile internet adoption levels

Ken Hydon Ken Hydon Group Financial Director Group Financial Director Vodafone Group Plc Vodafone Group Plc

Statutory Results Statutory Results

6 months to 30 September

2001 £m 2000† £m Increase % Turnover 8,906 7,019 27 Group operating profit * 3,392 2,420 40 Net interest payable (381) (597) (36) Profit before tax * 3,011 1,823 65 Tax (1,086) (680) 60 Exceptional items (4,763) (132) 3,508 Goodwill amortisation (6,697) (5,589) 20 Adjusted earnings per share * 2.51p 1.54p 63 Dividends per share 0.7224p 0.6880p 5

Adjusted EPS (Pence)†*

1.54 2.00 2.51 H1/01 H2/01 H1/02 † Restated following the adoption of FRS 19, “Deferred Tax” * Before amortisation of goodwill and exceptional items

Proportionate Results Proportionate Results*

Mobile Turnover Mobile Turnover

Analysis of Turnover

Japan 15% Germany 15% Italy 10% Rest of World 6% Americas 21% Other Europe 20% United Kingdom 13%

6 months to 30 September 2001 £m 2000* £m Growth % Germany 2,057 2,056

• Italy

1,328 1,137 17 United Kingdom 1,805 1,662 9 Other Europe 2,694 1,454 85 Total Europe 7,884 6,309 25 Americas 2,839 2,414 18 Japan 2,018 854 136 Other Asia Pacific 499 380 31 Middle East & Africa 252 213 18 Total Mobile 13,492 10,170 33

* September 2000 stated on a pro forma basis for Mannesmann

Proportionate Results Proportionate Results*

Mobile EBITDA** Mobile EBITDA**

6 months to 30 September 2001 £m Total Growth* £m Organic Growth % Margin % Germany 931 50 44 45.3 Italy 655 27 28 49.3 United Kingdom 565 14 14 31.3 Other Europe 952 111 36 35.3 Total Europe 3,103 49 32 39.4 Americas 1,000 23 19 35.2 Japan 413 122 11 20.5 Other Asia Pacific 154 56 27 30.9 Middle East & Africa 108 8 18 42.9 Total Mobile 4,778 46 26 35.4

* Calculated on a pro forma basis for Mannesmann ** Before exceptional items

EBITDA** Margin

32.3% 33.4% 35.4% H1/01 H2/01 H1/02

Proportionate Results Proportionate Results*

Other Operations Other Operations

* September 2000 stated on a pro forma basis for Mannesmann ** Before exceptional items

6 months to 30 September 2001 £m

2000* £m

Growth % Turnover 834 372 124 EBITDA ** (1) 6 N/A

Other Operations:

• Arcor
• Japan Telecom
• Vizzavi
• Cegetel

Cash Flow Cash Flow

3.18 4.29 5.37 H1/01 H2/01 H1/02

6 months to 30 September 2001 £m 2000 £m Increase % Operating cash flow 3,640 1,888 93 Capital expenditure (1,816) (1,357) 34 Tax paid (545) (829) (34) Net interest paid (449) (609) (26) Dividends received & other (1) 246 N/A Free cash flow before licences 829 (661) N/A Licences (223) (11,427) (98) Free cash flow 606 (12,088) N/A Acquisitions (8,558) (12,851) (33) Disposals 2,320 18,951 (88) Share placement 3,510

• N/A

Group dividends (486) (391) 24 Other 90 (156) N/A Net debt movement (2,518) (6,535) (61)

Operating Cash Flow per Share (pence)

Capital Expenditure Capital Expenditure

Analysis of Capital Expenditure

Other Operations 9% Germany 28% Italy 14% Other Mobile 10% Other Europe 21% United Kingdom 18%

September 2001:

• £1.8 billion
• Excludes:

– Verizon Wireless – J-Phone – Japan Telecom

Capital Expenditure Capital Expenditure

Capital Intensity

0% 5% 10% 15% 20% 25% 30% 1997/8 1998/9 1999/0 2000/1 2001/2 Forecast 2002/3 Forecast

2G GPRS & 3G

March 2002:

• £5 billion
• Includes:

– £1 billion in Japan

• 2% on GPRS
• 20% on 3G

Net Debt Net Debt

Committed to single ‘A’ credit ratings

£bn At 31 March 2001 6.7 Increase during the period 2.5 At 30 September 2001 9.2 £bn Recent transactions:

• JT tender offer

1.8

• JT debt assumed

6.2 8.0

Summary Summary

• Strong growth:

Strong growth:

– EBITDA

EBITDA

– Operating cash flow per share

Operating cash flow per share

– Free cash flow

Free cash flow

– Earnings per share

Earnings per share

• Financial strength

Financial strength

• Shareholder value

Shareholder value

Julian Horn-Smith Julian Horn-Smith Group Chief Operating Officer Group Chief Operating Officer Vodafone Group Plc Vodafone Group Plc

Realignment of Strategy Realignment of Strategy

• Sharpened focus on revenue growth and

Sharpened focus on revenue growth and margin improvement margin improvement

• Attracting, servicing and retaining high

Attracting, servicing and retaining high value customers and effective cost control value customers and effective cost control

• Delivered 3 percentage point increase in

Delivered 3 percentage point increase in margin margin

Customers Customers

16% 16% 65% 65% 7% 7% 35% 35% 43% 43% 64% 64% 5% 5% 1% 1% 0% 0% 10% 10% 20% 20% 30% 30% 40% 40% 50% 50% 60% 60% 70% 70%

6m 6m t to Se Sep-00 6m 6m t to Se Sep-01 6m 6m t to Se Sep-00 6m 6m t to Se Sep-01 6m 6m t to Se Sep-00 6m 6m t to Se Sep-01 6m 6m t to Se Sep-00 6m 6m t to Se Sep-01

Vodafone UK Vodafone UK D2 Vodafone D2 Vodafone Omnitel Omnitel Vodafone Vodafone

Contract net additions as a percentage of total net additions

Airtel Airtel Vodafone Vodafone

Subsidiary ARPU Subsidiary ARPU*

100 100 200 200 300 300 400 400 500 500 Jun-00 00 Sep-00 00 Dec-00 00 Mar-01 01 Jun-01 01 Sep-01 01 £ pe per c customer pe per a annum num Co Contract Pre Prepay Tot Total

* Comprises annualised quarterly data for European subsidiaries (excluding Malta and Hungary), weighted by network customer numbers, but not by shareholding percentage

Usage Usage

50 50 100 100 150 150 200 200 Jun- un-00 Sep- p-00 Dec-00 Mar-01 Jun- un-01 Sep-0 p-01 minut nutes pe s per c customer pe per m mont nth Hig Highest Lo Lowes west Weighted ed A Aver erage

Usage per customer per month Usage per customer per month *

2x

* Average monthly usage by quarter in European subsidiaries (excluding Malta and Hungary). Average weighted by network customer numbers, but not by shareholding percentage

Non-Voice Revenue Non-Voice Revenue

40 40% 66 66%

0% 0% 10 10% 20 20% 30 30% 40 40% 50 50% 60 60% 70 70% 6m 6m t to Ma Mar-01 01 6m t to S Sep-01 01 Re Revenue nue £ £m

% growth in non-voice revenue vs 6 months to Sep-00 *

* European subsidiaries (excluding Malta and Hungary)

8. 8.1% 1% 8. 8.6% 9. 9.1% 1%

7. 7.6% 7. 7.8% 8. 8.0% 8. 8.2% 8. 8.4% 8. 8.6% 8. 8.8% 9. 9.0% 9. 9.2% 12 12m t to Mar Mar-01 01 12 12m t to J Jun-01 12m t to S Sep-01 01 Re Revenue nue £ £m

Non-voice revenue as a %

• f service revenues **

** Controlled Group Total

Customer Acquisition Spend Customer Acquisition Spend

% decrease in acquisition spend - 6m to Sep-01 vs 6m to Sep-00

• 21
• 21%
• 5
• 57%

7%

• 2
• 25%

5%

• 70%
• 70%
• 60%
• 60%
• 50%
• 50%
• 40%
• 40%
• 30%
• 30%
• 20%
• 20%
• 10%
• 10%

0% 0%

Voda dafone ne UK UK D2 D2 V Voda dafone ne Omni nitel V Voda dafone ne

Rev Revenu nue £ e £m

Overheads Overheads

Overheads (excl. depreciation & am Overheads (excl. depreciation & amortisati

• rtisation) as a % of Turnover *
• n) as a % of Turnover *

20% 20% 21% 21% 22% 22% 23% 23% 24% 24% 25% 25% 26% 26% 27% 27% 28% 28% 29% 29% Apr-01 01 May-01 01 Jun-01 01 Jul-01 01 Aug-01 01 Sep-01 01 Weighted ed A Aver erage

* European Subsidiaries (excluding Malta and Hungary)

Vodafone UK Vodafone UK

Customer Base & Churn Customer Base & Churn

4, 4,631 631 4, 4,294 294 3, 3,944 944 7, 7,985 985 6, 6,296 296 8, 8,168 168 26% 26% 26% 26% 24% 24%

2,000 4,000 6,000 8,000 10,000 12,000 14,000

Sep-00 Mar-01 Sep-01

Custom

• mer

ers ( (000s) 0% 5% 10% 15% 20% 25% 30% Chur Churn % n % * *

Con Contract Pre Prepaid Chur hurn

12,279 12,799 10,240

* 6 months annualised

Vodafone UK Vodafone UK

50 50 10 100 15 150 20 200 Q1 Q1 00/ 00/01 01 Q2 Q2 00 00/01 Q3 Q3 00/ 00/01 01 Q4 Q4 00 00/01 Q1 Q1 01 01/02 /02 Q2 Q2 01/ 01/02 £ pe per c customer pe per qua quarter Co Contract Pr Prepaid Tot Total al

Quarterly ARPU Quarterly ARPU

50 50 10 100 15 150 Q1 Q1 00/ 00/01 Q2 Q2 00 00/01 Q3 Q3 00/ 00/01 Q4 Q4 00 00/01 Q1 Q1 01 01/02 /02 Q2 Q2 01/ 01/02 £ pe per g gross a addi ddition Co Contract Pr Prepaid Tot Total al

Cost to Connect Cost to Connect

D2 Vodafone D2 Vodafone

Customer Base & Churn Customer Base & Churn

8, 8,560 560 8, 8,478 478 8, 8,795 795 13, 13,069 069 7, 7,967 967 12, 12,490 490 11% 11% 12% 12% 19% 19%

5,000 10,000 15,000 20,000 25,000

Sep-00 Mar-01 Sep-01

Customers ( (000s 000s) 0% 5% 10% 15% 20% Ch Churn % % * *

Con Contract Prep Prepaid Ch Churn

20,968 21,864 16,527

* 6 months annualised

D2 Vodafone D2 Vodafone

50 50 10 100 15 150 20 200 Q1 Q1 00/ 00/01 01 Q2 Q2 00/ 00/01 01 Q3 Q3 00/ 00/01 Q4 Q4 00 00/01 /01 Q1 Q1 01 01/02 Q2 Q2 01 01/02 EUR pe per c customer pe per qua quarter Co Contract ct Pr Prepaid To Total

Quarterly ARPU Quarterly ARPU

50 50 10 100 15 150 20 200 25 250 30 300 Q1 Q1 00/ 00/01 01 Q2 Q2 00/ 00/01 01 Q3 Q3 00/ 00/01 Q4 Q4 00 00/01 /01 Q1 Q1 01 01/02 Q2 Q2 01 01/02 EUR pe per g gross a addi ddition Co Contract ct Pr Prepaid To Total

Cost to Connect Cost to Connect

Omnitel Omnitel Vodafone

• dafone

Customer Base & Churn Customer Base & Churn

1, 1,557 557 1, 1,504 504 1, 1,430 430 14, 14,176 76 12, 12,161 161 15, 15,095 095 18% 18% 16% 16% 12% 12%

5,000 10,000 15,000 20,000

Sep-00 Mar-01 Sep-01

Custom

• mer

ers ( (000s) 0% 5% 10% 15% 20% Chur Churn % n % * *

Con Contract Pre Prepaid Ch Churn 15,680 16,652 13,591

* 6 months annualised

Omnitel Omnitel Vodafone

• dafone

50 50 10 100 15 150 20 200 25 250 Q1 Q1 00/ 00/01 01 Q2 Q2 00 00/01 Q3 Q3 00/ 00/01 01 Q4 Q4 00 00/01 Q1 Q1 01 01/02 /02 Q2 Q2 01/ 01/02 02 EU EUR p per r custom

• mer p

per r quart rter Co Contract Pr Prepaid Tot Total al

Quarterly ARPU Quarterly ARPU

20 20 40 40 60 60 Q1 Q1 00/ 00/01 Q2 Q2 00 00/01 /01 Q3 Q3 00/ 00/01 01 Q4 Q4 00 00/01 Q1 Q1 01/ 01/02 02 Q2 Q2 01 01/02 EUR pe per g gross a addi ddition To Total

Cost to Connect Cost to Connect

Verizon Wireless Verizon Wireless

Customer Base & Churn Customer Base & Churn

26, 26,879 879 25, 25,446 446 23, 23,896 896 1, 1,676 676 2, 2,386 386 1, 1,803 803 27% 27% 33% 33% 30% 30%

5,000 10,000 15,000 20,000 25,000 30,000

Sep-00 Mar-01 Sep-01

Cu Cust stomers ( s (000s) s) 0% 10% 20% 30% 40% 50% Ch Chur urn % % * *

Con Contract Prep Prepaid Ch Churn 27,122 28,682 26,282

* 6 months annualised

Verizon Wireless Verizon Wireless

50 50 10 100 15 150 20 200 Q1 Q1 00/ 00/01 01 Q2 Q2 00 00/01 Q3 Q3 00/ 00/01 01 Q4 Q4 00 00/01 Q1 Q1 01 01/02 /02 Q2 Q2 01/ 01/02 02 US$ pe per c customer pe per qua quarter To Total

Quarterly ARPU Quarterly ARPU

50 50 10 100 15 150 20 200 25 250 Q1 Q1 00/ 00/01 01 Q2 Q2 00/ 00/01 01 Q3 Q3 00/ 00/01 Q4 Q4 00 00/01 /01 Q1 Q1 01 01/02 Q2 Q2 01 01/02 US$ pe per g gross a addi ddition To Total

Cost to Connect Cost to Connect

J-Phone J-Phone

Customer Base & Churn Customer Base & Churn

9, 9,108 108 9, 9,689 689 10, 10,714 714 388 388 277 277 33% 33% 31% 31% 27% 27%

2,000 4,000 6,000 8,000 10,000 12,000

Sep-00 Mar-01 Sep-01

Customers ( (000s 000s) 0% 10% 20% 30% 40% 50% Chur Churn % n % * *

Con Contract Pre Prepaid Chur hurn

9,966 11,102 9,108

* 6 months annualised

J-Phone J-Phone

10 10,000 000 20 20,000 000 30 30,000 000 40 40,000 000 Q1 Q1 00 00/01 /01 Q2 Q2 00/ 00/01 01 Q3 Q3 00 00/01 Q4 Q4 00 00/01 Q1 Q1 01/ 01/02 Q2 Q2 01 01/02 Yen pe n per c customer pe per qua quarter To Total

Quarterly ARPU Quarterly ARPU

10 10,000 000 20 20,000 000 30 30,000 000 40 40,000 000 50 50,000 000 Q1 Q1 00 00/01 /01 Q2 Q2 00/ 00/01 01 Q3 Q3 00 00/01 Q4 Q4 00 00/01 Q1 Q1 01/ 01/02 Q2 Q2 01 01/02 Yen pe n per g gross a addi ddition To Total

Cost to Connect Cost to Connect

Multi National Accounts Multi National Accounts

• 11 Multi National Accounts secured to date incl.

11 Multi National Accounts secured to date incl.

– KPMG;

KPMG;

– Deloitte &

Deloitte & Touche;

• uche;

– Unilever;

Unilever;

– Sun Microsystems;

Sun Microsystems;

– Reut

Reuters ers

• Winning new partners, particularly systems

Winning new partners, particularly systems integrators who assist in Corporate Sector integrators who assist in Corporate Sector

Brand Brand

• Launched global ad campaign-“How Are You”

Launched global ad campaign-“How Are You”

– Communicates the brand values:

Communicates the brand values:

• Dependability;

Dependability;

• Empathy;

Empathy;

• Can-do attitude;

Can-do attitude;

• Innovation; and

Innovation; and

• Joie de Vivre

Joie de Vivre

– Paves way for single brand

Paves way for single brand

• Communicate to employees the link between

Communicate to employees the link between corporate values and brand values corporate values and brand values

Brand Brand cont.

cont.

• October Portugal and Spain moved to single brand

October Portugal and Spain moved to single brand

– Ahead of early 2002 timetable

Ahead of early 2002 timetable

• Further migrations over course of the next year

Further migrations over course of the next year

• Revenue and cost synergies evident

Revenue and cost synergies evident

• Ferrari sponsorship starts next year

Ferrari sponsorship starts next year

– Significant catalyst to Vodafone brand globally

Significant catalyst to Vodafone brand globally

– Introduce products through ferrari.net agreement

Introduce products through ferrari.net agreement

• Sponsorship strategy to support overall brand

Sponsorship strategy to support overall brand strategy strategy

Global Internet Platform Global Internet Platform

Vizzavi Europe Vizzavi Europe

• Portal operational in UK; France; Germany; Greece;

Portal operational in UK; France; Germany; Greece; Italy; Netherlands; Portugal and Spain Italy; Netherlands; Portugal and Spain

• Customer base at 5.4 million in October

Customer base at 5.4 million in October

• Increase in WAP page views to 63 million in October

Increase in WAP page views to 63 million in October

• Current offering:

Current offering:

– Location based services; WAP games; and SMS

Location based services; WAP games; and SMS

• Future services:

Future services:

– Unified and instant messaging; and multi access chat

Unified and instant messaging; and multi access chat

Thomas Geitner Thomas Geitner Chief Executive Chief Executive Group Products and Services Group Products and Services

• Launched February 2001

Launched February 2001

• 4m customers at end Sept 2001

4m customers at end Sept 2001

• 11 countries across Europe

11 countries across Europe

• Certainty and predictability of roaming

Certainty and predictability of roaming charges to customers charges to customers

Virtual Home Environment Virtual Home Environment

• Launched January 2001

Launched January 2001

• Generated 6m* roaming minutes

Generated 6m* roaming minutes

• The product DNA of our brand

The product DNA of our brand

• Integrated across 11 operators

Integrated across 11 operators

• 3 further countries expected by end of 2001

3 further countries expected by end of 2001

* Proportionate figure * Proportionate figure

Assisted Roaming Assisted Roaming

• Benefits highest value roaming customers

Benefits highest value roaming customers

• 16 operators globally

16 operators globally

• Inbound capture rate increasing since

Inbound capture rate increasing since introduction in March 2001 introduction in March 2001

Pre-Paid Roaming Pre-Paid Roaming

• Launched in May 2001

Launched in May 2001

• 12 European countries by end FY 2002

12 European countries by end FY 2002

• Seamless roaming for 45m* European Pre-Paid

Seamless roaming for 45m* European Pre-Paid customers customers

• >11m* roaming minutes and 5m* text

>11m* roaming minutes and 5m* text messages messages

• Spanish top-up cards available to UK customers

Spanish top-up cards available to UK customers

* Proportionate figures * Proportionate figures

GPRS GPRS

• Data products across Europe

Data products across Europe

• Greater data usage as supply of devices

Greater data usage as supply of devices increases increases

• By Christmas: 13 different terminals

By Christmas: 13 different terminals

GPRS Roaming GPRS Roaming

• Roll out in 10 European networks

Roll out in 10 European networks

• Unlock demand from corporate customers

Unlock demand from corporate customers

– New data revenue created

New data revenue created

– Better value access to services

Better value access to services

Customer Applications Customer Applications

• Focus on customer applications

Focus on customer applications

• Range of 2.5G applications

Range of 2.5G applications

• Foundation for 3G launch

Foundation for 3G launch

Unified Messaging Unified Messaging

Instant Messaging Instant Messaging

Summary Summary

• Further significant synergy potential

Further significant synergy potential

• Substantial synergies already created

Substantial synergies already created

– Brand

Brand

– Products

Products

– Technology

Technology

– Supply Chain Management

Supply Chain Management

– Global Account Management

Global Account Management

Sir Christopher Gent Sir Christopher Gent Chief Executive Chief Executive Vodafone Group Plc Vodafone Group Plc

Mobile Prospects for H2 Mobile Prospects for H2

Data Revenues Data Revenues

i Continues to improve-prior to GPRS i Further enhancements and additional GPRS services i Wider variety of GPRS devices

Customer Growth Customer Growth

i Don’t expect repeat of exceptional growth at Christmas i Net growth likely to exceed 20% i Good mix to be sustained in H2

ARPU ARPU

i Expect stabilisation to continue in H2 i Small decline in roaming revenues - little effect on total revenues

EBITDA Margins EBITDA Margins

i Improvement to be maintained i Further improvements in UK i Slightly reduced performance in some exceptional markets i Increased competitive intensity remains threat but no changes to date

Japan in H2 Japan in H2

• Will consolidate JT and J-Phone from 12

Will consolidate JT and J-Phone from 12 October October

• J-Phone continues to exceed expectations

J-Phone continues to exceed expectations

– Better customer growth, good ARPUs,

Better customer growth, good ARPUs, improving margins improving margins

• Initial review of Japan Telecom undertaken

Initial review of Japan Telecom undertaken

– Revised forecasts for financial year issued by JT

Revised forecasts for financial year issued by JT

– No material impact on the Group’s results

No material impact on the Group’s results

– Further management appointments to be made

Further management appointments to be made

Group Outlook in H2 Group Outlook in H2

• Better performance in controlled mobile assets

Better performance in controlled mobile assets in H1 - in H1 - expect continued performance in H2 xpect continued performance in H2

• Fixed line businesses in difficult market

Fixed line businesses in difficult market

– Plans in place to improve fundamentals

Plans in place to improve fundamentals

– Benefits not visible until next year

Benefits not visible until next year

Outlook in FY 2003 Outlook in FY 2003

• Customer growth just under 10%*

Customer growth just under 10%*

• ARPU stabilisation or slight improvement

ARPU stabilisation or slight improvement

– Increased usage and data contribution

Increased usage and data contribution

• Healthy EBITDA growth -

Healthy EBITDA growth - before 3G efore 3G

• 3G launch in H2 of 2002 is an important step

3G launch in H2 of 2002 is an important step

– Financial impact not significant until end 2003

Financial impact not significant until end 2003

• Reduced capital expenditure expectations

Reduced capital expenditure expectations

– Reviewed capex downwards

Reviewed capex downwards in Japan from previous in Japan from previous management estimates management estimates

• Stronger cash flow than this year, incl. Japan

Stronger cash flow than this year, incl. Japan

* Including dilutive effect of likely IPO of Verizon Wireless

Vodafone’s Prospects Vodafone’s Prospects

• No further acquisitions or stake increases

No further acquisitions or stake increases planned for this financial year planned for this financial year

• Expect good EPS* performance this year

Expect good EPS* performance this year and next and next

* Pre goodwill and exceptionals

Summary Summary

• Enhanced global leadership position

Enhanced global leadership position

• Excellent progress on new products and services

Excellent progress on new products and services

• Better operational and margin performance

Better operational and margin performance

Delivering strong growth momentum Delivering strong growth momentum

• Current market conditions highlight Vodafone’s

Current market conditions highlight Vodafone’s defensive and growth defensive and growth qualities qualities

Conclusion Conclusion

• Transitioning to new service environment of 3G

Transitioning to new service environment of 3G

• Better financial performance than many

Better financial performance than many anticipated anticipated

• Complete confidence remains in revenue growth

Complete confidence remains in revenue growth

• pportunities from GPRS and 3G
• pportunities from GPRS and 3G
• Good immediate growth prospects for this year

Good immediate growth prospects for this year and next and next