Vodacom annual results presentation for the year ended 31 March - PDF document

16/05/2016 Vodacom annual results presentation for the year ended 31 March 2016 Annual results | 31 March 2016 Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentations may lawfully be communicated (‘relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. 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 offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Group. Promotional material used in this presentation that is based on pricing or service offering may no longer be applicable. This presentation contains certain non-GAAP financial information which has not been reviewed or reported on by the Group’s auditors. The Group’s management believes these measures provide valuable additional information in understanding the performance of the Group or the Group’s businesses because they provide measures used by the Group to assess performance. However, this additional information presented is not uniformly defined by all companies, including those in the Group’s industry. Accordingly, it may not be comparable with similarly titled measures and disclosures by other companies. Additionally, although these measures are important in the management of the business, they should not be viewed in isolation or as replacements for or alternatives to, but rather as complementary to, the comparable GAAP measures. This presentation also contains forward-looking statements which are subject to risks and uncertainties because they relate to future events. These forward- looking statements include, without limitation, statements in relation to the Group’s projected financial results. Some of the factors which may cause actual results to differ from these forward-looking statements are discussed on slides 36-39 of this presentation. Vodafone, the Vodafone logo, Vodafone Mobile Broadband, Vodafone WebBox, Vodafone WebBook, Vodafone Smart tab, Vodafone 858 Smartphone, Vodafone Passport, Vodafone live!, Power to You, Vodacom, Vodacom M-Pesa, Vodacom Millionaires, Vodacom 4 Less and Vodacom Change the World are trademarks of Vodafone Group Plc (or have applications pending). Other product and company names mentioned herein may be trademarks of their respective owners. Annual results | 31 March 2016 2 1

16/05/2016 Operating review Annual results | 31 March 2016 Highlights +7.5% +2.7% R12.9bn Group Group capital HEPS revenue 1 expenditure R 80 077 million 16.1% of revenue 883 cents per share +2.6% +12.8% +21.8% Group Dividend per Group EBITDA operating free share cash flow 795 cents per share R30 345 million R17 054 million 1. Restated – refer to note 11 of the preliminary condensed consolidated financial statements. Annual results | 31 March 2016 4 2

16/05/2016 Strategy | Driving consistent focus across all markets Lead in customer Lead in customer Grow data through Grow data through Deliver on Deliver on network differentiation network differentiation experience experience cost programme cost programme Brand leadership and Brand leadership and Lead and grow in Lead and grow in Focus on tight capital Focus on tight capital segmented segmented Enterprise Enterprise discipline discipline propositions propositions Deploy FTTx and lead in Deploy FTTx and lead in Drive highly engaged Drive highly engaged Improve customer Improve customer convergence convergence team team value management value management Annual results | 31 March 2016 5 South Africa | Strong demand for data underpins growth +5.2% Key indicators FY16 % change Revenue 1 (Rm) 62 279 5.2 Revenue growth Service revenue (Rm) 49 320 4.9 +9.5% EBITDA (Rm) 25 016 9.5 EBITDA growth Active customers (‘000) 34 178 6.4 +27.7% Active data customers (‘000) 18 704 12.7 Smart devices (‘000) 14 227 22.8 Data revenue growth 1. Restated – refer to note 11 of the preliminary condensed consolidated financial statements. Annual results | 31 March 2016 6 3

16/05/2016 Customer experience | Highest competitive differentiation Consumer NPS points differentiation % Network Value Service +6 ppts +15 ppts FY15 FY16 • Only operator with increased score • Network drives differentiation Vodacom Competitor A Competitor B • Value perception improved Annual results | 31 March 2016 7 7 Customer | Investing to be “best network” Estimated population coverage Average download speeds % Source: MyBroadband (March 2016) (Mbps) 23 18 17 10 96% 99% 35% 58% 3G LTE/4G FY15 FY16 FY15 FY16 Vodacom SA Operator A Operator B Operator C Drop call ratio • 1 st MyBroadband download speed test 44.6% % reduction • 1 st with commercial mobile LTE-A in dropped calls 0.74% • 1 st in Vodafone Group performance testing 0.65% 0.45% 0.43% 0.41% 4Q15 1Q16 2Q16 3Q16 4Q16 8 Annual results | 31 March 2016 8 4

16/05/2016 Customer | “Best value” driving ARPU and customer growth Contract revenue ARPU R million/% R • 85.1% contract Contract 71.8% 70.8% 69.8% customers on 68.9% new plans • ARPU +4.5% 380 387 407 10 521 10 771 11 039 11 548 380 yoy 1H15 2H15 1H16 2H16 1H15 2H15 1H16 2H16 In bundle revenue as % of contract revenue Total bundle sales Active customers Thousand Million • More than 1.1 billion Prepaid 189 2 bundles sold; 86 +46.1% yoy • Effective PPM 314 387 383 369 27 806 27 202 28 821 29 265 -17.8% 1H15 2H15 1H16 2H16 1H15 2H15 1H16 2H16 Total prepaid bundle sales Just 4 You Annual results | 31 March 2016 9 Customer | Doing even more for best experience for customers Worry free Customer care • Travel Saver extended to 180 • 15% decline in calls to call countries; prepaid voice in 135 centre countries when roaming • Named agent for large • Free call and App assistance enterprise • 1GB free @ upgrade to set up • Call back for RED customers • Data education campaign launched • Perfect start-up MyVodacom App Network • Easier login • Proactive for enterprise network improvement • Click to call • Proactively monitoring Top • In-App data bundle 500 000 customers purchased • SIM trial 10 Annual results | 31 March 2016 10 5

16/05/2016 Data growth | Device, pricing and network supporting demand Data progression Device sales 2.5m Vodacom Thousand • Average usage Million branded per smart devices device - 572MB +22.3% • 2G to 3G ARPU uplift +20.5% 2.8 32.1 34.2 16.6 18.7 11.6 14.2 1.5 3G to 4G ARPU • 10 450 5 322 10 485 6 508 uplift +19.7% Active Active data Active smart LTE customers FY15 FY16 customers customers devices FY15 FY16 Total devices sold Smart devices Data bundles sold LTE/4G Coverage Doubled Million • Data bundle LTE sites +85.9% 58.2% sales up 86% • 98.9% 3G 34.8% coverage 8.3% • Widest LTE/4G 184 343 coverage FY15 FY16 Sep-13 Mar-15 Mar-16 Annual results | 31 March 2016 11 11 Enterprise | Double digit growth Demand supporting strong growth R million +26.5% +9.9% 1 Enterprise revenue contribution % 5 824 6 905 1 327 1 678 R11.2bn +18.6% FY15 FY16 FY15 FY16 Fixed-line and BMS revenue Mobile customer revenue 22.8% of SA service Mobile Fixed revenue • Improved churn: 4.7% • Strategic partnership with IBM – 1 st global cloud in Africa. • Enterprise data revenue +29.8% 1 • IP-VPN +17.9% • Cloud and hosting +40.4% 1. Growth excluding the impact of Nashua in the prior year and Autopage in March 2016. 12 Annual results | 31 March 2016 12 6

16/05/2016 New services | Capturing new revenue shares Insurance revenue Internet of Things revenue Fibre R million R million +20.7% 1 +18.8% 441 524 493 556 FY15 FY16 FY15 FY16 • Insurance revenue +18.8% • IoT revenue +20.7% 1 • 25 725 homes and businesses passed • Connections +28.2% • Device insurance policies +25.0% • Wholesale partnership agreements • GDSP platform delivery • 190 estates pipeline 1. Growth normalised for consolidation of X-Link in the prior year. Annual results | 31 March 2016 13 13 International | Double digit growth supported by data +16.6% Key indicators FY16 % change Revenue (Rm) 18 356 16.6 Revenue growth Service revenue (Rm) 17 763 16.2 +31.9% EBITDA (Rm) 5 385 31.2 Data revenue growth Active customers (‘000) 27 127 (8.1) +19.3% Active data customers (‘000) 10 055 1.8 Active M-Pesa customers 9 224 15.4 M-Pesa revenue growth 14 Annual results | 31 March 2016 7