Vodafone Group Plc Background Presentation
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 offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in any company within the Group. The presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 which are subject to risks and uncertainties because they relate to future events. Some of the factors which may cause actual results to differ from these forward-looking statements are discussed on the final slide of the presentation. The presentation also contains non- GAAP financial information which the Group’s management believes is valuable in understanding the performance of the Group or the Group’s businesses. However, non -GAAP information is not uniformly defined by all companies and therefore it may not be comparable with similarly titled measures disclosed by other companies, including those in the Group ’s industry. Although these measures are important in the assessment and management of the business, they should not be viewed in isolation or as replacements for, but rather as complementary to, the comparable GAAP measures. Vodafone, the Vodafone Speech Mark, the Vodafone Portrait, Vodacom and M-Pesa are trademarks of the Vodafone Group. The Vodafone Rhombus is a registered design of the Vodafone Group. Other product and company names mentioned herein may be the trademarks of their respective owners. 2
A brief introduction to the Group • Vodafone Group Plc is one of the world’s largest Financial highlights FY 13/14 telecommunications companies providing a wide range of Revenue £43.6bn services, including voice, messaging, data across mobile EBITDA £12.8bn and fixed networks Adjusted operating profit £7.9bn • We have 438m mobile customers and 11 million fixed broadband customers Capex £7.1bn • We have mobile operations in 26 countries and partner Free cash flow £4.4bn with mobile networks in over 50 more Adjusted EPS 17.54p • Our operations are spread across two geographic regions - Dividend per share 11.00p Europe and Africa, Middle East and Asia Pacific ( AMAP ) • The Group is listed on the London and NASDAQ (ADR listing) stock exchanges and is headquartered in London • We have over 275,000 base station sites across our markets (as of December 2014) 3
Revenue and profit mix of the Group Group service revenue Group service revenue FY 13/14 FY 13/14 Mobile Other • Mobile accounts for the majority (81%) incoming Mobile 7% out-of- Consumer of our business 8% Enterprise bundle Fixed contract 31% 15% 37% 27% • Fixed (15%) is becoming an increasing 4% Other part of what we do 29% 42% • A quarter of our business comes from Consumer prepaid Mobile in-bundle Enterprise customers Group service revenue Group EBITDA • Revenue and profits are spread across FY 13/14 FY 13/14 Spain Italy our geographical footprint Germany Other 8% India 10% 21% 26% 10% 27% Other Vodacom 11% 13% Vodacom 6% Spain 15% 11% 12% 19% 11% UK India Italy Germany UK 4
Mobile customer mix of the Group Customers by country (%) Other FY 13/14 17 • Over 60% of our customers are India Spain 3 38 from emerging markets UK 4 6 Italy • The majority of our customers are 10 prepaid customers Egypt 7 15 Germany Vodacom • Consumer contract customers are 12% of the base and contribute Customers by segment (%) FY 13/14 over a third of service revenue Consumer prepaid Consumer contract • Enterprise contributes over a 12 81 quarter of our service revenue 7 Enterprise 5
History of the Group Sale of 45% Incorporated as Racal Acquisition of interest in Strategic Radio Limited Mannesmann AG, Verizon acquiring further Wireless businesses in Europe Demerger from Acquisition of Disposal of our interest Acquisition of Racal and full listing controlling stake in in China Mobile Cable and Wireless on the LSE Vodafone Essar (now Worldwide Acquisition of Vodafone India) Ono in Spain 1984 1991 1999 2000 2006 2007 2009 2010 2011 2012 2013 2014 Ownership of Vodafone India and Italy Merger with AirTouch Sale of interest increased Communications, in SFR Disposal of Vodafone Australia to 100% formation of Verizon Vodafone Japan merged with Wireless (Vodafone Hutchinson 3G Australia held a 45% stake) Acquisition of Telsim Vodacom Group Acquisition of (now Vodafone Turkey) became a subsidiary Kabel Deutschland in Germany 6
Where we operate Subsidiaries (% ownership) Albania (100%) Portugal (100%) Czech Rep (100%) Qatar (22.95%) Egypt (54.9%) Romania (100%) Germany (100%) Spain (100%) Ghana (70%) Turkey (100%) Greece (99.9%) UK (100%) Hungary (100%) Vodacom Group (65%) India (100%) Consists of South Africa Ireland (100%) Tanzania Italy (100%) Mozambique Malta (100%) DRC Netherlands (100%) Lesotho New Zealand (100%) Joint ventures/associates Indus Towers (42%), part of Vodafone India Australia (50%) Safaricom (Kenya) (40%) Partner markets See page 37 for details 7
Our people Gerard Kleisterlee (Chairman) Appointed July 2011 Vittorio Colao (CEO) Appointed July 2008 He retired as President/CEO and Chairman of Philips on 31 March CEO before joining the Board in 2002. He left Vodafone in 2004 for 2011 after spending three decades with the company. He is also a RCS MediaGroup before re-joining the Board in October 2006 as CEO, Board member of Daimler AG, Royal Dutch Shell and Dell Inc. Europe and Deputy CEO. Nick Read (CFO) Appointed April 2014 Steve Pusey* (CTO) Appointed June 2009 He joined Vodafone in 2006 having previously served as Executive He joined Vodafone in 2001 and has held a variety of roles including CFO, CCO and CEO of Vodafone UK. Before becoming Group CFO, he Vice President and President for Nortel, EMEA having joined the was the regional CEO for our AMAP region and a Board member of our company in 1982. Before then he worked for British Telecom. listed companies Vodacom Group, Safaricom and Vodafone Qatar. Non-executive board members: Luc Vandevelde (Senior Independent Director), Sir Crispin Davies, Dame Clara Furse DBE, Val Gooding, Renee James, Samuel Jonah, Nick Land and Philip Yea Executive committee : Vittorio Colao (CEO), Nick Read (CFO), Stephen Pusey (CTO), Philipp Humm (CEO Europe), Serpil Timuray (CEO AMAP), Paolo Bertoluzzo (Group Chief Commercial and Operations Officer), Warren Finegold (Strategy & Business Development Director), Matthew Kirk (External Affairs Director), Rosemary Martin (General Counsel and Company Secretary), Ronald Schellekens (Group HR Director), Nick Jeffery (Group Enterprise Director) Over 97,000 employees 1 24 nationalities 22% women in top senior management roles 1. As of March 2014 8 * Steve Pusey will retire on 31 July 2014
The services we provide Split of Group service revenue Voice FY 13/14 Other Over 1.2 trillion minutes of calls were carried over our networks last year 4% Fixed That’s the equivalent of everyone around the world talking for two and a half hours 15% Messaging We sent over 337 billion text, picture, music and video messages last year Mobile 81% Data Over 544 petabytes of data were sent across our networks last year That’s enough data for over 100 billion one minute video clips We also provide financial services Fixed We serve over 11 million customers, mainly in Germany, Spain and Italy We have 18.5m M-Pesa users across 9 markets. M-Pesa enables customers to send and receive money via their mobile phones without the need for a bank account. Other services M-Pesa also includes the ability to save and receive short-term loans in some markets We earn revenue from letting other ‘virtual’ operators use our network and from partners outside our footprint using our products and services 9
Our technology Mobile Fixed 37% Europe We have over 46% 275,000 India 26m households passed with NGN 17% base station AMAP (excl. India) 48m households passed with NGN sites (incl. wholesale) 18 79% markets with European sites with high 4G services capacity backhaul • Our fixed access comes from a range of sources: 65% 77% 4G coverage European sites fully – Acquisitions (e.g. KDG, Ono) in Europe modernised – Self or co-building (e.g. Italy, Spain, Portugal) 90% urban areas) 80% 3G coverage in 3G coverage in AMAP – Wholesale (e.g. Netherlands) India (targeted (excluding India) £17.2bn net book value of owned licences and spectrum (as of March 2014) An excellent network experience is key to our strategy and Project Spring accelerates our progress Data shown here correct as of 31 December 2014 unless otherwise stated 10 10 1. Next Generation Network technology: includes fibre-to-the-home, cable and fibre/VDSL to the cabinet or central office
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