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 • Sir Christopher Gent Sir Christopher Gent Analysis of results Analysis of results • Ken Hydon Ken Hydon Group funding Group funding • KPIs KPIs and business drivers and business drivers • Julian Horn-Smith Julian Horn-Smith Major operational initiatives Major operational initiatives • Global products and services Global products and services Thomas Thomas Geitner Geitner • Vodafone’s prospects Vodafone’s prospects 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 1 Proportionate Half-Year to September 2001 Mobile Only Mobile Only Sept 2001 Sept 2001 Change Change Turnover Turnover £13.492 bn £13.492 bn +33% +33% 2 EBITDA EBITDA £4.778 bn £4.778 bn +46% +46% 3 Group ope Group operating profit rating profit £3.321 bn £3.321 bn +44% +44% 4 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 ownerships thr hips throughout the period ughout the period 2 Before exception 2 Before exceptional items al items 3 Before goodwill a 3 Before g odwill and ex nd exceptional ceptional items items 4 At 31 March 2001 4 At 31 March 2001

Financial Highlights Financial Highlights Statutory Half-Year to September 2001 1 Statutory Half-Year to September 2001 Sept 2001 Sept 2001 Change nge 2 Group Turnover Group Turnover £8.906 bn £8.906 bn +27% +27% 2 Group Operating Profit Group Operating Profit £3.392 bn £3.392 bn +40% +40% 2 Profit Before Taxation Profit Before Taxation £3.011bn £3.011bn +65% 65% 2 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 odwill and exceptional items al items

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

Operational Highlights Operational Highlights Customer Growth Customer Growth Stabilisation in ARPU Stabilisation in ARPU i Net growth moderated i After years of decline i But higher rate than expected i Better mix of contract to prepaid Improved Margin Performance Improved Margin Performance Rise in Data Revenues Rise in Data Revenues i Lower acquisition costs i 9.1% in controlled subsidiaries i Better overhead management i 9.9% in month of September i Up 3pp on last financial year

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% Swisscom Final cash payment for 25% wisscom Mobile obile • 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 2000 † Increase Adjusted EPS (Pence)†* £m £m % Turnover 8,906 7,019 27 2.51 Group operating profit * 3,392 2,420 40 2.00 Net interest payable (381) (597) (36) 1.54 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 H1/01 H2/01 H1/02 Dividends per share 0.7224p 0.6880p 5 † Restated following the adoption of FRS 19, “Deferred Tax” * Before amortisation of goodwill and exceptional items

Proportionate Results * Proportionate Results Mobile Turnover Mobile Turnover 6 months to 30 September 2001 2000* Growth Analysis of Turnover £m £m % Germany 2,057 2,056 - Rest of World Italy 1,328 1,137 17 Germany 6% United Kingdom 1,805 1,662 9 Japan 15% Other Europe 2,694 1,454 85 15% Italy 10% Total Europe 7,884 6,309 25 Americas 2,839 2,414 18 United Japan 2,018 854 136 Americas Kingdom 21% Other Asia Pacific 499 380 31 13% Middle East & Africa 252 213 18 Other Europe Total Mobile 13,492 10,170 33 20% * September 2000 stated on a pro forma basis for Mannesmann

Proportionate Results Proportionate Results * Mobile EBITDA** Mobile EBITDA** 6 months to 30 September Total Organic EBITDA** Margin 2001 Growth* Growth Margin £m £m % % 35.4% Germany 931 50 44 45.3 33.4% Italy 655 27 28 49.3 32.3% 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 H1/01 H2/01 H1/02 Total Mobile 4,778 46 26 35.4 * Calculated on a pro forma basis for Mannesmann ** Before exceptional items

Proportionate Results Proportionate Results * Other Operations Other Operations 6 months to 30 September 2000* 2001 Growth £m £m % Other Operations : Turnover 834 372 124 • Arcor • Japan Telecom EBITDA ** (1) 6 N/A • Vizzavi • Cegetel * September 2000 stated on a pro forma basis for Mannesmann ** Before exceptional items

Cash Flow Cash Flow 6 months to 30 September 2001 2000 Increase £m £m % Operating Cash Flow per Share Operating cash flow 3,640 1,888 93 (pence) Capital expenditure (1,816) (1,357) 34 5.37 Tax paid (545) (829) (34) Net interest paid (449) (609) (26) 4.29 Dividends received & other (1) 246 N/A Free cash flow before licences 829 (661) N/A 3.18 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 H1/01 H2/01 H1/02 Net debt movement (2,518) (6,535) (61)

Capital Expenditure Capital Expenditure Analysis of Capital Expenditure September 2001: Other Operations • £1.8 billion 9% Germany Other Mobile • Excludes: 28% 10% – Verizon Wireless – J-Phone Other Europe 21% Italy – Japan Telecom 14% United Kingdom 18%

Capital Expenditure Capital Expenditure March 2002: Capital Intensity 30% • £5 billion 25% • Includes: 20% 15% – £1 billion in Japan 10% • 2% on GPRS 5% 0% • 20% on 3G 1997/8 1998/9 1999/0 2000/1 2001/2 2002/3 Forecast Forecast 2G GPRS & 3G

Net Debt Net Debt £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 Committed to single ‘A’ credit ratings

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