Vodafone Group Plc Results For the year ended 31 March 2017 16 May 2017 Disclaimer By watching this webcast you agree to be bound by the following This presentation also contains non-GAAP financial information conditions. You may not disseminate these slides or this recording, which the Vodafone Group’s management believes is valuable in in whole or in part, without the prior consent of Vodafone. understanding the performance of the Vodafone Group. However, non-GAAP information is not uniformly defined by all companies Information in this presentation relating to the price at which and therefore it may not be comparable with similarly titled relevant investments have been bought or sold in the past or the measures disclosed by other companies, including those in the yield on such investments cannot be relied upon as a guide to the Vodafone Group’s industry. Although these measures are important future performance of such investments. in the assessment and management of the Vodafone Group’s This presentation does not constitute an offering of securities or business, they should not be viewed in isolation or as replacements otherwise constitute an invitation or inducement to any person to for, but rather as complementary to, the comparable GAAP underwrite, subscribe for or otherwise acquire or dispose of measures. securities in any company within the Vodafone Group. Vodafone, the Vodafone Speech Mark, the Vodafone Portrait, This presentation contains forward-looking statements, including Vodacom and Vodafone One are trademarks of the Vodafone Group. within the meaning of the US Private Securities Litigation Reform The Vodafone Rhombus is a registered design of the Vodafone Act of 1995, which are subject to risks and uncertainties because Group. Other product and company names mentioned herein may they relate to future events. These forward-looking statements be the trademarks of their respective owners. include, without limitation, statements in relation to Vodafone Group’s financial outlook and future performance. Some of the factors which may cause actual results to differ from these forward-looking statements are discussed on the final slide of this presentation. 2
Overview of the year Vittorio Colao Group Chief Executive Full year highlights 1 Organic growth Service revenue Adjusted EBITDA Free Cash Flow Dividend 2 (€bn) (€bn) (€bn) (€c per share) +2.0% +1.9% +5.8% 3x 14.77 14.48 28.4% 29.7% 4.1 44.6 Margin Margin 43.0 14.2 14.1 1.3 FY 15/16 FY 16/17 FY 15/16 FY 16/17 FY 15/16 FY 16/17 FY 15/16 FY 16/17 Guidance basis 3 (including India) Guidance basis 3 (including India) Gaining revenue market share Growing dividends €15.8bn, +3.4% €4.3bn Met guidance including India 1. All growth rates in this document are organic unless otherwise stated, with Vodafone Netherlands excluded from organic growth, and Vodafone India excluded from AMAP and Group 2. €c14.48 dividend in FY 15/16 is the equivalent to the total dividend payout of 11.45 pence at 31 March 2016 exchange rate (£:€ 1.2647) 4 3. Based on guidance foreign exchange rates
Continuing commercial momentum Europe 1 AMAP ex. India India Customer net adds (000s) Customer net adds (m) Customer net adds (m) Mobile contract Mobile contract Total Fixed broadband Mobile prepaid of which data 4.0 4.4 2.0 2.0 0.3 1.4 1.3 275 253 0.0 317 0.4 202 3.5 2.7 339 340 0.5 0.6 271 254 (5.0) 0.9 0.8 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Service revenue 0.3% 1.0% 0.7% 0.1% 8.4% 8.1% 7.4% 6.8% 6.4% 5.4% (1.9)% (11.5)% growth 1.6m NGN broadband users 7.5m active data users Retaining voice and data users added in the year added in the year with integrated plans and targeted offers 5 1. Europe includes Vodafone Netherlands in the periods prior to the completion of the joint venture Key markets: Europe FY 16/17 Germany Italy Spain UK Consumer NPS rank Net additions 222 433 337 224 (000s) 209 212 107 (1,163) Mobile contract Broadband Mobile prepaid Broadband Mobile contract Broadband Mobile contract² Broadband Service revenue 1.9 2.3 4.0 1 (3.3) growth (%) 4.5 10.6 8.8 (7.3) 3 Adjusted EBITDA growth (%) 1. 4.0% excluding handset financing, 0.9% on an organic reported basis 2. Mobile contract net additions excludes the impact of a one-off customer base adjustment in Q3 16/17, which reduced the base by 125,000, FY 16/17 reported +97,000) 6 3. Underlying adjusted EBITDA growth; this excludes higher import costs following sterling weakness, central cost reallocations and one-off settlements, -15.8% on an organic reported basis
Key markets: Emerging markets FY 16/17 South Africa India Turkey Egypt Consumer NPS rank Net additions 2,082 3,233 960 (000s) 9,594 345 1,522 217 (344) Mobile contract Mobile prepaid Mobile contract Mobile prepaid Mobile contract Mobile prepaid Mobile contract Mobile prepaid Service revenue 5.6 (0.7) 16.0 15.6 growth (%) 7.5 (10.5) 29.9 22.7 Adjusted EBITDA growth (%) 7 Q4 16/17 snapshot Growth Customer Financial engines experience Consumer NPS 4G driving Group service Co/leader data volumes revenue +1.5% +62% in 19/21 markets 1 Record NGN Co/best network Europe stable +0.1% broadband net adds data in 14/21 markets, AMAP robust +6.8% voice in 21/21 1 +486k Leading EU Enterprise EBITDA accelerating Transformation NGN footprint outperformance H2 +6.3%, margin +170bps 36m own homes passed / to 29.9% revenue +2.0% 96m marketable 2 1. Includes India 8 2. Including VodafoneZiggo
Financial review Nick Read Group Chief Financial Officer 9 Operational leverage improving returns Vodafone Group, excluding India Service revenue 1 Adjusted EBITDA 1 Adjusted EBIT 1 (€bn) (€bn) (€bn) The Netherlands 4.0 14.1 43.0 H2 H2 H2 +1.8% +6.3% +12.0% 13.7 41.7 3.5 41.1 3.3 13.0 FY 15/16 FY 16/17 FY 15/16 FY 16/17 FY 15/16 FY 16/17 YoY +1.1% +1.9% +2.3% +5.8% -7.3% +7.0% growth All growth rates are organic and exclude India, Netherlands, UK ladder settlement and shareholder recharges 1. Stated on a constant currency basis 10
Reported earnings impacted by exceptional items Excluded from adjusted earnings: FY 16/17 FY 15/16 Reported (€m) (€m) growth (%) • €1.3bn gain from the Netherlands JV Adjusted EBIT 3,970 3,769 5.3 • Decrease of Luxembourg deferred tax assets Associates 164 60 of €3.9bn Adjusted net financing costs (862) (933) • India impairment net €3.7bn (H1 €5.0bn, H2 €1.3bn reversal) Adjusted tax expense (789) (754) Non-controlling interests (234) (308) Adjusted earnings 1 2,249 1,834 22.6 • Share count: 26,602m excl. dilution from India (excl. Indus) (4,107) 5 mandatory convertible bonds (Loss)/profit for the period (6,079) (5,122) n/a • Underlying effective tax rate 25.4%, medium-term rate is mid-20s 27,971 Weighted average number of shares 2 (m) 26,692 Adjusted earnings per share 1 8.04c 6.87c 17.0 1. Reported excluding the impact of restructuring costs, impairments, significant one-off items and amortisation of acquired intangible customer bases and brand intangible assets 2. Weighted average number of shares includes a dilution of 1,369 million shares following the issue of £2.9 billion of mandatory convertible bonds in February 2016 11 Sustained service revenue growth, regulatory impact ahead Group organic service revenue growth European roaming impact (%) (€m) 2.2 2.1 2.0 1.7 1.5 (150) c.(300) FY 16/17 FY 17/18e Q4 15/16 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q4 16/17 improved sequentially excluding: Elasticity with integrated plans: • Leap year Voice Data • Accounting reclassifications 4x 7x • UK carrier service boost in prior year • MTR / FTR headwind in Germany and Ireland 12
All three growth drivers contributing FY 16/17 organic service revenue growth contribution (pp) Data Convergence Enterprise 1.0 0.7 (0.6) 1.9 1.5 (1.0) 0.3 European AMAP consumer Consumer Enterprise¹ EU regulation¹ Carrier, wholesale FY 16/17 consumer mobile¹ mobile fixed line and other² 1. Excludes the impact of EU regulation. This is defined as out-of-bundle roaming declines and mobile termination rate changes 2. Other includes mobile and fixed wholesale, common functions and eliminations 13 Cost base reducing despite strong commercial momentum (€bn) Net adds FY 16/17 (000s) FY churn improvement (pp) EU contract mobile +1,101 0.3 AMAP mobile +9,724 3.9 Group fixed broadband +1,470 1.2 €0.5bn underlying cost reduction, incl. synergies 0.1 13.7 0.2 0.0 0.4 Absorbing 13.0 Spring opex Absorbing content costs FY 15/16 Gross margin² Customer costs Technology costs Support costs FY 16/17 adjusted EBITDA¹ adjusted EBITDA 1. Excludes India and Netherlands and stated on a constant currency basis 2. Gross margin includes a year-on-year increase of €200m in content costs 14
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