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  • Vodafone Group Plc Results

    17 May 2016

    For the year ended 31 March 2016

    1

  • Information in this 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.

    This 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 this presentation.

    Disclaimer

    This presentation also contains non-GAAP financial which the

    Groups management believes is valuable in understanding the

    performance of the Group. 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 Groups industry. Although

    these measures are important in the assessment and

    management of the Groups 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

  • Group Chief Executive Vittorio Colao

    Business review

  • Financial performance Return to full year service revenue +1.5% and EBITDA +2.7% growth

    Q4 Group service revenue +2.5%; underlying +1.8%

    Stabilisation in Europe, Q4 service revenue +0.5%

    Strong execution continues in AMAP, Q4 service revenue accelerated to +8.1%

    Good cost control, raising synergy targets for KDG and Ono

    Full year guidance met: EBITDA 11.9 billion and free cash flow 1.0 billion on guidance basis

    All growth rates shown in this document are organic unless otherwise stated

    Full year highlights

    Strategic progress and commercial momentum Successful completion of Project Spring build

    Significant improvement in net promoter score: leader in 13/21 markets, improving in 15 markets

    Driving data: 47m 4G customers +126%, 73m 3G data users in emerging markets, data volumes +71%

    Enterprise continues to outperform peers, FY 15/16 +2.1%

    Unified communications: record fixed broadband growth, 30m EU households on-net NGN, strategic agreements in

    Netherlands and Italy; 21% of Group revenues from fixed

    4

  • Vodafones strategy

    A converged communications leader

    Core footprint

    Number 1 or 2 in mobile

    Four growth engines

    1. Data

    2. Fixed

    3. Emerging markets

    4. Enterprise Unified communications

    Path to

    Deeper and stronger

    in existing markets Organic investment

    Spectrum

    Acquisitions

    Leading data network quality

    in 15/20 markets

    UC assets in all key markets

    Service revenue

    Q4 13/14

    (4.0)%

    Q4 15/16

    2.5%

    Europe,

    Africa and India

    5

  • Vodafones strategy: substantial investments

    1. Accrued capital expenditure

    2. Renewals and acquisitions

    3. Internet of Things (IoT) previously called Machine-to-Machine

    Last 3 years

    Capex1 (o/w 19bn

    Project Spring)

    102,000 new high capacity backhaul

    links for improved data

    experience

    203,000 new and upgraded base stations to improve coverage and quality

    24.1bn

    16 circles in India with 3G/4G

    to increase data quality

    17 markets have 800/700 spectrum for 4G (vs. 4 in 2013)

    Spectrum

    and licences2

    7.7bn

    KDG, Ono, Hellas Online,

    Cobra acquired leading fixed and IoT3 companies to become a fully converged operator

    Acquisitions

    14.7bn 47bn

    Total

    6

  • Vodafone strategy: key programmes

    7

    FY 13 /14 Verizon Wireless disposal

    PROJECT SPRING

    CUSTOMER EXPERIENCE:

    CARE

    FIT FOR GROWTH / ZBB

  • Enhancing the customer experience: Project Spring

    Mobile

    Enterprise

    Fully modernised network

    Fixed

    1. Targeted urban areas

    2. IoT Global SIM available in over 200 countries

    3. Points of Presence

    Broad reach

    Single RAN sites EU 4G coverage India 3G coverage1

    Enhanced customer experience

    Europe AMAP

    Dropped call rate

    Sept 2013 Mar 2016

    Homes reached

    with own NGN

    Converged service in all key markets

    Sept 2013 Mar 2016

    Fixed broadband

    customers

    Enhanced capability

    Countries IoT platform

    available2

    IP-VPN PoPs3

    Sept 2013 Mar 2016

    97k 212k

    32%

    87%

    83%

    95% 76%

    91% 1.3% 3Mbps

    8

  • Enhancing the customer experience: CARE

    Connectivity that is reliable and secure

    Always in control

    Reward loyalty Easy access

    Network satisfaction guaranteed

    Cost control with no surprises

    Extra rewards and service

    Always available, ask only once

    EU & US roaming included in new Red tariffs

    50% discount on prepaid value bundles

    In-store experts providing technical expertise

    30 day satisfaction guarantee

    9

  • Enhancing the customer experience: NPS leadership

    SP

    (4.7)

    (3.1)

    (2.3)

    2.0

    FY 12/13 FY 13/14 FY 14/15 FY 15/16

    18.6 17.9 17.6 17.0 17.0 16.7

    16.2 16.4

    14.6

    16.4

    13.9 15.4

    Q2 13/14 Q4 13/14 Q2 14/15 Q4 14/15 Q2 15/16 Q4 15/16

    Consumer contract Enterprise

    Europe churn reducing

    Consumer NPS (Group average) Difference to best competitor

    Consumer NPS

    EG IN IT SA TU

    Leading in 13/21 markets representing ~60% of revenue

    GH PT GR CZ HU MT RO

    10

    (%)

    (points)

  • Driving growth: data

    Increasing penetration of 4G customers (m)

    20.7 24.2

    30.1 34.8

    46.8

    15.9 18.9

    24.3 28.1

    33.4

    Q4 14/15 Q1 15/16 Q2 15/16 Q3 15/16 Q4 15/16

    Group

    Europe 50% of Europe data is 4G

    EU average smartphone usage 1.1GB 1

    5.1m new users in Turkey, India and Albania in Q4

    1. iOS and Android

    2. AMAP

    Higher ARPU at lower unit prices More for more in Germany (April 2016)

    Unlimited EU roaming

    Extra 1GB

    LTE max

    44.99 39.99

    Other moves:

    Italy (Sept 2015)

    Spain (April 2016)

    UK (May 2016)

    44.7 54.0

    61.6 67.8 72.5 2.0

    2.2 2.4

    2.9 9.2

    Q4 14/15 Q1 15/16 Q2 15/16 Q3 15/16 Q4 15/16

    4G

    3G

    Strong data adoption in emerging markets 3G and 4G data users (m) as a % of total data users

    Data volumes +82%1

    Average smartphone usage 745MB 1,2 (+41%)

    46% 40%

    52% 55%

    63%

    18

    21

    Contract 3G to 4G Prepaid 2G to 3G

    Monetising data growth South Africa ARPU uplift from device migration (%)

    Average data usage 590MB (+43%); web applications and streaming

    11

  • 0.0

    2.1

    (0.8)

    4.4

    0.3 1.3

    FY 14/15 FY 15/16

    Total Enterprise

    Fixed

    Mobile

    Organic service revenue growth (%)

    Project Spring achievements Financial performance

    268 PoPs (+57%) in 70 countries

    Cloud & Hosting in

    12 countries

    IoT platform in

    30 countries1

    One Net2 in

    30 countries

    FY 15/16

    Fixed: IP-VPN +8.0%

    Mobile: customers +7.4%, ARPU -7.7%

    VGE service revenue +5.9%

    IoT service revenue +29%; 38m connections +37%

    1. IoT Global SIM available in over 200 countries 2. One Net for SMEs, Corporates and multinationals 12

    Driving growth: enterprise

  • Fixed broadband net adds Homes reached with NGN broadband1 Spain churn4

    289 264

    230

    414 416 393

    228

    322

    382

    426

    Q4 14/15 Q1 15/16 Q2 15/16 Q3 15/16 Q4 15/16

    Broadband o/w NGN

    Record fixed net adds; 13.4m broadband users, 6.4m NGN

    9.5m TV customers UK and Italy launch in 2016

    21% of revenue from fixed

    (000s)

    (m)

    Expanding reach Building scale

    41

    62 66 69

    72

    26 26 27 29 30

    Q4 14/15 Q1 15/16 Q2 15/16 Q3 15/16 Q4 15/16

    Total On-net

    1. Europe

    2. Fixed access to premises and mobile backhaul

    3. Including CWW and international links

    4. Cohort analysis at March 2016. Differs from reported churn which includes converged customers

    48% household coverage in Europe o/w 41% on-net

    +246,000km1,2 of fibre since Sept 13,

    Group total now 1 million km3

    Lowering churn via convergence

    21%

    10%

    Mobile only Convergent

    Italy churn4 (%)

    -11ppt

    26%

    14%