vodafone group plc trading update · pdf filevodafone group plc trading update ... p3 test,...

Vodafone Group Plc Trading update

4 February 2016

For the three months ended 31 December 2015

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.

Disclaimer

The presentation also contains non-GAAP financial information

which the Groups management believes is valuable in

understanding the performance of the Group or the Groups

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 Groups 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

Commercial review

Group Chief Executive Vittorio Colao

All growth rates shown are organic unless otherwise stated 4

All growth rates shown are organic unless otherwise stated

1. Adjusting for inter-quarter timing differences

Group service revenue +1.4%: sixth consecutive quarter of improvement

Continued momentum in AMAP +6.5%, further recovery in Europe -0.6%

Strong commercial progress: Europe mobile contract net adds 0.5m, Group fixed broadband

customers +0.4m

Enterprise revenue +2.6%1; continued growth in VGE and M2M

Project Spring: 92% through mobile build; 4G coverage now 84% in Europe, AMAP build

targets achieved. Customer experience targets met

Continued data growth: volume +68%, 34.8m 4G customers (+4.7m)

Marketing high speed broadband to 69m homes across Europe; 29m on own infrastructure

Q3 15/16 highlights

5

5.6ppt

7.6ppt

2.0ppt

(4.2)

(1.5) (0.4)

0.1 0.8 1.2

1.4

(8.2)

(5.4)

(3.5) (2.6)

(1.5) (1.0) (0.6)

4.5

6.7 5.7 5.8 6.1

6.7 6.5

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

Group Europe AMAP

Delivering growth: 6th quarter of service revenue improvement Service revenue growth %

Continued customer and data growth in AMAP

8 out of 13 European markets back to growth

10 16 19 24 28

42 45

54 62

68

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

Europe 4G Emerging markets 3G

6

Delivering growth: engines of growth

1. Adjusting for inter-quarter timing differences

Mobile contract base Millions NGN fixed customers Millions

Europe 4G & Emerging markets 3G customers Millions Enterprise service revenue growth %

87 88

90 91

92

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

4.7 5.1 5.3

5.6 6.0

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

(1.1)

1.4 2.11

2.41 2.61

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

+5m YoY +1.3m YoY

+3.7ppt YoY +26m YoY

+18m YoY

7

Project Spring: delivering leading network positions & data growth

Italy: P3 test, Nov 2015 Points Spain: P3 test, Oct 2015 Points

India: sites, Dec 20152 Germany: Connect tests, Nov 2015 UK, London: P3 test, Oct 2015 Points

Download

speeds (Mbps)

319 265 223 268

509 433

352 398

Vodafone Operator 2 Operator 3 Operator 4

Voice Data

338 317 316 218

503 500 480

393

Vodafone Operator 2 Operator 3 Operator 4

Voice Data

177 175 115 135

219 258

184 154

Vodafone Operator 2 Operator 3 Operator 4

Voice Data

219 164 220 199

317 363 215 304

Vodafone Operator 2 Operator 3 Operator 4

Voice Data

134 151 123 76 50 47

47 77

48 12

15 12

Vodafone Op 2 Op 3 Op 4 Op 5 Op 6

2G 3G

14.5

6.7 5.6 4.5

Vodacom Operator 2 Operator 3 Operator 4

Points 000s

1. Internal mobile drive trials

South Africa:

Atio test, Dec 20151

Smartphone data usage: Europe >1GB, AMAP 0.7GB3

3. Monthly average 2. Estimated data for operators 5 and 6

11.8 12.0

12.3 12.5

13.0

Q3

14/15

Q4

14/15

Q1

15/16

Q2

15/16

Q3

15/16

40 41

62 66 69

Q3

14/15

Q4

14/15

Q1

15/16

Q2

15/16

Q3

15/16

46% household coverage in Europe

Of which 41% reached with own

infrastructure

Project Spring: supporting fixed / convergence growth

8

Record fixed broadband net adds

6.0m NGN customers (+0.4m)

Europe fixed revenue +3.7%; 26% of

EU service revenue from fixed

Vodafone Red One, Nov 2015

2.8m customers take converged

services

9.5m TV customers (PY: 9.1m)

TV offers in UK and Italy in 2016

39% 42% 43% 45% 46%

% NGN customers

Expanding services Achieving scale Increasing reach

Fixed/converged: recent launches Fixed broadband customers European homes marketed

with high speed broadband

Millions

Vodafone broadband, Oct 2015

Vodafone TV, Jan 2016

Millions

Vodafone One, Oct 2015

Expanding fixed services: enhancing consumer offers

9

Vodafone One TV

Champions League

and La Liga

Launched Aug 2015

1.0m TV users

12 markets with mobile content offers

Vodafone TV

>100 TV & Radio

channels

Launched Jan 2016

1Gbps fibre service to support TV

7 markets now offer TV

Instant 7 day catch up and wireless multi-room

300k football subscribers

10

Project Spring: supporting Enterprise growth

Continued growth Enabling Total Communications

Organic service revenue growth IP-VPN reach: 65 countries and 259 PoPs3 %

(1.1)

1.4

2.11 2.41

2.61

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

Key wins Q3 15/16

VGE

Q3 revenue +5.8%1

M2M Cloud & Hosting

Q3 revenue +27.3%,

connections 35.5m2 Q3 revenue +22.6%

1. Adjusting for inter-quarter timing differences

2. Restated to include all M2M connections activated and under customer ownership (Q2: 32.6m)

3. Points of Presence

Fixed

28% of Enterprise revenue

Fixed / Converged

55% of total pipeline

3.9m Vodafone One Net users in 12 markets

Security

Secure Internet now available in 180 countries

28% of Group

service revenue

Operational review

Group Chief Financial Officer Nick Read

Mobile revenue -1.7% (Q2: -2.8%)

Fixed revenue +1.7% (Q2: +0.0%)

Enterprise revenue -3.2% (Q2: -3.9%);

continued price competition

Germany: improved commercial execution

12

1. December 2015

2. Excluding migrations

Leading voice quality in Connect test,

dropped call rate -26% YoY to 0.46%1

Channel mix improved YoY

Consumer contract ARPU -3.9%

(Q2: -4.8%); back book re-pricing easing

KDG growth remains strong +7.0%

(Q2 +7.0%); base +96k

DSL net adds now positive +9k

(Q2: -32k)2

(1.8)

(3.5)

(1.2)

Incl. KDG (1.8)

Incl. KDG

(0.4)

Incl. KDG

Q3

14/15

Q4

14/15

Q1

15/16

Q2

15/16

Q3

15/16

235

137

104

245

196

Q3

14/15

Q4

14/15

Q1

15/16

Q2

15/16

Q3

15/16

101 93

70 66

105

Q3

14/15

Q4

14/15

Q1

15/16

Q2

15/16

Q3

15/16

Fixed broadband net adds Mobile contract net adds Service revenue growth % 000s 000s

Mobile revenue +0.1% (Q2: -3.0%)

Consumer prepaid ARPU +12.7%;

strong adoption of Vodafone Exclusive

Fixed revenue -2.5% (Q2: +3.5%);

increased competitive pressures

Italy: continued recovery in trends, mobile back to growth

13

Market leading voice and data

network, 4G coverage 94%

Strong data usage, +56%

Aggressive promotional acquisition

market

Fibre build: 14k cabinets installed,

3.0m homes passed

Fibre customer base 211k (+64k QoQ)