Q3 FY21 Trading Update - Vodafone Group
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Q3 FY21 Trading Update
Q3 highlights ⫶ Resilient trading performance, FY21 guidance re-iterated
Back to Consistent
growth momentum
• Capital markets day held
16.00%
Ex. roaming & visitor revenue European mobile contract churn (year to date)
on 17 Nov’20
15.00%
1.5%
1.8%
1.6% 1.5% 14.7%
14.00%
0.5%
0.8%
0.6% 0.4% 13.00%
-1.1pp
13.6% • Cornerstone JV in UK
-0.5%
(0.4%) commercialised &
(1.3%)
transferred to Vantage
12.00%
Q3 Q4 Q1 Q2 Q3
-1.5%
11.00%
FY20 FY20 FY21 FY21 FY21 Q3 Q3
-2.5% FY20 FY21 • Q3 trading update on
15 Feb’21
• Underlying trends broadly
-3.5%
• Solid commercial
similar quarter-on-quarter performance despite • IPO remains firmly on
further lockdown measures track (early 2021)
• Lower roaming & visitor drag
(Q3: -1.4pp, Q2: -1.9pp) • NGN broadband net adds vantagetowers.com
+330k, >1m year to date
Q3 FY21
Trading Update 2
Germany ⫶ Consistent commercial performance
41% of Group EBITDA1
Service revenue growth Net customer additions (‘000)
2.5% 2.5%
2.5% 1813
Retail 190
160
2.0% 2.0%
DSL
Retail ex. roaming 1.8% 1.8% Cable 140
118
& visitor (‘R&V’)
1.5% 1.5%
1.5% 99
Mobile contract
Reported organic 1.3% 90
1.0%
1.2%
1.0%
153 573
service revenue 118
growth2 1.0% 98
74 83
0.6%
0.5% 0.5% 40
0.4%
0.0% 0.0%
(33)
-10
(48) (44) (42)
0.0% 0.0%
-0.5% (0.1%) (0.1%) -0.5%
(60)
-60
Q3 Q4 Q1 Q2 Q3
Q3 Q4 Q1 Q2 Q3
FY20 FY20 FY21 FY21 FY21
FY20 FY20 FY21 FY21 FY21
• All segments in growth • Robust commercial momentum despite Dec lockdown
• QoQ improvement in retail SR (ex. R&V): • Quarter of cable base ≥400Mbps incl. >900k at 1Gbps
- higher call usage during lockdown
- strong business performance • Early benefits from combined sales teams &
harmonised premium TV portfolio
• Cable ARPU uplift +2.9% YoY
• Grey spot sharing with TEFD - MoU announced
1. Based on H1 FY21 EBITDA contribution
Q3 FY21 2. Unitymedia included in organic service revenue from FY21
Trading Update 3
3. Includes Unitymedia migrations of 63,000 in Q1 FY21 and 124,000 in Q2 FY21
Italy ⫶ Remains highly competitive UK ⫶ Continued commercial momentum
11% of Group EBITDA1 9% of Group EBITDA1
Q2 Q3 Q2 Q3
FY21 FY21 FY21 FY21
Service revenue growth (8.0%) (7.8%) Service revenue growth (0.5%) (0.4%)
Vodafone Mobile Number Portability (‘000) Net customer additions (‘000)
Q3 Q4 Q1 Q2 Q3 200
190 200
FY20 FY20 FY21 FY21 FY21 Mobile contract
+ VOXI 150 150
129
(1) Fixed broadband 119
100
(49) 100
88 100
(86) (78) 74 2
64
45
50 50
38
20
- -
Q3 Q4 Q1 Q2 Q3
(289) FY20 FY20 FY21 FY21 FY21
• Lower R&V drag offset by lapping of PY fixed price increase • Net adds similar to Q2, despite lockdown restrictions
• 2nd brand ho. reaching 2.4m customers • Strong new iPhone sales (+30% YoY) o/w 50% digital
• Increase in low-end pricing in Jan • Business fixed service revenue growth +4.9% in Q3
• NGN broadband coverage 8.3m households + c.3m FWA • Annual price escalator - CPI +3.9% on all new contracts
1. Based on H1 FY21 EBITDA contribution
Q3 FY21 2. Excludes a customer base restatement of 32,000
Trading Update 4
Spain ⫶ Sustained service revenue trend Other Europe ⫶ Improving performance
7% of Group EBITDA1 12% of Group EBITDA1
Q2 Q3 Q2 Q3
FY21 FY21 FY21 FY21
Service revenue growth (1.8%) (1.1%) Service revenue growth (1.8%) (0.7%)
Net customer additions (‘000) Service revenue growth Ex. roaming
& visitor drag
3.5%
Mobile contract 2.5%
83
Fixed broadband 3.4%
90 90
51 1.5%
3.0% 1.1%
0.7%
40
19 30
40
28
0.5%
9 -
(10)
12 (22)
(10) -0.5%
-1.5%
(0.6%) (0.7%)
(60) (60)
(45)
-2.5%
(1.8%)
(110) (110)
(3.1%)
-3.5%
(160) (160)
Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3
FY20 FY20 FY21 FY21 FY21 FY20 FY20 FY21 FY21 FY21
• Market portability high in Q3 – increased promo activity • Lower COVID-19 impact
• Price increases implemented in mid-Nov • Broadband net adds +47k, total base now 4.2m
• Consumer contract MNP back to growth in Dec & Jan • PT spectrum auction ongoing, legal challenge filed
• Low-end pricing pressure but Lowi competing well • Liberty integration on-track
1. Based on H1 FY21 EBITDA contribution
Q3 FY21
Trading Update 5
Turkey & Egypt ⫶ Acceleration in trends Vodacom ⫶ SA strong, M-Pesa charging
8% of Group EBITDA1 13% of Group EBITDA1
Q2 Q3 Q3
Q2 Q2
Q3
Service revenue growth FY21 FY21 Service revenue growth FY21 FY21
Egypt 4.9% 8.8% Vodacom
Service revenue
Groupgrowth 3.3%
3.2% 3.2%
3.3%
Turkey 13.9% 17.7% South Africa 7.7% 5.4%
Internationals (4.9%) (0.3%)
65.0 61.0 18.0
• Both markets continue to grow ahead of inflation 4G customers
60.0
55.0
52.5 17.4
17.0
• Egypt in SA (m)
16.0
50.0
41.4 40.9 41.9 15.8
15.0
- stc sale discussions ended in December
45.0
40.0 14.0
M-Pesa 14.8
35.0
14.7
- Attractive market, strong ROCE
13.0
quarterly 30.0
13.8
transaction 12.0
2
25.0
value (€bn)
• Turkey 20.0
11.0
- More-4-more initiatives and strong data growth
15.0 10.0
Q3 Q4 Q1 Q2 Q3
FY20 FY20 FY21 FY21 FY21
driving acceleration in service revenue trends
• SA government social grants starting to expire
- Good commercial momentum, mobile contract
net adds +315k • New roaming agreement with Cell C
• 13 million ‘ConnectU’ users
• M-Pesa zero rating lifted with structurally higher volumes
1. Based on H1 FY21 EBITDA contribution
Q3 FY21 2. Includes Safaricom
Trading Update 6
Summary ⫶ Continued resilient trading performance
Back to service revenue growth
Good commercial momentum
On-track for FY21 guidance1
Q3 results on 15 Feb’20, IPO remains firmly on-track
1. FY21 guidance: Adjusted EBITDA €14.4-14.6 billion and free cash flow of at least €5 billion (pre-spectrum and restructuring)
Q3 FY21
Trading Update 7
I Definitions p9
II Supporting information p10
III Importance notice p11
Appendices
Q3 FY21
Q1
Trading Update 8Appendix I ⫶ Definitions
Term Definition Term Definition
Adds Customer additions within a defined period MNP Mobile number portability
MoU A Memorandum of Understanding is an agreement expressing
ARPU Average revenue per user, defined as customer revenue the intent for two or more parties to work together.
and incoming revenue divided by average customers
NGN Fibre or cable networks typically providing high-speed
Churn Total gross customer disconnections in the period divided broadband over 30Mbps
by the average total customers in the period
Roaming Roaming: allows customers to make calls, send and receive
& Visitor texts and data on our and other operators’ mobile networks,
Converged A customer who receives both fixed and mobile services (R&V) usually while travelling abroad. Visitors: revenue received from
(also known as unified communications) on a single other operators or markets when their customers roam on one
bill or who receives a discount across both bills of our markets’ networks.
EBITDA Earnings before interest, tax, depreciation & amortisation
ROCE Return on capital employed
FCF Free cash flow Service Service Revenue comprises all revenue related to the provision
revenue of ongoing services including, but not limited to, monthly
(SR) access charges, airtime usage, roaming, incoming and
outgoing network usage by non-Vodafone customers and
Gbps / Mbps Gigabits (billions) / megabits (millions) of bits per second
interconnect charges for incoming calls
Q3 FY21
Trading Update 9Appendix II ⫶ Supporting information
1. Quarterly revenue The information opposite is available in spreadsheet format
2. Adjusted income statement
via investors.Vodafone.com
3. Regional results
4. Regional analysis
5. Cash flow
6. Mobile customers
7. Fixed-line broadband customers
8. Marketable homes passed
9. TV & fixed-line voice customers
10. Converged customers
11. Mobile customer churn
12. Mobile data usage
13. Mobile ARPU
14. Average foreign exchange rates
Q3 FY21
Trading Update 10Appendix III ⫶ Important notice
This presentation, along with any oral statements made in connection therewith, contains “forward- spectrum position to support ongoing growth in customer demand for mobile data services; the Group’s
looking statements” including within the meaning of the US Private Securities Litigation Reform Act of 1995 ability to secure the timely delivery of high-quality products from suppliers; loss of suppliers, disruption of
with respect to the Vodafone Group’s financial condition, results of operations and businesses and certain supply chains and greater than anticipated prices of new mobile handsets; changes in the costs to the
of the Vodafone Group’s plans and objectives. Group of, or the rates the Group my charge for, terminations and roaming minutes; the impact of a failure
or significant interruption to the Group’s telecommunications, networks, IT systems or data protection
In particular, such forward-looking statements include, but are not limited to, statements with respect to: systems; the Group’s ability to realise expected benefits from acquisitions, partnerships, joint ventures,
expectations regarding the Group’s financial condition or results of operations and the guidance for franchises, brand licences, platform sharing or other arrangements with third parties; acquisitions and
organic adjusted EBITDA and free cash flow (pre-spectrum and restructuring) for the financial year ending divestments of Group businesses and assets and the pursuit of new, unexpected strategic opportunities;
31 March 2021; the IPO and listing of Vantage Towers; prospects for the 2021 financial year, including the the Group’s ability to integrate acquired business or assets; the extent of any future write-downs or
response to the COVID-19 crisis and Vodafone’s support for national governments’ digital agendas; impairment charges on the Group’s assets, or restructuring charges incurred as a result of an acquisition or
expectations for the Group’s future performance generally; expectations regarding the operating disposition; a developments in the Group’s financial condition, earnings and distributable funds and other
environment and market conditions and trends, including customer usage, competitive position and factors that the Board takes into account in determining the level of dividends; the Group’s ability to
macroeconomic pressures, price trends and opportunities in specific geographic markets; intentions and satisfy working capital requirements; changes in foreign exchange rates; changes in the regulatory
expectations regarding the development, launch and expansion of products, services and technologies, framework in which the Group operates; the impact of legal or other proceedings against the Group or
either introduced by Vodafone or by Vodafone in conjunction with third parties or by third parties other companies in the communications industry and changes in statutory tax rates and profit mix.
independently including 5G networks, sharing infrastructure and its benefits and sharing mobile networks
in Europe; expectations regarding the integration or performance of current and future investments, Furthermore, a review of the reasons why actual results and developments may differ materially from the
associates, joint ventures, non-controlled interests and newly acquired businesses, including in respect of expectations disclosed or implied within forward-looking statements can be found under “Forward-looking
Vodafone Business’ partnership with Accenture. statements” and “Principal risk factors and uncertainties” in the Group’s annual report for the financial
year ended 31 March 2020. The annual report can be found on the Group’s website
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future (https://investors.vodafone.com/reports-information/latest-annual-results). All subsequent written or oral
or such words as “will”, “anticipates”, “could”, “may”, “should”, “expects”, “believes”, “intends”, “plans” or forward-looking statements attributable to the Company or any member of the Group or any persons
“targets” (including in their negative form or other variations). By their nature, forward-looking statements acting on their behalf are expressly qualified in their entirety by the factors referred to above. No
are inherently predictive, speculative and involve risk and uncertainty because they relate to events and assurances can be given that the forward-looking statements in this document will be realised. Any
depend on circumstances that may or may not occur in the future. There are a number of factors that forward-looking statements are made of the date of this presentation. Subject to compliance with
could cause actual results and developments to differ materially from those expressed or implied by these applicable law and regulations, Vodafone does not intend to update these forward-looking statements and
forward-looking statements. These factors include, but are not limited to, the following: external cyber- does not undertake any obligation to do so.
attacks, insider threats or supplier breaches; general economic and political conditions including as a
consequence of the COVID-19 pandemic, of the jurisdictions in which the Group operates, including as a Any securities issued in connection with an IPO of Vantage Towers will not be registered under the US
result of Brexit, and changes to the associated legal, regulatory and tax environments; increased Securities Act of 1933 (the “Securities Act”), and may not be offered or sold in the United States absent
competition; increased disintermediation; levels of investment in network capacity and the Group’s ability registration under the Securities Act or pursuant to an exemption from registration.
to deploy new technologies, products and services; rapid changes to existing products and services and the
inability of new products and services to perform in accordance with expectations; the ability of the Group References to Vodafone are to Vodafone Group Plc and references to Vodafone Group are to Vodafone
to integrate new technologies, products and services with existing networks, technologies, products Group Plc and its subsidiaries unless otherwise stated. Vodafone, the Vodafone Speech Mark Devices,
and services; the Group’s ability to generate and grow revenue; a lower than expected impact of new or Vodacom and The future is exciting. Ready? are trade marks owned by Vodafone. The Vantage Towers
existing products, services or technologies on the Group’s future revenue, cost structure and capital Logo and the VT Monogram Logo are trade marks owned by Vantage Towers GmbH. Other product and
expenditure outlays; slower than expected customer growth, reduced customer retention, reductions or company names mentioned herein may be the trade marks of their respective owners.
changes in customer spending and increased pricing pressure; the Group’s ability to extend and expand its
Q3 FY21
Trading Update 11Group
Investor
investors.vodafone.com Upcoming events
Relations
ir@vodafone.co.uk
1 Kingdom Street, London, W2 6BY
18 Vodafone Business virtual
March investor briefing
Matthew Johnson
Director matthew.johnson@vodafone.com
Group IR
Daniel Morris
Deputy Director
Group IR
daniel.morris@vodafone.com 18 Full year FY21 results
May
Roy Teal
Deputy Executive roy.teal@vodafone.com
Group IR
Victoria Garnham 17 Technology virtual
Access Manager victoria.garnham@vodafone.com
Group IR June investor briefingYou can also read
