Q3 FY24 Trading Update
Q3 FY24 trading update February 2024
Vodafone Group Plc
Q3 FY24 Trading Update ⫶ February 2024 Turnaround planning ⫶ April 2023
1
Q3 performance ⫶ Maintained good growth in service revenue
Europe & Africa service revenue growth (%)
Group service revenue growth (%)
Africa 1
Group
Group excl. Turkey
Europe
4.7%
4.7%
9.0% 9.0%
8.8%
8.0%
7.0%
3.7%
2.8%
2.5%
1.9%
1.8%
1.5% 1.3%
1.8%
0.4%
0.5%
0.5%
(0.8%)
(1.1%)
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
• Continued growth in Europe, supported by price actions • Continued good growth in Africa supported by reacceleration in Vodacom Internationals • Turkey growing ahead of inflation
• Good Group growth maintained at +4.7% (Q2: 4.7%) • Vodafone Business +5.0% (Q2: 4.3%), supported by IoT growth acceleration
Q3 FY24 Trading Update ⫶ February 2024
2
1 Vodacom Group service revenue growth, including Egypt
Vodafone Business ⫶ Further growth acceleration
Strong financial performance
Markets progress
Unique capabilities in digital
Business service revenue growth, Q3 FY24 (%)
Business service revenue growth (%)
Digital services 1 revenue growth (%)
23.7%
7.5% 7.8%
5.0%
16.9%
5.8%
4.6%
14.6% 13.6%
4.3%
12.9%
4.3%
2.9%
2.4%
(1.9%)
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
UK
DE
IT
O EU
SA
• Growing across all customer segments • Europe +3.7% in Q3 (Q2: +3.0%) • Acceleration driven by strong public sector growth and digital services adoption
• Q3 IoT growth of +19.6%, driven by UK and Other EU projects • 29.3% growth in Cloud; SaaS 2 and Security • Strategic Microsoft partnership announced, including planned Vodafone IoT investment
• Germany impacted by strong prior year digital revenue, and in-year IoT phasing • Strong UK IoT project revenue • Italy fixed connectivity and digital services growing, supported by ERF • All segments growing in Other EU
1 Digital services include IoT, Cloud & Security services, now 18% of Vodafone Business service revenue 2 Software as a Service
Q3 FY24 Trading Update ⫶ February 2024
3
Germany ⫶ Commercial improvement
Service revenue growth
Key drivers
• Slower growth, due to Business revenue phasing and unwind of non-recurring Q2 service provider revenue
• Last wave of broadband price increases concluded during January 2024
Germany 31% of Group service revenue
0.3%
• Mobile customer net additions supported by good growth in branded Consumer
• Bundled TV and Broadband proposition launched in December. MDU TV end user migrations to individual bills started in January 2024, ahead of July 2024 law change
Net additions (‘000)
Service revenue growth (%)
95
DSL
Cable
Mobile contract
69
1.1%
24
8
0.3%
(11)
(28)
(14)
(46)
(35)
(51)
(48)
(25)
(1.3%)
(49)
(1.8%)
(87)
(70)
(2.8%)
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Q3 FY24 Trading Update ⫶ February 2024
4
Europe ⫶ Growing in 8 out of 10 markets
Service revenue growth
Organic service revenue growth (%)
Key drivers
-1.0% -1.3%
-1.6%
• Strong Business growth with further public sector contract wins • Growth in FWA customers balancing fixed broadband losses • Mobile Consumer market remains competitive
-2.7%
Italy 11% of Group service revenue
-3.3%
-1.3%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
5.7% 5.5%
5.3%
5.2%
• Strong service revenue growth in both Consumer and Business • Mobile and fixed customer growth, supported by Black Friday promos • Progressing merger with Three UK with CMA notification filed
3.8%
UK 15% of Group service revenue
+5.2%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
4.1% 3.8%
• Service revenue growth in all markets, supported by broad based pricing actions & good commercial momentum • Further acceleration in Business growth to 7.8% (Q2: 5.2%), driven by digital services and public sector contract wins • Business driving service revenue trend improvement • Business service revenue returned to growth, supported by strong digital services demand, ERF 1 and public sector contract wins • Low-end Consumer segment competition remains intense
3.6%
3.6%
Other Europe 13% of Group service revenue
2.1%
+3.6%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
-1.1%
-2.7%
-3.7% -3.0%
Spain 9% of Group service revenue
-1.1%
-8.7%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Q3 FY24 Trading Update ⫶ February 2024
5
1 European Recovery Funds
Africa & Turkey ⫶ Good growth maintained
Service revenue growth
Organic service revenue growth (%)
Key drivers
4.1%
3.9%
3.0%
• Slower service revenue growth reflected strong mobile data demand in prior year during widespread power outages • Expect trend reacceleration, driven by strong Business Digital demand
1.9%
South Africa 8% of Group service revenue
1.4%
+1.9%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
27.6% 28.4% 29.1%
25.9%
• New price increases in mobile (Dec’23) and fixed (Jan’24) • Strong demand for Vodafone Cash • Inflation at 34% in December 2023
23.1%
Egypt 4% of Group service revenue
+29.1%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
6.7%
• Reacceleration in DRC, supported by network investment • Tanzania momentum maintained, with good M-Pesa and data growth • Mozambique impacted by price transformation and macro pressure
5.2%
5.2%
4.4%
Internationals 4% of Group service revenue
3.1%
+6.7%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
(Reported Euro growth, excl. hyperinflation)
• Growth ahead of inflation for four consecutive quarters • Repricing actions continuing • Reported Euro service revenue growth of 17.7%
28.7%
Turkey 4% of Group service revenue
22.2%
17.7%
14.6%
+90.4%
0.8%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Q3 FY24 Trading Update ⫶ February 2024
6
Appendices
I
More information
p8
II
ESG reporting & performance
p9
III
Importance notice
p10
Provide investor feedback here ⫶
investors.vodafone.com/feedback
Q3 FY24 Trading Update ⫶ February 2024
7
Appendix I More information
Vodafone Business ⫶ Virtual investor briefing
Vodafone Technology ⫶ Virtual investor briefing
Connecting people, places & things for a better future • We operate in attractive markets • We have unique scale & capabilities • We have strong operating momentum • We are on a clear growth pathway
A globally scaled operator • Our customer demand continues to accelerate • We have a strong technology roadmap
• We allocate capital to drive returns • We are transforming to deliver growth
Materials including videos, presentation, case studies and Q&A: investors.vodafone.com/vbbriefing
Materials including videos, presentation, case studies and Q&A: investors.vodafone.com/vtbriefing
Additional data ⫶ Spreadsheet format
Social Contract ⫶ Virtual investor briefing
Shaping the Digital Society • Historical policy choices have impacted the European telecoms sector • Our ‘Social Contract’ enabling digital society • Pro-investment policy reform is essential for Europe to meet its digital objectives
investors.vodafone.com/results
1.
Quarterly revenue
8.
Marketable homes passed
2.
Group financial performance
9.
TV customers
3.
Segmental results
10.
Converged customers
4.
Segmental analysis
11.
Mobile churn
5.
Cash Flow
12.
Mobile data usage
Materials including presentation & case studies: https://investors.vodafone.com/social-contract
6.
Mobile customers
13.
Mobile ARPU
7.
Fixed broadband customers
14.
FX rates
Q3 FY24 Trading Update ⫶ February 2024
8
Appendix II ESG reporting & performance
Extensive suite of ESG disclosures
Strong ESG performance
Annual Report ⫶ vodafone.com/ar2023
ESG Addendum ⫶ investors.vodafone.com/esgaddendum • >1,200 datapoints, covering >300 indicators, in spreadsheet format • Includes GRI Standards index
ESG Ratings ⫶ investors.vodafone.com/esg-ratings
• Integrated reporting covering ESG strategy & performance • Complimented by six videos on key ESG topics
MSCI ESG Rating 1, 2 “A”
Sustainalytics ESG Risk Rating 1, 3 “Low risk” Top 6% in sector
Board conversations ⫶ investors.vodafone.com/videos • Nine videos with Chair and Committee chairs • Introductions to new Non-Executive Directors
ESG A-Z ⫶ investors.vodafone.com/esga-z
• >30 links to supporting disclosures, reports & policies • Categorised by E, S or G & searchable
ISS ESG Corporate Rating 1 “B” Top 5% in sector
Refinitiv ESG score 1 “85/100” #2 in sector CDP Climate Change 1 “A” Leadership band
TCFD ⫶ investors.vodafone.com/tcfd
SASB ⫶ investors.vodafone.com/sasb
• Seven disclosure topics • Includes additional information beyond what is required in the SASB Standards
• Aligning to TCFD framework since 2019 • Fully or partially consistent with all 11 TCFD recommendations
1. Unless otherwise stated, ESG ratings and relative position within sector as at 31 January 2024. See additional disclaimers on page 10. | 2. In 2023, Vodafone Group Plc received a rating of A (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.
3. In 2023, Vodafone Group Plc received an ESG Risk Rating of 16.4 and was assessed by Sustainalytics to be at low risk of experiencing material financial impacts from ESG factors.
Q3 FY24 Trading Update ⫶ February 2024
9
Appendix III Important notice
You have been provided access to this presentation on the basis that you are an investment professional for the purposes of Article 19 or a member of the press for the purposes of Article 47 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. No other person should act or rely on the information presented and you agree to be bound by the following conditions. You may not disseminate these slides or any recording of this conference, in whole or in part, without the prior consent of Vodafone. This presentation contains non-GAAP financial information which the Vodafone Group’s management believes is valuable in understanding the performance of the Vodafone Group. These non-GAAP measures include Organic service revenue growth, Europe & Africa service revenue growth , Organic Vodafone Business service revenue growth, Reported Euro growth excluding hyperinflation, Digital services revenue growth and Organic group service revenue growth excluding Turkey. Definitions of these non-GAAP measures can be found in the Vodafone Group Plc Q3 Results for the three months ended 31 December 2023. This report can be found at investors.vodafone.com. However, non-GAAP financial 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 Vodafone Group’s industry. Although these measures are important in the assessment and management of the Vodafone Group’s business, they should not be viewed in isolation or as replacements for, but rather as complementary to, the comparable GAAP measures.
References to Vodafone are to Vodafone Group Plc and references to Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise stated. Vodafone, the Vodafone Speech Mark Devices, Vodacom and Together We Can are trade marks owned by Vodafone. Other product and company names mentioned herein may be the trade marks of their respective owners.
Please note that Europe & Africa service revenue growth, Reported Euro growth excluding hyperinflation and Digital services revenue growth are not defined in the Q3 trading update. We suggest defining these measures there if used in the presentation.
Vodafone to please confirm these are the right trademarks
This presentation, along with any oral statements made in connection therewith, contains “forward - looking statements” including within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Vodafone Group’s financial condition, results of operations and businesses, the information regarding the announced agreement to combine Vodafone UK and Three UK, the change in German TV regulations, expected trend reacceleration in South Africa, repricing actions in Turkey, the Vodafone Group’s strategic partnership with Microsoft, including the planned Vodafone IoT investment, and certain of the Vodafone Group’s plans and objectives. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as “transform”, “plan”, “continue”, “pathway”, “progress”, “roadmap”, “expect”, or “accelerate” (including in their negative form). By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. A review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements can be found under “Forward looking-statements and other matters” and “Risk Management” in the Vodafone Group Plc Annual Report for the year ended 31 March 2023 and under “Risk Factors” and “Forward -looking statements and other matters” in the Vodafone Group Plc H1 Results for the six months ended 30 September 2023. These reports can be found at investors.vodafone.com. All subsequent written or oral forward-looking statements attributable to Vodafone, to any member of the Vodafone Group or to any persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in or made in connection with this presentation will be realised. Any forward-looking statements are made as of the date of this presentation. Except as otherwise stated and as may be required to comply with applicable law and regulations, Vodafone does not intend to update these forward-looking statements and does not undertake any obligation to do so.
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 includes certain information from third-party sources. The Vodafone Group has not independently verified the market data or other information (i) contained in third-party sources or (ii) on which such third-party sources are based, nor does the Vodafone Group make any representation or give any warranty as to the accuracy or completeness of such information. The information from third-party sources that is cited here has been reproduced accurately. The use by the Vodafone Group of any MSCI ESG Research LLC or its affiliates ("MSCI") data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of the Vodafone Group by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided 'as-is' and without warranty. MSCI names and logos are trademarks or service marks of MSCI. Copyright ©2022 Sustainalytics. All rights reserved. This presentation contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.
Q3 FY24 Trading Update ⫶ February 2024
10
Upcoming events
investors.vodafone.com
Vodafone Group Investor Relations
ir@vodafone.co.uk
1 Kingdom Street, London, W2 6BY
14 May 2024
FY24 Results
Matt Johnson Director Group IR
matthew.johnson@vodafone.com
25 July 2024
FY25 Q1 Results
Daniel Morris Deputy Director Group IR
daniel.morris@vodafone.com
Roy Teal Deputy Director Group IR
roy.teal@vodafone.com
30 July 2024
Annual General Meeting
Victoria Garnham Corporate Access Group IR
victoria.garnham@vodafone.com
Q3 FY24 Trading Update ⫶ February 2024
11
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11Powered by FlippingBook