30th Mar 2007 07:04
Vodafone Group Plc30 March 2007 30 March 2007 VODAFONE ANALYST AND INVESTOR DAY Vodafone Group Plc ("Vodafone") is today hosting an analyst and investor day inLondon, which will focus on its Europe region and, in particular, its operationsin Germany and the UK. The day will be introduced by Arun Sarin, Vodafone's Chief Executive, withVittorio Colao, CEO Europe and Deputy Chief Executive, then providing anoverview of the Europe region. There will be presentations led by country CEOsNick Read and Fritz Joussen focusing on Vodafone's operations in the UK andGermany, respectively. The presentations will focus on two of the five strategic objectives set out inMay 2006 - revenue stimulation and cost reduction in Europe and innovating anddelivering on our customers' total communications needs. Vodafone is addressing the continuing challenge of declining prices from intensecompetition and regulatory pressure on incoming call rates and roaming inEurope. In the quarter ended December 2006, programmes to stimulate usage haveresulted in outgoing voice usage 22% higher year on year on an organic basis. Inaddition, there has been continued strong growth in data revenue primarily frombusiness services and the increasing penetration of 3G devices, with underlyingorganic growth of over 40% year on year. Overall these drivers have compensatedfor the regulatory and pricing pressures in Europe resulting in organic servicerevenue growth of 2.1% year on year for the quarter ended December 2006. In theyear ahead, the competitive and regulatory trends are expected to continue inthe Europe region. Vodafone is also focused on reducing its costs and continues to expect that, forthe Europe Region (excluding Arcor) and common functions, capitalised fixedasset additions will be 10% of revenue in the year ending 31 March 2008.Operating expenses are also expected to be broadly stable for that year comparedto the year ended 31 March 2006 on an organic basis, excluding the potentialimpact of developing and delivering new services and of any businessrestructuring. UK The presentations from Vodafone UK will highlight the progress being made withits strategy. In the second half of the last calendar year Vodafone UK refreshedits tariffs for both prepaid and contract customers, with the result that thequarter ended December 2006 showed an improvement in service revenue growth yearon year compared with the quarter ended September 2006, on an underlying basis. Vodafone UK management will highlight further improvement in the underlyingservice revenue trend, with year on year growth in the two month period toFebruary 2007 of 4.8%, up from 3.3% for the quarter ended December 2006. Thisincrease has been delivered by strong customer and usage growth, with outgoingtotal minutes of use increasing 28% year on year for the two month period endedFebruary 2007. As previously indicated, the impact of tariff changes and commercial policiesbeing consistently applied throughout the year is that the EBITDA margin forVodafone UK is expected to be lower in the second half of this financial yearwhen compared to the first half. For the five month period ended February 2007,the EBITDA margin for Vodafone UK was 26.6%. As well as highlighting the key elements of its strategy, Vodafone UK is alsoannouncing several new initiatives. Today Vodafone UK and Asda are announcing anew partnership whereby Asda will use the Vodafone UK network to offer its ownbranded service. Vodafone UK is also announcing a strategic partnership with DSG InternationalPLC to provide mobility solutions to small business customers, with a particularfocus on the SOHO customer segment. The strong growth in data cards and themobilising of the internet have resulted in Vodafone UK seeking new channels todistribute its business products and services. The partnership will initiallysee 30 Vodafone Connectivity Centres integrated into PC World stores, furtherstrengthening Vodafone UK's distribution channel to businesses. Vodafone UK will also be presenting highlights of its enterprise business whichhas increased its market share of customers in the UK enterprise segment by fourpercentage points in the last twelve months to reach 46 percent, the highestwithin Vodafone's European footprint. Germany Vodafone Germany will be focusing on how it is executing its strategy andmaintaining leadership in the challenging German market. With the effectiveprice per minute reducing by around 25% per annum and the impact of regulatedreductions in termination rates, Vodafone Germany is developing products andservices to stimulate revenue growth. As well as recently introducing a numberof new, larger minute bundles and flat rate offers, Vodafone Germany hascontinued to develop its Vodafone Zuhause product family, which now has over 2.1million customers. Only one fifth of total voice minutes are currently carriedby mobile networks in Germany, providing a significant opportunity for futurerevenue growth for Vodafone from fixed to mobile substitution. Data revenue growth remained strong at 58% year on year in the quarter endedDecember 2006, driven by strong sales of Vodafone Mobile Connect data cards andhand held business devices, as well as a growing number of customers using theVodafone live! portal. Presentations today will also highlight how Vodafone Germany is enhancing itsconsumer data proposition through mobilising the internet with the developmentof partnerships recently signed by the Group with Google, MySpace, YouTube andeBay. In addition to the Vodafone Germany management team, Harald Stoeber, ChiefExecutive Officer of Arcor, is also presenting. Arcor is the leading alternativetelecoms provider in Germany and at the forefront of the development of thefixed broadband market with over two million DSL customers. Vodafone Germany andArcor are working closely together to create synergies for the Group. VodafoneGermany is making further use of Arcor's backbone network, as well as Arcor'smore extensive voice interconnection network for calls to the principal fixedline network in Germany. Both Vodafone Germany and Arcor are cross-selling fixedand mobile products to their respective customer bases. Presentations today willoutline €50 million of cash savings already identified as a result of thisincreased co-operation. Today's event will be broadcast live via a webcast available on the Vodafonewebsite http://www.vodafone.com/investor beginning at 9.00am (UK time). For further information: Vodafone Group Investor Relations Media RelationsTelephone: +44 (0)1635 664447 Telephone: +44 (0) 1635 664444 Notes to Editors Underlying service revenue and underlying data revenue growth percentagesexclude the impact from adjustments to revenue from certain arrangements thatare now presented net of associated direct costs and, where relevant, theestimated impact of termination rate cuts. (c) Vodafone Group 2007. Vodafone, Vodafone live!, Vodafone Mobile Connect andVodafone Zuhause are trade marks of the Vodafone Group. Other product andcompany names mentioned in these presentations may be the trademarks of theirrespective owners. Cautionary statement regarding forward - looking statements This document contains certain "forward-looking statements" within the meaningof the Private Securities Litigation Reform Act of 1995, in particular withrespect to our expectations and plans, strategy, management's objectives, futureperformance, costs, revenues, earnings, and other trend information, includingstatements relating to expected levels of operating expenditure, the expectedbenefits of new products and services, expected growth of market share, expectedbenefits of the Arcor integration and the expected benefits of new initiativesand strategic partnerships, including the ASDA, PC World, Google, MySpace,YouTube and eBay partnerships. Forward-looking statements are sometimes, but notalways, identified by their use of a date in the future or such words as"anticipates", "aims", "due", "could", "may", "should", "will", "expects","believes", "intends", "plans", "targets", "goal" or "estimates". By theirnature, forward-looking statements are inherently predictive, speculative andinvolve risk and uncertainty because they relate to events and depend oncircumstances that will occur in the future. There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by these forward-lookingstatements. These factors include, but are not limited to: changes in economicor political conditions in markets served by operations of the Group that wouldadversely affect the level of demand for mobile services; a lower than expectedimpact of new or existing products, services or technologies on the Group'sfuture revenue, cost structure and capital expenditure outlays; the ability ofthe Group to harmonise mobile platforms and delays, impediments or otherproblems associated with the roll out and scope of new or existing products,services or technologies in new markets; the ability of the Group to integrateacquired businesses; changes in the regulatory framework in which the Groupoperates, including possible action by regulators in markets in which the Groupoperates or by the EU regulating rates the Group is permitted to charge; theimpact of legal or other proceedings against the Group or other companies in themobile telecommunications industry; loss of suppliers or disruption of supplychains; and the Group's ability to satisfy working capital requirements throughborrowing in capital markets, bank facilities and operations. Furthermore, a review of the reasons why actual results and developments maydiffer materially from the expectations disclosed or implied withinforward-looking statements can be found under the heading "Forward-LookingStatements" in our interim results announcement for the six months to 30September 2006 and under the heading "Risk Factors, Trends and Outlook £ RiskFactors" in the Group's Annual Report for the financial year ended 31 March2006, both of which are available on our website. All subsequent written or oralforward-looking statements attributable to Vodafone or any member of the Groupor persons acting on their behalf are expressly qualified in their entirety bythe factors referred to above. No assurances can be given that theforward-looking statements in this document will be realised. Neither Vodafonenor any of its affiliates intends to update these forward-looking statements. 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