| Wed 8 Feb 2012, 13:00 | | VOD - Vodacom Group Limited - Vodacom Group Limited trading statement for the |
|
VOD
VOD
VOD - Vodacom Group Limited - Vodacom Group Limited trading statement for the
quarter ended 31 December 2011
Vodacom Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1993/005461/06
(ISIN: ZAE000132577 Share Code: VOD)
(ISIN: ZAG000091067 JSE Code: VOD002)
(`Vodacom`)
News release
8 February 2012
Vodacom Group Limited trading statement for the quarter ended 31 December
2011
Highlights
Strong customer growth underpins robust Group performance
Group revenue up 12.2% (9.9%*)
Group service revenue up 11.2% (8.7%*)
Record net customer additions of 5.0 million in the quarter
Group customers up 27.3% to 52.9 million
Demand for data services remains high
Group data revenue growth of 23.8%
41.2% increase in Group active data customers to 13.8 million
Strong commercial success in South Africa
Revenue up 7.6%
Service revenue up 5.6% (7.9% excluding the impact of MTRs)
Customers up 25.4% to 31.7 million, adding 2.8 million in the quarter
Excellent momentum continues in International operations
Service revenue up 45.2% (24.8%*)
Customers up 30.2% to 21.2 million, adding 2.2 million in the quarter
2.7 million active M-Pesa customers in Tanzania
Pieter Uys, Vodacom Group CEO commented:
"This was a good quarter for Vodacom, with a record increase in our customers
of five million pushing us past the 50 million customers milestone. Overall
Group revenue increased 12% to R18 billion.
The South African business defied the somewhat gloomy economic conditions and
achieved a 25% increase in customers, ending the quarter at 32 million
customers. More than nine billion voice minutes were carried over the three
month period. The success of our summer campaigns, targeted promotions and
very attractive handset deals boosted customer additions, particularly in the
rural areas. The strong growth in customers and data usage helped offset the
year to date reduction of 16% in both voice and data prices.
Our International operations maintained the positive momentum and accounted
for more than 40% of the increase in our total customers.
Network investment continued to be a major focus with on-going upgrades to
our transmission and radio access networks supporting the 41% increase in
Group data customers. Vodacom now delivers data connectivity to nearly 14
million people."
* Represents normalised growth at a constant currency.
All growth rates refer to the quarter compared to prior year unless stated
otherwise.
Operating review
Group
Group service revenue for the quarter ended 31 December 2011 increased 11.2%
(8.7%*) year on year and 7.8% (7.5%*) for the nine months. Growth was driven
by a 27.3% increase in customers to 52.9 million and stronger voice revenue
growth. Data revenue increased 23.8% to R2 082 million as active data
customers grew 41.2% to 13.8 million. Equipment revenue was particularly
strong, growing 19.4%, contributing to overall revenue growth of 12.2%
(9.9%*).
South Africa
South Africa delivered a solid performance with service revenue growing 5.6%
to R12 755 million (7.9% excluding the impact of cuts in mobile termination
rates). Service revenue growth was boosted by strong net customer additions,
higher voice revenue growth and good performance in data and enterprise
services.
The quarter was characterised by attractive handset deals and summer
promotions with 5.1 million gross connections, up 49.9% year on year.
Customers increased 25.4% year on year to 31.7 million, a record net increase
of 2.8 million in the quarter. Ten customers won R1 million each as part of
our Millionaire Mofaya summer campaign, which saw in excess of 58
million entries. Total ARPU was down 14.6% to R140; largely due to lower
interconnect rates and the higher prevalence of lower usage customers in the
mix. We expect a seasonal increase in churn in the coming quarters from
the current low level.
Following our data price cuts in the previous quarter, data revenue growth
slowed to 19.3% year on year to R1 929 million. The active data customers
increased 31.5% to 11.4 million; a third of these customers are now buying
data bundles compared to a quarter a year ago. Demand for smartphones
remains high, with 655 000 devices activated during the quarter. We now
have 4.8 million active smartphones on the network, which as of 31 December
2011 accounted for 18.0% of all active devices.
We continue to make substantial investments in the network, to enhance
quality and support the growth in data traffic. Our radio access network
renewal initiative is now complete in Gauteng and we have commenced similar
initiatives in Kwa-Zulu Natal, Limpopo, Free State and North West
provinces. This is expected to further improve network quality and
operational efficiency.
International
Service revenue increased 45.2% (24.8%*) to R2 905 million mainly driven by
strong customer growth and the positive impact from foreign exchange
translation. The International operations recorded customer growth of 30.2%
to 21.2 million, adding 2.2 million customers in the quarter.
In Tanzania, customer growth of 34.1% was supported by promotional offerings
and improved distribution. During the quarter pricing increased in the market
after a long period of unsustainably low tariffs. Our capital investment in
Mozambique, smarter pricing and a specific focus on distribution underpinned
a 16.9% increase in customers. Despite uncertain political conditions during
the quarter, the DRC delivered a good performance and also received a boost
from the regulated minimum price.
Data revenue in the International operations increased by 135.4% (115.5%*) as
the appetite for data and mobile financial services continues to grow. M-Pesa
growth accelerated in Tanzania where we now have 2.7 million active customers
representing 23.4% of the base. The M-Pesa system processed transactions in
Tanzania worth more than US$400 million during the month of December alone. M-
Pesa now accounts for 8.5% of Tanzania`s service revenue, compared to 3.1% a
year ago.
Outlook
While we are encouraged by the strong revenue growth in the quarter, we
remain focused on tackling the increased competition in all our geographies
and also remain alert to fragile global economic conditions. Therefore our
medium-term service revenue guidance of "low single digit" remains unchanged.
The quarterly information has not been audited or reviewed by Vodacom`s
external auditors.
Financial review for the quarters ended
Revenue
December September December Year on Quarterly
year
Rm 2011 2011 2010 % change % change
South Africa 15 135 13 881 14 072 7.6 9.0
International 2 983 2 394 2 056 45.1 24.6
Corporate and (121) (97) (95) (27.4) (24.7)
eliminations
Revenue 17 997 16 178 16 033 12.2 11.2
Service revenue
December September December Year on Quarterly
year
Rm 2011 2011 2010 % change % change
South Africa 12 755 11 947 12 075 5.6 6.8
International 2 905 2 326 2 001 45.2 24.9
Corporate and (93) (73) (78) (19.2) (27.4)
eliminations
Service revenue 15 567 14 200 13 998 11.2 9.6
Key indicators for the quarters ended
South Africa key indicators
December September December Year on Quarterly
year
2011 2011 2010 % change % change
Customers 31 727 28 907 25 302 25.4 9.8
(thousand)1
Prepaid 26 189 23 468 20 310 28.9 11.6
Contract 5 538 5 439 4 992 10.9 1.8
Churn (%)2 30.7 44.6 32.7
Prepaid 35.3 53.0 38.3
Contract 10.1 8.9 10.3
Traffic (millions 9 012 9 186 8 402 7.3 (1.9)
of minutes)3
Outgoing 6 741 7 050 6 307 6.9 (4.4)
Incoming 2 271 2 136 2 095 8.4 6.3
MOU per month4 99 108 114 (13.2) (8.3)
Prepaid 83 91 92 (9.8) (8.8)
Contract 171 181 202 (15.3) (5.5)
Total ARPU (rand 140 140 164 (14.6) -
per month)5
Prepaid 80 77 93 (14.0) 3.9
Contract 362 370 408 (11.3) (2.2)
Notes:
1. Customers are based on the total number of mobile customers registered
on Vodacom`s network, which have not been disconnected, including
inactive customers, at the end of the period indicated. Prepaid
customers inactive for three months were 14.2% (2010: 6.3%) at 31
December 2011.
2. Churn is calculated by dividing the annualised number of disconnections
during the period by the average monthly total reported mobile customers
during the period.
3. Traffic comprises total traffic registered on Vodacom`s mobile network,
including bundled minutes, promotional minutes and outgoing
international roaming calls, but excluding national roaming calls,
incoming international roaming calls and calls to free services.
4. Minutes of use (`MOU`) per month is calculated by dividing the average
monthly minutes (traffic) during the period by the average monthly total
reported mobile customers during the period.
5. Total ARPU is calculated by dividing average monthly service revenue by
the average monthly total reported mobile customers during the period.
Prepaid and contract ARPU only includes service revenue generated from
Vodacom customers.
International key indicators
December September December Year on Quarterly
year
2011 2011 2010 % change % change
Customers (thousand)1 21 200 18 990 16 288 30.2 11.6
Tanzania 11 621 10 273 8 665 34.1 13.1
DRC 5 119 4 783 3 847 33.1 7.0
Mozambique 3 451 2 990 2 953 16.9 15.4
Lesotho 1 009 944 823 22.6 6.9
Churn (%)2
Tanzania 37.7 35.2 41.5
DRC 66.5 64.3 80.8
Mozambique 48.2 111.7 45.3
Lesotho 24.3 24.5 24.6
MOU per month3
Tanzania 51 56 58 (12.1) (8.9)
DRC 42 47 74 (43.2) (10.6)
Mozambique 44 33 43 2.3 33.3
Lesotho 29 30 32 (9.4) (3.3)
Total ARPU (rand per
month)4
Tanzania 23 20 20 15.0 15.0
DRC 38 37 32 18.8 2.7
Mozambique 48 32 23 108.7 50.0
Lesotho 58 55 62 (6.5) 5.5
Total ARPU (local
currency per month)4
Tanzania (TZS) 4 752 4 550 4 330 9.7 4.4
DRC (USD) 4.7 5.1 4.7 - (7.8)
Mozambique (MZN) 158 122 115 37.4 29.5
Notes:
1. Customers are based on the total number of mobile customers registered
on Vodacom`s network, which have not been disconnected, including
inactive customers, as at the end of the period indicated. Prepaid
customers inactive for three months were 19.1% (2010: 19.7%) for
Tanzania, 21.6% (2010: 34.0%) for Mozambique and 21.3% (2010: 17.5%) for
Lesotho at 31 December 2011. DRC reports 90 day active customers.
2. Churn is calculated by dividing the annualised number of disconnections
during the period by the average monthly total reported mobile customers
during the period.
3. Minutes of use (`MOU`) per month is calculated by dividing the average
monthly minutes (traffic) during the period by the average monthly total
reported mobile customers during the period.
4. Total ARPU is calculated by dividing average monthly service revenue by
the average monthly total reported mobile customers during the period.
Historical key indicators for the quarters ended
Revenue
December September June
Rm 2011 2011 2011
South Africa 15 135 13 881 13 537
International 2 983 2 394 2 119
Corporate and (121) (97) (87)
eliminations
Revenue 17 997 16 178 15 569
March December September June
Rm 2011 2010 2010 2010
South Africa 13 602 14 072 13 130 12 567
International 2 138 2 056 2 080 1 922
Corporate and
eliminations (92) (95) (100) (83)
Revenue 15 648 16 033 15 110 14 406
Service revenue
December September June March
Rm 2011 2011 2011 2011
South Africa 12 755 11 947 11 558 11 863
International 2 905 2 326 2 064 2 081
Corporate and (93) (73) (70) (74)
eliminations
Service revenue 15 567 14 200 13 552 13 870
December September June
Rm 2010 2010 2010
South Africa 12 075 11 442 11 012
International 2 001 2 016 1 859
Corporate and (78) (76) (69)
eliminations
Service revenue 13 998 13 382 12 802
South Africa
December September June March
2011 2011 2011 2011
Customers 31 727 27 731
(thousand)1 28 907 26 535
Prepaid2 26 189 23 468 22 411 21 409
Contract 5 538 5 439 5 320 5 126
Churn (%)3 30.7 44.6 35.5 28.5
Prepaid2 35.3 53.0 41.9 33.0
Contract 10.1 8.9 8.5 9.7
Traffic (millions 9 012 8 141
of minutes)4 9 186 8 108
Outgoing 6 741 7 050 6 079 6 060
Incoming 2 271 2 136 2 062 2 048
MOU per month5 99 108 100 104
Prepaid2 83 91 81 82
Contract 171 181 181 195
Total ARPU (rand 140 140 142 153
per month)6
Prepaid2 80 77 79 85
Contract 362 370 369 387
December September June
2010 2010 2010
Customers 25 302 23 161
(thousand)1 23 873
Prepaid2 20 310 19 074 18 489
Contract 4 992 4 799 4 672
Churn (%)3 32.7 35.9 87.2
Prepaid2 38.3 42.5 105.0
Contract 10.3 9.6 9.5
Traffic (millions 8 402 6 371
of minutes)4 7 352
Outgoing 6 307 5 351 4 442
Incoming 2 095 2 001 1 929
MOU per month5 114 105 86
Prepaid2 92 79 59
Contract 202 207 205
Total ARPU (rand 164 163 149
per month)6
Prepaid2 93 90 79
Contract 408 411 411
International
December September June March
2011 2011 2011 2011
Customers 21 200 18 990 17 686 16 957
(thousand)1
Tanzania 11 621 10 273 9 260 8 861
DRC 5 119 4 783 4 245 4 155
Mozambique 3 451 2 990 3 277 3 082
Lesotho 1 009 944 904 859
Churn (%)3
Tanzania 37.7 35.2 43.5 51.1
DRC 66.5 64.3 75.3 45.3
Mozambique 48.2 111.7 42.5 43.0
Lesotho 24.3 24.5 20.3 21.5
MOU per month 5
Tanzania 51 56 54 53
DRC 42 47 43 38
Mozambique 44 33 34 36
Lesotho 29 30 28 32
Total ARPU (rand per
month)6
Tanzania 23 20 19 19
DRC 38 37 33 34
Mozambique 48 32 24 22
Lesotho 58 55 54 55
Total ARPU (local
currency per month)6
Tanzania (TZS) 4 752 4 550 4 276 4 098
DRC (USD) 4.7 5.1 4.8 4.9
Mozambique (MZN) 158 122 106 102
December September June
2010 2010 2010
Customers 16 288 15 504 14 561
(thousand)1
Tanzania 8 665 8 421 8 009
DRC 3 847 3 638 3 419
Mozambique 2 953 2 676 2 411
Lesotho 823 769 722
Churn (%)3
Tanzania 41.5 41.9 42.9
DRC 80.8 91.1 77.5
Mozambique 45.3 65.3 76.9
Lesotho 24.6 20.2 17.2
MOU per month 5
Tanzania 58 55 58
DRC 74 77 56
Mozambique 43 49 29
Lesotho 32 33 31
Total ARPU (rand per
month)6
Tanzania 20 21 22
DRC 32 39 39
Mozambique 23 22 22
Lesotho 62 60 62
Total ARPU (local
currency per month)6
Tanzania (TZS) 4 330 4 393 4 127
DRC (USD) 4.7 5.3 5.2
Mozambique (MZN) 115 109 98
Notes:
1. Customers are based on the total number of mobile customers registered
on Vodacom`s network, which have not been disconnected, including
inactive customers, at the end of the period indicated.
2. South Africa changed its disconnection policy for call-forward SIMs from
13 months inactivity to seven months during the quarter ended 30 June
2010.
3. Churn is calculated by dividing the annualised number of disconnections
during the period by the average monthly total reported mobile customers
during the period.
4. Traffic comprises total traffic registered on Vodacom`s mobile network,
including bundled minutes, promotional minutes and outgoing
international roaming calls, but excluding national roaming calls,
incoming international roaming calls and calls to free services.
5. Minutes of use (`MOU`) per month is calculated by dividing the average
monthly minutes (traffic) during the period by the average monthly total
reported mobile customers during the period.
6. Total ARPU is calculated by dividing average monthly service revenue by
the average monthly total reported mobile customers during the period.
Prepaid and contract ARPU only include service revenue generated from
Vodacom customers.
Revenue for the quarter ended 31 December 2011
Yoy % Inter-
Rm South Africa change national
Mobile voice 7 753 4.3 1 440
Mobile interconnect 1 611 (9.4) 213
Mobile messaging1 823 6.5 75
Mobile data1 1 929 19.3 153
Other service revenue2 639 34.8 1 024
Service revenue 12 755 5.6 2 905
Equipment revenue 2 208 19.4 39
Non-service revenue2 172 17.0 39
Revenue 15 135 7.6 2 983
Corporate/
Rm Yoy % Elimina- Yoy %
change tions Group change
Mobile voice 60.4 - 9 193 10.3
Mobile interconnect 54.3 (32) 1 792 (5.0)
Mobile messaging1 27.1 - 898 7.9
Mobile data1 135.4 - 2 082 23.8
Other service 21.8 (61) 1 602 26.5
revenue2
Service revenue 45.2 (93) 15 567 11.2
Equipment revenue 39.3 (11) 2 236 19.4
Non-service 44.4 (17) 194 19.8
revenue2
Revenue 45.1 (121) 17 997 12.2
Notes:
1. In the prior year December quarter, we reclassified year-to-date revenue
of R194 million relating to telemetry, from mobile messaging to mobile
data revenue of which R65 million related to the December quarter only.
Reclassified values for the quarter ended 31 December 2010: South
Africa: Mobile messaging R773 million; Mobile data R1 617 million;
Group: Mobile messaging R832 million; Mobile data R1 682 million.
2. In the prior year December quarter, we reclassified year-to-date revenue
of R134 million relating to tower sharing revenue and returned debit
order handling fees, from non-service revenue to other service revenue
of which R44 million related to the December quarter only. Reclassified
values for the quarter ended 31 December 2010: South Africa: Other
service revenue R474 million; Non-service revenue R147 million; Group:
Other service revenue R1 266 million; Non-service revenue R162 million.
Average quarterly exchange rates
December September December Year on year% Quarterly%
2011 2011 2010 change change
USD/ZAR 8.10 7.15 6.90 17.4 13.3
ZAR/MZN 3.32 3.86 5.12 (35.2) (14.0)
ZAR/TZS 208.36 226.02 215.19 (3.2) (7.8)
EUR/ZAR 10.92 10.09 9.37 16.5 8.2
Non-GAAP information
This trading statement contains certain non-GAAP financial information which
has not been reviewed or reported on by the Group`s auditors. The Group`s
management believes these measures provide valuable additional information in
understanding the performance of the Group or the Group`s businesses because
they provide measures used by the Group to assess performance. However, this
additional information presented is not uniformly defined by all companies,
including those in the Group`s industry. Accordingly, it may not be
comparable with similarly titled measures and disclosures by other companies.
Additionally, although these measures are important in the management of the
business, they should not be viewed in isolation or as replacements for or
alternatives to, but rather as complementary to the comparable GAAP measures.
Trademarks
Vodafone, the Vodafone logo, Vodafone Mobile Broadband, Vodafone WebBox,
Vodafone Passport, Vodafone live!, Power to You, Vodacom, Vodacom M-Pesa,
Vodacom Millionaires, Vodacom 4 Less and Vodacom Change the World are
trademarks of Vodafone Group Plc (or have applications pending). The
trademarks RIMRegistered and BlackBerryRegistered are owned by Research in
Motion Limited and are registered in the US and may be pending or registered
in other countries. JavaRegistered is a registered trademark of Oracle and/or
its affiliates. Microsoft, Windows Mobile and ActiveSync are either
registered trademarks or trademarks of Microsoft Corporation in the US and/or
other countries. Google, Google Maps and Android are trademarks of Google
Inc. Apple, iPhone and iPad are trademarks of Apple Inc., registered in the
US and other countries. Other product and company names mentioned herein may
be trademarks of their respective owners.
Forward-looking statements
This trading statement which sets out the quarterly results for Vodacom Group
Limited for the quarter ended 31 December 2011 contains `forward-looking
statements`, which have not been reviewed or reported on by the Group`s
auditors, with respect to the Group`s financial condition, results of
operations and businesses and certain of the Group`s plans and objectives. In
particular, such forward-looking statements include statements relating to:
the Group`s future performance; future capital expenditures, acquisitions,
divestitures, expenses, revenues, financial conditions, dividend policy and
future prospects; business and management strategies relating to the
expansion and growth of the Group; the effects of regulation of the Group`s
businesses by governments in the countries in which it operates; the Group`s
expectations as to the launch and roll out dates for products, services or
technologies; expectations regarding the operating environment and market
conditions; growth in customers and usage; and the rate of dividend growth by
the Group.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as `will`, `anticipates`, `aims`,
`could`, `may`, `should`, `expects`, `believes`, `intends`, `plans` or
`targets`. 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 will occur in the future, involve
known and unknown risks, uncertainties and other facts or factors which may
cause the actual results, performance or achievements of the Group, or its
industry to be materially different from any results, performance or
achievement expressed or implied by such forward-looking statements. Forward-
looking statements are not guarantees of future performance and are based on
assumptions regarding the Group`s present and future business strategies and
the environments in which it operates now and in the future.
www.vodacom.com
Sponsor: UBS South Africa (Pty) Limited
Debt sponsor: Absa Capital
Date: 08/02/2012 13:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
