Vodafone Group Plc Results For the quarter ended 30 June 2017 21 July 2017 Disclaimer By reading these slides you agree to be bound by the following conditions. The presentation also contains non-GAAP financial information which the Vodafone Group’s management believes is valuable in understanding the Information in the following presentation relating to the price at which performance of the Vodafone Group or the Vodafone Group’s businesses. relevant investments have been bought or sold in the past or the yield on However, non-GAAP information is not uniformly defined by all companies such investments cannot be relied upon as a guide to the future and therefore it may not be comparable with similarly titled measures performance of such investments. This presentation does not constitute disclosed by other companies, including those in the Vodafone Group’s an offering of securities or otherwise constitute an invitation or industry. Although these measures are important in the assessment and inducement to any person to underwrite, subscribe for or otherwise management of the business, they should not be viewed in isolation or as acquire or dispose of securities in any company within the Vodafone replacements for, but rather as complementary to, the comparable GAAP Group. measures No person is under any obligation to update, complete, revise or keep Vodafone, the Vodafone Speech Mark, the Vodafone Portrait, Vodacom, current the information contained in this presentation. RED, Vodafone One Net, Vodafone One and M-Pesa are trademarks of the The presentation contains forward-looking statements, including within Vodafone Group. The Vodafone Rhombus is a registered design of the the meaning of the US Private Securities Litigation Reform Act of 1995, Vodafone Group. Other product and company names mentioned herein which are subject to risks and uncertainties because they relate to future may be the trademarks of their respective owners. events. These forward-looking statements include, without limitation, statements in relation to the Vodafone Group’s financial outlook and future performance. 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. 2 Q1 17/18 highlights Maintaining Fastest growing Leveraging scale Leading Strong data Clear NPS growth fixed broadband and reach in network growth leadership momentum provider Enterprise 2.2% 92% 63% 300k 1.5% 19/21 Group service 4G coverage1 growth in fixed broadband Enterprise markets as revenue growth mobile data net adds revenue growth consumer NPS to traffic co/leader €10.3bn 60% NGN coverage1 All growth rates in this document are organic unless otherwise stated, and are shown on a year on year basis, with Vodafone India and Vodafone Netherlands excluded from organic growth calculations 1. Europe 3 Trading update Nick Read Group Chief Financial officer All three growth engines contributing Q1 17 /18 organic service revenue growth contribution YoY (pp) Mobile Data Convergence Enterprise 0.7 (0.7) (0.3) 0.8 1.2 2.2 0.5 Europe consumer AMAP consumer Consumer Enterprise¹ EU regulation Carrier, wholesale Q1 17/18 mobile¹ mobile fixed line and other² 1. Excludes the impact of EU regulation. This is defined as out-of-bundle roaming declines and mobile termination rate changes 2. Other includes mobile and fixed wholesale, common functions and eliminations 5 Good commercial performance Group service revenue growth YoY (%) Customer net adds2 (000s) Group Europe ex. regulation1 Mobile contract Europe AMAP Fixed broadband 789 801 8.4 735 8.1 7.9 7.4 6.8 576 566 2.2 2.0 2.1 417 415 1.7 331 1.5 307 300 1.9 1.8 1.5 1.3 1.0 1.3 0.3 0.7 0.8 0.1 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q1 17/18 drivers: • Easier service revenue comparison vs. Q4 and underlying momentum improving • Sustained customer growth in large markets, slower growth in Ghana, Hungary, Turkey • Peak roaming impact in Q2, tougher comparison in Italy 1. Excludes the impact of EU regulation. This is defined as out-of-bundle roaming declines and mobile termination rate changes 2. Excludes Vodafone Netherlands and VodafoneZiggo in all periods 6 Key markets: Europe Germany UK Italy Spain Mobile Mobile Mobile Mobile Broadband Broadband Broadband Broadband contract contract total contract Customer 108 33 58 55 net additions 84 100 1 29 53 28 46 (000s) 26 (187) 15 8 (318) 1 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Reported Ex. regulation2 Reported Ex. Handset Financing Reported Reported Ex. Handset Financing 3.7 3.8 Service 3.0 3.2 4.1 3.0 (2.1) 2.8 2.5 2.6 (2.7) 2.2 3.5 revenue 3.1 2.0 (3.2) (2.2) growth (%) 1.8 (4.8) 1.2 1.6 0.6 0.0 0.8 1.3 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 1. Excludes the phasing out of the Talkmobile brand. Reported mobile contract net adds in Q1 17/18 -2k 2. Excludes the impact of EU regulation. This is defined as out-of-bundle roaming declines and mobile termination rate changes 7 Key markets: AMAP Vodacom South Africa Turkey Egypt International Mobile Mobile Mobile Mobile Mobile Mobile Mobile Broadband contract prepaid contract prepaid contract contract prepaid Customer 13 268 790 51 2,486 345 61 net additions 11 286 97 519 (000s) 31 891 19 2 (416) Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 Q1 16/17 Q1 17/18 24.6 22.8 19.6 Service 15.7 15.0 13.9 13.9 15.1 revenue 7.9 growth (%) 5.6 5.6 5.6 5.6 2.6 1.9 0.5 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 8 India: signs of stabilisation Service revenue (INR bn) YoY growth % • Continued significant decline in voice and data unitary 6.4 5.4 (1.9) (11.5) (13.9) pricing, down 32% and 67% respectively 114 112 • Retaining high-end users with larger data bundles; gaining 105 98 98 low-end share • Smaller players losing RMS1 in Q4 (-3.4pp YoY to 26.2%) • Investment focus on leadership circles; gaining RMS in Q4 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 (+1.1pp YoY) Users and ARPU growth Capital additions mix in FY 16/17 (%) Prepaid customers (m) Data users (m) Prepaid ARPU growth (% QoQ) Other circles Leadership circles (1.9) (4.8) (9.3) (10.7) +0.3 18 • 20% capital intensity in FY 16/17, “high teens” outlook for FY 17/18 184.6 185.2 189.0 193.4 196.3 82 69.7 69.6 65.0 66.9 69.2 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 1. Revenue market share 9 Strategic progress Vittorio Colao Group Chief Executive Monetising our leading customer experience Market leading NPS More-for-more actions Mobile ARPU stabilising Consumer NPS (points)1 Typical changes, April 2017 Consumer contract ARPU (% change Q1 17/18 local currency) • +€2 Gap to next best Germany Italy2 UK Spain • Extra 1 - 5GB Gap to third • Data rollover 17 15 8.7 8.7 14 • +£1 - 5 11 • Extra 1-3GB • Flexible upgrades 4 4 • Mobile +€2 2 • Convergent +€3 0.7 1.1 1.1 • Extra 6 - 10GB (2) (0.9) (1.1) • Personalised offers (1.7) FY 14/15 FY 15/16 FY 16/17 Q1 17/18 Reported Underlying³ • Best/co-best data network in • Further opportunities from leveraging • Reported ARPU is suppressed by MTR 14/21 markets data analytics capability cuts, SIM-only/handset financing and roaming regulation 1. Gap to next best based on 21 markets, gap to third based on 20 markets 2. Consumer prepaid 3. Adjusted for out-of-bundle roaming declines, mobile termination rate changes and handset financing where applicable 11 Growth engines: mobile data Group data usage is growing rapidly Market context 4G customers (m)1 Average data usage (GB)2 83.5 74.7 66.6 59.3 52.8 Video demand 4G /4G+ Compression Desire for 1.6 surging quality techniques worry-free 1.3 exceeding improving usage… 1.2 Wi-Fi 1.1 1.0 Q1 16/17 Q2 16/17 Q3 16/17 Q4 16/17 Q1 17/18 ~60% ~75% >50% >60% of data usage of mobile reduction in of customers Data traffic growth +76% incl. India is via video/ usage is still traffic load at want worry- and Netherlands 3 4 68% 66% 63% 62% 63% social apps via Wi-Fi 480p free plans 1.