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Vodacom Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/005461/06)
ISIN: ZAE000132577 Share code: VOD
ISIN: US92858D2009 ADR code: VDMCY
("Vodacom" or "Vodacom Group" or "the Group")
Trading update for the quarter ended 31 December 2024 (the quarter) (short form announcement)
3 February 2025
Highlights
- Group revenue grew 1.6% to R39.5 billion, impacted by a stronger rand.
Group service revenue growth accelerated to 11.6%* on a normalised basis, above our medium-term target.
- South Africa service revenue growth improved to 3.2%, supported by prepaid.
- Egypt grew service revenue 44.3%* in local currency, with Egypt financial services revenue up.
- International service revenue increased 1.4% (7.0% normalised*), impacted by rand strength and pressure in Mozambique.
- Group financial services revenue increased 5.7% (17.2% normalised*) to R3.6 billion.
- Transacted US$437.7 billion through our mobile money platforms, including Safaricom, over the last twelve months.
Quarter ended 31 December YoY % change
Rm 2024 2023 Reported Normalised*
Group revenue 39 531 38 921 1.6 12.6
South Africa 23 865 22 798 4.7 4.7
Egypt 7 767 8 399 (7.5) 54.9
International 8 179 8 027 1.9 7.5
Group service revenue 30 693 31 117 (1.4) 11.6
South Africa 16 192 15 689 3.2 3.2
Egypt 6 837 7 941 (13.9) 44.3
International 7 829 7 719 1.4 7.0
Notes:
The quarterly information has not been audited or reviewed by Vodacom's external auditors. All growth rates quoted are year on year and refer to the quarter ended 31 December
2024 compared to the quarter ended 31 December 2023.
Certain financial information presented in this trading update constitutes pro forma financial information in terms of the JSE Listings Requirements. The applicable criteria on the
basis of which this pro forma financial information has been prepared is set out in the supplementary information in the full trading update. The pro forma financial information is
presented as:
* Normalised growth, which presents performance on a comparable basis. This adjusts for trading foreign exchange, foreign currency fluctuation on a constant currency basis (using
the current year as base) and excludes the impact of merger, acquisition and disposal activities, at a constant currency basis where applicable, to show a like-for-like comparison of
results.
The pro forma financial information has not been audited or reviewed or otherwise reported on by external auditors.
Shameel Joosub, Vodacom Group CEO commented
Key trends from Vodacom Group's third quarter results support the confidence we communicated in November last year that
the organisation is poised for a stronger second half performance. While currency headwinds continue to impact various
markets where we operate, the focused execution of our strategy has resulted in a resilient operational response to the extent
that we remain well on track to deliver on our medium-term financial targets. Additionally, the recent currency market
stability, particularly in Egypt, bodes well for the Group's performance in the year ahead.
In particular, the quarter was positively impacted by accelerated growth in South Africa's prepaid market in addition to another
stellar performance in Egypt and Tanzania while network operators in Mozambique, including Vodacom, have been hampered
by post-election tensions since October 2024. On a normalised basis, which removes the impact of currency fluctuations,
Group service revenue accelerated to 11.6%, which is comfortably ahead of our stated medium-term target.
In line with our purpose of connecting people for a better future, the Group has celebrated a number of key milestones of late
including partnering with Orange in DRC to accelerate rural coverage, launching M-Wekeza in Tanzania to make investments
more accessible and introducing a cloud-based handset to reduce the cost of smartphone access in South Africa. As part of
our digital and financial inclusion drive across our footprint, including Safaricom, we serve over 210 million customers with our
sights firmly set on connecting the next 100 million Africans to the digital economy. Ethiopia, the continent's second most
populous country, is expected to play a significant role in this ambition and is already making impressive progress with our
customer base increasing 63.6% to 7.1 million.
Additionally, we are well on track to reach our medium-term target of a 25-30% contribution to Group service revenue from
what we now call our beyond mobile services. Previously billed as "new services", beyond mobile encompasses digital and
financial services, fixed and IoT and now makes up 21.4% of the Group total having delivered R6.6 billion in service revenue in
the quarter.
Our financial services business, a clear strategic priority for the Group and the largest contributor to beyond mobile, has seen
the value of mobile money transactions facilitated by our platforms increase 19.1% in US dollars. We now process an
impressive US$1.2billion a day. This highlights the scale of this business and solidifies our position as Africa's largest mobile
money platform by transaction value processed. Excluding Safaricom, the Group generated R3.6 billion in service revenue in
the quarter, up 5.7% or 17.2% on a normalised basis.
Across our geographic segments, Egypt remains a star performer having grown service revenue at 44.3% in local currency, well
above the rate of inflation. South Africa delivered an improved 3.2% increase in service revenue, while Tanzania and DRC were
significant contributors to the normalised 7.0% growth in our International business.
The improved Vodacom South Africa performance was underpinned by a variety of factors including successful seasonal
campaigns, improved consumer environment in the prepaid segment and a 40.6% increase in data traffic. Service revenue
from beyond mobile was another highlight, increasing by 11.3% and contributing R2.8 billion to South Africa's total of R16.2
billion. Having invested R3.2 billion in the quarter, we expect to invest between R11.0 and R11.2 billion of capital expenditure
in the current financial year to further enhance customer experience.
Egypt's strong performance was largely led by clear NPS leadership. Commercial momentum was strong in Egypt, with a 40.7%
increase in financial services customers to 10.5 million and a 25.6% improvement in data traffic. With service revenue of R6.8
billion, Egypt now accounts for 22.3% of the Group's total, closing the quarter with 50.7 million customers, up 6.2%.
Across our International business, DRC delivered high single-digit US dollar growth and Tanzania continued to deliver excellent
local currency results, while normalised M-Pesa and data revenue growth was strong at 10.2% and 15.4% respectively. Our
International business customer base reached 58.4 million, up 8.6%, supported by strong commercial execution and a further
R1.4 billion network investment in the quarter. Data traffic grew by 31.1% while smartphone users were up 1.5 million in the
quarter to reach 19.0 million, as we look to accelerate smartphone penetration with innovative financing options, including a
new daily repayment model. While we remain hopeful that the conflict in DRC will reach a resolution, our immediate focus is
to safeguard our people, extend relief through our foundation's initiatives, and ensure that our customers stay connected.
From a mergers and acquisitions perspective, we have appealed the decision handed down by the Competition Tribunal in
October regarding the proposed acquisition of a joint control stake in South African fibre operator Maziv. We remain firmly of
the view that this transaction will accelerate fibre reach in South Africa, fostering economic development and helping bridge
South Africa's digital divide.
Looking ahead, the continued execution of our strategy has the potential to create immense economic value in the markets
where we operate, which in turn will help address inequality. In particular, we will continue to drive access to smartphones,
financial services, healthcare and education to every person across our markets.
This short-form announcement is the responsibility of the directors and is only a summary of the information in the full trading update and does not contain full or complete
details. Any investment decision should be based on the full trading update that has been published on the JSE's cloudlink at
https://senspdf.jse.co.za/documents/2025/jse/isse/VOD/3Q25SENS.pdf and is also available on our website www.vodacom.com.
Copies of the full trading update may be requested by contacting Investor Relations on telephone: +27 (0) 11 653 5000 or email: vodacomir@vodacom.co.za.
Sponsor
Investec Bank Limited
Date: 03-02-2025 07:05:00
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