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Vodacom Group Reviewed Annual Results for the year ended 31 March 2024 and Cash Dividend Declaration
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")
ASZ share code: VOD
13 May 2024
Vodacom Group Reviewed Annual Results for the year ended 31 March 2024 and Cash Dividend Declaration
Highlights
• Group revenue of R151 billion was up 26.4%, positively impacted by the acquisition of Egypt^.
• Group service revenue growth was 29.1%, and including Egypt on a pro-forma basis was 9.2%.
• Group EBITDA growth of 24.3% or 7.8% on a pro-forma basis.
• Group free cashflow generation of R18.2 billion supported lower leverage of 0.9x net debt to EBITDA.
• Serve a combined 203.1 million customers across the Group, including Safaricom on a 100% basis.
• 78.9 million financial services customers, including Safaricom on a 100% basis, transacting US$1.1 billion per day.
• Financial services revenue increased 32.2% to R13.0 billion, contributing 10.8% to Group service revenue.
• Full year dividend of 590cps, consistent with our policy.
Group statutory performance measures1
Year ended 31 March % change
Rm 2024 2023 Reported
Revenue 150 594 119 170 26.4
Service revenue 120 897 93 650 29.1
Net profit from associates and joint ventures 2 197 2 607 (15.7)
Operating profit 35 337 29 252 20.8
Net profit 19 262 18 111 6.4
Net debt to EBITDA 0.9 1.1 (0.2x)
Earnings per share (cents) 842 948 (11.2)
Headline earnings per share (cents) 846 948 (10.8)
Total dividend per share (cents) 590 670 (11.9)
Group additional performance measures
Year ended 31 March % change
Rm 2024 2023 Reported
EBITDA 56 116 45 144 24.3
EBITDA margin (%)1 37.3 37.9 (0.6ppts)
Capital expenditure2 20 422 16 490 23.8
Capital intensity (%)2 13.6 13.8 (0.2ppts)
Operating free cash flow3 30 305 25 111 20.7
Free cash flow3 18 209 18 524 (1.7)
Financial services revenue4 13 033 9 856 32.2
Notes:
1. EBITDA margin is EBITDA as a percentage of revenue.
2. Detail relating to capital expenditure is contained in the full announcement. Capital intensity is capital expenditure as a percentage of revenue.
3. A reconciliation of operating free cash flow and free cash flow is set out in the full announcement.
4. The combination of South Africa financial services revenue, Egypt financial services revenue and International M-Pesa revenue.
Certain financial information presented in this results announcement 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 announcement. The pro-forma financial information includes:
* Normalised growth 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.
Amounts marked with an * in the announcement represent normalised growth as defined above.
All growth rates quoted are year-on-year and refer to the year ended 31 March 2024 compared to the year ended 31 March 2023, unless stated otherwise.
^ Vodafone Egypt Telecommunications SAE (Vodafone Egypt) was consolidated from 8 December 2022 representing the effective date of the transaction. Results comparable with our
medium-term targets or 'pro-forma' results have been presented for the Group as if the effective date of the Vodafone Egypt acquisition was 1 April 2022, thus showing the segment's financial
information on a full year basis.
Growth rates for Safaricom are in local currency and year-on-year, unless otherwise stated. Safaricom results announcements are available at:
https://www.safaricom.co.ke/investor-relations-landing/reports/financial-report/financial-results
Shameel Joosub, Vodacom Group CEO commented:
Our acquisition of Egypt contributed significantly to the 29.1% increase in Group service revenue, supported by a resilient
performance in our largest market, South Africa. A 6.4% increase in net profit showcased the robustness of our strategy and
our execution track-record of adapting to changes in our operating environments, despite elevated global economic
pressures.
In a year when we celebrate our 30th anniversary, we also surpassed the 200 million customer mark. These are two
particularly gratifying milestones in Vodacom's history. Our customer base is evenly split across our segments, which include
South Africa, Egypt, International business and Safaricom, showcasing the breadth of our footprint, which covers more than
half a billion people across the continent. In aggregate, our new services, which include digital and financial, fixed and IoT,
reached a contribution of 20.0% of Group service revenue, as we also advanced our product diversification. Financial services
is the key driver of our new services and a meaningful enabler of our purpose to connect for a better future. This is evidenced
by the 11.8% increase in financial service customers to 78.9 million, as we now process an impressive US$381.2 billion in
annual transaction value.
A combination of start-up losses in Ethiopia, higher finance and energy costs, the impact of absorbing inflationary pressures,
and weaker exchange rates across markets, including the recent devaluation of the Egyptian pound, contributed to the 10.8%
decline in headline earnings of 846 cents per share (cps). Reflective of our dividend policy of paying at least 75% of headline
earnings, the Board declared a dividend per share of 590cps for the year. Nonetheless, we expect that our efforts to diversify
the Group's footprint and product mix will unlock strong returns over the medium term.
Despite the economic backdrop, we remain committed to spending 13% to 14.5% of our overall revenue on capital
expenditure that ultimately results in an enhanced customer experience through sustained investments in technology and
network infrastructure. This has and will continue to enhance network resilience through the acceleration of 5G coverage,
our rural coverage programme to help bridge the digital divide and keeping customers connected despite, the power
challenges across key markets.
In South Africa, service revenue growth of 2.6% was largely on the back of new services, the consumer contract segment and
prepaid mobile data. This was partly offset by pressure in Vodacom Business, as a shift away from 'Work From Home' policies
saw corporate customers recalibrating their spend.
New services in South Africa were up 11.2% and contributed R10.2 billion, or 16.6% of service revenue. The 7.9% service
revenue increase from financial services to R3.2 billion was largely driven by our insurance business and payments, while
Airtime Advance remained an important enabler of digital inclusion.
The traction and transaction volume growth that our VodaPay super-app continues to attract is particularly pleasing having
ended the period with 10.4 million downloads and 5.8 million registered users, reflecting an increase of 83.0% and 79.4%,
respectively.
From an infrastructure investment perspective, we spent R11.1 billion to support network resilience, leverage our new
spectrum assets and enhance our IT platforms to maintain our competitive edge and remain South Africa's most reliable
network. Our proposed purchase of a joint venture stake in South African fibre company Maziv will enable affordable access
to connectivity in some of the most vulnerable parts of the country through an ambitious fibre roll-out programme, assisting
in narrowing the country's digital divide. The transaction is subject to a review by the Competition Tribunal with hearings due
to commence on 20 May 2024, during which Vodacom will showcase the strong public interest and pro-competitive
advantages that the transaction would have on the fibre market, and the country as a whole.
Egypt now services 48.3 million customers, an increase of 6.2%, and contributes one quarter of Group revenue supported by
excellent customer engagement in connectivity, mobile and fixed price adjustments, and excellent growth in its financial
services platform, Vodafone Cash. A 10.9% increase in data customers contributed to a 41.8% jump in data traffic while the
local currency 107.4% increase in financial services revenue was supported by our one-app strategy resulting in customer
growth of 52.1% to 8.2 million and strong growth in transaction values to over EGP1 trillion in the year.
We are encouraged by the meaningful steps taken by Egypt's government to support economic growth through foreign direct
investment and foreign exchange liquidity. Pleasingly, the dividend declared by Egypt to the Group in the first half of the
financial year was repatriated to South Africa in March 2024.
Our International business in DRC, Lesotho, Mozambique and Tanzania produced a reported 13.1% increase in service
revenue, supported by foreign exchange tailwinds, a 21.4% increase in M-Pesa revenue, and a 30.5% rise in data revenue.
Tanzania delivered strong double-digit growth, DRC's service revenue growth improved in the second half, while
Mozambique's performance disappointed with a service revenue decline of 12.5%. We expect recent regulatory reforms in
Mozambique will meaningfully improve our prospects in that market.
Across the four markets, M-Pesa revenue grew 21.4%, contributing 26.5% of International business service revenue. This was
boosted by a strong performance in Tanzania while new growth areas such as lending and savings products continue to gain
traction across the portfolio as we facilitated loans worth R16.9 billion, more than doubling year-on-year.
Safaricom delivered an excellent performance in Kenya with service revenue accelerating in the second half to end the year
with growth of 13.4%, boosted by double-digit growth in mobile data and M-Pesa revenue. M-Pesa transaction volumes
increased 34.8%, showcasing the scale of the business. Despite start up costs associated with operations in Ethiopia,
Safaricom has confirmed that its roll-out is on track in Africa's second most populous country.
Of the many purpose-led initiatives that we led over the past year, I am particularly proud of m-mama, Code like a Girl and Je
Suis Cap. With the support of partners like USAID and the Vodafone Foundation, these initiatives are expanding across our
markets to change lives. Alongside these programmes our Tech for Good solutions are key enablers of inclusion and address
challenges across critical industries, including healthcare, education and agriculture.
Looking ahead, we are focussed on delivering the final year of our Vision 2025 targets, while at the same time developing the
Group's next strategic phase to support our TechCo transition, where we will anchor our business on imperatives such as
amplifying our commitment to purpose and customers, excelling at simplicity and innovating for growth so that we deliver
sustainable growth.
Core to this strategy will be accelerating mobile and fixed connectivity, scaling handset financing and the rollout of innovative
digital and financial services in all our markets. We will also seek to expand our partnerships across Africa to power Vodacom's
growth, drive infrastructure sharing to increase rural and fibre connectivity and expand the reach of our Tech for Good
solutions.
While the global economic outlook is uncertain, we are encouraged by the recent macro reforms in Egypt and Kenya. Building
on this momentum, our portfolio of products positions us to deliver on our purpose and capture the structural growth
opportunities across our markets, while also supporting an upgraded outlook for Group service revenue growth. Delivering on
this outlook will require an unwavering focus to deliver our strategy, to meet our business objectives and to serve our
customers.
Declaration of final dividend number 30 – payable from income reserves
Notice is hereby given that a gross final dividend number 30 of 285 cents per ordinary share in respect of the financial year
ended 31 March 2024 has been declared payable on Monday, 24 June 2024 to shareholders recorded in the register at the
close of business on Friday, 21 June 2024. The number of ordinary shares in issue at the date of this declaration is 2 077 841
204. The ordinary dividend will be subject to a local dividend withholding tax rate of 20% which will result in a net final dividend
to those shareholders not exempt from paying dividend withholding tax of 228 cents per ordinary share.
Last day to trade shares cum dividend Tuesday, 18 June 2024
Shares commence trading ex-dividend Wednesday, 19 June 2024
Record date Friday, 21 June 2024
Payment date Monday, 24 June 2024
Share certificates may not be dematerialised or rematerialised between Wednesday, 19 June 2024 and Friday, 21 June 2024,
both days inclusive.
On Monday, 24 June 2024, the final dividend will be electronically transferred into the bank accounts of all certificated
shareholders where this facility is available. Shareholders who hold dematerialised shares will have their accounts at their
CSDP or broker credited on Monday, 24 June 2024.
Vodacom Group Limited tax reference number is 9316/041/71/5.
Dividend policy
Following the acquisition of Vodafone Egypt in the previous financial year, the company instituted a policy of paying dividends
of at least 75% of Vodacom Group headline earnings. At this level of payout, Vodacom offers one of the highest dividend pay-
out policies on the JSE. Additionally, the policy provides scope for the Group to invest within its 13.0% to 14.5% capital
intensity target, de-lever the balance sheet and accommodate the upstreaming and dividend pay-out profiles of Safaricom
and Egypt.
For and on behalf of the Board
10 May 2024
Sakumzi Justice Macozoma Shameel Aziz Joosub Raisibe Morathi
Chairman Chief Executive Officer Chief Financial Officer
Midrand
This short-form announcement is the responsibility of the directors and is only a summary of the information in the full announcement and does not
contain full or complete details. Any investment decision should be based on the full announcement that has been published on the JSE's cloudlink at
https://senspdf.jse.co.za/documents/2024/jse/isse/VOD/FY24SENS.pdf and is also available on our website www.vodacom.com.
Copies of the full announcement may be requested by contacting Investor Relations on telephone: +27 (0) 11 653 5000 or
email: vodacomir@vodacom.co.za. The annual results for the year ended 31 March 2024 were reviewed by the Group's auditors
Ernst & Young Inc, who have expressed an unmodified review report. The review report is available in the full announcement.
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 13-05-2024 07:05:00
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