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Preliminary results for the year ended 31 March 2011

Monday, 16 May 2011

Salient features

Strong performance culminates in solid HEPS growth

• Group revenue up 6.4%(*) (4.5% reported)
• Group free cash flow up 22.4% to R8 829 million
• Impairment losses of R1 508 million mainly in respect of Gateway
• Headline earnings per share up 28.6% to 656 cents per share
• 60.0% increase in final dividend per share to 280 cents

Customer focus underpins commercial success

• Group customers increased 9.0% to 43.5 million
• New offers delivering more value to customers
• Group voice traffic up 19.0%
• Number one Net Promoter Score (‘NPS') in South Africa

Demand for data services remains high

• Group data revenue increased 35.5% to R6 433 million
• Expanded portfolio of low cost internet devices
• Investment in 1 086 more 3G base stations across the Group
• 34.6% growth in South Africa data customers to 9.0 million

Refocus, reorganise and refresh

• Sustainability objectives integrated into strategic and reporting processes
• Steps taken to simplify the organisation, empower employees, speed up decision making
• Brand refresh kicks off initiatives covering network, service and value

(*) All amounts marked with an ‘(*)' represent normalised growth excluding trading foreign exchange and at a constant currency.

Pieter Uys, Vodacom Group CEO commented:

"We've gone from cool blue to red hot.

Credit to the team for the financial and operational results, delivered in an environment of mobile termination rate reductions, price reductions and inflationary cost pressure. This has been achieved through a sharp focus on the customer experience, the R6 311 million capital invested in our networks and delivering on our R500 million cost efficiency programme. The resulting 51% increase in total shareholder returns is really pleasing.

The decision we took some years ago to lead the industry on mobile data is bearing fruit. The combination of considerable investment in new base stations and taking charge of our own transmission has put us in an enviable position. The new dual-carrier technology that we're rolling out across the network has both speed and capacity benefits and will support continued growth in the data business.

After taking a long hard look at how we can improve the customer experience, knowing that this is the key to continued success, we realised that we needed a fresh approach to strategy setting and an unencumbered organisation to deliver it. The change from blue to red is just an outward indicator of all the internal changes underway which will deliver real benefits to customers across the areas of network, customer experience and value."

 



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