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FY10 Results – Full Year Ending 31 March 2010
Vodafone Qatar Q.S.C.
Full Year Results
Year ending 31 March 2010
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FY10 Results – Full Year Ending 31 March 20102
Disclaimer
• The following presentation is made only to, and is directed only at, persons to whom such a presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.
• This presentation contains forward-looking statements that are subject to risks and uncertainties, including statements about Vodafone Qatar’s beliefs and expectations.
• These forward-looking statements are based on assumptions that Vodafone Qatar has made in light of its experience in the industry in which it operates, as well as its perceptions of historical trends, current conditions, expected future developments and other factors which Vodafone Qatar believes are appropriate under the circumstances. Prospective investors should understand that these statements are not guarantees of future performance or results.
• The presentation also contains certain non-GAAP financial information. Vodafone Qatar’s management believes these measures provide valuable additional information in understanding the performance of the Vodafone Qatar because they provide measures used by the management to assess performance. Although these measures are important in the management of the business, they should not be viewed as replacements for, but rather as complementary to, the comparable GAAP measures
• Due to these factors, Vodafone Qatar cautions that prospective investors should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise from time-to-time, and it is impossible to predict these events or how they may affect Vodafone Qatar.
• Vodafone, the Vodafone logo and Vodafone Money Transfer are trademarks of the Vodafone Group.
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FY10 Results – Full Year Ending 31 March 20103
Agenda
• Key Highlights
• Customer Growth
• Financial Highlights
• Revenue
• EBITDA
• EBIT
• Capitalised Fixed Asset Additions
• Debt
• FY11 Outlook
• Fixed Line License Update
• Condensed Statement of Income & Cash Flows
• Condensed Statement of Financial Position
• Dividends
• Shareholding Structure
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FY10 Results – Full Year Ending 31 March 20104
Key Highlights in FY10 (1st April 2009 to 31st March 2010)
Launch• Fully subscribed IPO raised QAR 3,381.6m
• Freedom plans launched 7 July 2009
• Prepay plans launched 9 September 2009
• 464,962 Customers at 31 March 2010• 121% ahead of plan• Customers grew 32% last quarter• 500,000 Customers at 9 May 2010
Customer Numbers
Market Share• 28% Population share at 31 March (30% at 9
May)
• 18% Customer market share at 31 March
• 14% Revenue share at 31 March
Revenue &ARPU
• Total Revenue 26% ahead of plan
• Total Mobile ARPU for quarter ending 31 March 2010 of QR101
Network• Implemented 2G & 3G network
• 100% geographic coverage of 2G by 28 December 09
• Recent increase in network capacity to meet demand
Distribution & Care• 9 VF retail stores, 2 mobile truck stores & online
shop
• 600 outlets to join at & 2,000 where you can recharge
• Call Centre in 5 languages & recognised as top call centre in GCC
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FY10 Results – Full Year Ending 31 March 20105
Customer GrowthQuarterly Customers & Market Share
15,404
150,799
353,580
464,962
18%
14%
7%
0.8%
-
100,000
200,000
300,000
400,000
500,000
600,000
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
Tota
l Cus
tom
ers
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Mar
ket S
hare
Total Customers Customer Market Share
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FY10 Results – Full Year Ending 31 March 20106
Financial Highlights
(1) Quarterly EBITDA and EBIT have been adjusted to align the Vodafone Group management fees with when revenues were earned (2) EBIT includes mobile license cost of QAR 7.7bn amortized over 19.16 years starting from 1 May 2009 and Quarterly EBIT has been adjusted to
distribute additional Amortisation expense incurred in March 2010 following a change from 20 to 19.16 years
Financial Performance
Q4 FY10 Q4 FY09 FY10 FY09Mar-10 Mar-09 Mar-10 Mar-09
QARm QARm QARm QARm
Total Revenue 144.7 n/a 361.5 n/a
EBITDA (28.7) (80.1) (225.4) (124.6)
EBIT (155.7) (80.8) (674.7) (125.3)
Operating Free Cash Flow (excl. license payment)
(256.0) (416.9) (551.6) (492.6)
Capitalised Fixed Asset Additions 201.5 308.6 523.8 389.3
KPIs
Jun-09 Sep-09 Dec-09 Mar-10
Total Customers 15,404 150,799 353,580 464,962
Total Quarterly ARPU n/a 173 171 101
Population 1.609M 1.623M 1.631M 1.677M
Annual Population growth 11% 8% 5% 2%
Mobile Penetration 117% 141% 152% 156%
Population Share 1% 9% 22% 28%
Customer Market Share 0.8% 7% 14% 18%
AnnualQuarterly
Quarterly
1,2
1
2
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FY10 Results – Full Year Ending 31 March 20107
RevenueQuarterly Revenue
178
145
3.08
36.1
-
20
40
60
80
100
120
140
160
180
200
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
QA
R (
mill
ions
)
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FY10 Results – Full Year Ending 31 March 20108
EBITDAQuarterly Adjusted EBITDA*
• Q4 FY10 EBITDA in-line with management forecasts and IPO prospectus business
plan.
• Expected to turn cumulatively EBITDA positive by December 2011.
-39
-29
-85
-73
-90
-80
-70
-60
-50
-40
-30
-20
-10
-
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
QA
R (
mill
ions
)
*Quarterly EBITDA has been adjusted to align the Vodafone Group management fees with when revenues were earned
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
Unadjusted EBITDA -73 -83 -30 -39
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FY10 Results – Full Year Ending 31 March 2010
-162 -156-152
-205
-250
-200
-150
-100
-50
-
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
QA
R (
mill
ions
)
9
• Q4 FY10 EBIT in-line with management forecasts and IPO prospectus business
plan.
EBITQuarterly Adjusted EBIT*
*Quarterly EBIT has been adjusted to align the Vodafone Group management fees with when revenues were earned and to distribute additional Amortisation expense incurred in March 2010 following a change in the amortisation period from 20 years to 19.16 years
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
Unadjusted EBIT -149 -199 -149 -178
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FY10 Results – Full Year Ending 31 March 201010
Capitalised Fixed Asset Additions
• Long-term capital expenditure expected to stabilise at 9% of revenue from FY14 onwards
524
389
0
100
200
300
400
500
600
FY 09 FY 10
QA
R (
mill
ions
)
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FY10 Results – Full Year Ending 31 March 201011
Net Debt Borrowings less Term Deposits
• Borrowing facility extended from US$110m to US$230m to cater for increase in capex
due to accelerated customer uptake. The additional US$120m facility is at an interest
rate of 1.80%.
• Future borrowing will be required for fixed line.
433
371
-34
269
156
-42
-294
(400)
(300)
(200)
(100)
-
100
200
300
400
500
Q2 Sep-08 Q3 Dec-08 Q4 Mar-09 Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 Q4 Mar-10
QAR
(mill
ions
)
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FY10 Results – Full Year Ending 31 March 201012
Outlook FY11
• Focus on customer acquisition
• Launch BlackBerry® and data products
• Development of innovative solutions for the market• Vodafone Money Transfer
• Complete network build• Indoor coverage
• Convert temporary sites to permanent
• Launch fixed line broadband and voice services to The
Pearl, then wider Qatar
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FY10 Results – Full Year Ending 31 March 201013
Fixed Line License
• Awarded to Vodafone Qatar Q.S.C. on 29 April 2010, subject to:– Shareholders’ approval to change the Memorandum and Articles of
Association at the EGM on 28 June 2010; and– Payment of QAR 10m license fee by 31 July 2010
• Fixed Line License Obligations:• The Pearl Development
– Broadband coverage within 3 months– Voice services within 12 months– Performance Bond: QAR 5m
• West Bay CBD– 100% Coverage within 30 months– Performance Bond: QAR 10m
• Rest of Qatar– 100% Coverage within 48 months– Performance Bond: QAR 10m
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FY10 Results – Full Year Ending 31 March 201014
Condensed Statement of Income and Cash Flows – Year ended 31 March 2010
Year ended 31 March 2010
Period from 23 June 2008 to
March 31 2009Year ended 31 March 2010
Period from 23 June 2008 to
March 31 2009QAR ‘000 QAR ‘000 QAR ‘000 QAR ‘000
Net cash flows used in operating activities
(147,863) (99,715)
Revenue 361,522 28Direct costs (247,570) (31) Cash flows from investing activitiesOther expenses (339,253) (123,942) Purchase of property, plant and
equipment(423,994) (389,269)
EBITDA (225,301) (123,945) Payment for intangible assets (3,086,400) (4,629,600)Interest received 26,680 11,841
Depreciation (80,007) (752) Net cash flows used in investing activities
(3,483,714) (5,007,028)
Amortisation of licence (369,265) -Interest income 26,680 11,841 Cash flows from financing activitiesFinancing costs (25,495) (20,067) Issue of ordinary share capital 3,393,042 5,072,400Loss before taxation (673,388) (132,923) Proceeds of long term borrowings 379,083 -
Net movement in short term borrowing (35,000) 35,000Income tax expense - - Interest paid (20,746) (103)
Net cash flows from financing activities 3,716,379 5,107,297
Loss for the period (673,388) (132,923)Net cash flows 84,802 554
Basic and diluted loss per share (QAR) (0.82) (0.26)
554 --
85,356 554Cash and cash equivalents at the end of the financial period
Cash and cash equivalents at the beginning of the financial period
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FY10 Results – Full Year Ending 31 March 201015
Condensed Statement of Financial Position – as at 31 March 2010
31 March 2010 31 March 2009 31 March 2010 31 March 2009QAR ‘000 QAR ‘000 QAR ‘000 QAR ‘000
Non-current assets EquityProperty, plant and equipment 832,283 388,517 Share capital 8,454,000 5,072,400Intangible asset 7,346,735 7,716,000 Legal reserve 11,442 -Trade and other receivables 4,432 5,348 Accumulated losses (806,311) (132,923)Total non-current assets 8,183,450 8,109,865 Total equity 7,659,131 4,939,477
Current assets Non-current liabilitiesInventory 21,713 4,784 End of employment benefits 1,972 392Trade and other receivables 118,207 25,705 Provisions 4,848 250Cash and cash equivalents 85,356 554 Long term borrowings 379,083 -Total current assets 225,276 31,043 Total non-current liabilities 385,903 642Total assets 8,408,726 8,140,908
Current liabilitiesTrade and other payables 363,692 3,165,789Short term borrowings - 35,000Total current liabilities 363,692 3,200,789Total liabilities 749,595 3,201,431Total equity and liabilities 8,408,726 8,140,908
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FY10 Results – Full Year Ending 31 March 201016
Dividend Expectations
• As outlined in our IPO prospectus, subject to the Articles, any decision to pay
dividends to Shareholders and the amount of such dividends will be at the
discretion and upon recommendation of the Board.
• The amount of dividends may vary from year to year.
• The declaration of dividends will be subject to any limitations enshrined in
the Articles and applicable laws, and may be influenced by a number of
factors, including Vodafone Qatar’s prospects, current and anticipated cash
requirements, plans for expansion, financial performance, covenants
restricting the payment of dividends in agreements entered into by the
Vodafone Qatar, the condition of the markets in which Vodafone Qatar
operates and the general economic climate.
• Based on the Business Plan, in particular the Company’s projected cash flow
and profit before amortisation, the Company does not anticipate that it will
declare a dividend before the financial results for the year ended 31 March
2013.
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FY10 Results – Full Year Ending 31 March 201017
Vodafone Qatar Shareholder Structure
GlobalTelecommunications
leader
Private institution of publicUtility founded by
HH Sheikh Hamad Bin KhalifaAl-Thani
FoundingQatari Governmental
InstitutionalInvestors
Free float on Qatar Exchange
Vodafone and Qatar Foundation
LLC
Vodafone Qatar QSC
40%15% 45%
49%51%
• Qatar Foundation:5.0%
• Military Staff Loans Fund: 3.4%
• Military Pension Fund: 3.3%
• Health & Education Endowment:3.3%
• Number of shares: 338,160,000 shares• No foreign ownership restrictionsFree Float ownership split at 31 March:• Institutional Investors: 47%• Individual Investors: 53%
Founding Government Institutions Free Float (40%)
• Authorized Share Capital: 845,400,000 (Shares)
• Paid Up Capital: QAR 8,454,000,000
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FY10 Results – Full Year Ending 31 March 201018
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FY10 Results – Full Year Ending 31 March 201019
Contact Details
Rachael Mayo-Smith
Investor Relations Manager
Tel: +974 777 5642
Email: [email protected]
Address: Vodafone Qatar
PO BOX 27727
Doha
Qatar
Website: www.vodafone.com.qa
John Tombleson
Chief Financial Officer
+974 777 5835