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Q3 Results FY10 - 9 months ending 31 December 2009
Vodafone Qatar Q.S.C.
Q3 Results FY10
9 months ending 31 December 2009
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Q3 Results FY10 - 9 months ending 31 December 20092
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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Q3 Results FY10 - 9 months ending 31 December 20093
Agenda
• Key Highlights• Customer Growth• Financial Highlights• Revenue• EBITDA• EBIT• Capitalised Fixed Asset Additions• Debt• Dividends• Shareholding Structure• Q4 FY10 Outlook• Condensed Statement of Income & Cash Flows• Condensed Statement of Financial Position• Long-Term Forecast
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Q3 Results FY10 - 9 months ending 31 December 20094
Key Highlights in FY10 (1st April 2009 to 31st March 2010)
IPO• Largest IPO in the world at time of closing
• Fully subscribed; US$950m raised
• 353,580 Customers at 31 December 2009
• Customers more than doubled in last quarter
• Total customers 84% ahead of planCustomer Numbers
Market Share• 22% Population share at 31 December
• Estimated 14% customer market share at 31 December
Revenue &ARPU
• Total Revenue 46% ahead of plan
• Total Mobile ARPU for quarter ending 31 December 09 of QR171
Launch• Freedom plans launched 7 July 2009• Prepay plans launched 9 September 2009• Implemented 2G & 3G network• 100% geographic coverage of 2G by 28 December 09
Distribution• Online shop – 3rd most successful online retailer in Qatar
• 9 VF retail stores & 2 mobile truck stores
• 500 outlets to join at & 1,500 where you can recharge
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Q3 Results FY10 - 9 months ending 31 December 2009
15,404150,799
353,580
700,000
1,618,000
43%
0.8%
7%
14%
32%
-
400,000
800,000
1,200,000
1,600,000
2,000,000
Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 …..+ 2yrs….. FY12 …..+ 6yrs….. FY18
Total
Custo
mers
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Marke
t Sha
re
Total Customers Customer Market Share
5
Customer GrowthQuarterly Growth in Customers & Market Share
IPO Prospectus Forecasts for FY12 & FY18
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Q3 Results FY10 - 9 months ending 31 December 20096
Financial Highlights
(1) EBIT includes licence cost of QR 7.7bn amortised over 20 years from 1 May 09
Financial PerformanceQ3 FY10 Q3 FY09 YTD FY10 YTD FY09Dec-09 Dec-08 Dec-09 Dec-08
QARm QARm QARm QARm
Total Revenue 177.6 n/a 216.8 n/aEBITDA (29.7) (7.1) (185.9) (44.5)EBIT(1) (149.2) (7.1) (496.6) (44.5)Operating Free Cash Flow (excl. license payment) (206.7) (54.1) (295.5) (75.7)
Capitalised Fixed Asset Additions 140.0 77.1 322.3 80.7
KPIsJun-09 Sep-09 Dec-09
Total Customers 15,404 150,799 353,580Total Quarterly ARPU N/A 173 171Population 1.609M 1.623M 1.631MAnnual Population growth 11% 8% 5%Mobile Penetration 117% 141% 152%Population Share 1% 9% 22%Customer Market Share 0.8% 7% 14%
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Q3 Results FY10 - 9 months ending 31 December 2009
1,400
3,000
3.10.03178
36-
500
1,000
1,500
2,000
2,500
3,000
3,500
Q4 Mar-09 Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 ..+ 2yrs.. FY12 ..+ 6yrs.. FY18
QA
R (m
illio
ns)
7
RevenueQuarterly Revenue with Forecasts for FY12 & FY18
IPO Prospectus Forecasts for FY12 & FY18
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Q3 Results FY10 - 9 months ending 31 December 2009
-83 -30
462
1,410
-73-80
47%
33%
-200
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q4 Mar-09 Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 ..+ 2yrs.. FY12 ..+ 6yrs.. FY18
QA
R (m
illio
ns)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
EBITDA (QRm) EBITDA Margin
8
EBITDAQuarterly EBITDA with Forecasts for FY12 & FY18
• Q3 FY10 EBITDA in-line with management forecasts and IPO prospectus business plan.
• Expected to turn cumulatively EBITDA positive in mid 2011.• Expectation that current high EBITDA % in the Qatar market will decline as a
result of competition.
IPO Prospectus Forecasts for FY12 & FY18
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Q3 Results FY10 - 9 months ending 31 December 2009
-199 -149 -69
903
-149-81
-700
-200
300
800
1,300
1,800
Q4 Mar-09 Q1 Jun-09 Q2 Sep-09 Q3 Dec-09 ..+ 2yrs.. FY12 ..+ 6yrs.. FY18
QA
R (m
illio
ns)
9
• Q3 FY10 EBIT in-line with management forecasts and IPO prospectus business plan.
EBITQuarterly EBIT
IPO Prospectus Forecasts for FY12 & FY18
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Q3 Results FY10 - 9 months ending 31 December 200910
Capitalised Fixed Asset Additions
• Long-term capital expenditure expected to stabilise at 8% of revenue from FY13 onwards
308.6322.3
198.7
80.7
0
50
100
150
200
250
300
350
Q1-Q3 Dec08 Q4 Mar09 Q1-Q3 Dec09 Q4 Mar10
QA
R (m
illio
ns)
Management estimate
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Q3 Results FY10 - 9 months ending 31 December 200911
Net Debt Borrowings less Term Deposits
• Minimal requirement to raise debt from capital markets based on the current business model; assumes no regional expansion or fixed line direct ownership
433
371
(34)
269
162
(42)(100)
-
100
200
300
400
500
Q2 Sep-08 Q3 Dec-08 Q4 Mar-09 Q1 Jun-09 Q2 Sep-09 Q3 Dec-09
QAR (
millio
ns)
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Q3 Results FY10 - 9 months ending 31 December 200912
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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Q3 Results FY10 - 9 months ending 31 December 200913
Vodafone Qatar Shareholder StructureGlobal
Telecommunicationsleader
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
December:• 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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Q3 Results FY10 - 9 months ending 31 December 200914
Outlook Q4 FY10
• Focus on customer acquisition• Launch BlackBerry® and data products• Continue expansion of distribution footprint• Development of innovative solutions for the market
• Vodafone Money Transfer• Complete network build
• Indoor coverage• Convert temporary sites to permanent
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Q3 Results FY10 - 9 months ending 31 December 200915
Condensed Statement of Income – 9 months ended 31 Dec 09
(1) Includes license amortization and depreciation of QR 294.7m for the nine month period to 31 December 2009 and nil for the period to 31 December 2008
Nine month period ended
December 31, 2009(Unaudited) (Unaudited)QAR ‘000 QAR ‘000
Revenue 216,816 -
Cost of sales (1) (461,394) (879)Gross loss (244,578) (879)
Selling and distribution expenses (81,737) -Administrative expenses (169,909) (44,521)Other income and expense (334) 865Operating loss (496,558) (44,535)
Interest income 20,866 4,614Financing costs (19,883) -Loss before taxation (495,575) (39,921)
Income tax expense - -
Loss for the period
Basic and diluted loss per share (QAR) (0.61) (0.08)
Period from June 23, 2008 to December 31,
2008
(495,575) (39,921)
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Q3 Results FY10 - 9 months ending 31 December 200916
Condensed Statement of Financial Position – as at 31 Dec 09
March 31, March 31, 2009 2009
(Unaudited) (Audited) (Unaudited) (Audited)QAR ‘000 QAR ‘000 QAR ‘000 QAR ‘000
Non-current assets Shareholders’ EquityProperty, plant and equipment 657,283 388,517 Share capital 8,454,000 5,072,400Intangible assets 7,458,800 7,716,000 Legal reserve 11,442 -Trade and other receivables 6,512 - Accumulated deficit (628,498) (132,923)Total non-current assets 8,122,595 8,104,517 Total shareholders’ equity 7,836,944 4,939,477
Current assets Non-current liabilitiesInventory 15,919 4,784 End of service benefits 1,905 392Trade and other receivables 134,818 31,053 Provisions 3,485 250Cash and cash equivalents 331,922 554 Long term borrowings 374,244 -Total current assets 482,659 36,391 Total non-current liabilities 379,634 642
Total assets 8,605,254 8,140,908 Current liabilitiesTrade and other payables 388,676 3,165,789Short term borrowings - 35,000Total current liabilities 388,676 3,200,789
Total equity and liabilities 8,605,254 8,140,908
December 31, 2009
December 31, 2009
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Q3 Results FY10 - 9 months ending 31 December 200917
Vodafone Qatar Long-Term Forecast
*At QR 10 per share
Year End Year End
31-Mar-12 31-Mar-18Population 2,195,000 3,002,000Market Share 32% 43%
Customer NumbersOn-account 221,000 509,000
Prepay 479,000 1,109,000
Total (closing customers) 700,000 1,618,000
ARPUOn-account 397 347
Prepay 87 76
Total 180 160
Revenue QR 1.4 billion QR 3 billion
EBITDA % 33% 47%
capex to revenue % 14% 7%
EPS 1.4
ROE* 14%
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Q3 Results FY10 - 9 months ending 31 December 200918
Contact Details
Rachael Mayo-SmithInvestor Relations ManagerTel: +974 777 5642Email: [email protected]
Address: Vodafone QatarPO BOX 27727DohaQatar
Website: www.vodafone.com.qa
John TomblesonChief Financial Officer+974 777 [email protected]
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