Vodafone ItalyPCaholo EBxeerctoultuzzo iefive Officer 1M0th Deutsche yBank Conference ilan, 27th Ma 2009 1 DVoeduatscohnee Bank Conference 2009 27th May 2009 f Italy
Outperforming the Total Communications market Other<81%% W3 Market 196%% I6% 16%ND 767153%%% 326% Other 16FaTsiscaelitwYoY2 0G0r8owth Y1113%1% 1 %V37%%% 8 8o %%d afone Infostrabd a FoYY 2 G00ro8w0t9h 34% T Coottmallm s 1% 41%57% 73% +% 73% Telecom T+1% IM TItalia Mobiille 2% ellieac om Itao.+w2. D9a%ta : Year 200~8 2M2o €bn ~4o . .€wFiixed 1% B%B : (excbileBwBb.. n ~21 €bn + (excil ll.. Haandsseettsso)) iixed +70% * Source: Deutsche2 D Bank as of Apr ’09; for fixed BB internal analysis based on Analysys Mason and Company Reports Voeduatsche Banyk Conference 2009 27th May 2009 fone Ital
Driving growth in traditional and new business Vodafone service revenues (1) (€bn) Key drivers • A+%(eRgPU enhancing initiatives on Voice and SMS : You&Me Senza Limiti, Family, Zero Limits) YoY +Y2o9Y% +Y4o%Y • (8u0s0iKn ecsosn and Consumer contracttracts +Y2 net additions) o%Y Y1o2Y% • P(~C5 0C0oKnnectivity new devices) • M(~o 1bmile Internet bundles EOP FY 08/09) 0F7Y • Fixed services, Vodafone/08 Mcoorbei l(e2) Incvooming iceMob datail e Fixed 0F8Y /09 (~ 360k BBt and Tele2 ne additions) ((12)) OMrogbanic: including Tele2 full year contribution in FY 07/08 excile core including Voice (excl. incoming), Messaging, Visitors on our network and other miscellaneous revenue; 3 luDding incoming voice Voeduatsche Bank Conference 2009 27th May 2009 fone Italy
Dgrroivwinthg efficiency to sustain EBITDA and invest in Ebitda (€bn) Key drivers O• Ef–fi cMieonbcy through: costile acquisition and retention unitary – Cons reduction 3.+~r0g%anic (1) YOY 8 (1) (1) trol of opex through efficiency initiatives • Inv–e HCsiotgmnhes vnatl uine: mobile customers acquisition, –– Fumer and Business Siaxleeds barnodadband customers acquisition 0F7Y /08 eGffrowticienhcy & (2) Investments (3) s40F8Y 4/09 .5% Ebitdoat aml arergvienn( 1u) (%– Fervice enhancement acixceed services ramp up and Mobile Data of Te) % leration ((1(2)3) ) Organic: including Tele2 full year contribution in FY 07/08 and excluding release of brand trademark provisions Increase in variable margin (Revenues – direct variable costs); inflation driven inertial increase on opex net of efficiency initiatives; reduction in A&R unitary costs Increase on opex driven by new initiatives (eg: fixed, new sales channel customerss, mobile broadband quality, customer service enhancement); fixed and mobile A&R investments 4 in higDh value additional volumes Voeduatschee Bank Conference 2009 27th May 2009 fon Italy
Group strategy Drive operational performance • VCaolsute enhancement • reduction Pursue growth opportunities in total commun• Mobile data ications • Enterprise • Broadband Strengthen capital discipline• Sharehoplder returns • Explicit riorities for surplus capital Execute in emerging markets • Delivery ine xepxaisntisniog nm/caaruktets • Selective ious approach Focus on free cash flow generation and execution 5 DVoeduatsche Banyk Conference 2009 27th May 2009 fone Ital
Kefefiyc isetnractye gic focus in Italy: driving growth and Drive operational performance •V aVlauleue e ennhhaatnncceemmeentn t • Cost reducion Poutarsue growth opportunities in tl communications•ME oMbobiliele Ddaattaa •B nEtneterprprriise • rBoroaaddbbaanndd Strengthen capital discipline • Shareholder returns • Explicit priorities for surplus capital Execute in emerging markets • Delivery in existing nm/caaruktets • Selective expansioious approach Focus on free cash flow generation and execution 6 DVoeduatschee Bank Conference 2009 27th May 2009 fon Italy
Kefefiyc isetnractyegic focus in Italy: driving growth and Drive operational performance •VC aoVlsautleu e e eendnhuhcaatnncceemmeentn t • Cost rion Pursue growth opportunities in totaMl communica•E Mobirletions p data • Enterise •Bnotbreduction eile Data rp Broadbbraiand Snd road Strengthen capital discipline •E hxSpahraerehchiot olpdlder rettuusrrnns s • Exlpicliit riiorritiiteies fo fro sru srpulurps lcuasp ictal Epital xecute in emerging markets • Delivery in existing markets • Selective expansion/cautious approach Focus on free cash flow generation and execution 7 DVoeduatsche Banyk Conference 2009 27th May 2009 fone Ital
DenrihvainngMc obevmoiecnet growth through customer value ile voice out volumes (bn) Key drivers CA• On– Net Traffic increase: ToLTiamriff options (You&Me Senza Limiti, Zero –its, Family, …) tal2733 37 +G17R% % mM inutes 36% +12% offinnuettes % 39%37% –wTopUp Promotions (+ 20% on net traffic Cihthr a top up > 15€) Seasonal Promotions (SuoMninnuettes 61% 63% 64% +21% istmas Vommer & ice) % FY• Contract 06/07 FY 07/08 FY 08/09additions acquisitions: net in the year 8 DVoeduatscohnee Bank Conference 2009 27th May 2009 f Italy
Customer value enhancement: “Infinity Messaggi” MARPU (1) Churn 100 Index 116 Index 100 90 • TCaoriff option Addon to a–n Pmsmaumern ny tariff plaey only the firstessssaaggeess/day/day, 100 onnet, + 100Pre Post Pre Post – M1€onth/month of fnet ly Fee 6€/month onnet + /month offnetCustomer Lifetime Value( 2) • Pdenetration on 2m subsarcribers nivde CnR bMy ATL communicationIndexs100 125 activities Pre Post (1) MAisRPU: ARPU – Interconnection Costs. Delta ARPU and delta churn calculated on a representative sample of subscribers based on customer behaviour bcounpromoefore and after the subscription 9(2) DtedD Customer Lifetime Value Voeduatsche Bank Conference 2009 27th May 2009 fone Italy
Dperinveintrga tgioronw atnhd i nd iMffoerbeilnet iDataitoan t hrough mass market PC connectivity users (‘000s) 1,360k 700k • Vodafone Internet Key • Mini PC Q1 MQobF2Y 07/Q083 Q4 Q1 QF2Y 08/Q039 Q4 ile Internet bundles active (‘ 94)5k • Smartphones, full portfolio available: iPhone, Storm, Nokia 5800, gPhone, … Q3k1 QF2• Internet Bundles on prepaidY 07/Q083 Q4 Q1 QF2Y 08/Q039 Q4 Customers / Contracts 10 DVoeduatsche Banyk Conference 2009 27th May 2009 fone Ital
Driving growth in business through convergence Business service revenues (€bn) Current focus• Convergence i••SSearlevsic ech aanndn eqluality differentiation Vodafone Ren SMEs: – One integrattee dUnica VPN: •Mobs enhancement •Peneilte Data growth ration in SoHo –fixed/ mobile, voice/ data– IP Centrex in our Network
Accelerating growth in fixed broadbandFixed broadband cuFsYtomers net adds/Q (‘000), 08/09 Key drivers Vodafone • Vo–d Vaofdoane Station 117148 – Vwfone innovation: convergent fixed BB oithda mfoonbeile addon, instant activation mobilefixed integrated sales anECRd – M xpandingT69 sales channels ele2 28• Te–l Q109 Q209 Q309 Q409 – eM2a intaining nofrills/ price positioning – CCoonmspolleidating sales channels ting cost synergies/ infrastructure integration with Vodafone 12 DVoeduatsche Bank Conference 2009 27th May 2009 fone Italy
Dvarliuvien cgu esftfoicmieenrcsy a innd mAcquisition and reten fioxbeidle g Aro&wRt hto reinvest in high tion costs* (€bn) • MoKey drivers – bRileed uced prepaid acquisition volumes to – fEocus on value activities Fixed 10% 17%fficie – oPnncy on unitary costs, also leveraging a rGroup Terminals organization tial reinvestment on HMobCCustomers acquisition in Biguhs inVeasluse and adodnistiuomnse)r Contract (+ contract net ile 90% 83%• Fi–x eVdo prolpuomseit iroanmsp (Vuopd oaf Vodafone branded fone Station, Vodafone –Rete Unica) FY 07/08 FY 08/09 Tele2 focus on higher value propositions 1* 3A cquisitionD and retention costs anVoeduatsche Bank Conferendc deistribution channels remuneration (including commissions on airtime) 2009 27th May 2009 fone Italy
Scahpifetixn gin cteanpseixty towards fixed while controlling overall Capex (€bn) Key drivers Fixed 60%.9 1188%% • Rstirgicotrous Capex discipli governancene through 23% Mob23%• D glroivbiang unital SCMry costs down through • Mo–bile Neile 94% 82% 77% – ~1,500twork Sharing: shared sites since March ‘08 ~80% sharing on new sites • Dseeploy1F0Y 06/07 F–r ving Fixed investments in ViUocLcdeLkasf oanned unbund COs unling babundling with fiber 5h0au%l iPn opprogress, overlaid over Tele2 .6% (C%apitalY 07/08 yFY 08/09 intensit) of Total Turnover % . Coverage * Including Tele2 full yea14 Dr contribution in FY 06/07 and FY 07/08 Voeduatsche Bank Conference 2009 27th May 2009 fone Italy
Key messages Outperforming the Total Communications market Sustaining profitability through efficiency; investing in growth Jump start in fixed; expanding into a new marketDopripvoinrgtu sntirtategy execution deeper, to capture all growth ies in Total Communications 15 DVoeduatsche Bank Conference 2009 27th May 2009 fone Italy
Disclaimer Tprhoev presentation contains certain nonGAAP financial information. The Group’s management believes these measures becaiudsee valuable additional information in understanding the performance of the Group or the Group’s businesses they provide measures used by the Group to assess performance. Although these measures are important in tchoem mpaarnaabgement of the business, they should not be viewed as replacements for, but rather as complementary to, the le GAAP DVoeduatsche Bank Conference 2009 27th May 2009 fone Italy
