Vodacom Group Limited (JSE:VOD) News - Vodacom Group Limited trading update for the quarter ended 31 December 2021

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)

01 February 2022

Vodacom Group Limited trading update for the quarter ended 31 December 2021 (short form announcement)

Highlights
• Group revenue grew 6.4% (5.7%*) to R26.7 billion underpinned by strong service revenue growth.
• Group service revenue was up 5.3% (4.4%*), supported by sustained demand for connectivity and growth in new services
  such as financial services.
• South Africa service revenue grew 4.5% with excellent growth in Vodacom Business.
• International service revenue increased by 6.7% (3.5%*), supported by data and M-Pesa revenue growth.
• Financial services revenue increased 12.5% to R2.0 billion, with strong adoption of our South African super-app, VodaPay.


                                                                       Quarter ended 31 December                                       YoY % change
 Rm1                                                                              2021                       2020                       Reported                  Normalised*
  Group service revenue                                                          20 664                      19 627                           5.3                         4.4
  South Africa                                                                   14 950                      14 306                           4.5                         4.5
  International                                                                   5 913                       5 543                           6.7                         3.5
  Group revenue                                                                  26 745                      25 134                           6.4                         5.7
  South Africa                                                                   20 875                      19 729                           5.8                         5.8
  International                                                                   6 110                       5 685                           7.5                         4.3

Shameel Joosub, Vodacom Group CEO commented:

The third quarter of our financial year coincided with a fourth wave of milder COVID-19 infections across most of the world
but was largely shaped by economies beginning to recover from the impact of the pandemic. The Group remains committed
to focusing on the economic recovery in markets where we operate through the execution of a purpose-led six-point plan.
This plan includes expanding network coverage and resilience, accelerating support to governments, enhancing digital
accessibility and digital adoption, supporting our customers as they adapt to new ways of working and promoting financial
inclusion.

We expect that the two strategic acquisitions we announced in November last year – a majority interest in Vodafone Egypt
and a strategic stake in the fibre assets of Community Investment Ventures Holdings (Pty) Limited (CIVH) - will be
instrumental for this plan. It is particularly pleasing that our minority shareholders recently overwhelmingly voted in favour
of the R41 billion Vodafone Egypt transaction as this presents significant diversification and growth opportunities for
shareholders in a substantial and largely unbanked market and is expected to be transformational in our evolution from a
telco to a techco. This approval represents an important milestone in our target to close the transaction by 31 March 2022.
However, the transaction remains subject to regulatory approvals including from the National Telecom Regulatory Authority
of Egypt (NTRA) and Egypt’s Financial Regulatory Authority.



Notes:
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 trading update.
The pro-forma financial information has not been audited or reviewed or otherwise reported on by external auditors.
The quarterly information has not been audited or reviewed by Vodacom’s external auditors.

All growth rates quoted are year-on-year and refer to the quarter ended 31 December 2021 compared to the quarter ended 31 December 2020.
Amounts marked with an * in this document represent normalised growth which presents performance on a comparable basis. This excludes merger acquisition and disposal
activities where applicable and adjusting for trading foreign exchange and foreign currency fluctuation on a constant currency basis (using the current year as base) to show a like-
for-like comparison of results.

The CIVH fibre transaction in South Africa is also expected to accelerate Vodacom’s purpose of connecting people for a better
future by facilitating an ambitious fibre roll-out programme that will assist in narrowing the digital divide by enabling
affordable access to connectivity in some of the most vulnerable parts of our society. Vodacom has submitted regulatory
filings in respect of the transaction to the Competition Commission and ICASA, respectively, initiating a process to obtain
regulatory approval.

The assignment of additional spectrum in South Africa will also be instrumental in extending coverage, improving quality of
service and lowering the cost to communicate, all of which are expected to support economic growth. With the auction
scheduled for March 2022, we are working with the government, ICASA and the other telecommunication operators in South
Africa to unlock this economic tailwind and avoid further delays. The allocation of high demand spectrum remains a key
strategic priority for the Group.

Revenue in the third quarter was up 6.4% driven by a sustained demand for connectivity and the growth of new services,
which includes financial and digital services, IoT and fixed. Our service revenue growth of 4.4%* on a normalised basis was in
line with the Group’s medium-term target and supported by a resilient performance in South Africa on the back of sustained
investment into technology and our network to further enhance customer experience.

Financial services remains a clear strategic priority for the Group and this business continues to gain momentum. This is
evidenced by the 12.5% increase in financial services revenue to breach the R2 billion mark for the first time in a quarter. Our
M-Pesa platform, including Safaricom, continues to scale at an impressive rate with transaction values up 16.1% to exceed
R430 billion per month. In South Africa, the launch of our VodaPay super-app in October last year has exceeded our
expectations by attracting 1.4 million downloads and 1.0 million registered users in its first three months. We see VodaPay as
a precursor to M-Pesa’s evolution and further strengthening our fintech position across our footprint.

In South Africa, we invested a further R2.3 billion in the network during the quarter and delivered great value to customers
through a highly successful summer campaign that attracted over 400 million engagements, unlocking prizes and rewards for
our expanded customer base. We service 45.7 million customers in South Africa, an increase of 3.3% in a year, which
contributed to a 4.5% increase in service revenue.

Supported by our continued focus on financial inclusion and accelerated capital expenditure, service revenue for our
International operations grew 6.7% to R5.9 billion, or 3.5%* on a normalised basis. The reported growth was underpinned by
a 12.9% increase in M-Pesa revenue and a 21.2% rise in data revenue. Tanzania’s financial performance and progress in
driving financial inclusion was impacted by government levies imposed on mobile money and airtime recharges. A key focus
for our International portfolio is digital inclusion, which will be supported by our growing 21.5 million data customer base
and driving higher smartphone adoption. International customers on smartphones stands at 12 million.

Looking ahead, we are encouraged by the post COVID-19 recovery taking place in many of the markets in which we operate
and look forward to making meaningful contributions to foster economic development.


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 SENS
https://senspdf.jse.co.za/documents/2022/jse/isse/VOD/3Q22_SENS.pdf and is also available on our website www.vodacom.com.

The full announcement is also available at our registered office and our sponsor’s office for inspection, at no charge, during office hours. 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.

Sponsor: UBS South Africa (Pty) Limited

Date: 01-02-2022 07:05:00
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