UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
6-K
Report
of Foreign Private Issuer
Pursuant
to Rules 13a-16 or 15d-16 under
the
Securities Exchange Act of 1934
Dated
November 17, 2020
Commission
File Number: 001-10086
VODAFONE
GROUP
PUBLIC
LIMITED COMPANY
(Translation
of registrant’s name into English)
VODAFONE
HOUSE, THE CONNECTION, NEWBURY, BERKSHIRE, RG14 2FN, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form
20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant
by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes
¨ No x
If “Yes” is marked, indicate below
the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-¨.
This
Report on Form 6-K contains a Stock Exchange Announcement dated 17 November 2020 entitled ‘VODAFONE GROUP PLC ⫶ VANTAGE
TOWERS CMD’.
RNS
NUMBER: 5025F
Vodafone
Group Plc ⫶ Vantage Towers CMD
17
November 2020
Vantage
Towers Capital Markets Day
Vantage Towers is holding
a Capital Markets Day today, for investors and analysts. The event will be hosted by Vivek Badrinath (CEO), Thomas Reisten (CFO)
and other members of the senior management team. The Company will, for the first time, present full operational and financial
details as well as the significant growth potential for Vantage Towers and its sector as a whole.
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A
leading tower infrastructure company in Europe with c. 68,000 macro sites across 9 countries1
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#1
or #2 tower market share by number of sites in 8 of our 9 markets
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€680
million2 aggregated pro forma FY20 adjusted EBITDAaL, comprised of pro forma
Consolidated Vantage Towers adjusted EBITDAaL (€523 million) and proportionate share
of Infrastrutture Wireless Italiane S.p.A (“INWIT”) CY19 adjusted EBITDAaL
(€157 million)
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H1
FY21 consolidated pro forma adjusted EBITDAaL of €267 million, in line with management
expectations
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Commitments
for 7,100 new build macro sites with expected run-rate adjusted EBITDAaL contribution
of €130 million by FY27
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Attractive
medium term revenue, adjusted EBITDAaL and RFCF growth outlook supported by new build
sites, committed new tenancies and rural white spot coverage obligations underpinning
a tenancy ratio target of >1.5x
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Vivek
Badrinath, Vantage Towers Chief Executive, commented:
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“Vantage
Towers is now fully operational, with activities in 9 countries, including INWIT, and I am pleased to report a good first
set of results as a standalone company.
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People
and businesses across Europe need more and better connectivity. Vantage Towers is ready to support its customers to satisfy
this demand. The growth potential in the towers sector is fueled by the requirement for data as well as the roll out of 5G
technology and new and wider network coverage obligations across Europe. These factors will increase the number of tenants
renting space on our towers and we have also received firm commitments to build 7,100 new sites for our customers.
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With
inflation-linked revenue – secured for the long term – from Europe’s leading mobile operator Vodafone and
other high-quality investment-grade tenants, and a strong balance sheet, we have a powerful base from which to capture exciting
organic and inorganic value accretive growth opportunities.”
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A
series of on-demand webcasts with supporting presentation materials in relation to the Capital Markets Day will be made available
on Vantage Towers’ website (https://www.vantagetowers.com/cmd) and Vodafone Group Plc website (investors.vodafone.com).
The on-demand webcasts will be available from 7.00am GMT and will provide further information on the company's strategy and financial
outlook. The event will be followed by a live Q&A session from 2.00pm GMT.
1 Including 100% of Greece; closing of
merger with Wind Hellas tower assets in Greece pending completion
2 Aggregate of FY20 pro
forma consolidated adj. EBITDAaL of €523m and 33.2% share of INWIT CY19 pro forma adj. EBITDA of €157m (including Vodafone
estimates for INWIT lease adjustments); please refer to appendix for information on basis of preparation of pro forma financial
information
For
more information, please contact:
Investor
Relations
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Media
Relations
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Investors.vodafone.com
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Vodafone.com/media/contact
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ir@vodafone.co.uk
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GroupMedia@vodafone.com
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Registered
Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679
Vantage
Towers ⫶ A leading tower infrastructure company in Europe
Vantage
Towers (the “Company”) is one of Europe’s largest and most geographically diversified tower companies, with
c. 68,000 macro sites and c. 6,000 micro sites3 (small cells and distributed antenna systems (“DAS”)) across
9 markets. It has the #1 or #2 market position measured by number of sites in 8 of them. The Company has a controlling interest
in 8 markets: Germany, Spain, Greece4,
Portugal, Czech Republic, Romania, Hungary and Ireland (“Consolidated Vantage Towers”). Vantage Towers will also own
a co-controlling interest of 33.2% in INWIT, the #1 tower infrastructure operator in Italy.
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Fully-owned
operations
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30
September 2020
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DE
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ES
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GR5
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CZ
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PT
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RO
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HU
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IE
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Vantage
Towers
(exc. IT)
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IT6
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Vantage
Towers
(inc. IT)
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Macro
sites
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19.1
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k
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8.8
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k
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4.9
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k
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3.8
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k
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3.5
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k
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2.2
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k
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1.9
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k
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1.3
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k
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45.5
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k
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22.1
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k
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67.6
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k
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Tenancy
ratio7
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1.2
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x
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1.6
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x
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1.6
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x
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1.1
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x
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1.2
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x
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2.0
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x
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1.3
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x
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1.5
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x
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1.4
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x
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1.9
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x
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1.5
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x
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Market
position8
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#2
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#2
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#1
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#2
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#2
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#4
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#2
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#2
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#1
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Vantage
Towers has a well-balanced portfolio of macro sites, which is split between ground-based towers (35% of the total) and rooftop
towers (65% of the total). More than half of Vantage Towers’ sites (c. 56% of total) are located in urban and sub-urban
locations with beneficial capacity and densification dynamics, while the Company’s rural sites can help mobile operators
meet their 5G coverage obligations. Vantage Towers has secured commitments to a significant new build, or build-to-suit (“BTS”),
programme of 7,100 sites of which Vodafone has committed to 6,850 macro sites and Wind Hellas has committed to 250 macro sites.
Vantage
Towers benefits from long-term contractual commitments with highly rated tenants, which provide resilient, long-term and predictable
inflation-linked revenues. Approximately 95% of Vantage Towers’ anchor revenues are generated from investment grade tenants.
This includes the anchor tenant master services agreements (“MSAs”) with Vodafone, Europe’s largest mobile operator,
contributing c. 83% of the Company’s pro forma FY20 revenues9. In addition, the Company also serves other top
tier highly rated customers across all its markets, including Deutsche Telekom, Orange, Telefonica and Telecom Italia.
Vantage
Towers also benefits from long-term, network sharing contracts already in place between its major customers in many markets. This
ensures that many of its towers form a critical part of the essential consolidated tower grid of at least two of the largest mobile
operators in markets including Italy, Spain, Greece, Portugal and Romania. This is a key differentiator that protects Vantage
Towers further from potential MNO consolidation and provides it with growth potential from offering space on its leading tower
grids to new tenants.
The
Company also has over 1,600 non-mobile network operator tenants, such as for public protection and disaster relief, and is targeting
growth in this business by bringing new focus and managerial intensity in exploring this market.
Vodafone
currently holds a 50% co-controlling shareholding in Cornerstone Telecommunications Infrastructure Limited (“Cornerstone”),
the joint venture in the UK which owns 14,300 towers. Subject to reaching a legally binding agreement on a revised MSA with its
JV partner, Vodafone intends to transfer this shareholding into Vantage Towers. Based on current market anchor tenancy rates and
the attributable cost base in Cornerstone, the estimated FY20 pro forma adjusted EBITDAaL for the 50% share of Cornerstone is
expected to be between €50 million and €70 million.
3
1,500 micro sites excluding INWIT
4
Including 100% of Greece; closing of merger with Wind Hellas tower assets in Greece pending completion
5
Including 100% of Greece; closing of merger with Wind Hellas tower assets in Greece pending completion
6
Data represents INWIT’s full portfolio
7
Tenancy ratio represents the total number of tenancies (including two tenancies where both Vodafone and another MNO are active
sharing on a site) of Vantage Towers divided by the total number of macro sites
8
Estimated based on total number of macro sites compared to other market participants
9
Represents total revenues excluding pass-through revenue in respect of recharged capital expenditure. Recharged capital
expenditure revenue was €0.3m in FY20 and €0.4m in HYFY21
The
Company would equity account for its shareholding in Cornerstone and the actual financial contribution of Cornerstone will depend
on the agreed terms of any MSA, the future cost base and the finalisation of accounting treatments.
Financial
information ⫶ Vantage Towers’ selected pro forma
financial information
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Aggregated
FY20 pro forma adjusted EBITDAaL of €680 million, comprised of:
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‒
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Consolidated
Vantage Towers FY20 pro forma adjusted EBITDAaL of €523 million (adjusted EBITDAaL
margin of 55%); plus
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‒
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The
Group’s 33.2% share of INWIT10 CY19 estimated pro forma adjusted EBITDAaL
of €157 million
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Consolidated
Vantage Towers FY20 pro forma recurring OpFCF of €494 million (adjusted EBITDAaL
less maintenance capital expenditure of €29 million), yielding a cash conversion
of 94% (recurring OpFCF over adjusted EBITDAaL)
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Consolidated
Vantage Towers H1 FY21 pro forma adjusted EBITDAaL at €267 million, in line with
management expectations
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Consolidated
Vantage Towers pro forma11
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FY20
(€m
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H1FY21
(€m
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Revenue (excl. pass through)
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945
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479
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Adjusted EBITDA
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814
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413
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Margin (%)
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86
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%
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86
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%
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Depreciation of lease-related right of use assets and interest on leases12
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(291
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(146
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Adjusted EBITDAaL
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523
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267
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Margin (%)
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55
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%
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56
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%
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Maintenance capital expenditure
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(29
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(14
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Recurring OpFCF (adjusted EBITDAaL – maintenance capex)
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494
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253
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Cash conversion (Recurring OpFCF / adj. EBITDAaL)
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94
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%
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95
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%
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Recurring
free cash flow (RFCF)13
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373
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190
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Commercial
focus ⫶ Clear strategic roadmap with multiple levers of growth
Vantage
Towers is well positioned to benefit in each of its markets from the compelling structural growth drivers of increasing
data usage, 5G roll-out and coverage obligations. The Company is a commercially driven business with a clear strategy to increase
tenancies and deliver growth by leveraging its comprehensive capabilities.
The Company has strong visibility on the drivers
of tenancy growth in the medium term with commitments for approximately 13,400 additional net new tenancies from new site builds,
committed new tenancies and rural white spot coverage obligations. This includes a commitment from tenants, primarily Vodafone,
for 7,100 new macro BTS sites which are expected to contribute an incremental €130 million of run rate adj. EBITDAaL by FY27
(based only on committed tenants at build), representing an attractive incremental return on invested capital, with a high degree
of certainty and visibility.
In order to meet its medium term target of in
excess of 15,500 new tenancies, Vantage Towers needs to secure an additional 2,100 new tenancies to reach a tenancy ratio of c.
1.5x. The Company already has an identified pipeline14 of opportunities that is multiple times greater than that to
support driving a tenancy ratio >1.5x.
10 The 33.2% share in INWIT will be
equity accounted
11 See basis of preparation for further information on pro
forma adjustments
12 Along with Vodafone Group, Vantage Towers is expected
to undertake a lease policy re-assessment once all Vantage Towers assets have been separated, which may result in minor historical
restatement
13 See glossary for further definition
14 Opportunities the Company has identified, including current negotiations and future opportunities
The Company also has preferred supplier status
with Vodafone for additional deployment requirements. In addition, with its extensive footprint, attractive strategic locations
and strong relationships with leading mobile operators, Vantage Towers is well placed to attract new tenants onto its existing
towers and to deploy new sites as mobile operators increase their tenancies to meet their coverage and densification requirements.
Growth
from the focus on increasing the tenancy ratio is expected to lead to strong growth in cash flow and enhance our return on capital
as a result of the high operating leverage in our business. Opportunities also exist to deliver efficiencies by driving best practices
and optimising costs across Vantage Towers’ site portfolio, which together will further enhance its return on capital.
Growth
outlook ⫶ Key FY21 guidance and medium term targets
Vantage
Towers sets out today a clear set of medium term targets reflecting the clear visibility in its business model.
Consolidated
Vantage Towers
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FY21
PF15
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Medium
Term Targets16
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Tenancy
Ratio for Consolidated Vantage Towers
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~1.38x
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>1.50x
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Consolidated
Revenue (ex. pass-through)
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€955–970m
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Mid-single
digit CAGR
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Consolidated
Adj. EBITDAaL
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€530–540m
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High
50s percentage margin
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Consolidated
RFCF
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€375–385m
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Mid
to high single digit CAGR
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There is also further organic growth potential
beyond the core. Vantage Towers is already in discussions with customers regarding numerous other services across its markets.
These opportunities include Fibre to the Site (“FTTS”), through wholesaling of existing FTTS capacity or investment
in new FTTS infrastructure, in-building solutions, outdoor small cells, and IoT, Edge Computing and Smart Cities. These provide
opportunities to deploy capital at attractive rates of return.
The Company will also consider strategic M&A
opportunities if they enhance shareholder value and meet its investment criteria. These opportunities could include in-market bolt-on
opportunities (as demonstrated by the recent acquisition in Greece), expanding Vantage Towers’ capabilities in adjacent segments
with high growth potential (such as fibre, small cells and private network deployment), and tower portfolios in new geographies
where Vantage can develop leadership positions with high quality anchor tenancies.
Capital
structure and dividend policy ⫶ Growth and shareholder returns
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FY21
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Policy
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Dividend
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€280m17
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Payout
ratio: 60% of RFCF (including dividends from joint ventures18)
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Initial
Leverage
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4.0x
Net Financial Debt / Adj. EBITDAaL
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Consistent
with investment grade credit rating
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15 FY21 guidance on pro forma numbers;
excluding the UK and before any adjustment for ongoing lease reassessment
16 Medium term guidance on actuals; excluding the UK and
before any adjustment for ongoing lease reassessment
17 To be paid following 2021 AGM
18 Subject to the availability of
distributable profits (Bilanzgewinn) and legal restrictions with respect to the distribution of profits and available funds
The capital structure and dividend policy will
ensure Vantage Towers retains capacity for organic and inorganic growth investments and enable a strong cash distribution policy
for shareholders. With a starting leverage of 4x Net Financial Debt / adj. EBITDAaL, Vantage Towers is preserving the strategic
flexibility to pursue additional organic and inorganic opportunities, resulting in €1 billion of leverage capacity that can
be complemented by the issuance of equity to fund larger opportunities.
This
provides Vantage Towers’ shareholders with an attractive mix of flexibility to invest in growth opportunities with attractive
incremental return on capital and significant ongoing shareholder distribution.
Separation
roadmap ⫶ Moving at pace
Since
the announcement of Vodafone's intention to separate its European tower infrastructure operations in July 2019, we have
been working hard to create Vantage Towers. The Company has been operationally separate since May 2020, with the full senior management
team in place running the day-to-day operations.
We have also recently announced the nomination
of Rüdiger Grube as Independent Chairman of the Supervisory Board. Rüdiger Grube brings over 30 years of international
executive and non-executive Board experience. Dr. Grube previously had a long career at Daimler across a variety of roles, was
CEO of Deutsche Bahn, and was Chairman and non-executive Director of Airbus. He is excited to be nominated as Chairman of the Supervisory
Board of Vantage Towers, and is committed to dedicating appropriate time and focus to this role. We are in advanced discussions
with additional independent Supervisory Board members, who will be announced in due course.
Basis of preparation
Introduction
The financial information
presented above sets out certain summary pro forma consolidated financial results for Vantage Towers for the twelve months ended
31 March 2020 and the six months ended 30 September 2020.
The basis of the pro
forma information for the consolidated group reflects the historical results of Vantage Towers (including its operations in Germany,
Spain, Greece, Ireland, Portugal, Romania, Hungary and Czech Republic).
The pro forma results
of operations are adjusted for the expected financial impact of the separation of the business from Vodafone Group Plc (“Vodafone”).
The impact of commercial agreements, including the Master Services Agreements (“MSAs”) and Long Term Agreements (“LTAs”)
which have been or are expected to be entered into with Vodafone, together with expected incremental running costs of Vantage Towers,
are included as if they had been in place throughout the twelve month period and six month periods respectively.
The pro forma results
relating to Vantage Towers Greece are based on the historical results of the tower assets contributed by Vodafone-Panafon Hellenic
Telecommunications Company S.A (“Vodafone Greece”) and Wind Hellas Telecommunications SA (“Wind Hellas”)
and reflect the commercial arrangements (including the Master Services Agreement) between Vantage Towers Greece, Vodafone Greece
and Wind Hellas, and certain expected incremental costs of Vantage Towers Greece on a standalone basis, as if they had been in
place for 100% of both businesses throughout the twelve month period and six month period respectively.
In addition, Vantage
Towers is expected to hold Vodafone’s equity stake in Infrastrutture Wireless Italiane S.p.A (“INWIT”). Selected
financial information in relation to INWIT is set out separately. This investment is classified as an equity accounted joint venture
and will therefore not be included in consolidated EBITDA measures for financial reporting purposes.
The financial information
presented herein has been neither audited nor reviewed by Vodafone or Vantage Towers’ independent auditors and may be subject
to changes.
Pro forma financial
information for Consolidated Vantage Towers
Historical financial
information for the twelve months ended 31 March 2020
The summary historical
financial information used as the basis for the pro forma financial information for the twelve months ended 31 March 2020 contained
herein has been prepared by extracting the directly attributable revenues and costs of the infrastructure assets to be included
in Vantage Towers from the accounting records of Vodafone. The financial statement line items that can be directly identified
are:
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Revenues
from tenants other than Vodafone;
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Costs
which are directly attributable to the tower infrastructure assets, such as energy, maintenance,
depreciation of property, plant and equipment (“PPE”) and lease costs recognised
under IFRS 16; and
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·
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The
non-current PPE assets and related asset retirement obligations.
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The same accounting
policies and measurement principles as were applied by Vodafone in preparing its consolidated financial information for inclusion
in its Annual Report for the year ended 31 March 2020 have been used for the preparation of the historical financial information,
which forms the basis of the pro forma financial information. This includes IFRS 16 “Leases” which was adopted by
Vodafone on 1 April 2019.
Historical financial
information for the six months ended 30 September 2020
The summary historical
financial information used as the basis for the pro forma financial information for the six months ended 30 September 2020 contained
herein is derived from the accounting records of the five markets that demerged before or during the period from the following
dates:
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Vantage
Towers S.L.U (“Vantage Towers Spain”) – 1 April 2020;
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Vantage
Towers GmbH (“Vantage Towers Germany”) – 25 May 2020;
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Vantage
Towers Limited (“Vantage Towers Ireland”) – 1 June 2020;
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Vodafone
Towers Portugal S.A. (“Vantage Towers Portugal”) – 16 July 2020; and
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Vantage
Towers s.r.o. (“Vantage Towers Czech Republic”) – 1 September 2020.
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The post-demerger financial
information has been combined with historical results for the pre-demerger periods in the above markets, and historical results
for the full period for Vantage Towers Hungary, Vantage Towers Romania and Vantage Towers Greece. This historical financial information
has been prepared by extracting the directly attributable revenues and costs of the passive infrastructure to be included in Vantage
Towers from the accounting records of Vodafone (and Wind Hellas in the case of Greece).
Pro forma adjustments
Pro forma financial
adjustments have then been made to present what the material effects of the separation of Vantage Towers from Vodafone would have
had on the historical financial information if Vantage Towers had existed in the structure set out in the introduction above,
for the twelve months ended 31 March 2020 and for the six months ended 30 September 2020. The main adjustments that have been
made in preparing the pro forma financial information arise from:
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Revenue
from Vodafone based on the terms of the relevant MSA that are/will be in place for each
market. This adjustment includes the anchor tenant rental income from Vodafone.
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·
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Costs
required to run Vantage Towers on a standalone basis. This adjustment includes charges
for local Vodafone markets, such as maintenance and other support services, and group
services and other contractual arrangements covering, inter alia, maintenance and insurance
costs.
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·
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Employment
and other general and administrative costs.
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The adjustments set
out above are based on the commercial arrangements that have been or are expected to be entered into between Vantage Towers and
other members of the Vodafone group, and with Wind Hellas in Greece, and the expected future costs of Vantage Towers, and are
subject to potential change. These changes might result from amendments to the proposed portfolio of assets and equity investments
to be held by Vantage Towers, the scope and pricing of services supplied by Vantage Towers, the actual incremental costs of Vantage
Towers, changes to accounting policies and related estimates and other potential business developments. The pro forma results
exclude any one-off costs in relation to the separation of Vantage Towers from Vodafone.
Along with Vodafone Group,
it is expected that Vantage Towers will reassess the IFRS 16 lease term for its head leases once all Vantage Towers assets have
been separated. This may result in minor historical restatement of the pro forma depreciation of lease-related right of use assets
and interest on leases.
Summary historical
financial information for INWIT
Vodafone owns a 33.2%
stake in INWIT, which it intends to transfer into Vantage Towers. This stake will be equity accounted by Vantage Towers. The merger
of Vodafone Towers Srl (“Vodafone Towers Italy”) and INWIT was effective from 31 March 2020 (the “INWIT Transaction”)
and as such INWIT did not contribute to Vodafone’s results for the year ended 31 March 2020.
The financial information
presented in respect of INWIT for the 12 months ended 31 March 2020 is directly extracted from the INWIT prospectus dated 10 June
2020, is based on INWIT’s accounting policies and is prepared in accordance with EU-IFRS and with the legal and regulatory
provisions in force in Italy (in particular, the measures adopted in implementation of Section 9 of Italian Legislative Decree
no. 38 of 28 February 2005). Lease costs have been derived from the INWIT prospectus and INWIT’s CY19 Annual Report and is
therefore based on INWIT’s accounting policies.
The pro forma income
statement in the INWIT prospectus represents INWIT's financial performance for the 12 months ended 31 December 2019 combined with
the Vodafone Towers Italy carve out financial information and adjusted to reflect the performance of the combined group as though
the INWIT Transaction had taken place as at 1 January 2019. The pro forma adjustments include adjustments to reflect the MSA between
Telecom Italia S.p.A. (“TIM”), Vodafone Italia S.p.A. (“Vodafone Italy”) and INWIT, as if it had been in
place for the full year presented, and adjustments to align the Vodafone Towers Italy carve out financial information to INWIT’s
accounting policies and adjustments for one-off and standalone costs. As a joint venture the results of INWIT will be equity accounted
for by Vantage Towers. The financial information presented in respect of INWIT for the six months ended 30 September 2020 is directly
extracted from the INWIT Q3 2020 results announcement as the sum of INWIT’s Q2 and Q3 results, based on INWIT’s accounting
policies.
KPIs and financial
terms
A number of Alternative
Performance Measures (“APMs”) are presented in this announcement, which are used in addition to IFRS statutory performance
measures. These APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional
helpful information on the performance of the business.
Adjusted EBITDA is defined
as operating profit before depreciation on lease-related right of use assets and interest on leases, depreciation, amortisation
and gains/losses on disposal for owned fixed assets, and excluding share of results in associates and joint ventures, impairment
losses, restructuring costs arising from discrete restructuring plans, other operating income and expense and significant items
that are not considered by management to be reflective of the underlying performance of the Group.
Adjusted EBITDAaL is
defined as operating profit, less capital expenditure recharge revenue and after depreciation on lease-related right of use assets
and interest on leases, but excluding depreciation, amortisation and gains/losses on disposal for owned fixed assets, and excluding
share of results in associates and joint ventures, impairment losses, restructuring costs arising from discrete restructuring plans,
other operating income and expense and significant items that are not considered by management to be reflective of the underlying
performance of the Group.
Capital expenditure recharge
revenue represents direct recharges to tenants of capital expenditure in connection with upgrades to existing sites.
Aggregated adjusted EBITDAaL
represents adjusted EBITDAaL for the Consolidated Vantage Towers operations, plus Vodafone’s ownership share of the adjusted
EBITDAaL of INWIT. The results of INWIT will be equity accounted by Vantage Towers.
Recurring operating free
cash flow (“OpFCF”) is adjusted EBITDAaL less maintenance capital expenditure.
Maintenance capital expenditure
represents capital expenditure required to maintain and continue the operation of the existing tower network and other passive
infrastructure. For the avoidance of doubt, maintenance capital expenditure excludes capital investment in new sites or other growth
initiatives and should not be taken to be indicative of the total future investment requirement of Vantage Towers.
Recurring free cash flow
(“RFCF”) is recurring OpFCF less taxation, interest and changes in operating working capital. For the pro forma results,
pro forma income statement taxation and interest have been used as a proxy for cash paid as no pro forma cash flow has been prepared.
Tenancy ratio represents
the total number of tenancies (including both Vodafone and another MNO where there is existing active sharing on a site) of Vantage
Towers divided by the total number of towers.
Glossary
“Active Equipment”
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the
customers’ equipment used to receive and transmit mobile network signals.
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“BTS”
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build-to-suit
and corresponds to committed new build site programs and related services that have been contracted with different clients,
including ad-hoc capital expenditure which might be required.
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“CAGR”
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compound
annual growth rate.
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“Company”
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Vantage
Towers.
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“Consolidated Tower Grid”
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the combination of the mobile network of two or more operators which are sharing both physical infrastructure (i.e. macro sites) and the communication equipment placed on the macro sites.
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“Consolidated Vantage Towers”
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the European tower infrastructure business in Germany, Spain, Greece, Portugal, Romania, Czech Republic, Hungary and Ireland in which Vantage Towers has, or is planned to have, a controlling interest.
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“DAS”
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distributed antenna system, which is a network of spatially separated antenna nodes connected to a common source via a transport medium that provides wireless service within a geographic area or structure.
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“FTTS”
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Fibre to the Site, which refers to the optical fibre connection to transmit the high-frequency signal from the macro or micro site to the rest of the mobile network.
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“INWIT”
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Infrastrutture Wireless Italiane S.p.A.
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“IoT”
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Internet of Things, the interconnection of uniquely identifiable embedded computing devices within the existing internet infrastructure.
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“JV”
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Joint Venture.
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“Macro sites”
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the physical infrastructure, either ground-based (“Ground Based Tower” or “GBT”) or located on the top a building (“Rooftop Tower” or “RTT”) where communications equipment is placed to create a cell in a mobile network.
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“Micro
sites”
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indoor / outdoor smalls cells, repeater sites, mobile sites and distributable antenna system.
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“MNO”
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mobile network operator.
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“MSA”
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master services agreement.
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“Passive Infrastructure”
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an installation comprising a set of different elements located at a Site and used to provide support to the Active Equipment.
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“Physical tenancy”
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the installation of Active Equipment on a Site.
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“Site”
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the Passive Infrastructure on which Active Equipment is mounted as well as its physical location.
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“Small Cells”
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low-powered radio access nodes used in the completion of macro cells and in areas of high traffic concentration.
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“White Spot”
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a specific geographical location where no mobile operator has network coverage.
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Forward-looking
statements
This report contains "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Company’s results of operations,
financial condition, liquidity, prospects, growth and strategies. Forward-looking statements include, but are not limited to, statements
regarding objectives, targets, strategies, outlook and growth prospects, including guidance for the financial year ending March
31, 2021, medium-term targets, the growth of the microsite portfolio and revenue therefrom, tenancy targets and the tenancy pipeline;
run-rate adjusted EBITDAaL contributions from new build site commitments; the Company’s capital structure and dividend policy;
future plans, events or performance, including the transfer of Vodafone’s 50% interest in Cornerstone, Cornerstone’s
estimated pro forma adjusted EBITDAaL contribution to the Company, new site builds, committed new tenancies and rural white spot
coverage obligations; economic outlook and industry trends.
Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such words as "will", "could", "may",
"should", "expects", "intends”, “prepares" or "targets" (including in their
negative form or other variations). By their nature, forward-looking statements are inherently predictive, speculative and involve
risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are
a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these
forward-looking statements. All subsequent written or oral forward-looking statements attributable to the Company or any member
of the Vodafone Group, including any member of Vantage Towers, or any persons acting on their behalf are expressly qualified in
their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in this document
will be realised. Any forward-looking statements are made of the date of this announcement. Subject to compliance with applicable
law and regulations, neither Vodafone nor Vantage Towers intend to update these forward-looking statements and do not undertake
any obligation to do so.
Important Information
This announcement is not directed to, or intended
for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or
other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation of such jurisdiction
or which would require any registration or licensing within such jurisdiction. Any failure to comply with these restrictions may
constitute a violation of the laws of any such jurisdiction. This announcement does not constitute an offering of securities or
otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of
securities in any company within the Vodafone Group, including, for the avoidance of doubt, any company within Vantage Towers.
This announcement contains certain summary pro
forma financial information of Vantage Towers for the financial year ended 31 March 2020 and for the six months ended 30 September
2020 (together, the “PF Financial Information”) as well as financial information from INWIT. For a description of the
basis of preparation of the PF Financial Information, please see "Basis of Preparation" above. The PF Financial Information
has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and does not, therefore,
represent Vantage Towers' actual results of operations. Such information may not, therefore, give a true picture of Vantage Towers'
results of operations nor is it indicative of its results. The PF Financial Information is subject to change.
This announcement also contains non-IFRS financial
information which Vodafone's and Vantage Towers' management teams believe is valuable in understanding the performance of Vantage
Towers. For a description of this information, please see “KPIs and financial terms” above. In this document, the Company
utilises certain alternative performance measures, including but not limited to revenue (excluding pass through revenue), adjusted
EBITDA, adjusted EBITDAaL, aggregated adjusted EBITDAaL, recurring OpFCF and RFCF, that in each case are not recognized under International
Financial Reporting Standards (“IFRS”). These non-IFRS measures are presented as the Company believes that they and
similar measures are widely used in the markets in which it operates as a means of evaluating a company’s operating performance
and financing structure. They may not be comparable to other similarly titled measures of other companies and are not measurements
under IFRS or other generally accepted accounting principles, nor should they be considered as substitutes for the information
contained in the financial statements included in this document.
This announcement does not purport to contain
all information required to evaluate the Company and/or its financial position. Financial information in this announcement is preliminary
and unaudited and certain financial information (including percentages) has been rounded according to established commercial standards.
In addition, the Company is currently still in the process of establishing capital markets readiness by expanding the scope of
management reporting, financial accounting as well as forecasting and budgeting processes through the hiring and training of additional
resources and rolling out market standard policies and procedures. As a result, some of the financial and/or operational information
set forth in this announcement remains subject to change and/or completion. Certain market positioning data about Vantage Towers
included in this announcement is sourced from third party sources. Third party industry publications, studies and surveys generally
state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of
the fairness, quality, accuracy, relevance, completeness or sufficiency of such data. Such research and estimates, and their underlying
methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change
without notice. Accordingly, Vodafone and Vantage Towers expressly disclaim any responsibility for, or liability in respect of,
such information and undue reliance should not be placed on such data.
References to Vodafone are to Vodafone Group Plc
and references to Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise stated. References to Vantage
Towers are either a reference to a member of the group of entities and investments comprising Vodafone's European towers business
as described in this announcement, or to the group as a whole, depending on the context and unless otherwise stated. Vodafone,
the Vodafone Speech Mark Devices, Vodacom and The future is exciting. Ready? are trade marks owned by Vodafone. Vantage Towers
is a trade mark owned by Vantage Towers. Other product and company names mentioned herein may be the trade marks of their respective
owners.
END
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorised.
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VODAFONE GROUP
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PUBLIC LIMITED COMPANY
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(Registrant)
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Dated:
November 17, 2020
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By:
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/s/ R E S MARTIN
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Name: Rosemary E S Martin
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Title: Group General
Counsel and Company Secretary
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