· Group revenue of R102.7 billion was up 4.5%, as strong normalised growth of 5.8%* was partially offset by rand appreciation.
· Normalised Group service revenue and Group operating profit growth of 4.6%* and 5.4%* respectively, is in line with our medium-term targets.
· Added 5.9 million customers, to serve a combined 129.6 million customers across the Group, including Safaricom on a 100% basis.
· Financial services customers, including Safaricom on a 100% basis, up 5.0% or 2.9 million to 60.6 million.
· Free cash flow up 4.6%.
· Full year dividend of 850cps, up 3.0% and declared a final dividend of 430cps.
Shameel Joosub, Vodacom Group CEO commented:
The past year is best described as being a watershed year for Vodacom in which we made significant strides in our transition to a pan-African technology company through the two significant proposed strategic acquisitions we announced in November last year and the commercial launch of our consortium in Ethiopia this year. The purchase of a 55% stake in Vodafone Egypt, which has a proven track record of consistently delivering strong revenue growth, is nearing conclusion and will help us promote greater digital and financial inclusion in Egypt through leveraging our financial services platforms, global partnerships and best practices.
Similarly, our proposed acquisition of a strategic stake in Community Investment Ventures Holdings (Proprietary) Limited (CIVH), will assist in narrowing the digital divide by enabling affordable access to connectivity in some of the most vulnerable parts of our society, is before South Africa’s regulators for approval. Additionally, our financial services business is underpinned by Africa’s clear fintech leader by transaction volumes, M-Pesa, which recently celebrated its 15th anniversary.
Our efforts as a purpose-led organisation continue to be the core ethos of the Vodacom brand and we support and uplift the communities across our markets wherever possible, in keeping with our Social Contract. In KwaZulu-Natal, which has recently been ravaged by devastating flooding, Vodacom donated R3 million to the Gift of the Givers Foundation to help towards relief efforts. As part of one of our flagship projects to combat the scourge of Gender Based Violence (GBV) in South Africa, Vodacom also pledged R10 million to fund a private sector-led, multi-sectoral ‘Gender-Based Violence and Femicide Response Fund 1’. This is in addition to various GBV initiatives that support the implementation of the South African government’s National Strategic Plan (NSP), and the wider GBV response in the country.
Looking to some of our other purpose-led initiatives across the continent, I was honoured to be part of a delegation in Tanzania attended by President Samia Suluhu Hassan, celebrating the national launch of Vodafone Foundation and Vodacom Tanzania Foundation’s m-Mama. The service, which provides emergency transport for pregnant and postpartum women, is expected to save the lives of up to 9 000 mothers and babies over the next five years. It has already cut maternal mortality rates by 30%. In keeping with our continued efforts to combat COVID-19, the Vodafone Foundation and Vodacom donated R87 million to purchase vaccines and support vaccine roll-outs to vulnerable people in hard-to-reach communities across our markets. This includes funding the delivery of cold chain units to the Democratic Republic of Congo (DRC), Ghana, Mozambique, South Africa and Tanzania.
The coming financial year also promises to be significant in the lives of the South African consumer now that the long-awaited spectrum auction has concluded in March 2022 and is expected to contribute to the long-term sustainability of the industry in Vodacom Group’s largest market. In addition to accelerating our rural coverage programme and fast-tracking the roll-out of our 5G network, access to high-demand spectrum will result in even faster data connectivity and will ultimately assist in delivering greater value for customers, who have already benefitted from a 43% drop in headline data prices since 2020 and our R50 billion investment in infrastructure over the past five years alone.
In building resilience of our networks to cope with significant increases in mobile data traffic volumes, enabling businesses to operate, facilitating online learning and assisting governments in providing critical services, we invested R14.6 billion into capital expenditure across the Vodacom Group markets, helping underpin the 3.0% (4.6%*) increase in Group service revenue.
In particular, I am also pleased with the growth of our Group financial services and Internet of Things divisions in an increasingly difficult trading environment. The strong operating results supported a 3.0% increase in full year dividend to 850 cents per share, a testament to having the right strategy in place and the manner in which the Group and its employees adapt to crises while at the same time resolutely delivering on our purpose-led ambitions.
In South Africa, revenue grew by 5.3% to R80.8 billion on the back of growth in our new services, continued demand for connectivity and incremental wholesale revenue. New services, such as financial and digital services, fixed and Internet of Things (IoT), grew 8.5% and contributed R8.4 billion or 14.4% of South Africa’s service revenue.
Our International operations reported muted revenue growth of 0.6% in the year, impacted by a stronger rand and new levies on mobile money in Tanzania, which has proven to be a setback for our financial inclusion efforts in that country. Despite the impact of the levies, normalised growth came in at 5.6%*, showcasing the operational strength of our International portfolio. Our continued investments in our 4G capacity and coverage to enhance our network lead in all our markets continues to pay dividends with data services a key driver of growth. This is evidenced by the 11% increase in data revenue, contributing 20.7% of International service revenue.
Through our sustained investments into financial, digital and lifestyle services, we remain focused on providing opportunities to enhance our relationship with the 129.6 million customers we serve across our footprint. I am particularly excited about VodaPay’s high adoption rate since its launch in South Africa in October last year. This super-app has attracted 2.2 million downloads and 1.6 million registered users and will offer services ranging from loans and savings, seamless QR and person-to-person payments, to entertainment and personalised shopping experiences, promoting greater financial inclusion.
Alongside M-Pesa, which is expected to further establish itself as Africa’s largest fintech provider through the implementation of an enhanced product roadmap, VodaPay will be instrumental in our quest in connecting the next 100 million African customers so that no one is left behind. M-Pesa across our markets has grown to serve more than 47.1 million customers and 550 000 merchants through 510 000 agents in the DRC, Kenya, Lesotho, Mozambique and Tanzania. M-Pesa processes over 52 million transactions daily with a value of US$324.6 billion during the year. We now serve 60.6 million financial services customers across our footprint, including Safaricom on a 100% basis.
While we remain encouraged by the post COVID-19 recovery taking place in many of the markets in which we operate, the Ukraine-Russian war has significantly impacted commodity prices, heightening inflation risk globally which will likely impact customer affordability and weigh on economic growth. This will place even greater reliance on our ability to deliver personalised nano pricing through our innovative ‘Just4You’ platform, in addition to other proactive innovations to adjust to shifts in customer behaviour.
In addition to focusing on the closure of the proposed acquisitions, and the expansion into Ethiopia, our priorities in the year ahead will include scaling our super-apps, deeper penetration of financial services and delivering innovative products to assist customers with the higher cost of living.