Recommended offer for Cable & Wireless Worldwide

Transcription

1 Recommended offer for Cable & Wireless Worldwide 1

2 Disclaimer This Investor Presentation is in connection with the recommended cash offer (the Offer ) by Vodafone Europe B.V. ( Vodafone ) for Cable & Wireless Worldwide Plc ( CWW ). By attending this Investor Presentation, you agree to be bound by the following conditions: Overseas Persons The information contained in the Investor Presentation is not for publication or distribution, directly or indirectly, in or into any jurisdiction where to do so would violate the law of that jurisdiction (a Restricted Jurisdiction ), and the availability of the Offer to shareholders who are not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable regulatory and legal requirements. Unless otherwise determined by Vodafone or required by the City Code on Takeovers and Mergers, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in or into a Restricted Jurisdiction where to do so would violate the securities laws in that jurisdiction and the Offer is not capable of acceptance from or within a Restricted Jurisdiction except pursuant to an applicable exemption. Accordingly, copies of this Investor Presentation are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this investor presentation and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdiction where to do so would violate the laws in that jurisdiction. No Investment Advice This Investor Presentation is not intended to form the basis of any investment decision. It does not constitute an offer or invitation for the sale or purchase of any securities, businesses and/or assets or any recommendation or commitment by Vodafone Group Plc ( Vodafone Group ) or any company or interest comprised in the Vodafone Group and neither this Investor Presentation, nor its contents nor any other written or oral information made available in connection with the Offer shall form the basis of any contract. This Investor Presentation has been prepared without reference to your particular investment objectives, financial situation, taxation position and particular needs. If you are in any doubt in relation to these matters, you should consult your financial or other advisers. No Reliance The information in this Investor Presentation has been provided by Vodafone and has not been independently verified by UBS, the financial adviser to Vodafone and Vodafone Group (the Financial Adviser ) or any other person. This Investor Presentation does not purport to be comprehensive or to contain all the information that a recipient may need in order to evaluate the Offer. No representation or warranty, express or implied, is given and, so far as is permitted by law and except in the case of fraud, no responsibility or liability is accepted by any person, with respect to the accuracy or completeness of the Investor Presentation or its contents or any oral or written communication in connection with the Offer. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts contained in this Investor Presentation. In giving this Investor Presentation, the Vodafone Group undertakes no obligation to provide any additional information or to update this Investor Presentation or any additional information or to correct any inaccuracies which may become apparent. 2

3 Transaction highlights Strengthens the enterprise business of Vodafone in the UK and internationally Attractive UK and international fibre network assets Creates a leading integrated enterprise focused operator in the UK Valuable in-market and international cost saving opportunities Value creative for Vodafone shareholders 3

4 Consistent with our Group strategy Leadership focus Europe, Africa, India Mobile data: accelerate across footprint A growth strategy from data Enterprise: exploit opportunity across footprint Emerging markets: drive penetration and data adoption Total Communications: continue to develop services in Europe New services: deliver growth opportunities Value & efficiency from scale Asset / portfolio strategy Continue to enhance efficiency and realise scale benefits Generate liquidity or free cash flow from all non-controlled assets Capital discipline and financial objectives Profitable investment and shareholder returns Continue to apply rigorous investment criteria to deployment of surplus capital and regular assessment of all assets 4

5 Overview of CWW Services IP and Data Wide area networks Local area networks IP voice solutions Hosting & Applications Managed hosting solutions Co-location Server and website hosting Storage and security Hosted applications FY11 revenue by product 12% 44% 2.3bn 44% IP and data Traditional voice and legacy Hosting and applications Traditional voice & legacy Source: CWW Network One of the largest fibre networks in the UK, comprising c.20,500km in length International network spanning c.425,000km in length 127 global points of presence in 35 countries Member of several cable consortiums FY11 revenue by customer 9% Source: CWW 16% 9% 38% 2.3bn 13% 16% UK Enterprise UK Carrier UK Public sector UK Mid-market Global Carrier Global Enterprise 5

6 Creates a leading integrated operator in the UK UK telecoms operators latest reported full year domestic revenue m 18,000 16,000 15,575 CWW UK Vodafone UK 7,200 4,800 6,971 6,784 1,700 5,769 5,271 3,992 2,400 5,271 1, (Pro forma) Combined entity will be well positioned to capitalise on the growing demand for unified communications Opportunity for enterprise customers to purchase advanced total communications services from a single provider Source: Company information 6

7 UK cost saving opportunities CWW UK network footprint Cost saving opportunities Extensive fibre network that fits well with the location of Vodafone s mobile base stations Backhaul to support demand for data traffic at considerably lower cost Network rationalisation Utilise Vodafone's purchasing organisation to extract procurement savings Rationalise overlapping IT systems and functions Eliminate duplicative SG&A costs CWW local exchange CWW UK trunk network Source: CWW, Samknows 7

8 Incremental benefits across Vodafone s global footprint CWW international network and Vodafone footprint CWW network Vodafone operating companies 1 Verizon Wireless Partner markets CWW s high IP traffic volumes and peering status will provide further cost efficiencies International network capable of handling part of Vodafone s international traffic 1. Includes Vodafone Group Plc s subsidiaries and joint ventures, as well as Safaricom 8

9 Transaction terms and timetable Terms Recommended cash offer of 38p per share 92% premium to pre-approach price 1,044m total consideration for ordinary share capital Offer required for the convertible bond ( 230m par value) Cash and equivalents of 174m (Sep-11) Loans/finance leases of 57m (Sep-11) CWWRP actuarial pension funding deficit of 248m (Sep-10) Subject to certain conditions, including satisfactory regulatory approvals EC merger control approval required Offer to be effected by Scheme of Arrangement Requires approval by majority of shareholders representing 75% of value of those voting in person or by proxy Shareholders representing approximately 18.6% of CWW shares have signed an irrevocable undertaking or letter of intent to vote in favour of the offer Timetable Rule 2.7 announcement 23 April 2012 Scheme documents posted to shareholders by 21 May 2012 Expected completion Q

10 Transaction evaluation process Process Regularly assess buy/build/partner opportunities across Vodafone s markets Different market dynamics support different decisions Attractive opportunity to buy in the UK Detailed and rigorous diligence exercise completed Funded through cash reserves Maintain net debt/ebitda at current levels Remains small in the Vodafone context 3% of FY11 EBITDA M&A Criteria M&A Criteria 1 2 IRR exceeds market WACC by 200bps ROIC exceeds market WACC within 3 5 years Acquisition of CWW Expected to be accretive to EPS and FCF per share in the first 12 months of ownership (after synergies and before integration costs) 1 EPS and FCF per share accretion expected to exceed share buyback by year 4 1. Before purchase accounting adjustments 10

11 Outline post acquisition plan The business has historically been underinvested 1. Post acquisition phase CWW kept separate for a period to ensure the business is stabilised Vodafone senior executive in charge of integration plan Focused investment to stabilise platforms Utilisation of CWW capacity for Vodafone data traffic in the UK and internationally Creation of joint sales account teams 2. Integration phase Technology assets integrated UK: fibre network Group Technology: international infrastructure and data centres Combine Vodafone and CWW teams according to customer type Regional/peripheral assets integrated locally 11

12 Forward-looking statements The information in this Investor Presentation may contain forward-looking statements regarding the Vodafone Group s financial position, business strategy, plans and objectives of management for future operations. All statements other than statements of historical facts may be forward-looking statements. Forward-looking statements also often use words such as targets, plans, believes, expects, aims, intends, will, may, anticipates, estimates, projects, should and words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, and undue reliance should not be placed on such statements. These forward-looking statements speak only as of the date of this Investor Presentation. Vodafone Group expressly disclaims any obligation or undertaking to update or revise any forward-looking statement (except to the extent legally required). Unless expressly stated otherwise, no statement contained or referred to in this investor presentation is intended to be a profit forecast. 12

13 Q & A 13

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