Vodafone Group Plc's CEO Discusses Q3 2012 Results - Earnings Call Transcript

I will start with few highlights on the quarter before passing to Andy who will take you through all the operating companies and then I will summarize, and we'll then open to questions.

So let me start on Slide 3, highlights of the quarter. Group service revenue grew 0.9%, which is just over 3% excluding MTRs. This growth is less than the previous quarter, reflecting difficult conditions in a number of our European markets, offset by strong momentum from our AMAP regions and continued growth from operations in Northern Europe. In this context, we continue to deliver, in our strategic growth areas, the 3 areas of data, enterprise and emerging markets.

Data, specifically, grew 21.8%, led by the increasing smartphone penetration, which is now over 24% in Europe. Enterprise growth of 0.8% was a little slower than the previous quarter due to competitive and macroeconomic pressures in voice, but we still see a healthy and growing demand for enterprise data services.

And we continue to generate strong cash flows. Today, we report GBP 1.5 billion free cash flow for the quarter. We are now over halfway through the GBP 4 billion SFR buyback program and over 70% complete against our GBP 6.8 billion commitment. And finally today, we confirm our guidance for the '11/'12 fiscal year.

So we can move to Slide 4. Here you can see our regional performance for the quarter. Europe declined 1.7% on a reported basis. However, once we remove the impact of regulated voice termination rate cuts, Europe grew 1%. Some of our markets in Southern Europe remain very challenging, as I said. And particularly, we saw a deterioration of trends in Italy, which Andy will cover a little bit later.

On the other hand, AMAP grew 7.6% on a reported basis, which would be 8.8% excluding voice MTR cuts, with momentum coming from 20% growth in India, 80% growth in Vodacom and not mentioned on the chart, but still worth mentioning, an excess of 30% in Ghana, which is small but we are proud of.

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