Slide 1: Safaricom Ltd FY 2012 Presentation
Safaricom Ltd FY 2012 Presentation
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentations may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or its contents. This presentation does not
Slide 3: Contents
Contents CEO Summary 2011/12 Financials Operational Focus and Outlook 3
Slide 4: 2011/2012 Highlights
2011/2012 Highlights • Sustained investment in network quality and modernization • Continued momentum in customer growth • Strong operational and financial performance • Voice, Mobile data and M-PESA remain key drivers of growth 4
Slide 5: Market Overview
Market Overview Market Share-Dec 2011 7.9% 10.3% Safaricom • Forex and borrowing costs impacting industry Airtel profitability Orange 15.2% Yu • Inflation +6.42ppt to 15.6% in March 2012 66.6% • Ksh weakened vs USD in H1, recovered in H2 • Central Bank of Kenya rate currently at 18% Market Share-Dec
Slide 6: Delivering Excellence in Customer Experience
Delivering Excellence in Customer Experience • Launch of the Customer Experience Centre • 36 Safaricom Shops with 2 Mini Centres • 39,400 M-PESA Agents – a 46% increase • The Fastest Speeds on Data – up to 42mbps • Widest Data Network Coverage • Low Cost smartphones e.g. Huawei Ideos
Slide 7: 1st to Market Launch of Online Customer Service Support
1st to Market Launch of Online Customer Service Support • First large Kenyan corporate to offer Online Customer Support • Dedicated team of subject matter experts • Includes a Self Help Portal with a growing database of FAQs • Involving our customers in the resolution process increases loyalty and p
Slide 8: Improvement in Key Financial Metrics
Improvement in Key Financial Metrics TOTAL REVENUE +13% to Kshs. 107.00bn VOICE REVENUE +9% to Kshs.68.96bn NON -VOICE % OF REVENUE +3pp to 29% of total revenue EBITDA +5% to Kshs. 37.49bn NET INCOME -4% to Kshs. 12.63bn FREE CASH FLOW +110% to Kshs.9.35bn RECOMMENDED FULL YEAR +10% to Kshs.0.22 per
Slide 9: Contents
Contents CEO Summary 2011/12 Financials Operational Focus and Outlook 9
Slide 10: Delivering on Strategy
Delivering on Strategy Revenue EBITDA Kshs. Billion Net Income Free Cash Flow Kshs. Billion Kshs. Billion Kshs. Billion +12.8% +5.0% -4.0% +109.7% 107.00 37.50 13.16 9.35 35.72 12.63 94.83 4.46 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 Continued customer Growth in revenue Impac
Slide 11: Strong Performance in H2
Strong Performance in H2 Revenue EBITDA Net Income Free Cash Flow Kshs. Billion Kshs. Billion Kshs. Billion Kshs. Billion +15.6% +54.0% +114.9% +1463.58% 57.37 22.74 8.62 49.63 10.09 14.76 4.01 -0.74 H1 FY12 H2 FY12 H1 FY12 H2 FY12 H1 FY12 H2 FY12 H1 FY12 H2 FY12 Mid-year tariff Held costs relativel
Slide 12: Sustained Revenue Growth in the year
Sustained Revenue Growth in the year • Customer base +11% growth to 19m customers YoY Revenue Kshs. Billion CAGR 11% • Pursuing sustainable pricing strategy 12.8% 107.00 • Increased usage - +21% MOUs; 116 mins in FY12 94.83 83.96 70.48 • Successfully driving value added services: M-PESA and our supe
Slide 13: Non-Voice revenues continue to drive growth
Non-Voice revenues continue to drive growth • Delivering on strategy of reducing reliance on Voice YoY Non-Voice Revenue Kshs. Billion • Non-Voice revenue represents 29% of total revenue (26% in March 2011) CAGR 36% 26.5% 31.24 24.70 • M-PESA the key driver: 15.72 16% of total revenue 9.10 reven
Slide 14: M-PESA: Continues to deliver strong growth
M-PESA: Continues to deliver strong growth YoY M-PESA Revenue Kshs. Billion 43.2% 16.87 55% 11.78 • M-PESA revenue +43% to Ksh. 16.9bn 7.56 • M-PESA registered customers grew 6% to 14.9m 2.93 • 39,400 agents across the country – up 46% FY 2009 FY 2010 FY 2011 FY 2012 • 29% of airtime top-ups now thr
Slide 15: Significant potential for Mobile Internet and Broadband
Significant potential for Mobile Internet and Broadband YoY Mobile& Fixed Data Revenue Kshs. Billion • Mobile and Fixed data revenue +23% due to CAGR 45% 22.8% 6.59 increased data usage in customer base 5.37 • Distinct data users +31% to 4.6m (3.5m March „11) 2.98 1.51 • 25% data penetration of our
Slide 16: Robust ARPUs despite intense competition
Robust ARPUs despite intense competition Voice Broadband SMS M-PESA Service ARPU Kshs. Kshs. Kshs. Kshs. Kshs. 303 456 294 175 437 164 96 37 36 81 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 Mid year tariff Reduced pricing of Reduction in SMS Increased number & 4%
Slide 17: Direct costs
Direct costs YoY Direct Costs Direct Costs Breakdown Kshs. billion Kshs. billion 107.00 (7.37) 43.5 (16.53 37.2 ) 21.9 24.1 (5.98) (0.73) FY 2009 FY 2010 FY 2011 FY 2012 (5.73) (7.13) 63.52 • 17% increase in direct costs to Ksh.43.5bn • H2 direct costs held constant • Increased dealer discounts driv
Slide 18: Operating costs
Operating costs YoY OPEX Kshs. billion • FY operating costs +19% to Ksh. 26.0bn • Operating cost savings initiatives include • Transmission costs 26.0 • Inventory costs 20.7 21.3 21.9 • Network operating costs • IT operational costs • Headcount control FY 2009 FY 2010 FY 2011 FY 2012 • H2 operating
Slide 19: EBITDA improvement in H2
EBITDA improvement in H2 H1/H2 EBITDA Kshs. Billions 25 20 15 22.7 10 20.1 18.8 16.5 16.9 14.8 5 0 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 • Resilient FY EBITDA of Kshs. 37.5 billion and EBITDA margin of 35% • 54% H2 EBITDA growth due to increased revenue (+16%) with relatively flat direct a
Slide 20: Largest & Fastest Network in Kenya
Largest & Fastest Network in Kenya CAPEX Base Stations Kshs. billion 30 40% 2690 Total 34% 2604 2501 35% 3G 25 2282 27% 30% 2162 24% 1972 Wimax 20 21% 25% 15 20% 25.48 25.28 1343 1439 23.82 15% 10 1140 17.44 10% 5 829 5% 607 0 0% 384 FY 2009 FY 2010 FY 2011 FY 2012 140 165 193 195 187 CAPEX CAPEX In
Slide 21: Cash & Debt Overview
Cash & Debt Overview Free Cash Flow Net Debt Kshs. billion Kshs. billion 37.50 (1.70) (5.26) 7.10 (8.81) 12.00 (25.28) 9.35 10.30 4.09 EBITDA Net Tax paid Capex Working Free cash Corporate Bond Bank borrowings Cash at Bank Net Debt interest capital flow movement *FCF before funding forex, Investment
Slide 22: Key Financials
Key Financials: Ksh. Billion Mar-11 Mar-12 %Change 1H 2012 2H 2012 %Change Voice 63.50 68.96 8.6% 31.49 37.47 19.0% M-PESA 11.78 16.87 43.2% 7.88 8.99 14.1% Data 5.37 6.59 22.7% 3.08 3.51 14.0% SMS 7.54 7.77 3.0% 3.65 4.12 12.9% Handset & Acquisition 6.64 6.80 2.4% 3.53 3.28 -7.1% Total Revenue 94.8
Slide 23: FY13 Guidance
FY13 Guidance Revenue: Low to mid-single digit growth in total revenues EBITDA: Maintain full year underlying margin through continued cost control and competitive customer focus. CAPEX: Continued investment in the network focused on quality and data speeds. Capex intensity slowly falling over a 3 y
Slide 24: Contents
Contents CEO Summary 2011/12 Financials Operational Focus and Outlook 24
Slide 25: Strategy Overview
Strategy Overview • Protecting our core business • Democratising data • Grow Enterprise business • Financial deepening • Network investment • Making a lasting difference 25
Slide 26: Driving democratisation of mobile broadband
Driving democratisation of mobile broadband • Low cost data enabled devices • Affordable tariffs • Relevant local content • More content based VAS • Back up & location based services 26
Slide 27: Increased Focus On Growing Enterprise Business
Increased Focus On Growing Enterprise Business • Offer converged services to Kenyan SME businesses • Provide true integration across fixed and mobile platforms • Drive uptake of managed services solutions for data storage, disaster recovery, & cloud based enterprise applications VIDEO & VOICE TELEPR
Slide 28: Enabling financial inclusion in Kenya
Enabling financial inclusion in Kenya • Drive financial inclusion in Kenya through M-PESA •Increase access to basic financial services •Increase agent outlet footprint •Increase utility of M-PESA value adds(e-wallet, m-ticketing ) 28
Slide 29: Expansion of network coverage
Expansion of network coverage Expansion of access network Modernization of core network Adoption of new efficient technologies Reliable fiber optic infrastructure 29
Slide 30: Making a lasting difference
Making a lasting difference •Contribution to meeting the Millennium Development Goals (MDGs) •Promote m-health •Continued Corporate Social Responsibility •Sustainable approach to business 30
Slide 31: 2011/2012 Highlights
2011/2012 Highlights • Sustained investment in network quality and modernization • Continued momentum in customer growth • Strong operational and financial performance • Voice, Mobile data and M-PESA remain key drivers of growth • Full year dividend of Kshs 22 cents 31
Slide 32: Q&A
Q&A