Safaricom Plc · NSEKE:SCOM
Safaricom — H1 FY22 Earnings Presentation
26 slides from Safaricom's earnings presentation, Nov 10, 2021
Slide 1: Safaricom PLC H1 FY22 Investor Presentation
The Numbers 12 Safaricom PLC H1 FY22 Investor Presentation 10th November 2021
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: Operating Environment: Uncertainty Remains, Gradual Recovery Underway
OPERATING ENVIRONMENT | UNCERTAINTY REMAINS, GRADUAL RECOVERY UNDERWAY Tailwinds Headwinds Improved macro outlook Increasing regulatory scrutiny, +6.3% YoY GDP projection for Taxation- adjusted excise duty on telco 2021 (World Bank), -0.3% 2020 products Improved business sentiment Sustained pressure
Slide 4: Our Purpose: Supporting Economic Resilience in Our Communities
OUR PURPOSE | SUPPORTING ECONOMIC RESILIENCE IN OUR COMMUNITIES Foundations Sponsorships Investing Supporting our KShs 810Mn Communities 2 million Beneficiaries Safaricom M-PESA Sports Conservation Foundation Foundation (KShs 200Mn) & Music Pamoja (Staff) Initiative Uzazi Salama Programme 2021 Tokyo
Slide 5: Sustainable Business: Standing Together, Going Beyond
SUSTAINABLE BUSINESS | STANDING TOGETHER, GOING BEYOND True Value Assessment A Impact on society B Economic value added C Social value of M-PESA D Environmental externalities 9.7x profit KShs 362.0Bn KShs 242.4Bn KShs 419.0Bn generated Through operations and taxes 3.5 % 3.1% (KShs 68.7Bn) 1.0% 1.5%
Slide 6: Strategic Focus: Strong Execution Driving Growth
STRATEGIC FOCUS | STRONG EXECUTION DRIVING GROWTH P ! urpose Transforming lives Vision To be a purpose-led technology company Transformation A digital-first, insights-led organization that enables platforms and ecosystem partnerships Goal Deepen Customer Engagement & Experience Transformative Pillar
Slide 7: Strategy: Pivoting Towards a Technology Company
STRATEGY | PIVOTING TOWARDS A TECHNOLOGY COMPANY Strengthening FinTech Winning in Achieving Cost the Core Ecosystem Digital Ecosystems Leadership Defending voice Powering digital lifestyles Scale DigiFarm in a Cost optimization to (consumer & businesses) commercially fuel new growth nal Expansion De
Slide 8: Regional Expansion to Ethiopia
Regional Expansion to Ethiopia 8
Slide 9: Ethiopia: An Opportunity to Launch Operations Beyond Kenya
ETHIOPIA | AN OPPORTUNITY TO LAUNCH OPERATIONS BEYOND KENYA GDP per Capita, PPP (USD) / Population* Ethiopia is an attractive market 2020 4,452 Governmentʼs clear intention to open up the economy 2,780 2,423 1,297 A huge population (median age at 17 years), growing 1,131 GDP per capita (average at 7
Slide 10: Ethiopia: License Awarded and Our Financial Ambitions
ETHIOPIA | LICENSE AWARDED AND OUR FINANCIAL AMBITIONS Spectrum Unified technology neutral telecoms Capex Investment Network Rollout services license, with spectrum allocated 5Yr plan: Y1: c1k sites at launch USD 1.5 - 2.0Bn Y10: 10k - 12k sites 2x10 2x10 2x20 2x20 2x20 MHz MHz MHz MHz MHz 800 MHz 9
Slide 11: Ethiopia: Investment Risks and Uncertainties
ETHIOPIA | INVESTMENT RISKS AND UNCERTAINTIES Political & Currency Infrastructure Regulatory Currency volatility Securing access to land Implementation of market and buildings liberalisation & new Forex availability regulatory framework Concluding infrastructure sharing Investment rules and agreemen
Slide 12: Ethiopia: Launch Readiness
ETHIOPIA | LAUNCH READINESS Completion of company and governance set up 01 Board members appointed Exco leadership team with diverse experience Contributing to purpose-led digital Ethiopia Regulatory framework operationalization 02 02 DATA Ethio Telecom partnership on infrastructure Mobile money lic
Slide 13: The Numbers
The Numbers 13
Slide 14: HY22 Key Highlights: Solid Performance in H1
HY22 KEY HIGHLIGHTS| SOLID PERFORMANCE IN H1 Service Revenue +16.9% YoY EBIT HY22 HY21 +28.8% YoY KShs 138.4Bn KShs 118.4Bn HY22 HY21 KShs 57.9 Bn KShs 45.0Bn +4.7% YoY Customers One month active Capex 31.75Mn HY22 Free Cash Flow +0.3%YoY 30.31Mn +45.8% YoY HY21 HY22 HY21 HY22 HY21 KShs 22.8Bn KShs
Slide 15: Service Revenue: Double Digit Growth, Supported by M-PESA
SERVICE REVENUE | DOUBLE DIGIT GROWTH, SUPPORTED BY M-PESA Contribution to Service Revenue Growth (KShs Bn) Evolution of Service Revenue Profile 1.4 1.3 0.6 0.4 138.4 Others Others 16.4 Fixed 13.1% Fixed 11.2% (0.0) Enterprise Enterprise 118.4 2.4% 2.5% FTTH M-PESA 30.3% FTTH M-PESA 1.4% 1.5% 37.8%
Slide 16: M-PESA: Regaining Momentum with Return to Charging
M-PESA | REGAINING MOMENTUM WITH RETURN TO CHARGING Contribution to M-PESA Growth Contribution to Fintech Solutions Growth IMT +22.6% YoY International Money Transfer, Alipay Withdrawals Lending & Savings +17.2%% YoY 0.6 7.6ppts Fuliza, M-Shwari 1. ppt KCB M-PESA 8p +18.8% YoY pt s M-KOPA, M-KESHO s
Slide 17: M-PESA: Sustained Velocity in the Customer Ecosystem
M-PESA | SUSTAINED VELOCITY IN THE CUSTOMER ECOSYSTEM Usage Growth, Opportunity to Drive Sustained Growth in Value of M-PESA Transactions Penetration Remains (KShs Trn) Total M-PESA Value Transfers 2.0 2.1 18.1 13.7 13.0 H1 FY22 1.6 28.7 9.0 14.5 H2 FY21 28.3 H1 FY21 H2 FY21 H1 FY22 H1 FY21 H2 FY21
Slide 18: M-PESA: Developing Scalable Digital Platforms for Key Growth Areas
M-PESA | DEVELOPING SCALABLE DIGITAL PLATFORMS FOR KEY GROWTH AREAS CREDIT MINI APPS B2B CONSUMER C2B BUSINESS FOCUS WEALTH FOCUS 322k Business App 3.9Mn App Customers DELIVERING Customers P2P INSURANCE CONSUMER VALUE 258k Agents Target Addressable Market Target Addressable 29.0Mn Market E-COMMERCE
Slide 19: Mobile Data: Price Rationalization Slows Down Performance
MOBILE DATA | PRICE RATIONALIZATION SLOWS DOWN PERFORMANCE Mobile Data Revenue +6.3% Opportunity to Drive Usage and Growth Remains 23.6 YoY 22.6 +4.7% YoY 22.2 31.7 2.0 30.3 31.5 1.5 +8.1% YoY 13.7 16.7 17.0 +16.4% YoY 15.7 11.5 +37.3% YoY 12.2 9.9 10.8 9.7 +26.7% YoY 1.3 10.0 7.1 8.5 6.8 6.1 5.4 On
Slide 20: Fixed Service: Accelerated Customer Acquisition Drives Solid Growth
FIXED SERVICE | ACCELERATED CUSTOMER ACQUISITION DRIVES SOLID GROWTH Contribution to Fixed Revenue Growth FTTH 137.4 153.4 2,337 119.1 2,334 2,278 FTTB 8.8ppts 53.5% 58.5% 63.9% +15.8% YoY FTTH 8.3ppts +21.1% YoY KShs 2.9Bn H1 FY21 Closing Customers (’000s) H2 FY21 ARPU (KShs) H1 FY22 Conversion rat
Slide 21: Net Income: Improved Performance Driven by Top Line Recovery & Cost Efficiencies
NET INCOME | IMPROVED PERFORMANCE DRIVEN BY TOP LINE RECOVERY & COST EFFICIENCIES 2.3 Service Revenue and EBIT (KShs Bn) 16.2 138.4 (4.4) (1.1) (0.3) (2.7) 37.1 118.4 (6.0) 33.1 57.9 45.0 39.6% 36.3% H1 FY21 H1 FY22 H1 FY21 Contribution Opex Opex Depreciation Share of Finance Taxation H1 FY22 Servic
Slide 22: Capex: Sustained Investment to Enhance Customer Experience
CAPEX | SUSTAINED INVESTMENT TO ENHANCE CUSTOMER EXPERIENCE HY22 Capex Split Capex (KShs Bn) 40-43* Operations 37.3 36.1 35.0 36.3 1.7 % 22.8 17.4 22.8 17.0 18.1 IT Capex 33.5% Radio Access FY18 FY19 FY20 FY21 FY22 36.5% H1 FY Capex Intensity 14.9% 13.8% Fixed Network 14-16% 6.5% 13.2% HY22 Capex Al
Slide 23: Outlook
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Slide 24: Revised FY22 Guidance
REVISED FY22 GUIDANCE Initial Guidance FY22 (KShs) Revised guidance EBIT Capex (KShs) 105 – 108Bn 40 – 43Bn Including Safaricom EBIT CAPEX Ethiopia 97-100Bn 70-73Bn Safaricom PLC Group Excluding Safaricom EBIT CAPEX Ethiopia 107-110Bn 40-43Bn 24
Slide 25: Thank You!
Thank You! (Safaricom aa
Slide 26: Lorem ipsum
Simple * Transparent * Honest FOR YOU (eo) {Safaricom | XC) YEARS