Airtel Africa Plc · LSE:AAF
Airtel Africa — FY2022 Earnings Presentation
44 slides from Airtel Africa's earnings presentation, May 11, 2022
Slide 1: Results for year ended 31 March 2022
Airtel Africa plc Results for year ended 31 March 2022 11 May 2022 1
Slide 2: Disclaimer
Disclaimer Important Information alternative products and to do so profitably; the ability to effectively implement strategic initiatives and actions taken to increase sales growth; the ability to enhance cash generation and pay By reading this presentation you agree to be bound by the following con
Slide 3: A year of strong growth, margin improvement and cash generation
A year of strong growth, margin improvement and cash generation. Delivering… Financially Strategically Operationally Sustainably …creating value for all stakeholders 3
Slide 4: Highlights
FINANCIAL STRATEGIC • Underlying Group revenue1 growth of 23.3% • Nigeria PSB and Super Agent licences (FY’21: 19.4%) • $550m investments into mobile money • Underlying EBITDA1 growth of 31.2% (FY’21: • Airtel Nigeria minority buyout 25.2%) • Tower sales in Tanzania, Madagascar and • EPS (before exc
Slide 5: Delivering against our objectives
Mobile revenue growth of 22.0% Mobile revenue Voice and data growing across all regions Mobile money Mobile money revenue growth of 34.9% revenue Underlying Underlying EBITDA margin increased by 296 bps to EBITDA 49.0% Capex $656m for FY’22, in line with guidance Leverage Improved to 1.3x from 2.0x
Slide 6: Financial Performance
@ airtel | Africa Financial Performance
Slide 7: Strong set of financial results
Underlying revenue1 Underlying EBITDA1 Margin $4,714m $2,311m 49.0% FY’22 46.1% FY’21 +23.3% +31.2% $1,222m $608m Q4’22 +19.1% YoY +23.7% YoY EPS (pre-exceptional) Leverage2 16.0 cents 1.3x FY’22 +7.8 cents (0.7x) Strong set of Q4’22 4.6 cents 1.3x +1.4 cents (0.7x) financial results Board has recom
Slide 8: Strong results across our regions
Strong results across our regions Contribution to Customer base Revenue Underlying EBITDA Group revenue 55.2% margin A strong performance 44.4m $1,878m $1,037m 39.8% despite SIM registration Nigeria requirements 5.8% +27.7% +30.4% 49.4% margin Our fastest growing East 57.2m $1,717m $848m 36.4% under
Slide 9: Strong growth across voice, data and mobile money services
Strong growth across voice, data and mobile money services Contribution to Customer base ARPU growth Revenue growth Group revenue growth Strong revenue growth Voice 50.0% +8.7% 8.0% +15.4% driven by customer and ARPU growth Penetration and usage Data 32.3% +15.2% +18.6% +34.6% improvements, particul
Slide 10: Double digit revenue growth across voice, data and mobile money
$m +21.3% reported currency growth ($826m) +13.2% +31.8% +37.9% +15.4% +34.6% +34.9% +23.3% constant currency growth ($884m) Double digit FY’21 Currency Voice Data Mobile money Others FY’22 devaluation revenue growth across voice, data and mobile Currency devaluation sensitivities for revenues: On a
Slide 11: Underlying EBITDA growth of 31.2%, with margin reaching 49.0%
$m +29.0% reported currency growth ($519m) Margin 49.0% Margin 46.1% +31.2% constant currency growth ($545m) FY’21 Currency Revenue Expenses incl. Other income FY’22 Underlying devaluation regulatory EBITDA growth of 31.2%, with Currency devaluation sensitivities for EBITDA and finance costs: On a 1
Slide 12: Mobile Money: strong KPI developments
Mobile Money: strong KPI developments Customer base (m) Transaction value ($bn) 20.7% 37.0% 26.2 64.4 21.7 es 18.3 46.0 31.6 FY'20 FY'21 FY'22 FY'20 FY'21 FY'22 Revenue ($m) Underlying EBITDA ($m) and margin (%) Underlying EBITDA Margin 350 55.0% 34.9% 300 48.2% 48.7% 48.7% 50.0% 250 553 270 45.0% 2
Slide 13: Strong normalised free cash flow
$m + 168% 1 2 3 4 5 Strong Normalized free cashflow is defined as cash from operations less cash interest, cash tax, lease repayments, capex (tangible & normalised free intangible) and payouts to non controlling interests in subsidiaries. However, it does not include one-off transaction impacts like
Slide 14: Our transparent and balanced capital allocation policy
Our transparent and balanced capital allocation policy 2 Group capex (excluding spectrum) 1 outlook of $700–750m pa Efficient Sustainable Net debt / underlying EBITDA of 1.3x capital capital 2 Continued focus on strengthening the balance investments structure sheet Progressive dividend policy aims t
Slide 15: Strengthening the balance sheet
Strengthening the balance sheet De-leveraging Net debt and leverage As of March 31, 2022 As of March 31, 2021 3.0x Underlying Underlying $m $m EBITDA EBITDA 2.1x 2.0x Foreign Currency: 1,657 0.7x 2,870 1.6x 1.3x - Holdco 1,000 0.4x 2,388 1.3x - OpCos 657 0.3x 482 0.3x Local Currency: 604 0.3x 452 0.
Slide 16: EPS before exceptional items grew 96.0%
$m + 96.0% 1 EPS before exceptional items grew 96.0% Notes: 1. Others includes a change in minority shareholder PAT and profit/(loss) on joint ventures. 16
Slide 17: Strategic financial initiatives
Executed opportunities Future opportunities Tower deals completed Further monetise mobile money • Tanzania, Madagascar & Malawi deals • IPO within 3 years completed ➢ Sold 2,600+ towers ➢ Total gross proceeds of $284m Further monetise tower assets ➢ Tanzania $177m, Malawi $55m and Madagascar $52m •
Slide 18: Strategic and operational update
Strategic and operational update 18
Slide 19: Our market opportunity for digital inclusion
Our market opportunity for digital inclusion Airtel Africa Benchmarks 598m 5-year population forecast (CAGR 2021-2026E) Population (m) 2021 79 5-year 371 447 658 4,250 1,291 598 Market CAGR population (m) and growth 2016 519 growth of 2.5% 2.7% (%) (1) 2.9% 0.6% 0.8% 0.7% -0.1% Population North Amer
Slide 20: Our customer opportunity for greater digital usage
Our customer opportunity for greater digital usage Airtel Africa Benchmarks Voice usage per customer in mins FY’22 257 5-year (per month) Voice 106 CAGR 338 298 602 257 usage per FY’17 growth of NA 176 sub (mins) 151 (1) 11.3% North Europe LatAm Asia Africa Footprint (4) America Voice usage per cust
Slide 21: Our growth strategy
| Africa Accelerated by our commitment to Our growth strategy : Underpinned by our 21
Slide 22: Win with network
Win with network Our intent 2022 progress Create a leading, modernised network that can provide the data • Almost 1,400 new sites added in rural areas capacity to meet rapidly growing demand and enhance connectivity and digitisation in our markets. • More than 3,400 additional sites deployed, reachi
Slide 23: Win with network – case study: Uganda
Delivering best-in-class service: Uganda Our ability to help transform customers' lives depends on delivering fast, reliable, and responsive services – and on leading the way in our markets. Airtel recognised as Uganda’s fastest* mobile network at 2022 Mobile World Congress 4G network now available
Slide 24: Win with distribution
Win with distribution Our intent 2022 progress To build on our unique distribution network to increase our ability • 15,000+ exclusive distribution channels of Mini-shops and Kiosks to reach and serve customers in all our markets. added, reaching a total of almost 53,000 • Strengthening our distribu
Slide 25: Win with distribution – case study: DRC
Never more than 1km away: getting closer to customers in DRC Access to our connectivity and financial services requires proximity to the customer. For example less than 26% of DRC population have access to traditional banking, and mobile money is essential to individuals and country-wide financial i
Slide 26: Win with data
Win with data Our intent 2022 progress To maximise the value of data-based services and increase data • 87.6% of sites are now on 4G, an increase of 11.0% in the year penetration in all our markets. By encouraging smartphone ownership and increasing data usage at scale, while facilitating ease of ac
Slide 27: Win with data – case study: Kenya
Enabling the rapid growth in data use in Kenya We aim to meet the strong demand for data in our markets by increasing access through expanding our 4G network, strengthening our unique distribution channels, and offering transparent, well-priced offers. Data growth in Kenya show that this strategy is
Slide 28: Win with mobile money
Win with mobile money Our intent 2022 progress Accelerate the digital ecosystem by rapidly enabling Airtel Money • Exclusive* distribution channels grew by 44.2% services; Harness the ability of a profitable mobile money business to enhance financial inclusion in some of the most ‘unbanked’ • Multi-
Slide 29: Mobile money: driving financial inclusion and developing the ecosystem
Mobile money: driving financial inclusion and developing the ecosystem Core focus Developing ecosystem of financial services Assured availability Bill /merchant Bank to wallet & Safety wallet to bank float and cash payments Bulk transfers - International money Ease and convenience Trust that it work
Slide 30: Mobile money: a diversified business, with rapidly evolving ecosystem
Mobile money: a diversified business, with rapidly evolving ecosystem User activities and revenue contribution financial services Users as % of AM customers Revenue contribution % Cash in / cash out 74% 10% 70% payment Mobile re-charges 11% solutions P2P services 9% 55% 44% Bill pay and merchant ser
Slide 31: Nigerian PSB opportunity
Key Nigeria stats and facts • Country population 1 of 211m • Unbanked adult population 2 of 55% • Real GDP 3 of $441bn Key Airtel Nigeria stats and facts Nigeria • Total customers in Nigeria 44.4 million + • Total exclusive shops, kiosks and branches now 30,000 + • PSB and Super Agent licence approv
Slide 32: Win with people
Win with people Our intent 2022 progress To be the employer of choice with a diverse and inclusive work • Diversity: environment that continues to foster a culture of high performance, employee wellbeing, skills enhancement and coaching. ➢ 26% women in workforce, level with prior year • Accelerating
Slide 33: Our sustainability ambitions and goals
Our sustainability ambitions and goals PILLAR Our Business Our People Our Community Our Environment SDGs AMBITIONS Increase digital inclusion Rewarding employment Drive digital and financial Address and minimise impact of opportunities inclusion and access to our operations on the education environm
Slide 34: Summary and outlook
Another strong year Our outlook • Delivering financially: • Strong long term business fundamentals with track record of solid • Revenue growth in all regions and execution services • Focus to remain on improving network • Margins increasing quality and availability, and our distribution… • Free cash
Slide 35: Thank you
@ airtel | Africa
Slide 36: Appendix
@ airtel | Africa
Slide 37: Nigeria: Strong performance, and returned to net profit
• Revenue grew 27.7% driven by both voice and data (revenue in reported currency revenue grew by 21.0%). Revenue Underlying EBITDA • Voice revenue grew 15.9% driven by voice ARPU growth of 20.7% as a $1,878m $1,037m result of increase in voice usage per +27.7% YoY +30.4% YoY customer. • Data revenue
Slide 38: East Africa: 22.7% revenue growth, with broad-based growth
• Revenue grew 22.7% driven by driven by all the key services; voice, data and Revenue Underlying EBITDA mobile money. (revenue in reported currency grew by 24.3%). $1,717m $848m • Voice revenue grew 19.2% driven by +22.7% YoY +31.6% YoY customer base growth of 7.8% and voice ARPU growth of 7.5% led
Slide 39: Francophone Africa: fastest growing customer base
• Revenue grew by 17.2% in both reported and constant currency, driven by all the key services; voice, data and mobile money. Revenue Underlying EBITDA • Voice revenue grew 10.0% driven by $1,131m $464m customer base growth of 15.9%. +17.2% YoY +27.7% YoY • Data revenue grew 31.0% largely driven by
Slide 40: Growth by service segment waterfalls
Growth by service segment waterfalls Voice revenue ($m) Data revenue ($m) +34.6% constant currency growth +15.4% constant currency growth es Mobile money revenue ($m) +34.9% constant currency growth 40
Slide 41: Mobile services
Mobile services 18.6% Customer base (m) ARPU ($) Reported 8.0% 16.1% currency 8.7% Constant 140.0 130.0 currency 120.0 128.4 5.9% 2.90 110.0 118.2 2.44 2.50 FY'20 110.6 100.0 90.0 FY'21 80.0 1.58 1.51 1.60 FY'22 70.0 60.0 50.0 FY'20 FY'21 FY'22 Voice ARPU Data ARPU Revenue ($m) Underlying EBITDA ($m
Slide 42: Effective tax rate
Effective tax rate Unit of Year ended Year ended Description measure 31 March 2022 31 March 2021 Profit before Income tax Tax Rate Profit before Income tax Tax Rate taxation expense % taxation expense % Reported Effective tax rate $m 1,224 469 38.3% 697 282 40.5% Adjusted for : Exceptional Items $m
Slide 43: Finance cost & forex
Finance cost & forex Total finance charges (excluding exceptional items) were lower by $20m, mainly due to: Description FY'22 FY'21 Change $m $m $m • Net interest costs were lower by $5m due to: Interest cost on gross debt and other financial liabilities 310 305 5 Interest Income (19) (9) (10) ➢ Int
Slide 44: Currency effects – historical trends
Currency effects – historical trends Historical trends CAGR % Currency March 2017 March 2019 March 2022 3-year 5-year NGN 306.0 360.5 415.2 4.8% 6.3% UGX 3,615.9 3,715.8 3,590.0 (1.1%) (0.1%) TZS 2,234.5 2,312.3 2,320.0 0.1% 0.8% ZMK 9.7 12.2 18.1 14.1% 13.3% MWK 724.6 730.6 816.7 3.8% 2.4% KES 103.