Safaricom Plc · NSEKE:SCOM
Safaricom — FY2020 Earnings Presentation
21 slides from Safaricom's earnings presentation, Apr 29, 2020
Slide 1: Safaricom PLC FY20 Results Presentation
Safaricom PLC FY20 Results Presentation 29th April 2020
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: Stability in a Shifting Landscape
STABILIT Y IN A SHIFTING LANDSCAPE Global health Emergency Climate Change Regulatory Risk • Disruption of supply chain • Higher inflation due to failed crops •Disruption of betting industry • Currency volatility • Reduced agricultural exports • Changing competitive landscape • Job insecurity • Food
Slide 4: Operational Review
OPERATIONAL REVIEW Regained Mobile data at market share double digit growth Steady underlying Enhanced margins from Service Revenue growth better asset utilization 04
Slide 5: Digital Strategy: Transforming Beyond a Telco
DIGITAL STRATEGY| TRANSFORMING BEYOND A TELCO Brand of Choice Financial Partner of Choice Business Partner of Choice •Personalised and simplified •M PESA Global • Expansion/M&A products •Driving a savings culture and Acquisiton of M-PESA brand, Data and voice NO EXPIRY pursuing entry into Ethiopia w
Slide 6: Driving a Sustainable Business, Investing in Our Economy and Community
DRIVING A SUSTAINABLE BUSINESS, INVESTING IN Our Economy Our Community • Duties, taxes, licence fees paid KShs 810bn since inception • Directly impacting 1m+ Kenyans in FY20 • Tax payer of the year 12 years in a row • Supporting projects across health, education, economic • Supporting nearly 1m peop
Slide 7: Earnings Outperform Guidance
EARNINGS OUTPERFORM GUIDANCE EBIT Capex FREE LNM, Achieved Achieved FY20 Guidance KShs 101.5 Bn FY20 Guidance KShs 36.1 Bn KShs 93-97 Bn KShs 36-39 Bn Our FY20 performance reflects the adoption of IFRS15 and IFRS16 accounting standards 07
Slide 8: The Numbers
KShs 248.0 Bn FY20 KShs 97.9 Bn FY20 KShs 1.73 Bn FY20 KShs 67.2 Bn FY20 KShs 234.1Bn FY19 KShs 83.5 Bn FY20 KShs 1.46 Bn FY 19 KShs 57.5 Bn FY 19 The Numbers *Following the adoption of IFRS 16-Leases on 1 April 2019, the Group’s results for the period ended 31 March 2020 are on IFRS 16 basis, where
Slide 9: Key Highlights: Improved Shareholder Returns
KEY HIGHLIGHTS | IMPROVED SHAREHOLDER RE TURNS X.X ppts Service Revenue EBIT HEPS* Free Cashflow +X.X% YoY +4.8% YoY +13.5% YoY +14.3% YoY +11.4% YoY KShs 251.2 Bn FY20 KShs 101.0 Bn FY20 KShs 1.78 FY20 KShs 70.3 Bn FY20 KShs 239.8 Bn FY19 KShs 89.0 Bn FY19 KShs 1.56 FY19 KShs 63.1 Bn FY19 *Headline
Slide 10: Service Revenue: Mobile Data Recovery Gaining Momentum
SERVICE REVENUE | MOBILE DATA RECOVERY GAINING MOMENTUM Evolution of Service Revenue Profile Contribution to Service Revenue Growth (KShs Bn) Other SR Other SR Fixed Data 5.3% Fixed Data 5.3% 0.9 (1.2) 2.6% 4.4 (2.1) 3.6% 11.9 (1.9) 251.2 (0.6) Mobile Data 14.4% Mobile Data 16.2% Voice Voice Outgoin
Slide 11: Underlying M-PESA Revenue: Lending and Payments Sustain Growth
UNDERLYING MPESA REVENUE | LENDING AND PAYMENTS SUSTAIN MPESA GROWTH Contribution to M-PESA growth Contribution to New Business Growth IMT +50.7% YoY International Money Transfers Transfer, PayPal, Alipay 5.3 ppts +14.6% YoY HOME Lorem 0.6 ppts ipsum New Business 3.2 ppts +17.2% 9.6 ppts 9.6 ppts
Slide 12: M-PESA: Well Adopted but Still Underpenetrated
MPESA | WELL ADOPTED BUT STILL UNDERPENE TRATED Customers and Activity +10.0% YoY 23.6 24.9 Payments • 20k+ Billers, these merchants using remote or online including government 22.6 (C2B, B2C, • Accepted in 173k+ outlets, now recruiting micro merchants in transport +5.3% YoY +21.0% YoY B2B, LNM) •
Slide 13: Mobile Data: Revenue Growth Returns to Double Digit
MOBILE DATA | REVENUE GROWTH RE TURNS TO DOUBLE DIGIT Mobile Data Revenue (KShs Bn) Unlocking the latent potential is key for growth FY20 +12.1% YoY 28.6 27.5 20.9 26.1 19.8 21.1% 22.0 20.5 19.3 17.3 4.0% 2.3% 7.9 9.1 H2FY19 H1FY20 H2FY20 7.4 6.1 4.5 Revenue YoY% Growth 3.2 One Month Active One Mont
Slide 14: Fixed Service Revenue: Penetration and Activity Drive Growth
FIXED SERVICE REVENUE | PENE TRATION AND AC TIVIT Y DRIVE GROWTH +11.2% FTTH YoY 331.2 302.9 297.9 Contribution to Fixed Revenue Growth (KShs) +31.9% YoY 142.1 +42.8% 114.7 YoY 107.8 0.4 0.1 97.7 0.7 (0.3) 68.4 75.9 9.0 8.1 Homes Passed Homes Connected Closing Customers (’000’) (’000’) (’000’) FY19
Slide 15: EBIT: Reshaping the Business for the Future
EBIT | RESHAPING THE BUSINESS FOR THE FUTURE FY 20 EBIT (KShs Bn) 2.6 2.3 (0.6) 101.0 1.9 (1.9) 7.7 89.0 OPEX YoY Growth Net Opex Saving KShs 2.6 Bn +12.4% +10.0% +5.8% FY17* FY18 FY19 FY20 -4.9% FY19 Contribution Opex- Digital Opex- Other Opex Depreciation Depreciation FY20 Margin efficiencies effi
Slide 16: Capex: Diversifying Spend to Serve the Digital Customer
CAPEX | DIVERSIFYING SPEND TO SERVE THE DIGITAL CUSTOMER Capex (KShs Bn) Capex Split 37.3 Core Other Capex 36.3 Network 2.1% 36.1 3.6% 35.3 Fixed Network 7.8% FY17 FY18 FY19 FY20 Radio Access Operations 9.1% 45.0% Capex Intensity 16.4% Transmission 13.8% 15.6% 14.9% Digital Capex 18.6% 13.8% 4.4ppts
Slide 17: Looking Ahead
Looking Ahead 17
Slide 18: Always There For You
ALWAYS THERE FOR YOU In the face of COVID-19, each of us has to play our part in keeping ourselves safe. Safaricom is here with you as we move forward in these tough times 719 Over 300 trained BONGA customer care executives FOR GOOD Coronavirus toll-free line powered by Safaricom 24/7 Use Bonga Poin
Slide 19: Shaping Our Digital Society
SHAPING OUR DIGITAL SOCIE T Y MOBILE AGRICULTURE COMMUNICATION HEALTH FINANCIAL SERVICES ENTERPRISE EDUCATION SOLUTIONS ESSENTIAL SERVICES 19
Slide 20: FY21 Guidance: Postponed to Q2 FY21 Due to COVID-19
FY 21 GUIDANCE | POSTPONED TO Q2 FY21 DUE TO COVID19 PANDEMIC Possible Tailwinds Headwinds • Opportunity to shift away from cash • Economic growth slow down • Increased uptake of mobile data • Increased pressure on consumer wallet • Increased penetration of fixed connectivity • Interest rates and c
Slide 21: Thank you
Thank you Safaricom PLC FY20 Results Presentation