Telkom Sa Soc Ltd. · JSE:TKG
Telkom Sa Soc — FY2025 Earnings Presentation
55 slides from Telkom Sa Soc's earnings presentation, Mar 31, 2025
Slide 1: Annual Results for the year ended 31 March 2025
Annual Results For the year ended Seamlessly connecting our 31 March 2025 customers to a better life. 1
Slide 2: Disclaimer
Disclaimer Disclaimer Many statements in this document and verbal statements that may be Telkom cautions readers not to place undue reliance on forward-looking made by Telkom or officers, Directors or employees acting on Telkom’s statements. All written and verbal forward-looking statements behalf c
Slide 3: Contents
Contents 01 Strategic Overview 02 Highlights 03 Business Review 04 Financial Review 05 Outlook & Priorities
Slide 4: Strategic Overview
Strategic 01 Overview Serame Taukobong Group CEO
Slide 5: We made excellent progress in positioning Telkom for success
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities We made excellent progress in positioning Telkom for success Positioned for growth 5 Fit for Future growth impact growth OneTelkom People, leadership & sustainability 4 ways of winning Sales engine optimisation, Oper
Slide 6: Sustainability excellence is embedded into our operations
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Sustainability excellence is embedded into our operations Advancing shared prosperity through purposeful interventions that have a meaningful impact on all stakeholders in the South African economy. 9.25 GWh 8 280 47
Slide 7: Three strong businesses operating with shared purpose and momentum
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Three strong businesses operating with shared purpose and momentum Building on our InfraCo strengths as OneTelkom Consumers Small businesses Airtime Funding through • 3rd largest MNO. Mobile Services Financial servic
Slide 8: Highlights
) | ee ae i ' Pe . o] a 02| Highlights @s .. q : q s 7 e Telkom
Slide 9: On the back of successful strategy execution, FY25 results provide reasons for confidence
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities On the back of successful strategy execution, FY25 results provide reasons for confidence… Continuing operations STRONG GROUP PERFORMANCE ENHANCED PROFITABILITY MARGIN EXPANSION SUSTAINED CASH GENERATION Group Revenu
Slide 10: Our data-led strategy drives growth momentum
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Our data-led strategy drives growth momentum FINANCIAL PERFORMANCE FROM CONTINUING OPERATIONS Group revenue Adjusted EBITDA1 Adjusted EBITDA margin1 Rbn +3.3% Rbn +25.1% +4.7ppts +0.5ppts +3.8% +1.5% R43.9bn R11.8bn
Slide 11: Business Review
Business Review Telkom
Slide 12: Telkom Consumer
Slide 13: Ten consecutive quarters of market leading service revenue growth
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Ten consecutive quarters of market leading service revenue growth Mobile subscribers Mobile service revenue Mobile data revenue Mobile EBITDA/EBITDA margin ’000 Rm % Rm 13.4% 10.2% 12.3% 30.3% 23 176 20 965 16 065 19
Slide 14: Mobile network sustaining data-led growth
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Mobile network sustaining data-led growth Broadband subscriber growth Broadband traffic growth 4.5G sites integrated ‘000 ‘000 # KEY POINTS 19.5% 24.1% 6.8% • Broadband subscribers grew 1 759 +19.5% YoY to 15.2m. 7 6
Slide 15: Openserve
Slide 16: Fibre-related revenue growth and cost optimisation have improved EBITDA margins
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Fibre-related revenue growth and cost optimisation have improved EBITDA margins Revenue Fibre-related data revenue Operating revenue split EBITDA/EBITDA margin Rm Rm % Rm 1.3% 5.9% 1.8% 12 897 12 511 12 349 32.4% 9 3
Slide 17: Continue to expand fibre footprint and connectivity rate despite industry slow down
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Continue to expand fibre footprint and connectivity rate despite industry slow down Fibre homes passed Fibre homes connected Connectivity rate ‘000 ‘000 % 1.9 KEY POINTS 13.3% 17.6% ppts • Expansion of fibre footprin
Slide 18: World class NPS: transforming service delivery
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities World class NPS: transforming service delivery NPS Assurance visits Fibre broadband avg. time to install Net Promoter Score ‘000 Days KEY POINTS 3.7% 20.4% 1.6% 221 • Strong customer satisfaction metrics as NPS incre
Slide 19: BCX
Slide 20: BCX reshaping continues
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities BCX reshaping continues Margin momentum Improving margin mix KEY POINTS 13.2% H2 margin • Margin profile transforming 37% IT services through high-value IT services and platforms. 11.4% 8.6% 9.0%1 13.2% Fibre-related
Slide 21: Positive signals in H2
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Positive signals in H2 Revenue IT business revenue Converged Comms revenue Adjusted EBITDA/EBITDA margin Rm Rm Rm Rm 4.4% 6.8% 1.4% 6.3% 13 216 12 915 12 346 7 263 6 608 6 608 6 771 13.7% 5 652 5 575 5 652 11.1% 6 60
Slide 22: Gyro
Slide 23: Gyro has accelerated the disposal of decommissioned properties
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Gyro has accelerated the disposal of decommissioned properties Accelerated • Improved Group liquidity through accelerated disposal of non-core properties disposal of (R730m realised from 57 properties). non-core • 30
Slide 24: Financial Review
Financial 04 Review Nonkululeko Dlamini Group CFO
Slide 25: Financial performance rooted in the successful execution of our strategy
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Financial performance rooted in the successful execution of our strategy 1 2 3 4 5 6 Momentum Robust Smart capex Improved FCF Successful execution Delivering value in the underlying financial deployment conversion of
Slide 26: Medium term guidance achieved
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Medium term guidance achieved FY25 FY25 Targets Reported Reported Total operations1 Continuing operations Low to mid-single digit 3.1% 3.3% Revenue growth Low to mid-single digit 14.8% 16.8% EBITDA growth 12% - 15% 1
Slide 27: Total operations | Continuing business and Swiftnet performance before disposal
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Total operations | Continuing business and Swiftnet performance before effective date of disposal KEY POINTS Total operations Discontinued operations Continuing operations • Discontinued operations reflect the Rm per
Slide 28: Continuing operations | Driven by strong operational performance
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Continuing operations | Driven by strong operational performance Continuing operations Reported Reported Variance Adjusted1 Variance Rm FY25 FY24 % FY25 % Revenue 43 880 42 463 3.3 Other income 1 552 895 73.4 Total e
Slide 29: Revenue by stream | Data-led strategy delivering results
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Revenue by stream | Data-led strategy delivering results, major contributor to Group revenue Continuing operations Rbn 11.6% FY25 R2 470m 15% 5.0% 4% 36% R1 053m 7% +12.3% 9% 11% 16.1 18% 14.3 +1.0% +10.0% -7.0% -10.
Slide 30: Cost to income | Focus on revenue growth and cost optimisation
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Cost to income | Focus on revenue growth and cost optimisation yielding positive results Continuing operations Cost to income2 Rm % Adjusted EBITDA 1 Group cost to income2 25.1% R2 364m -3.3ppts 657 290 11 792 1 417
Slide 31: EBITDA margin | Expansion enhanced by operational efficiencies
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities EBITDA margin | Expansion enhanced by operational efficiencies Continuing operations EBITDA margin Rm % 25.1% 4.7ppts 16.8% 778 11 792 26.9% 1 586 11 014 25.1% 22.2% 9 428 1 Reported Reported operational Reported Onc
Slide 32: Effective tax rate | Continuing operations
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Effective tax rate | Continuing operations % Comparison against SA companies tax rate Year-on-year ETR comparison 27.0% -4.0% 25.5% -4.0% -2.8% -1.1% -2.4% 19.1% 19.1% SA company Swiftnet profits Capital gains Exempt
Slide 33: Earnings | Headline earnings illustrate improved quality of underlying performance
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Earnings | Headline earnings illustrate improved quality of underlying performance Continuing operations cents per share Reported Reported Adjusted +383.9 +128.9% +102.4% cents per share FY25 FY24 FY25 BEPS 1 528.0 3
Slide 34: Capital expenditure | Allocated to growth areas
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Capital expenditure | Allocated to growth areas. ROIC is also improving. Capex spend and intensity Capex investments allocation Network population coverage Rm % FY25 FTTH Homes connected 5 825 5 827 ‘000 ‘000 +13.3%
Slide 35: Strengthened financial position
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Strengthened financial position | Driven by strong operational performance, sale of non-core properties & proceeds from the sale of Swiftnet Net debt Debt maturity profile Rm Rm FY25 FY24 % Cash balances1 11 054 3 74
Slide 36: Free cash flow | Driven by strong operational performance
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Free cash flow | Driven by strong operational performance and working capital management Free cash flow Reported Reported Variance Rm FY25 FY24 % Cash receipts from customers 44 484 43 469 2.3 Cash paid to suppliers
Slide 37: Cash conversion | Operations funding capital investment
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Cash conversion | Operations funding capital investment Free cash flow Rm 11 792 376 1 153 2 496 4 660 2 023 6 165 537 396 2 778 Adjusted Other 2 Working Lease Capex Operating Finance Interest Tax paid FCF EBITDA 1 c
Slide 38: Dividend re-instated | R1.3bn delivered to shareholders
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Dividend re-instated | R1.3bn delivered to shareholders Dividend policy • Annual pay-out at a ratio of 30% - 40% of FCF. • Strength of balance sheet takes priority. • Future capex obligations taken into account when
Slide 39: Swiftnet sale | Impact on Group's results
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Swiftnet sale | Impact on Group’s results Proceeds received Utilisation of proceeds Before reporting date Post reporting date Strategically dedicating Effective date 31 January 2025 R4 750m of proceeds post year end
Slide 40: Adequate liquidity | Support growth
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Adequate liquidity | Support growth Liquidity Rbn 11.05 9.77 4.75 4.80 1.33 Cash balance at Dedicated to Return to Committed unutilised facilities Headroom 31 March 2025 debt repayment shareholders Annual Results Pre
Slide 41: Capital allocation | Priorities to support our strategy
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Capital allocation | Priorities to support our strategy 1 EBITDA margin enhancement and increased profitability Smart capex deployment driving value creation 2 • Sustain and expand our core business. • Target high re
Slide 42: Medium term guidance (FY26 – FY28)
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Medium term guidance (FY26 – FY28) Targets Strategic drivers • Industry-leading mobile service revenue growth. Mid-single digit • Industry-leading fibre connectivity ratio. Revenue growth1 • Accelerate IT services an
Slide 43: Outlook & Priorities
Outlook 05 & Priorities Serame Taukobong Group CEO
Slide 44: Shared values foster a unified OneTelkom culture
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Shared values foster a unified OneTelkom culture Through effective talent management, targeted development, recognition and culture-building initiatives, we enhance employee experience while advancing transformation,
Slide 45: A strong, aligned leadership team driving execution through OneTelkom
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities A strong, aligned leadership team driving execution through OneTelkom GCEO GCFO CEO: BCX Serame Taukobong Nonkululeko Dlamini Jonas Bogoshi Demanding execution Driving financial discipline to Transforming BCX into an
Slide 46: Delivered against our priorities
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Delivered against our priorities NGN revenue growth Smart capex deployment • Grew data consumption. • Expanded network, prioritising growth areas: • Increased FTTH passed and connected. o Expanded mobile network foot
Slide 47: Build on FY25 momentum to grow core revenues and create new business opportunities
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Build on FY25 momentum to grow core revenues and create new business opportunities… Our markets are Our Our rapidly evolving response priorities Leverage our digital Core business Relentless tech innovation. infrastr
Slide 48: Momentum unlocked - Telkom's transformation fuels results and future growth
Strategic Overview Highlights Business Review Financial Review Outlook & Priorities Momentum unlocked - Telkom’s transformation fuels results and future growth Unrivalled Backbone of Excellent Wave of momentum Focused relentlessly infrastructure gives SA’s execution of to thrive on delivering hard r
Slide 49: Thank you
Telkom Thank you
Slide 50: Appendix
Appendix Telkom
Slide 51: 51
51
Slide 52: Consumer revenue growth, with improved profitability
Consumer revenue growth, with improved profitability Consumer operating revenue1 ARPU Consumer EBITDA/EBITDA margin Rm R Rm 5.6% 36.0% 27 804 20.0% 25 874 26 329 452 444 482 2 810 201 3 168 186 15.5% 5 567 3 815 180 12.7% 4 093 86 84 78 3 295 24 542 21 617 22 679 64 65 60 FY23 FY24 FY25 FY23 FY24 FY
Slide 53: Openserve
Slide 54: Openserve sees solid enterprise gains despite carrier easing
Openserve sees solid enterprise gains despite carrier easing Enterprise revenue Carrier revenue Enterprise1 Rm Rm Business circuits 3.7% 1.8% 6.5% 44 663 1 627 1 630 1 690 41 951 4 344 41 898 10% 15% 4 297 19% 3% 4 273 2% 4% 90% 81% 85% 97% 98% 96% FY23 FY24 FY25 FY23 FY24 FY25 FY23 FY24 FY25 1 Incl
Slide 55: Ongoing migration to fibre drives broadband growth
Ongoing migration to fibre drives broadband growth Carrier1 Fixed line broadband services Fixed line broadband services Circuits Services (‘000) Services (‘000) 5.4% 12.8% 810 718 4% 21 149 20 192 20 071 17% 15% 641 10% 33% 21% 96% 83% 85% 90% 67% 79% FY23 FY24 FY25 FY23 FY24 FY25 FY23 FY24 FY25 Bel