Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — Blue Label Telecoms — FY2013 Earnings Presentation
47 slides from Blu Label Unlimited's earnings presentation, 2013
Slide 1: Audited results for the year ended 31 May 2013
Audited results for the year ended 31 May 2013 1
Slide 2: Highlights for the year ended May 2013
Highlights for the year ended 31 May 2013 Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • HEPS up17% to 64.17 cents* • GP margin up from 6.04% to 6.60% (excl IFRS) • Revenue increases to R19 billion • Growth strategy continues: 25 25 - electricity commiss
Slide 3: Strategy creates Value
Strategy creates Value Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Prepaid provides certainty • Robust, scalable, agnostic • >150,000 POPs in SA and proprietary technology • Prepaid is an alternative platform - AEON • Organic growth payment method • P
Slide 4: The Importance of Distribution
The Importance of Distribution 4
Slide 5: South African Distribution
South African Distribution Brett Levy – Joint CEO 5
Slide 6: Operational and Financial Highlights
Operational and Financial Highlights Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Revenue reaches R18.7 billion • If airtime sales as agent imputed into Revenue, growth equates to 6% • Increasing Gross Profit margin 5.99% 5.75% 5.26% • Rural and urba
Slide 7: Prepaid Airtime - Revenue Growth
Prepaid Airtime - Revenue Growth Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions 2013 2012 R 2,500 R 2,000 Millions R 1,500 R 1,000 R 500 R- June July August September October November December January February March April May Revenue comprises sales of phy
Slide 8: Direct Top Up - PINless Airtime Growth
Direct Top Up - PINless Airtime Growth Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions 2013 2012 120 100 80 R Millions 60 40 20 - 8
Slide 9: Prepaid Airtime and Starter-Packs
Prepaid Airtime and Starter-Packs Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Innovative bulk inventory purchases continue • Acquisitions of airtime bases • Reach into rural and urban areas expanding: - introducing 2 innovative low cost POS devices: ‘
Slide 10: Prepaid Airtime Revenue Growth Per Network
Prepaid Airtime Revenue Growth Per Network Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions Revenue per Network August 2012 - July 2013 Revenue per Network August 2011 - July 2012 Cell C Vodacom 51% 12% Cell C 10% Vodacom 51% MTN 36% MTN 38% Cell C MTN Telko
Slide 11: Prepaid Electricity
Prepaid Electricity Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Commissions earned up 33% from R85 million to R113 million, due to increasing volumes • Equates to R7.2 billion in utility sales, up from R5.5 billion • Our growth drivers: - more municip
Slide 12: Prepaid Electricity – Revenue Growth
Prepaid Electricity – Revenue Growth Mobile Highlights Strategy SA Distribution International and Financial Prospects Solutions 800 700 600 500 Millions 400 300 200 100 12
Slide 13: Prepaid Electricity – UniPIN Redemptions
Prepaid Electricity – UniPIN Redemptions Mobile Highlights Strategy SA Distribution International and Financial Prospects Solutions 700,000 70,000,000 600,000 60,000,000 500,000 50,000,000 Rand 400,000 40,000,000 Qty Redeemed 300,000 30,000,000 Value Redeemed 200,000 20,000,000 100,000 10,000,000 -
Slide 14: Other Products and Services
Other Products and Services Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Community based and customised starter packs: - benefit pack for pregnant women - life insurance covers - concert tours NEW • Ticketing engine – events and transport • Financial S
Slide 15: Shareholder Profile
Shareholder Profile Beneficial Shareholders South Africa 82% USA 6% UK & Europe 8% Rest of World 4% Free Float % Free Float 55% Strategic Holders 43% Below Threshold 2% 15
Slide 16: International Distribution
International Distribution Mark Levy – Joint CEO 16
Slide 17: Operational and Financial Highlights
Operational and Financial Highlights Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • International strategy replicates SA business model • Partnerships key to delivering strategy • Arbitration proceedings in Multi-Links case postponed to early 2014 • Exte
Slide 18: Ukash
Ukash Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Operating in 57 countries on >460,000 POS • MoneyGram global agreement adds 310,000 locations • Queen’s Award for Enterprise - 3rd successive year • Revenue up 32%* • Share of profit R7.3 million * rep
Slide 19: Oxigen Services India
Oxigen Services India Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Product diversity and growth over 10 years Product diversity • India’s first and largest payments solutions provider: 23% 6% 38% - processing ~30 million transactions per month - upgrad
Slide 20: Blue Label Mexico
Blue Label Mexico Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Underpinned by sales and distribution agreements • Rapid roll-out reaches 60,000 POS • On-track to reach target 140,000 POS by mid-2014 • Redeploying underperforming POS • Opening dedicated
Slide 21: Mobile and Solutions Segments
Mobile and Solutions Segments Mark Levy – Joint CEO 21
Slide 22: Mobile Segment
Mobile Segment Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Cellfind - WASP, aggregator and intelligent distributor of SMS’s and LBS provider - enhancing SMS capability - expanding into rest of Africa with TCS • Blue Label Engage and Blue Label One - a
Slide 23: Solutions Segment
Solutions Segment Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Blue Label Data Solutions: - markets data and analytical products and services - accredited by Direct Marketing Association of South Africa - reaching ~43 million consumers - growth through
Slide 24: Technology
Technology Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Proprietary AEON, AMS and Postilion platforms entrench neutral aggregation • Increasing transactional volumes: >400 million per month ~2.5 million to 3 million online in a day ~80 million bulk pri
Slide 25: Prospects
Prospects Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions • Diverse range of customer engagement initiatives through affinity programmes • Ticketing engine for transport, as well as sporting and entertainment events • Innovative Financial Services products,
Slide 26: Financial Overview
Financial Overview David Rivkind – Financial Director 26
Slide 27: Highlights
Highlights Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions Headline EPS Revenue Gross Profit GP Margins Increased by 17% Increased to Increased to Increased from to R19 billion R1.3 billion 6.45% to 64.17 cents* 6.70% Overheads Cash flows R432m Capital and
Slide 28: Income Statement
Income Statement Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth % R’000 R’000 R’000 Growth Revenue 18,984,210 18,715,390 268,820 1% Gross profit 1,271,245 1,207,922 63,323 5% GP margins 6.70% 6.45% 0.25% Other income 12,313 17,307 (4
Slide 29: South African Distribution
South African Distribution Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2013 FY 2012 Growth % R’000 R’000 R’000 R’000 Growth Total group SA Distribution SA Distribution SA Distribution Revenue 18,984,210 18,712,080 18,439,688 272,392 1% Gross
Slide 30: Income Statement
Income Statement Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth % R’000 R’000 R’000 Growth Revenue 18,984,210 18,715,390 268,820 1% Gross profit 1,271,245 1,207,922 63,323 5% GP margins 6.70% 6.45% 0.25% Other income 12,313 17,307 (4
Slide 31: Associates
Associates Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth % R’000 R’000 R’000 Growth Share of profit from associates 6,726 6,844 (118) (2%) - Ukash 7,291 2,228 5,063 227% - Oxigen Services India (565) 4,616 (5,181) (112%) • Ukash * -
Slide 32: Income Statement
Income Statement Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth % R’000 R’000 R’000 Growth Revenue 18,984,210 18,715,390 268,820 1% Gross profit 1,271,245 1,207,922 63,323 5% GP margins 6.70% 6.45% 0.25% Other income 12,313 17,307 (4
Slide 33: Joint Ventures
Joint Ventures Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth R’000 R’000 R’000 Share of losses from joint ventures (54,052) (26,679) (27,373) - Blue Label Mexico (51,124) (24,873) (26,251) - Other (2,928) (1,806) (1,122) • Blue Labe
Slide 34: Income Statement
Income Statement Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth % R’000 R’000 R’000 Growth Revenue 18,984,210 18,715,390 268,820 1% Gross profit 1,271,245 1,207,922 63,323 5% GP margins 6.70% 6.45% 0.25% Other income 12,313 17,307 (4
Slide 35: Income Statement
Income Statement Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions FY 2013 FY 2012 Growth % R’000 R’000 R’000 Growth Headline earnings from continuing operations 424,506 394,936 29,543 7% Discontinued operation – APS Nigeria - (5,492) 5,492 100% Headline earn
Slide 36: Balance Sheet
Balance Sheet Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions Summarised Group Statement of Financial Position as at 31 May 2013 2012 Non- current assets 1,340,410 993,076 Property, plant and equipment 88,125 112,188 Intangible assets and goodwill 706,018 5
Slide 37: Cash Flow
Cash Flow Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions Summarised Group Statement of Cash Flows as at 31 May 2013 2012 Cash generated by operations (257,384) 656,429 Interest received 35,806 59,730 Interest paid (23,709) (3,307) Taxation paid (194,507) (
Slide 38: Dividend of 25 cents
Dividend Mobile Highlights Strategy SA Distribution International and Prospects Financial Solutions Dividend of 25 cents per share declared Cover of 2.52 times 38
Slide 39: Thank you Q&A
Thank you Q&A bli BLUE LABEL TELECOMS
Slide 40: Supplementary Information
Supplementary Information 40
Slide 41: Supplementary – Group Structure
Supplementary – Group Structure Blue Label Blue Label Blue Label Blue Label South Africa International Mobile Solutions Blue Label African Prepaid Cellfind Datacel Distribution Services (72%) The Prepaid Gold Label Blue Label One Velociti Company Investments Oxigen Blue Label Engage CNS Call Ventury
Slide 42: Supplementary – Technical Overview
Supplementary – Technical Overview 42
Slide 43: Supplementary – Blue Label factsheet
Supplementary – Blue Label factsheet • Founded in 2001 • 1103 employees • Business model underpinned by long-term contracts • Income drivers: • sales of commodity – 43% • annuity income – 53% • interest earned – 4% • Listed as BLU on JSE in 2007, ADR’s launched in 2013 • ~R5.5 billion market capital
Slide 44: Supplementary – Barriers to entry
Supplementary – Barriers to entry • Lag times in negotiating supplier and customer contracts can hinder integration • Long term contracts – to ensure there is no cheaper pricing in the market • Lock-out periods for processing new and developing existing technologies. Roll-out of devices takes time •
Slide 45: Supplementary – Peer group
Supplementary – Peer group • Euronet Worldwide – Nasdaq listed • Easypay • NET 1 – Nasdaq listed • Itron • PayPoint – LSE listed • Syntel • PayPal – held by eBay • Conlog • Cyberplat – Russian base • Qiwi – Russian base • InComm – held privately in USA • Blackhawk Network – Nasdaq listed 45
Slide 46: Supplementary - Top beneficial shareholders
Supplementary - Top beneficial shareholders • Allan Gray clients – 17% • Shotput Investments – 14.8% • B M Levy – 12.3% • M S Levy – 11.2% • RECM clients – 5.1% • Fidelity Investments – 4.8% • Nedbank Group – 2.7% • Investec Investments (UK) – 2.8% • Wellington Management – 2.2% • Government Employe
Slide 47: Supplementary – ADR Program
Supplementary – ADR Program • American Depositary Receipts program • CUSIP No: 095648101 • Ticker name: BULBY • Level: 1 • Ratio: 10 BLU ordinaries equals 1 BULBY • Sponsor: Bank of New York Mellon • Launched: February 2013 47