Safaricom Plc · NSEKE:SCOM
Safaricom — H1 FY13 Earnings Presentation
28 slides from Safaricom's earnings presentation
Slide 1: Safaricom Ltd H1 FY13 Presentation
Safaricom Ltd H1 FY13 Presentation
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: Contents
Contents H1 FY13 Highlights H1 FY13 Financial Review Strategic Focus and Guidance 3
Slide 4: H1 FY13 highlights
H1 FY13 highlights • Good recovery from damaging price wars • Strong commercial and financial performance • Continued investment and innovation in network and services • Improved customer satisfaction levels through service delivery • Great progress on our initiatives to transform lives, especially
Slide 5: Improvement in H1 key financial metrics
Improvement in H1 key financial metrics TOTAL REVENUE +19% to Kshs 59.1bn VOICE REVENUE +19% to Kshs 37.4bn NON-VOICE REVENUE +28% to Kshs18.7bn (SMS, DATA and M-PESA) EBITDA +51% to Kshs 22.3bn NET PROFIT BEFORE TAX +113% to Kshs 11.5bn FREE CASH FLOW From Kshs (0.7bn) to Kshs 5.0bn 5
Slide 6: Contents
Contents H1 FY13 Highlights H1 FY13 Financial Review Strategic Focus and Guidance 6
Slide 7: Delivering on strategy: Strong financial results
Delivering on strategy: Strong financial results Total Revenue EBITDA Net Income Free Cash Flow Kshs. Billion Kshs. Billion Kshs. Billion Kshs. Billion +19.1% +51.0% +93.8% +791.1% 59.12 7.78 22.29 5.14 49.63 14.76 4.01 -0.74 H1 FY12 H1 FY13 H1 FY12 H1 FY13 H1 FY12 H1 FY13 H1 FY12 H1 FY13 Good custo
Slide 8: Strong revenue growth in the year
Strong revenue growth in the year H1 Revenue Kshs. Billion • 19% growth in total revenue 19.1% 59.12 • Customer base now 19.2m customers - up 7% 49.63 47.11 • Successfully growing all service revenue streams 40.66 Revenue Breakdown H1 FY10 H1 FY11 H1 FY12 H1 FY13 Kshs. Billion H1 FY12 H1 FY13 Revenu
Slide 9: Voice: Good recovery from damaging price wars
Voice: Good recovery from damaging price wars H1 Voice Revenue Kshs. Billion • 19% growth in voice revenue 18.8% 37.42 • Pursuing sustainable pricing strategy 33.31 31.90 31.49 • Off-net tariff lowered to match on-net tariff • Variety of promotions to ensure retention H1 FY10 H1 FY11 H1 FY12 H1 FY13
Slide 10: Non-Voice service revenues grow in significance
Non-Voice service revenues grow in significance • Non-Voice revenue grew 28% - now 32% of total H1 Non-Voice Revenue Kshs. Billion revenue 27.8% • Driven by increased customers and increased usage 18.68 14.61 • M-PESA +32% 11.20 7.20 • SMS +17% • Mobile data +22% H1 FY10 H1 FY11 H1 FY12 H1 FY13 • Fi
Slide 11: M-PESA: Integral to society
M-PESA: Integral to society H1 M-PESA Revenue • 32% growth in M-PESA revenue, driven by Kshs. Billion 32.3% • Increase in 30 day active users 10.43 7.88 • Increase in number of transactions 5.28 • Contributes 18% of total revenue 3.22 • M-PESA agents grew by 40% (6,000 new agents) to 45,540 H1 FY10
Slide 12: Data growth remains strong with significant further potential
Data growth remains strong with significant further potentia H1 Mobile& Fixed Data Revenue Kshs. Billion • 30% growth in mobile and fixed data revenue 29.5% 3.98 • 30 day active mobile data users grew 30% to 5.6m – 3.08 now 29% of our customer base 2.26 1.34 • 9% increase in fixed data customers to
Slide 13: Value Focus supports ARPU growth, despite intense competition
Value Focus supports ARPU growth, despite intense competition Voice SMS M-PESA Mobile Broadband Service ARPU Kshs. Kshs. Kshs. Kshs. Kshs. 320 491 115 110 288 39 439 35 92 92 H1 FY12 H1 FY13 H1 FY12 H1 FY13 H1 FY12 H1 FY13 H1 FY12 H1 FY13 H1 FY12 H1 FY13 Quality customer Increased Increased number R
Slide 14: Direct cost controls improve contribution margin
Direct cost controls improve contribution margin H1 Direct Costs H1 Direct Costs Breakdown Kshs. billion Kshs. billion 59.12 (3.57) 22.0 22.4 (9.39) 17.3 13.6 (2.58) (0.36) H1 FY10 H1 FY11 H1 FY12 H1 FY13 (3.22) (3.28) 36.72 • Contribution margin increase of 33% • 2% increase in direct costs , despi
Slide 15: Focus on operating cost initiatives continues
Focus on operating cost initiatives continues H1 OPEX Kshs. billion • 12% increase in operating costs versus a 19% increase in revenue • Operating costs as a % of revenue held constant at 24.6% of total revenue • Operating cost saving initiatives focus on • Transmission costs 14.4 • Inventory costs
Slide 16: Robust growth in EBITDA
Robust growth in EBITDA H1/H2 EBITDA Kshs. Billion 25 20 15 22.7 22.3 10 20.1 18.8 16.5 16.9 14.8 5 0 H1 FY10 H2 FY10 H1 FY11 H2 FY11 H1 FY12 H2 FY12 H1 FY13 • Solid EBITDA of Kshs. 22.3bn and EBITDA margin of 37.7% • H1 FY12 had the effect of the price war plus Kshs 1bn forex loss within EBITDA • H
Slide 17: Largest & Fastest Network in Kenya
Largest & Fastest Network in Kenya CAPEX Base Stations Kshs. Billion 18 35% 2815 31% 2604 2690 16 2501 30% 2282 14 2162 21% 25% 12 10 16% 20% 1545 15% 1439 8 1343 15.51 15% 1140 6 10.01 10% 829 4 8.55 607 6.59 2 5% 140 165 193 195 187 190 0 0% H1 FY10 H1 FY11 H1 FY12 H1 FY13 H2 FY10 H1 FY11 H2 FY11
Slide 18: Cash & Debt Overview
Cash & Debt Overview H1 Free Cash Flow H1 Net Debt Kshs. billion 22.29 Kshs. billion (0.77) (2.00) 7.03 12.00 (13.20) (8.55) 5.14 5.83 (5.87) 0.04 • Kshs. 8.0bn corporate bond at 12.25% • Large increase in Free Cash Flow : from • Kshs. 4.0bn corporate bond at 7.75% Kshs(0.7bn) in H1 FY12 to Kshs 5bn
Slide 19: Key Financials
Key Financials: H1 FY13 H1 FY12 Variance Voice revenue 37.42 31.49 18.8% Messaging revenue 4.27 3.65 17.0% Mobile data revenue 2.97 2.44 21.7% Fixed data revenue 1.01 0.63 60.3% M-Pesa revenue 10.43 7.88 32.4% Service Revenue 56.10 46.09 21.7% Handset revenue 2.43 3.11 (21.9%) Acquisition and other
Slide 20: Contents
Contents H1 FY13 Highlights H1 FY13 Financial Review Strategic Focus and Guidance 20
Slide 21: Strategic Focus
Strategic Focus • Continue strong commercial and financial results • Deliver the best network in Kenya • Grow mobile and fixed broadband • Deepen financial inclusion using M-PESA • Transform lives in Kenya through innovation and CSR programmes 21
Slide 22: Deliver the best network in Kenya
Deliver the best network in Kenya What we have achieved: • Deployed 125 2G and 106 3G cell sites in last 6 months • Modernised 410 sites (now have the radio on 1,856 out of 2,815 sites modernised) • Recent independent tests show 8/8 CCK KPIs met in 3G and 7/8 in 2G Top priority items in pipeline: •
Slide 23: Grow mobile and fixed broadband
Grow mobile and fixed broadband What we have achieved: • Increased data customers by 30% to 5.6m • Increased the number of 3G handsets on the network to 1.8m • Increased the number of smartphones on the network to 536k • Increased the average usage to 60Mb per mobile data customer Top priority items
Slide 24: Deepen financial inclusion using M-PESA
Deepen financial inclusion using M-PESA What we have achieved: • Recruited 6,000 new M-PESA agents in last 6 months • Increased the 30 day active customer base by 14% to 9.7m • Reduced system downtimes substantially over H2 FY12 • Grown person to person payments to 27% of GDP • Grown person to busin
Slide 25: Transforming lives
Transforming lives What we have achieved: • Launched m-health, e-learning and m-agriculture services • Launched m-Kopa solar lighting : pay as you go • Safaricom Foundation involved in Kshs 250m p.a. of initiatives • M-PESA Foundation involved in Kshs 400m p.a. of initiatives • Published 2012 sustai
Slide 26: FY13 guidance upgraded
FY13 guidance upgraded Revenue Upgrade: Low double digit growth in total revenue EBITDA Upgrade: Maintain H1 FY13 margin through revenue growth and cost control Capex Reaffirmed : Continued investment in the network, focused on voice quality and coverage, with capital intensity slowly reducing over
Slide 27: H1 FY13 highlights
H1 FY13 highlights • Good recovery from damaging price wars • Strong commercial and financial performance • Continued investment and innovation in network and services • Improved customer satisfaction levels through service delivery • Great progress on our initiatives to transform lives, especially
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