Slide 1: Group Interim Results for the six months ended 30 September 2014
Telkom SA SOC Ltd Group Interim Results for the six months ended 30 September 2014 The information contained in this document is also available on Telkom’s investor relations website www.telkom.co.za/ir
Slide 2: Contents
CONTENTS Group interim results presentation Group Interim Results for the six months ended 30 September 2014 Telkom SA SOC Ltd (Registration number 1991/005476/30) JSE share code: TKG ISIN: ZAE000044897 Notes: Group Secretary Xoliswa Mpongoshe Transfer secretaries Computershare Investor Services (Pr
Slide 3: Our performance in the first half
Our performance in the first half HEPS EBITDA Operating Net revenue expenses 261.7cps R4.4 bn R13.3 bn R9.2 bn +14.9%* +12.1%* +1.6%* -2.4%* Free cash flow generated, strong at R1.7 billion BEPS excluding once-off items increased 82.7% to 263.2 cps *Excluding VSP/VERP expenses and the PRML curtailme
Slide 4: Maintaining revenues and controlling costs
Maintaining revenues and controlling costs Addressing the critical issues our customers are telling us need to be fixed • Operating costs decreased 8.3% in real terms Explore and buy Get started Fix fault/ Use Get help • Consolidating the business and improving efficiencies • Key initiatives include
Slide 5: Operational and commercial traction in Consumer and Business
Operational and commercial traction in Consumer Leading provider of communications services in business • Consolidated the fixed-line and • Exclusive provider of communication mobile consumer businesses services to three big banks • Rationalised our product • Leading provider of services in the reta
Slide 6: Customer-led high speed broadband offering
Customer-led high speed broadband offering • FTTH: Wholesale open access Fibre Broadband product PRETORIA commercial launch on JOHANNESBURG 1 December 2014 – first fibres lit and presence in 23 suburbs DURBAN Wholesale and • Reduced our 20 Mbps and 40 Mbps pricing Networks • Launched LTE Advance – t
Slide 7: Financial overview
Interim results Sept 2014 Sept 2013 % Rm Rm Operating revenue 15 911 15 989 (0.5) Net revenue 13 299 13 087 1.6 Operating expenses 9 168 9 389 (2.4) Financial overview EBITDA 4 403 3 927 12.1 Depreciation and impairments 2 489 3 091 19.5 Capital investments 1 815 3 171 (42.8) Free cash flow 1 699 33
Slide 8: Higher mobile data and CPE revenues
Higher mobile data and CPE revenues Data volumes show steady growth Group operating revenue (Rm) ADSL Subscribers 7.4% 965 046 27.0% (5.9%) Voice and interconnection 898 203 574 Sept 2014: 53.9% 841 831 1 314 Sept 2013: 55.8% Data Sept 2012 Sept 2013 Sept 2014 Sept 2014: 34.2% Sept 2013: 33.9% Manag
Slide 9: Prospects
Capital expenditure Financial guidance The guidance excludes the impact of the successful conclusion of the MTN and BCX transactions Sept 2014 Sept 2013 H1 F2014 A H1 F2015 A F2015 F2016 % Our dividend policy Rm Rm going forward Total capital expenditure 1 815 3 171 42.8 Net Stabilise Stabilise +0.8
Slide 10: Our turnaround strategy is on track
Our turnaround strategy is on track De-risking mobile • We are seeing the benefits of discipline in operational and capital Telkom Mobile and MTN SA expenditure • The objective is to enhance our position in the mobile market, and allow Telkom to compete with much larger and • Starting to see the tra
Slide 11: We are clear what needs to be done
We are clear what needs to be done Deliver superior customer experience Disciplined capital allocation with greater emphasis on productivity and returns Complete corporate transactions – awaiting approval for MTN agreement and BCX Telkom SA SOC Limited Improve efficiency – address all costs and opti
Slide 12: Special note regarding forward-looking statements
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS CONTENTS Many of the statements included in this document, as well as verbal statements that may be made by us or by officers, directors or employees acting on our behalf, constitute or are based on forward-looking statements. All statements, other t
Slide 13: Group salient features
GROUP SALIENT FEATURES 0.5%ê 82.7%é 14.9%é 263.2 261.7 15 989 15 911 227.8 144.1 12.1%é 4 403 3 927 HEPS Net revenue Operating expenses EBITDA Operating revenue R million EBITDA BEPS Cents per share HEPS 261.7 R13.3 R9.2 R4.4 Sept 2013 Sept 2014 Sept 2013 Sept 2014 CENTS BILLION BILLION BILLION 7.4%
Slide 14: Overview
OVERVIEW Johannesburg, South Africa – 17 November 2014, Telkom SA SOC Ltd (JSE: TKG) today announced Group interim results for the six months We have also been in discussion with MTN South Africa regarding the extension of our existing roaming agreement to include bilateral ended 30 September 2014.
Slide 15: Operational data
OVERVIEW OPERATIONAL (continued) DATA RESULTS FROM OPERATIONS The Group recorded a profit after tax of R1.2 billion (September 2013: R3.0 billion). This is significantly lower than the previous year and September September was driven by a one-off R2 173 million net gain recognised on the curtailment
Slide 16: Financial performance
FINANCIAL PERFORMANCE GROUP OPERATING REVENUE Managed data network services revenue increased 14.2% to R507 million (September 2013: R444 million) due to an increase of 5.3% in the number of sites to 47 830 (September 2013: 45 441). September September In ZAR millions 2014 2013 % In line with our st
Slide 17: Financial performance (continued)
FINANCIAL PERFORMANCE (continued) GROUP OPERATING EXPENSES 3. R3 million relating to Cell Captive has been reclassified as foreign exchange and fair value movements as Cell Captive is no longer consolidated. Employee expenses were 5.7% lower due a R199 million reduction in service and interest cost
Slide 18: Financial performance (continued)
FINANCIAL PERFORMANCE (continued) FINANCE CHARGES AND FAIR VALUE MOVEMENTS Network evolution expenditure of R576 million (September 2013: R1 014 million) is related to the continued roll-out of the Next Generation Network programme, which aims to modernise the legacy voice network, provide high-spee
Slide 19: Condensed consolidated interim statement of profit or loss and financial position
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FINANCIAL POSITION for the six months ended 30 September 2014 at 30 September 2014 Reviewed Restated* Audited Reviewed Reviewed Audited Six months ended Six months en
Slide 20: Statement of changes in equity and cash flows
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY CASH FLOWS for the six months ended 30 September 2014 for the six months ended 30 September 2014 Reviewed Reviewed Audited Six months ended Six months ended Year ended Reviewed Audited Reviewed
Slide 21: Notes to the condensed consolidated interim financial statements
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 September 2014 1. CORPORATE INFORMATION Pronouncement Title Effective date Telkom SA SOC Limited (Telkom) is a Company incorporated and domiciled in the Republic of South Africa (South Africa) whose shares a
Slide 22: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued) 2.3 Adjustments to the condensed consolidated interim statement of profit or loss and other 2.2 Standards and interpreta
Slide 23: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 Reviewed Restated Audited Reviewed Restated Audited Six months ended Six months ended Year ended Six months ended Six months ended Year ended 30 September 2014 30 September 2013 31
Slide 24: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 Reviewed Reviewed Audited Reviewed Reviewed Audited Six months ended Six months ended Year ended Six months ended Six months ended Year ended 30 September 2014 30 September 2013 31
Slide 25: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 Reviewed Restated Audited Reviewed Reviewed Audited Six months ended Six months ended Year ended Six months ended Six months ended Year ended 30 September 2014 30 September 2013 31
Slide 26: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 Reviewed Reviewed Audited 15. FINANCIAL RISK MANAGEMENT Six months ended Six months ended Year ended Exposure to continuously changing market conditions has made management of fina
Slide 27: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 15. FINANCIAL RISK MANAGEMENT (continued) Reviewed Reviewed Audited 15.3 Fair value hierarchy (continued) Six months ended Six months ended Year ended The following table presents
Slide 28: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 19. CONTINGENCIES (continued) Reviewed Reviewed Audited Contingent liabilities (continued) Six months ended Six months ended Year ended Matters before ICASA (continued) 30 Septembe
Slide 29: Notes to the financial statements (continued)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2014 Reviewed Reviewed Audited 21. SIGNIFICANT EVENTS (continued) Six months ended Six months ended Year ended Restructuring of the organisation 30 September 2014 30 September 2013 31 M
Slide 30: Notes
Notes 56 TELKOM SA SOC LTD Group Interim Results for the six months ended 30 September 2014