Mtn Group Limited · JSE:MTN
Mtn — UBS conference 2018
18 slides from Mtn's conference presentation, Mar 26, 2018
Slide 1: Capital allocation and enhanced risk management
Capital allocation and enhanced risk management MTN Group Limited Ralph Mupita – Group CFO UBS conference – 26 March 2018
Slide 2: Agenda
Agenda 1 Recap on 2017 results 2 Capital allocation 3 Enhanced risk management 2
Slide 3: Recap on 2017 results
Recap on 2017 results 3
Slide 4: 2017 group financial results - salient features
2017 group financial results - salient features + 6,8%* + 7,2%* + 34,2%* +14,2%* Group revenue Group service revenue Group data revenue Group digital revenue R133bn** R124bn** R28bn** R13bn** R47,0bn** R31,5bn** 182 cents 665 cents Group EBITDA Group capital expenditure HEPS Adjusted HEPS +2,5%* 23,
Slide 5: 2017 group financial results - HEPS
2017 group financial results - HEPS Impacted by non-operational items ZAR (cents) 2017 2016 Change% Attributable earnings / (loss) per share 246 (144) NM Impairment of goodwill, PPE and non-current assets 275 60 NM Profit on exercise of exchange right (IHS) (335) - (100,0) Other (4) 7 NM Basic headl
Slide 6: Medium-term targets
Medium-term targets Service revenue Group upper single digit growth Improving growth* EBITDA South Africa mid single Nigeria double digit margins digit growth growth Capex intensity between Adjusted holdco leverage ∆ 20% to 15% 2,0x – 2,5x Dividend policy of 500 cents in 2018, growing 10% to 20% per
Slide 7: Growth – capital allocation and cash generation
Growth – capital allocation and cash generation Top line growth EBITDA growth Lower Capex Higher FCF Revenue EBITDA Capex Operating FCF 2017 2018 2019 2020 2017 2018 2019 2020 2017 2018 2019 2020 2017 2018 2019 2020 Capex intensity Capex Operating free cash flow Service revenue Other revenue EBITDA
Slide 8: Capital allocation
) | | eee Capiral allocation
Slide 9: Capital allocation
Capital allocation 1 Incremental ROIC > WACC +2% • Seeking projects with payback < 4 years • Conflict markets to be self funding Smart capex 2 • Investing appropriately for network and NPS leadership • Reducing unitary costs for network equipment 3 Appropriate group and opco gearing • Stabilise net
Slide 10: Capex profile - 2017 actual and 2018 guidance
Capex profile - 2017 actual and 2018 guidance Capex 2017 ZAR (million) 31 461** 27 747 11 470 9 600 8 953 9 274 6 917 4 002 3 696 4 620 3 651 3 794 2 499 2 294 1 078 1 254 SA SEAGHA Nigeria WECA MENA Iran* Other Group 2018 guidance 2017 *Iran Capex at 49% and is not part of the consolidated Group Ca
Slide 11: Capital allocation drivers – smart capex
Capital allocation drivers – smart capex Input Model Output Customers Device Market sizing and market share analysis Market & Position, Market share Segmentation New site establishment plan per city, province Network utilisation and Demographics Market Potential Modernisation plan per BT
Slide 12: Capital allocation drivers - price book savings
Capital allocation drivers - price book savings RAN HW + SW standardisation key highlights - illustrative Hardware Software Average Hardware Pricing (unitary), Old vs New Prices Software Pricing (Tiered annual unitary pricing/site), Old vs New Prices USD ‘000 USD ‘000 SA SA SEAGHA Nigeria Old Price
Slide 13: Leverage and funding
Leverage and funding Leverage Nigeria borrowings (%) Group (ZAR million) 2017 2016 49% 2016: (65%) Cash and cash equivalents (22 575) (35 052) Interest bearing liabilities 79 720 86 954 51% 2016: (35%) Net debt 57 145 51 902 Group leverage# 1,3 1,1 Naira USD Holdco (ZAR million) 2017 2016 Head offic
Slide 14: Debt and maturity profile
Debt and maturity profile Focus on managing holding company debt profile and refinancing risk Instruments Amount due 2018 GBFs 750 Bonds and CPs 307 2019 Term facilities 1 237 Bonds and CPs 1 150 2020 Bonds and CPs 1 954 Term facilities 1 500 2021 Term facilities 24 518 2022 Eurobond 6 187 Bonds and
Slide 15: Enhanced risk management
Enhanced risk management
Slide 16: MTN Group's top risks
MTN Group’s top risks Risk Risk description 1 Foreign exchange volatility and weakening currencies 2 Operational and compliance risks 3 Increased regulatory pressures 4 Suboptimal cash generation and upstreaming to the group 5 Political and economic risk in our key markets: South Africa, Nigeria and
Slide 17: Enhancements to risk management framework
Enhancements to risk management framework 1 Splitting lines of assurance • Our risk & compliance functions & internal audit functions will be separate functions • OpCo internal audit functions will report directly to the Group 2 Strengthening our Compliance functions • We are strengthening resource
Slide 18: Thank you
Thank you Questions?