Mtn Nigeria Communications Plc · NSENG:MTNN
Mtn Nigeria Communications — H1 2023 Earnings Presentation
23 slides from Mtn Nigeria Communications's earnings presentation, Aug 1, 2023
Slide 1: MTN Nigeria Results presentation for the six months ended 30 June 2023
MT N N ig er ia R es ults pr es enta tion f or the s ix months ended 30 J une 2023
Slide 2: Agenda
Agenda 01 Operational review 02 Financial review 03 Looking ahead 2 Sensitivity: MTN Internal
Slide 3: Operational review
Operational review Karl Toriola CEO 3
Slide 4: H1 2023 Challenging operating environment
H1 2023 Challenging operating environment Macroeconomic Supply chain Energy/power • Rising inflation rates • Geopolitical uncertainties • Fuel subsidy removal • Monetary policy tightening • Forex volatility/availability • Rising energy costs • Forex liberalization • Cash shortages • 2023 finance act
Slide 5: Navigating the environment
Navigating in a Focus on operational efficiency with a disciplined capital allocation Commercial Supply chain Network • CVM | Price optimisation • Advance purchase orders for • Adequate balance sheet capacity and resilience headroom to support capex • Revamped product offerings • Use of trade lines
Slide 6: Ambition 2025
Ambition 2025 Solid operational performance underpinned by execution excellence Solid commercial Financial resilience of Continued execution Creating performance the business maintained of strategic priorities shared value • Sustained subscriber growth • Service revenue growth and • Focus on our exp
Slide 7: Highlights
Highlights Continued commercial momentum on sustained increased demand Subscribers Active data users Active MoMo wallets Solid growth Accelerated adoption Solid momentum 77.1m 41.0m 3.1m 74.1m 36.8m 2.4m +4.0% +11.5% +33.2% H1 22 H1 23 H1 22 H1 23 H1 22 H1 23 ARPU Data usage per active user Fintech
Slide 8: Fintech journey
Fintech journey of Evolution to MoMo PSB | Focus on wallets and fintech Fintech users’ composition (H1 23) Active wallets (m) OTC (m) 14.9 Active agents (‘000) Impact of cash 224 227 shortages on OTC transactions Active wallets 6.9m 45% 12.9 6.9 135 MoMo agent users down 39.3% 105 55% 9.4 3.8 4.7 2.
Slide 9: How we are driving growth
How we are driving Leading connectivity operations Largest/valuable platforms Own the Voice Data Fintech Digital Enterprise Home • Ramp up gross • Sustained • Increased fiber- • Grow wallets and • Gaming • Co-create connections increase in to-the-home merchant customer- data traffic deployment in ec
Slide 10: Progress against our medium-term targets
Progress against our H1 23 results are in line with our medium-term targets KPI Target Performance Service revenue growth At least 20% 21.6% EBITDA Margin 53 - 55% 53.0% Reducing intensity (<18%) 15.2% Capex intensity Dividend payout Minimum 80% of distributable income 88.5% 10 Sensitivity: MTN Inte
Slide 11: Financial review
Financial review Modupe Kadri CFO 11
Slide 12: Highlights
Highlights Unique growth engine supports healthy financial performance +21.6% +34.9% +7.8% Service revenue Data revenue Fintech revenue N1.2tn Macroeconomic N470.0bn N43.6bn +12.1% +20.6% - 0.6pp Voice revenue EBITDA EBITDA margin N562.7bn N614.5bn 53.0% - 25.4% Interim DPS 15.2% (capex intensity) P
Slide 13: Revenue growth and efficiency drive performance
Revenue growth and efficiency drive Data, digital & fintech drive strong service revenue growth | Expenses largely driven by lease rental costs Service revenue Expenses EBITDA and Capex +21.6% 53.6% 53.0% EBITDA margin 21.5% 15.2% Capex intensity +23.5% (IAS 17) 1,152.7 544.3 N bn 562.7 Voice +12.1%
Slide 14: Impact of the naira devaluation
Impact of the Focus on expense efficiencies and disciplined capital allocation to manage the impact of the naira devaluation, supported by the nature of our tower contracts EBITDA margin Net finance costs Capital expenditure • USD component of opex in lower • ~64% movement in the exchange • H1 capex
Slide 15: Understanding our tower contracts
Understanding our Impact of rising energy costs mitigated by tower contracts Foreign exchange Energy pass-through CPI escalation • Tower lease costs are paid at the • ~80% of tower contracts do not • Tower contracts have US$ start of each quarter have energy pass-through and naira CPI escalation • E
Slide 16: Disciplined approach to capex
Disciplined approach to Sustained capex investment to capture growth opportunities| Capex intensity in line with target levels Capex (ex-leases) Capex breakdown H1 2023 1% 8% Network investment priority (N’billions) • 4G coverage 361.0 • 5G coverage • Capacity upgrade 91% 176.3^ Network Information
Slide 17: Capital structure
Capital structure Disciplined approach to funding activities to reduce market risk and maintain strong balance sheet Key metrics Funding strategy Net debt (N’b) • Diversified funding sources to optimise debt mix and cost – bonds 340 355 and CPs • Comfortable balance sheet headroom to strengthen leve
Slide 18: Looking ahead
Looking ahead Karl Toriola CEO 18
Slide 19: Key priorities
Key priorities We remain committed to executing our Ambition 2025 strategy 1 Accelerate 4G and 5G network coverage to drive data growth 2 Drive home broadband penetration strategy to capture significant share of market growth Implement MoMo acceleration plan to drive adoption of active wallets and g
Slide 20: Q&A
Q&A 20
Slide 21: Appendices
Appendices 21
Slide 22: Key financial items
Key financial Items (in millions) H1 2023 H1 2022 YoY Q2 2023 Q2 2022 YoY Total Revenue 1,158,739 950,086 22.0% 590,605 479,102 23.3% Service Revenue 1,152,671 947,850 21.6% 586,735 478,031 22.7% Voice 562,685 501,846 12.1% 285,074 243,081 17.3% Data 470,015 348,483 34.9% 242,200 185,753 30.4% Digit
Slide 23: Thank you Q&A
Doing Thank you tomorrow, Doing for today tomorrow, Q&A today. Contact: Chima Nwaokoma Senior Manager, Investor Relations Chimaobi.Nwaokoma@mtn.com +234 803 200 0186
MTN Nigeria Communications — H1 2023 Earnings Presentation on 6ix