Mtn Group Limited · JSE:MTN
Mtn — Investor Day (2010)
28 slides from Mtn's investor day presentation, 2010
Slide 1: Introduction and Overview
Introduction and Overview Nigeria Ahmad Farroukh- CEO Nigeria
Slide 2: Country overview
Country overview Population 150m Market sizing 111m (2014) Penetration 45.8% Economics GDP per capita *GDP USD 2 2,440 440 13% (National Bureau of Inflation Statistics) Commercial banks' prime lending rate 17.8% (averge) LC/USD = 152.00 (2010 Exchange rate est. av.) Demographics English, several loc
Slide 3: Market dynamics
Market dynamics • Uncertainty pending general elections in 2011 Political environment i t • Implementation of political reforms aimed at ensuring free and fair elections • Real GDP growth rate forecast 2010 - 6.9% • Average inflation forecast 2010 - 11.5% • On going tightening of banking supervision
Slide 4: GSM competitors – Jun 10
GSM competitors– competitors– Jun 10 MTNN ZAIN Globacom Etisalat Launch date 2001 2001 2003 2007 Subscribers 35.0m 15.1m 14.9m 3.1m Market share 51.27% 22.17% 21.90% 4.66% EMTS (40%) Mubadala (30%) **MTNI (76%) Bharti Airtel (65.7%) Shareholders Nigerian shareholders PTHNV (30%)* Private (24%) Priva
Slide 5: Fixed wireless and CDMA segment
Fixed wireless and CDMA segment Fixed i d wireless i l operators 31 3 Dec 09 C CDMA mobile bil operators 31 3 Dec 09 4.14% 2.50% 14.52% 4.71% 21.90% 8.60% 3 74% 3.74% 2.43% 27.20% 68.47% 36.30% Starcomms Visafone Multilinks Reltel 21st Century O'Net Starcomms Visafone Multilinks Reltel NITEL CMDA co
Slide 6: Management team
Management team Ahmad Farro Farroukh kh Chief Executive Officer Karl Toriola Andrew Bing Bola Akingbade Akin Braithwaite Chief Technical Chief Financial Chief Marketing Customer Relations Offi Officer Offi Officer Offi Officer E Executive ti Wale Goodluck Amina Oyagbola Derek Appiah Abdul Ismail Mic
Slide 7: Licences
Licences • Digital Mobile Licence (GSM): Feb 01 – Jan 16 • Unified Access Service licence ((“UASL”): UASL ): Sep 06 – Aug 21 Period • 2 GHz Spectrum (3G): May 07 – Apr 22 • 3.5GHz (WiMAX): Jul 07 – Jun 12 • DML – US$285m • UASL – NGN114.6m NGN114 6 Upfront fees • 2GHz – US$150m • 3.5GHz – NGN13.9m •
Slide 8: Radio network rollout
Radio network rollout • 6,356 6 356 BTS BTS’s s • 2,367 cities and towns • Over O 20 20,000 000 villages ill and d communities • 41,645 , km of highway g y • 97 MSC’s • 106 BSC BSC’s s • Adopt lower cost rollout methodologies such as co-location and infrastructure sharing 8
Slide 9: 3G network coverage
3G network coverage • 1,422 1 422 live 3G sites to date • 3G has enabled the launch and rapid growth of mobile internet and other data services including corporate services • 50 WiMax Sites • WiMax is expected to further improve MTN’s positioning in the data services segment • High density 9
Slide 10: Backbone route
Backbone route 10
Slide 11: Distribution channel
Distribution channel Selection of competent…. • Efficient distribution channels all Trade Partners alignment g to captive p markets and clusters with joint responsibility for market aligned to particular Trade development. Partners down to the retail level Drive towards the evolution of trade partne
Slide 12: Data
Data Licence • Unified licence Customers • Large corporations and Small and Medium Enterprises (SMEs) • Data solutions – lease lines, high speed internet (ADSL), dedicated Products internet, satellite links, high speed internet (Wimax) • Voice – fixed voice (prepaid and post paid) • Nigeria wide – l
Slide 13: Product and services
Product and services Product Customer Benefit Segment Weekly mobile email and PIM subscription for Blackberry Weekly Youth/young professionals prepaid. Customers can be where they want to be seen, MTN Pulse Youth/young y gpprofessionals making friends and sharing content. content MTN EYE gives you a
Slide 14: Product and services
Product and services Product Customer Benefit Segment Mobile M bil email il andd PIM. PIM First Fi t and d only l prepaid id Blackberry from MTN Youth/young professionals solution in Nigeria Search the web without the internet. Knowledge on Google SMS Youth/young professionals the go enabled by MTN
Slide 15: Brand leadership
Brand leadership Q210 Market Share 51.0% Brand Preference 59.9% B Brand d Awareness A 69 9% 69.9% Brand Affinity 61.6% MTN remains the leading brand in the Nigerian telecoms space 15
Slide 16: Financials
Financials Nigeria Ishmael Nwokocha- Nwokocha Senior Manager Nigeria
Slide 17: Revenue analysis
Revenue analysis • Airtime and subscriptions fees 277 83 277.83 17.7% • Increase in the number of revenue 235.99 generating subscribers • Increase in the total billable minutes • Increase in the number of blackberry subscribers from 4,242 in Jun 09 to , 33,015 • Interconnect Revenues • Reduction in
Slide 18: Operating expenses analysis
Operating expenses analysis • Interconnect and roaming 33.16 26.3% • Decrease primarily as a result of decrease in interconnect rates by 24.98 26.25 NCC 24 8% 24.8% • Direct network operating costs 18.79 • Increase in number of sites in 2010 resulting in increased rent, maintenance costs and fuel us
Slide 19: Operating expenses analysis
Operating expenses analysis • Staff costs • Marginal growth in head count 34.35 • Annual salary increases for staff 28.3% • Selling, Selling distribution and 26.78 27.17 marketing expenses 42.1% • Increased sponsorships with 19.12 new events added e.g. g Project j Fame competition, FIFA 29.8% Promot
Slide 20: Tax considerations
Tax considerations Effective tax rates % Material reconciling items Jun 10: 46 43 • Education tax 2.8% 33 33 • Commencement provisions 0.0% 0 0% • Additional deferred tax 3.2% • Investment allowance relief (2.4%) Dec-07 Dec-08 Dec-09 Jun-10 Nigeria – expected trends in effective tax rates Illustrati
Slide 21: Capital trends
Capital trends 2.5E-07 80.0% 71.0% 596 70.0% 0.0000002 60.0% 50.0% Billions 1.5E-07 45.0% 138 NGN 112 40.0% N 0.0000001 28.2% 32.0% 81 24.0% 22.0% 30.0% 80 68 191 20 0% 20.0% 5E-08 10.0% 171 0 0.0% 2004 2005 2006 2007 2008 2009 CAPEX CAPEX to revenue % 21
Slide 22: Looking forward
Looking forward Nigeria Ahmad Farroukh- CEO Nigeria
Slide 23: MTN Foundation
MTN Foundation • Established in Jul 04 as a separate entity • Founded to manage Corporate Social Responsibility initiatives across Nigeria General • MTN Nigeria invests up to 1% of its PTA • Focus areas Economic Empowerment, education and health • Facilitate economic empowerment of Nigerian citizens
Slide 24: Looking forward: Opportunities and Challenges
Looking forward Opportunities Challenges • Rural area penetration • Poor infrastructure • Strong brand • Increasing competition from PTOs • Industry leader • Devaluation of local currency • Dependence on oil production and • Strong demand revenue • Capex rollout • Political uncertainty 24
Slide 25: Nigeria - income statement (LC)
Nigeria - income statement (LC) % NGN millions Jun 10 Jun 09 change Revenue 330,121 287,820 14.7% EBITDA 202 442 202,442 175 856 175,856 15 1% 15.1% EBITDA margin (%) 61.3% 61.1% Depreciation & amortisation 50,885 42,295 20.3% Net finance costs 13,198 13,557 (2.6%) Profit before taxation 138,359 120
Slide 26: Thank you
Thank you Questions
Slide 27: Nigeria - balance sheet (LC)
Nigeria - balance sheet (LC) NGN millions as at Jun 10 as at Jun 09 Non-Current C Assets 461,537 6 3 441,996 996 Property. plant and equipment 431,566 400,312 Intangible assets 126 186 Other non-current assets 29,845 41,498 Current Assets 219,012 180,641 Bank and cash 152,768 107,739 Other current a
Slide 28: Nigeria - funding structure
Nigeria - funding structure • US$400m foreign currency term loan facility Original US$ • 5 year tenor facility • Outstanding balance of US$250m (as at Jun 10) • Currently in repayment with final repayment in Oct 12 Restructured • NGN206bn term loan facility local • 5.5 years tenor currency facility