Mtn Nigeria Communications Plc · NSENG:MTNN
Mtn Nigeria Communications — Investor Presentation (2021)
35 slides from Mtn Nigeria Communications's investor presentation, 2021
Slide 1: MTN Nigeria Investor Presentation FY 2020
& Lia MTN Nigeria Investor Presentation FY 2020 :
Slide 2: Operational review, financial review, looking ahead, transaction terms
r 2) Operational review Financial review <> <> Looking ahead <> Transaction terms
Slide 3: Who We Are
Who We Are
Slide 4: MTN Nigeria
MTN Nigeria August 8, 2001, we opened our doors and on May 16, 2019, MTN Nigeria Communications Plc (MTNN) was admitted to the Premium Board of the Nigerian Stock exchange. We are connecting Nigerians with each other and a world of people, ideas and opportunities. We believe that everyone deserves t
Slide 5: 4G and 3G population coverage, smartphone penetration
4G Population 3G population Data Smartphone coverage coverage penetration penetration
Slide 6: Our supportive Board of Directors
tal Bb Dr. Ernest Ndukwe, OFR Mr. Karl Toriola Mr. Ralph Mupita Mr. Modupe Kadri Mr. Muhammad Ahmad, OON Mr. Michael Ajukwu Mr. Andrew Alli TW =) = 4 a Sah y \ ~ iy Li] e Mr. Rhidwaan Gasant Dr.Omobola Johnson A.B. Mahmoud, S.A.N. bs Mr. Ferdinand Moolman == Mr. Paul Norman IfFueko Omoigui-Okauru, M
Slide 7: Balanced structure with executive management
Balanced structure with FINANCE HUMAN RESOURCES COMPANY SECRETARY RISK AND COMPLIANCE CORPORATE SERVICES Karl Toriola Modupe Kadri Esther Akinnukawe Uto Ukpanah Cyril lok Tobechukwu Okigbo 3 3 x ENTERPRISE BUSINESS NETWORKS SALES & DISTRIBUTION INFORMATION TECH. OPERATIONS INTERNAL AUDIT Lynda Saint
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Slide 9: Operational highlights
)» Operational highlights Strong operational and commercial performance | Data momentum sustained Market context Key acti ey ities Solid results il * Macro pressures | Oil & FX volatility | Exchange rate adjustment| COVID-19 effects * Increase in value-added tax from 5% to 7.5% | Increase in coverag
Slide 10: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 11: Y'ello Hope COVID-19 response
Yello Hope = #GoodTogether Our COVID-19 response (valued at ~N25bn): Supported national efforts to contain spread of the virus and Y e | lo H ope mitigate its social and economic impact, while keeping customers connected to loved ones, critical resources, & support. 7 7 Communities & businesses | *
Slide 12: Enabling & supporting broader economic development
» Enabling & supporting broader economic development Paid N2 Trittion in taxes and levies to government From inception, and N2.9 Triton Capital investment Created over 600,000 direct and indirect employment through trade partners and agents over N4Z00Bition paid to local (Nigerian) partners, vendors
Slide 13: MTN Foundation community investments
MTN ..improving the quality of lives and the progress of our communities because we believe that thriving communities can only bring good to all entrepreneurs awarded gran equipmentiioans,), School Furniture . Through ‘WhakGan We Do Together! we sc Ned 120 primaty health care centres; supported chil
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Slide 15: Once off COVID-19 direct costs
• • • ₦ ₦ • • • • • Once off COVID 19 direct costs of N2.0 Billion
Slide 16: Financial highlights
» Financial highlights Strong financial performance in FY 2020 Service Revenue Voice +14.7% +5.9% YoY YoY EBITDA EBITDA Margin +9.7% -2.5pp YoY YoY Note: Unless otherwise stated, all figures are based on IFRS 16. YoY is FY 2020 vs. FY 2019. Data +57.0% YoY Free Cash Flow +3.2% YoY Opex +27.2% YoY To
Slide 17: FY 2020 performance summary
FY 2020 performance summary Porn Despite COVID-19, data has driven strong service revenue growth rvice revenue f Expenses RGD) EBITDA and Capex (IFRS (NGN bn) (NGN bn) (NGN bn) . YoY Growth (14.7%) (213%) (53.4% EBITDA Margin 021.4%) Cost of sale Capex Intensity) Capex Intensity?) =O pes EBITDA 544.
Slide 18: Total revenue
» Total revenue Revenue growth on track * Growth in gross connections, 4G network expansion and Yoy Growth 116% > (17.4% > 12.6% > (15.1% > FY'19Revenue | 1,169.7 increased smart phone . penetration driving data subscribers and revenue (NGN bn) : . 8 m Other * Expanded customer 1,039.1 . > a Wholesa
Slide 19: Cost of sales
» Cost of sales (NGN bn) Gross margin (792% BLK) 813% BLT 246.1 22.5 184.0 198.9 218.8 18.7 Contribution 2017 2018 2019 2020 Interconnect 45.8% 48.1% 48.1% 45.7% Commissions 24.4% 25.8% 25.9% 27.8% Digital 11.3% 3.7% 0.9% 0.3% Fintech 3.5% 4.2% 4.6% 4.6% Regulatory 10.5% 11.6% 12.0% 12.4% Other 4.6%
Slide 20: Operating expenses (Opex)
» Operating expenses (Opex) Opex intensity (40.2% = 39.3%) 27.9%) 30.8% Opex Split 356.1 408.7 326.02 414.7 (NGN bn) 44.2 30.2 x 2017 2018 2019 2020 Contribution Lease Rentals 60.0% 59.9% 53.7% 55.8% Staff Cost 6.7% 6.8% 9.2% 10.8% Maintenance 12.0% 11.1% 15.0% 12.8% Prof. Fees 8.4% 7.3% 6.3% 6.0% M
Slide 21: EBITDA
» EBITDA Revenue driving growth in EBITDA v EBITDA (NGNbn) 53.4% EBITDA Margin Fy'19 Aggressive roll-out of 4G, Naira exchange rate adjustment and VAT increase Lease rentals Staff costs Provision for doubtful debts +9.7% COVID-19 Other 1.0% 50.9% Cost of sales EBITDA Margin FY'20
Slide 22: Capital expenditure
Capital expenditure Par 4G network expansion driving investment in capital expenditure NoNbn FY 2020 225.3 240.1 2 208.3 6x 184.2 = Network alT ee Capex” = Other — Capex Intensity 82.2% 2017 2018 2019 2020 Capex Mix (%) 2018 2019 2020 Sites 3G 8295 5795 945 Network 91.5% 88.9% 84.1% 82.2% rolled out
Slide 23: Cash flow
» Cash flow Strong cash flow position & working capital efficiencies (NGNbn) FY 2020 112.2 (55.9) (214.9) TY Es (115.5) EBITDA Capex (excl. non- Change in working Current Income Net Interest paid” NCC Fine cash items)” capital Tax Paid Repayments FY 2019 a 62.1) (89. EBITDA Capex (excl. non- Change
Slide 24: Capital structure
» Capital structure * MTNN has historically maintained moderate leverage; remains in a comfortable Total position relative to covenants on current FY’20 metrics: Debt 255 > 175 > 419) >) C5210 > 296 ~ Interest Coverage of c. 14.0x (in terms of IAS 17, within bank covenants) 246 - Net Debt to EBITDA
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Slide 26: Ambition 2025: Framing our strategic priorities
» Ambition 2025 | Framing our strategic priorities Far Belief statement “Everybody deserves the benefits of a modern connected life” Strategic intent Ambition 2025: “Leading digital solutions for Africa's progress” D, (0) Build the Accelerate portfolio & most oe connectivity strategic operations pri
Slide 27: Investment case - A compelling Nigeria growth story
» Investment case - A compelling Nigeria growth story Ne Nigeria's leading mobile operator and provider of communication services * #1 subscriber market share Leader with a Strong Competitive Advantage across all Segments with significant lead over competitors S Exciting demographic opportunity Larg
Slide 28: 2021 priorities
)» 2021 priorities «as we continue to manage COVID-19 uncertainties ie Sustain double-digit revenue growth JQ Position fintech for accelerated growth and value unlock od & ) Sustain cost management drive and strengthen financial position to unlock efficiency and support et: margins @(6) Drive 4G net
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Slide 30: Indicative term sheet
)» Indicative Ferm sheet porn MTN Nigeria Communications PLC NGN200billion Up to [e] Fixed Rate Senior Unsecured Bonds N1,000 per unit 100% of Par Value [e] 2021 [e] 2028 7 years [Actual / Actual] Direct, unsecured, senior and unconditional obligations of the Issuer AA/ GCR; Aa/ Agusto AA/ GCR; Aa/
Slide 31: Appendix
Appendix
Slide 32: Attractive return profile
» Aftractive return profile Driving growth and profitability 2 : oo : ~ Service Revenue Growth rer] Strong EBITDA Growth ih ) Strong Capex Investment N O ) ( y (NGN bn) (NGN bn) (NGN bn) (%) 79.2% 81.1% 81.3% 81.7% 41.8% 53.5% 50.9% 25.4% 1,339 3.0% —~____ 17.7% 17.8% 17.8% 1,039 1,168 " 625 686 885
Slide 33: Highlights of income statement
Highlights of income statement 2 Growth 2020 2019 (restated) Note(s) % NGN mn NGN mn Revenue 15.1% 1,346,390 1,169,831 Other income n.m. 104 - Direct network operating costs 25.8% 310,248 246,604 Value added services 2.9% 12,820 12,459 Cost of handsets and other accessories 61.1% 20,566 12,766 Inter
Slide 34: Highlights of financial position
Highlights of Financial position 2 Growth 2020 2019 (restated) % of Total % of Total Assets % NGNmn Assets NGNmn ‘Assets Non-Current Assets 16.2% 1,440,725 73.4% 1,239,395 82.5% Current Assets 98.9% 522,818 26.6% 262,888 17.5% 1,963,543 100.0% 100.0% Non-Current Liabilities 8.3% 1,041,245 53.0% 961,
Slide 35: Disclaimer
» Disclaimer The information contained in this document (“presentation”) has not been verified independently. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contai
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