Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — H1 2022 Earnings Presentation
46 slides from Blu Label Unlimited's earnings presentation, January 2022
Slide 1: Connecting Our World to Yours
CONNECTING OUR WORLD TO YOURS Unaudited results for the six months ended 30 November 2021 bluelabeltelecoms.co.za 1 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOV 2021
Slide 2: Highlights
01 HIGHLIGHTS bluel abel tel ecom s . co . z a 2 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOV 2021
Slide 3: Our Key Performance
OUR KEY Revenue * PERFORMANCE R36.2bn • Resilient despite economic challenges; generating cash Period Growth 12% • Back-to-basics remains key strategic focus • Investment in product development, IT infrastructure and digitisation pays off *Including the gross amount generated on ‘PINless top-ups’, e
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS For the six months ended 30 November 2021 REVENUE * GROSS PROFIT GROSS PROFIT NET CASH FROM MARGIN OPERATING ACTIVITIES R9.1bn R1.36bn 14.93% R862m (2020: R9.6bn) (2020: R1.14bn) (2020: 11.87%) (2020: R970m) Imputed Revenue: Up 12% * On inclusion of the gross amount ** generated
Slide 5: Gross Revenue and Gross Profit
GROSS REVENUE * GROSS PROFIT * 40 000 1 600 +12% R'million R'million 35 000 1 400 +20% 30 000 1 200 25 000 1 000 20 000 800 15 000 600 10 000 400 5 000 200 - - Nov-17 Nov-18 Nov-19 Nov-20 Nov-21 Nov-17 Nov-18 Nov-19 Nov-20 Nov-21 * From continuing operations * From continuing operations Gross airtim
Slide 6: Debt & Cash Flow
DEBT & 3 500 R'millions CASH FLOW 3 000 2 500 2 000 1 500 Debt has gone up marginally, but group 1 000 continues to generate cash. 500 - Based on the decision to preserve cash flow, 2016 2017 2018 2019 2020 2021 2022 - 500 (1st 6 no dividends have been declared, nor any months) share repurchase cons
Slide 7: SA Distribution
02 SA DISTRIBUTION bluel abel tel ecom s . co . z a 7 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOV 2021
Slide 8: Product Performance
PRODUCT PERFORMANCE 20 000 R'million 15 000 • While turnover in face value sales continue to grow, we still see margin squeeze across high performing 10 000 products. 5 000 • Consumer buying behaviour continues to move away from traditional pinned - offline channels to PINless online Airtime offline
Slide 9: Channel Performance
CHANNEL PERFORMANCE • Retail channel experienced major setbacks 20 000 across the segment due to political unrest and R'millions 18 000 looting. 16 000 • YoY decline of 0.80% for face value is 14 000 attributable to site closures as a result of the 12 000 10 000 unrest. 8 000 • Informal channel rema
Slide 10: Diversification Strategy
DIVERSIFICATION STRATEGY • Our newer generic voucher offerings, Ringas and Blu Voucher, continue to deliver strong growth. • Aligned to our strategy of diversifying our revenue streams, we continue to focus growth across transportation, gaming and money transfers. • In parallel, we are launching var
Slide 11: Unrest & Looting
UNREST & LOOTING • More than 500 of our sites affected • Many spazas closed out of fear • Some still not trading Essential nature of our products and a robust business model saw us through. Google Images In July 2021, more than 340 people lost their lives, damage exceeded R50bn, affecting more than
Slide 12: The Informal Market
THE INFORMAL MARKET Bringing products and services closer to the homes of our people remains a key focus. The Informal Market Segment is passionate about this and have placed aggressive emphasis on aligning its operations to meet the demand. Our aim will remain to expand our footprint in this enviro
Slide 13: Informal Market Snapshot
Trade • Trader base has stabilized and is showing good traction, having grown 12% since the SNAPSHOT start of the fiscal year. • This factors in churn, which has also slowed. INFORMAL MARKET • Trade is showing promising trends, both in terms of average trade per trader, as well as from a product mix
Slide 14: Comm Equipment Company
03 COMM EQUIPMENT COMPANY equi pm entco . co .z a 14 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 15: CEC Key Results
CEC KEY RESULTS FINANCE NOV NOV NOV • Financing agreement 2019 2020 2021 completed with African Bank for R1.9 billion • Support entrepreneurial initiatives GP R166m R177m R368m • Free to pursue opportunities as they arise • Opens up additional partnership prospects NPAT R111m R90m R127m 15 U N A U D
Slide 16: Information Subscription Income Sharing Arrangement
SUBSCRIPTION INCOME SHARING ARRANGEMENT • Now implemented and fully functional • Priorities remain to: INFORMATION MORE - Profitably grow the Cell C post-paid business - Reduce churn on the base - Regain our consumer champion title - Leverage our partners in BLC and BluNova 16 U N A U D I T E D R E
Slide 17: Striide
STRIIDE striide.co.za In line with the strategy to offer new credit and product offerings, a wellness solution was recently launched, offering gym equipment to consumers on a unique rental model. Launched into Cell C and expected to launch other channels soon. eCommerce website will be live in March
Slide 18: Nano-Advances
NANO- • Customers get access to an emergency service - ADVANCES • Utilise huge amounts of data available to BLT. Electricity, BluVoucher, UniPin. • High frequency, low value loans. Buy now, pay later • Differentiated by an innovative scoring model, • Provide electricity top-ups to prepaid clients on
Slide 19: Cell C
04 CELL C cellc.co.z a 19 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 20: Operational Update
OPERATIONAL UPDATE Steady progress in execution of strategy • Implementation of new operating model and network strategy remains on track; completed by end of 2023 • Stable subscriber base, attracting new prepaid customers through innovation of products and services, improving competitiveness • Cont
Slide 21: Six Months Recap
SIX MONTHS RECAP ENDED 30 NOV 2021 Addressing balance sheet and providing • Reduction in operating costs partially momentum to effectively manage transition. offset margin decline; EBIT in line This, along with focus on profitable revenue with strategy growth and overall simplification of cost base,
Slide 22: Cigicel
05 CIGICELL cigicel l .co .z a 22 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 23: Continued Growth
CONTINUED GROWTH The business has continued to perform well even under challenging conditions. Morphing from a token vending company to a solutions provider for municipalities: Large power user auditing and rectification of inaccuracies Data verification Credit control Meter installations & audits 2
Slide 24: Cigicel Gross Revenue
CIGICELL GROSS REVENUE 21% The business is promising to sustain its performance and growth due to the innovation around revenue enhancement and revenue protection, which is gaining traction with muncipalities. R3 500,00 R'millions R 13.2 bn R 16 bn R3 000,00 R2 500,00 R2 000,00 R1 500,00 R1 000,00 R
Slide 25: Reware
REWARE reware.co.za Specialists in creating solutions for Real Time Energy Measurement, metering management and optimal hardware solutions in order to assist and guide customers in their everyday utility management. • Manage costs and improve efficiencies through tailor- made solutions across segmen
Slide 26: VRM
VRM visualrm.co.za Visual Revenue Management (VRM) was established in February 2020 with the vision to become a key player and strategic partner within the municipal space of South Africa. • Assist municipalities to become financially sustainable by optimising their revenue management process with u
Slide 27: UniPay
UniPay allows UNIPAY convenient and unipay.co.za safe payment UniPay is a convenient, reliable and secure platform that allows of bills. customers to instantly pay bills in one place, with zero transaction fees. The business continues to grow through our online and traditional retail channels. 27 U
Slide 28: Blue Label Data Solutions
06 BLUE LABEL DATA SOLUTIONS bluel abel tel ecom s . co . z a 28 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 29: Aggressive Growth Snapshot
SNAPSHOT The Challenges The Growth COVID & POPIA AGGRESSIVE GROW TH • COVID headwinds still exist and • However, opt-in database continues to the 4th wave at the end of grow; now at 31.3m, up from 29.3m at November had a significant May 2021. impact on call centre operations. • Using cellular, credi
Slide 30: BluNOVA
07 BLUNOVA blunova. co .z a 30 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 31: About BluNOVA
ABOUT BluNOVA delivers services to anchor group clients while keeping sight of potential external clients. Anchor clients gain immediate benefit from the partnership with BluNOVA, while BluNOVA develops insights, feature variables, skills and competencies that can be reused across the group. 31 U N
Slide 32: BluNOVA Update
1 Key Projects BluNova focuses primarily on key projects for CEC, Cell C, BLD, TPC and GloCell. 2 Nano-Advances BluNOVA has been supporting Nano-Advances. 3 Non-financial objectives Staff benefitted from a mid-year check-in on the company strategy and deep planning of client projects in mid-January
Slide 33: Snapshot: Challenges and Achievements
SNAPSHOT The Challenges The Achievements • Mining group data continues to move slowly despite • Reduction in IT costs have been achieved with the some progress. Anonymous transactions remain optimisation of architecture and governance. significant. • CEC: Alternative scoring has been deployed with ~
Slide 34: Technology
08 TECHNOLOGY bluel abel tel ecom s . co . z a 34 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 35: Digital Business Advancement & Core Platforms Transformation
Digital Business Advancement & Core Platforms Transformation Automation Robotics Process Automation platform selected and Moving our businesses from digital availability implemented and 80+ identified automation opportunities to fully digitally-driven business models: being rolled out into core subs
Slide 36: Infrastructure & Fixed Cost Transformation
Infrastructure & Fixed Cost Transformation Defense of core business and enablement of hosting on modern infrastructure to support digital business models with computational scalability: Pipelines Costs Embracing hybrid-cloud rails built during 2020 and 2021 for Reduced running costs to reduce our tr
Slide 37: Ongoing Operational Stability and Cyber Security
Ongoing Operational Stability and Cyber Security Maintaining high stability, resilience and redundancy by design to ensure continued reliability of our service offerings: Uptime Vigilance Combined uptime of 99.9% across all transactional platforms. Maintained ongoing Cyber Security vigilance with 0%
Slide 38: Financial Results
09 FINANCIAL RESULTS bluel abel tel ecom s . co . z a 38 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
Slide 39: Financial Highlights
FINANCIAL HIGHLIGHTS For the six months ended 30 November 2021 REVENUE * GROSS PROFIT GROSS PROFIT NET CASH FROM MARGIN OPERATING ACTIVITIES R9.1bn R1.36bn 14.93% R862m (2020: R9.6bn) (2020: R1.14bn) (2020: 11.87%) (2020: R970m) Imputed Revenue: Up 12% * On inclusion of the gross amount ** generated
Slide 40: Group Income Statement
GROUP INCOME STATEMENT For the six months ended 30 November Extraneous Extraneous Notes Group income* Remaining Group income** Remaining November November November November November November Growth Growth Core headline earnings for the period ended 30 2021 2021 2021 2020 2020 2020 remaining remainin
Slide 41: Extraneous Income (Nov 2021)
EXTRANEOUS INCOME For the six months ended 30 November 2021 Notes * The extraneous contributions to Group earnings Extraneous in the current period were attributable to: income* Once-offs(1) WiConnect(2) November November November - Once-off recoupment income, comprising the aggregate value of asset
Slide 42: Extraneous Income (Nov 2020)
EXTRANEOUS INCOME For the six months ended 30 November 2020 Notes ** The extraneous contributions to Group Extraneous Fair value earnings in the prior period were attributable to: income** movements(3) Once-offs(4) WiConnect(5) November November November November - Realised foreign exchange gains on
Slide 43: Revenue
REVENUE For the six months ended 30 November Group Group Nov 2021 Nov 2020 Growth Growth Notes R'000 R'000 R'000 % Revenue generated by the continuing operations within the Group declined by 5% to R9.1 billion. Prepaid airtime, data and related revenue 17 870 844 17 380 264 490 580 3% - Prepaid airt
Slide 44: Balance Sheet
BALANCE SHEET As at Group Group Nov 2021 May 2021 R'000 R'000 Notes Non-current assets 3 139 194 2 821 283 Property, plant and equipment 188 302 194 193 Of the net increase in intangible assets and goodwill of R387 million, additions to intangible assets Intangible assets and goodwill 2 120 127 1 73
Slide 45: Cash Flow
CASH FLOW For the six months ended 30 November Notes Cash generated from trading operations totaled Group Group R954 million. Working capital movements comprised Nov 2021 Nov 2020 an increase in trade payables of R310 million and a R'000 R'000 decrease in advances to customers of R508 million, offse
Slide 46: Thank You
THANK YOU Questions? HEAD OFFICE POSTAL ADDRESS CONTACT 75 Grayston Drive P.O. Box 652261 +27 (0)11 523 3030 Sandton, Johannesburg Benmore info@blts.co.za South Africa 2010 investors@blts.co.za 46 U N A U D I T E D R E S U L T S F O R T H E S I X M O N T H S E N D E D 3 0 N O V 2 0 2 1
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