Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — H1 2024 Earnings Presentation
39 slides from Blu Label Unlimited's earnings presentation, Feb 22, 2024
Slide 1: Interim Results
INVESTOR PRESENTATION // 22 FEBRUARY 2024 INTERIM RESULTS Unaudited interim results for the half year ended 30 November 2023 bluelabeltelecoms.co.za UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023 1
Slide 2: Operating Environment
OPERATING We are resilient. ENVIRONMENT Despite a complex and challenging operating environment in which consumers have been significantly affected and SME’s are struggling, we remain focused on leveraging our unique digital platforms and large-scale distribution network to transform the lives of or
Slide 3: We have evolved.
We have evolved. From a leading distributor of secure fintech products and services, we are now running South Africa’s largest ‘virtual mall’ where our products and services require no inventory management by merchants. We have continuously innovated and adapted our service offering while transition
Slide 4: Inclusion
INCLUSION As a company we strive for financial inclusion for the mass market - bringing products and services directly to the ‘virtual’ doorsteps of people who may be geographically and economically isolated. Financial Inclusion E-tech Ecosystems Leading Distributor UNAUDITED RESULTS FOR THE SIX MON
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS ** REVENUE OF * GROSS REVENUE GROSS PROFIT CORE HEADLINE EARNINGS / SHARE R7.6 bn R43.8 bn R1.6 bn 47.15 c (2022: R39.3bn) (2022: R1.54bn) (2022: 3.94c) * On inclusion of the gross amount ** Excluding the positive contributions of R65 generated on “PINless top-ups”, prepaid mill
Slide 6: Subsidiaries
SUBSIDIARIES bluelabeltelecoms.co.za UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023 6
Slide 7: Comm Equipment Company
COMM EQUIPMENT COMPANY In partnership with Cell C, our key focus areas include: Update Profitable customer acquisition Subscriber retention CEC's strong alignment with Reduced churn Cell C has ensured continued success on our Enhanced customer satisfaction postpaid projects. UNAUDITED RESULTS FOR TH
Slide 8: Cell C Postpaid
CELL C POSTPAID 01 02 03 Monthly acquisition Improvements across New range of simplified and targets reached key metrics competitive postpaid products UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023 8
Slide 9: Postpaid Subscriber Base
POSTPAID SUBSCRIBER BASE Acquisitions Renewals Total Subscribers Increased pressure on consumers 30 000 900 000 25 000 890 000 875k 20 000 880 000 15 000 870 000 10 000 860 000 5 000 850 000 0 840 000 Dec '22 Jan '23 Feb '23 Mar '23 Apr '23 May '23 June '23 Jul '23 Aug '23 Sep '23 Oct '23 Nov '23 Co
Slide 10: Weighted Average Risk Grade
WEIGHTED AVERAGE RISK GRADE CEC has been carefully managing risk through active scorecard monitoring and adjustment as well as running carefully targeted retention campaigns to ensure the right mix of business is maintained and optimised. 10 We observed a slight rise in early default rates commencin
Slide 11: Key Priorities
KEY PRIORITIES Improved Control Renewed Focus Embedding various in-house Renewed focus on retentions functions that were previously and an expanded VAS offering. outsourced, which will result in improved oversight and control over key processes. UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER
Slide 12: Blue Label Distribution
BLUE LABEL DISTRIBUTION A period marked by strong performance, particularly within the Financial Institutions segment, with much opportunity to diversify and strengthen future revenue streams. Positive results, particularly in Blu Voucher and OTT sales. Opportunity for new products and expansion. Si
Slide 13: Revenue by Channel & Product
REVENUE BY CHANNEL & PRODUCT For the period ended 30 November 2023 30 000 R'millions 20 000 R'millions 25 000 18 000 16 000 20 000 14 000 12 000 15 000 10 000 8 000 10 000 6 000 5 000 4 000 2 000 - Financial Aggregators Retail Retail formal Petro Informal Other - institutions independents convenienc
Slide 14: Cigicell
CIGICELL Despite a challenging operating environment, electricity vending performed well. Moving forward, we are committed to pursuing new contracts, with several notable awards materialising during this period. Efforts will continue to focus on growing revenue assurance while building upon the comp
Slide 15: Gross Electricity Revenue
GROSS ELECTRICITY REVENUE 4000 R’millions 3500 3000 2500 2000 1500 1000 500 0 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER
Slide 16: Looking Ahead
LOOKING AHEAD 01 02 Relationships Showcase Intensify focus on Showcase services on relationship management open platforms 03 04 Profitability Competitiveness Position Cigicell for more Maintain competitive lucrative business edge in the market UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2
Slide 17: Ticketpro
TICKETPRO We have continued to drive digital adoption of new technology within this business, achieving significant success. ticketpros.co.za UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023 17
Slide 18: Face Value Revenue by Channel
FACE VALUE REVENUE BY CHANNEL 400 350 Face Value Revenue (R’millions) 300 250 200 150 100 50 0 Jun - Nov 18 Jun - Nov 19 Jun - Nov 20 Jun - Nov 21 Jun - Nov 22 Jun - Nov 23 Putco Long Distance Bus Sports and Events Revenue in the Commuter Transport segment, with Revenue in the Sports and Events part
Slide 19: Growing our distribution network
We will continue to explore growing our distribution network, with an eye on seeking new distribution channels outside of traditional retail. UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023 19
Slide 20: Blue Label Data Solutions
Our goal is to become the premier data provider in South Africa. BLUE LABEL DATA SOLUTIONS Partnering with Cyborg Intell to optimise data selection efficiency across campaigns: improving effectiveness, time and cost savings and profitability. Concurrently broadening our reach into platforms such as
Slide 21: Our Focus
OUR FOCUS Relationships Leads Compliance Maintaining relationships with Becoming the top lead supplier Adhering to regulatory our partners and clients, while by prioritising quality, frameworks such as POPI also ensuring ownership of the contactibility, reliability and remains key for Blue Label pro
Slide 22: Group Technology
Update on key metrics: • Transactions: Processed +/- one billion during the period. • Platform Stability: 99,6% average uptime. • Zero Breaches: Enhanced security against unauthorised access. • Delivery: Reduced timelines for onboarding of new clients. • Upskill: 90% of staff certified in Agile SAFE
Slide 23: Strategic Direction
STRATEGIC DIRECTION Cautiously optimistic about future prospects, with continued Integrating several of our existing offerings into a fit- investment in proprietary digital platforms and IP. for-purpose, efficient, profitable and growth-focused Cell C ecosystem, leveraging data. Significant resource
Slide 24: Cell C Performance
CELL C PERFORMANCE
Slide 25: Business turnaround, stabilisation and growth
Our focus on driving business turnaround, stabilisation and growth has yielded positive results. Improved network quality Return to growth Governance and Staff and and perception and profitability execution excellence stakeholder confidence UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023
Slide 26: Good topline revenue growth year on year
YTD Sept 2023 highlights Good topline revenue growth year on year 1 June to 30 November 2023 Highlights 6 744 6 393 5 065 4 554 5 965 4 286 1 839 1 679 1 679 Nov’22 Nov’23 Nov’23 Norm Nov‘22 Nov’23 Nov’23Norm Nov’23 Norm Nov’22 Nov’23 Nov’23 Norm Revenue R’m Direct Expenditure R’m Gross Margin R’m D
Slide 27: Brand remains resilient with increased customer base
Brand remains resilient with an increased customer base and a strong ARPU uplift. 8,5m R89 Kantar Top 30 Total customers Blended ARPU Brands +300k +11% UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023
Slide 28: Continued focus on revenue acceleration
Continued focus on revenue acceleration, anchored in consumer and people-centricity. Building the best culture in the country. UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023
Slide 29: Financial Results
FINANCIAL RESULTS bluelabeltelecoms.co.za UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023 29
Slide 30: Financial Highlights
FINANCIAL HIGHLIGHTS For the period ended 30 November 2023 * ** REVENUE OF GROSS PROFIT GROSS PROFIT CORE HEADLINE MARGIN EARNINGS / SHARE R7.6 bn R1.6 bn 21.08 % 47.15 c (2022: R1.54bn) (2022: 15.67%) (2022: 3.94c) * On inclusion of the gross amount ** Excluding the positive contributions of R65 ge
Slide 31: Group Income Statement
GROUP INCOME STATEMENT For the period ended 30 November 2023 Extraneous Extraneous NOTES Group income* Remaining Group costs** Remaining Growth Nov 2023 Nov 2023 Nov 2023 Nov 2022 Nov 2022 Nov 2022 remaining R'000 R'000 R'000 R'000 R'000 R'000 R'000 Core headline earnings for the period ended 30 Nov
Slide 32: Comm Equipment Company Performance
COMM EQUIPMENT COMPANY PERFORMANCE For the period ended 30 November 2023 The anticipated decline in Comm Equipment Company’s (CEC) core headline earnings of R119 million was attributed to: • a decrease in gross profit of R155 million, primarily due to: a decrease in earnings resulting from the exp
Slide 33: Extraneous Income
EXTRANEOUS INCOME For the period ended 30 November 2023 NOTES Extraneous Recap of income* Cell C(1) * The positive contributions to Group earnings in the Nov 2023 Nov 2023 current period were attributable to the accounting R'000 R'000 treatment relating to the recapitalisation transaction of Cell C
Slide 34: Extraneous Costs
EXTRANEOUS COSTS For the period ended 30 November 2022 NOTES ** The negative contributions to Group earnings in the prior period were primarily attributable to: Extraneous Recap of • the accounting treatment relating to the recapitalisation costs** Cell C(2) Once-offs(3) transaction of Cell C (2), e
Slide 35: Revenue
REVENUE For the period ended 30 November 2023 Group Group Nov 2023 Nov 2022 Growth Growth R'000 R'000 R'000 % Prepaid airtime, data and related revenue 15 565 395 17 571 497 (2 006 102) (11%) NOTES - Prepaid airtime and data 4 752 000 6 873 196 (2 121 196) (31%) - "PINless" airtime top-ups 10 813 39
Slide 36: Balance Sheet
BALANCE SHEET As at 30 November 2023 Group Group Nov 2023 May 2023 R'000 R'000 NOTES Non-current assets 5,582,959 5,700,072 Property, plant and equipment 202,238 224,362 The decline in non-current assets included decreases of Intangible assets and goodwill 2,227,763 2,300,706 R148 million in advance
Slide 37: Cash Flow
CASH FLOW For the period ended 30 November 2023 NOTES Group Group Cash generated from trading operations amounted to R288 million. Working capital movements included an Nov 2023 Nov 2022 increase in trade receivables of R436 million, a R'000 R'000 decrease in trade and other payables, including defe
Slide 38: Normalised Cash Flows Generated from Operating Activities
NORMALISED CASH FLOWS GENERATED FROM OPERATING ACTIVITIES For the period ended 30 November 2023 30 Nov 30 Nov 2023 2022 R’000 R’000 Normalised cash flows generated from operating activities 670 717 700 395 Additional interest received related to the loan to Cell C for its debt funding requirements 5
Slide 39: Thank You
THANK YOU bluelabeltelecoms.co.za 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 BLUE LABEL AUDITED RESULTS 31 MAY 2023 39
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