Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — Blue Label Unlimited Group — FY2011 Earnings Presentation
43 slides from Blu Label Unlimited's earnings presentation, May 31, 2011
Slide 1: Audited Results for the year ended 31 May 2011
Audited Results for the year ended 31 May 2011
Slide 2: Agenda
Agenda Salient Features Strategy Update South African Distribution International Distribution Financial Overview Prospects 2
Slide 3: Salient Features for year ended 31 May 2011
Salient Features for year ended 31 May 2011 • Revenue up 13% to R18 billion • SA airtime revenue up 15% • Stand-out performance from prepaid electricity up 79% • Rationalisation of operations in SA under Blue Label Distribution • International I t ti l strategy t t refocused: f d - Commitment to sel
Slide 4: Strategy to Creating Value
Strategy to Creating Value Opportunity Delivery Value Added • Prepaid provides certainty • Robust, scalable and • POPs: proprietary technology • Prepaid is an alternative >1 million globally and payment method • Ensure right skills and talent >140,000 in SA • Airtime builds the highway • Minimum cap
Slide 5: South African Distribution
South African Distribution Brett Levy - Joint CEO 5
Slide 6: SA Distribution Operational and Financial Highlights
SA Distribution Operational and Financial Highlights • Revenue up 15% to R17,8 billion • Core net profit up 3% to R571 million • Airtime contribution up 15% vs network growth of ~6% • Electricity commissions received up 79% from R34 million to R61 million • Money transfers slowly gaining traction •
Slide 7: Prepaid Airtime: Revenue Growth
Prepaid Airtime: Revenue Growth 2011 2010 R 2 300 R 2 100 Millions R 2 100 R 1 900 R 1 900 R 1 700 R 1 700 R 1 500 R 1 500 R 1 300 R 1 300 R 1 100 R 1 100 R 900 R 900 R 700 R 700 R 500 R 500 R 300 R 300 R 100 R 100 Revenue comprises sales of physical and virtual prepaid airtime as well as compounded
Slide 8: Prepaid Airtime and Starter-Packs
Prepaid Airtime and Starter-Packs • Revenue growth entirely organic and volume related • Growth G th from f greater t reach h into i t independent i d d t stores t • No. of connections up 47% (YOY) • RICA impact of reduced activations seems to be over • Price increases passed down distribution chann
Slide 9: Prepaid Airtime Revenue Per Network
Prepaid Airtime Revenue Per Network 31 May 2010 31 May 2011 Cell C Cell C Vodacom 8% 10% 57% Vodacom 52% MTN 31% MTN 35% Telkom 4% Telkom 3% *the other networks amount to less than 1% 9
Slide 10: Prepaid Electricity: Revenue Growth
Prepaid Electricity: Revenue Growth R 400 R 350 R 300 R 250 Millions R 200 R 150 R 100 R 50 R- OCT OCT OCT DEC DEC DEC NOV MAY NOV MAY NOV MAY SEPT SEPT JUL AUG JUL AUG SEPT JUL AUG JUN JAN JAN APR JAN MAR APR FEB MAR APR JUN FEB MAR JUN FEB 2009 2010 2011 * The group does not account for revenue on
Slide 11: Prepaid Electricity
Prepaid Electricity • Commissions received up 79% from R34 million to R61 million, equating to R3,4 billion in sales, up from R1,9 billion YOY • Net commissions received average 2% included in revenue • Act as agent not principle, so only commissions earned is included in revenue and not face value
Slide 12: Other Products
Other Products • Bill payments • Electronic Funds Transfers • Financial services • Retail outlets • Transport ticketing and solutions • Lotto • Bela international calling card • Ukash – Standard Bank online • Near Field Communications (NFC) 12
Slide 13: International Distribution
International Distribution Mark Levy - Joint CEO 13
Slide 14: International Distribution: Operational and Financial Highlights
International Distribution: Operational and Financial Highlights • Consolidation of segment • Commitment to sell assets and liabilities in Nigeria: - resources better deployed in other territories - arbitration with Multi-Links ongoing • Ukash (15,75% held): - share of profit up 209% to R8,8 million
Slide 15: Oxigen India
Oxigen India • Evolving from a prepaid recharge platform into a versatile payment solutions provider • Market penetration only 450,000 POS • 90,000 POS footprint, with 30,000 more being deployed • Focus on State Bank of India business correspondent/kiosk banking • Development of low-cost low cost PO
Slide 16: Blue Label Mexico
Blue Label Mexico • One of our most promising businesses: 5,000 POS active with growth through Independent Sales Organisation (ISO) model • Strategic partnership with Grupo Bimbo at 40% stake, with remaining 40% held by Blue Label and 20% by local management, with effect from February 2011 • Grupo B
Slide 17: Blue Label Technology, Mobile and Solutions Segments
Blue Label Technology, Mobile and Solutions Segments Technology Mobile Solutions • Restructured to align with new • >5 billion mobile users in world Blue Label Bl L b l Data D t Solutions S l ti business segments • Our ecosystem now includes • Entrenching direct marketing • > 10% growth in transacti
Slide 18: Financial Overview
Financial Overview David Rivkind - Financial Director 18 18
Slide 19: Financial Overview
Financial Overview Positive Contributors Revenues Call Centres Associates Mexico + Negative Contributors Nigeria Impairments Core 15% Headline 13% = Core Earnings Headline Earnings 4% Earnings (Excl. ge a) Nigeria) 19
Slide 20: Highlights for the 2011 year
Highlights for the 2011 year Revenue NPAT Core Earnings Increased by 13% to Increased by 18% to Increased by 15% to R18 billion R431 million R456 million Headline EPS Cash Generation Dividend From continuing R566 million million, Per share operations increased accumulated cash 14 cents 15% resources
Slide 21: Income Statement
Income Statement FY 2011 FY 2010 Growth % R’000 R’000 R’000 Growth R Revenue 18 064 572 18,064,572 15 939 764 15,939,764 2 124 808 2,124,808 13% Gross profit 1,067,633 1,016,543 51,090 5% GP margins 5.91% 6.38% (0.47%) Oth income Other i 6 942 6,942 11 087 11,087 (4 145) (4,145) (37%) Overheads (476
Slide 22: South African Distribution
South African Distribution FY 2011 FY 2011 FY 2010 Growth % R’000 R’000 R’000 R’000 Growth Total group SA Distribution SA Distribution SA Distribution Revenue 18,064,572 17,821,605 15,543,337 2,278,268 15% Gross profit 1,067,633 925,398 867,230 58,168 7% Gross profit % 5.91% 5.19% 5.58% EBITDA 597 8
Slide 23: Associates
Associates FY 2011 FY 2010 Growth % R’000 R’000 R’000 Growth Sh Share off profit fit / (losses) (l ) from f associates i t 4 817 4,817 (14 948) (14,948) 19 765 19,765 132% - Ukash 8,782 (8,079) 16,861 209% - Oxigen Services India (5,163) (7,098) 1,935 27% - Other Oth 1 198 1,198 229 969 423% • Ukash
Slide 24: Joint Ventures
Joint Ventures FY 2011 FY 2010 Growth R’000 R’000 R’000 Share off losses Sh l from f joint j i t ventures t (18,896) (18 896) (12,699) (12 699) (6,197) (6 197) - Blue Label Mexico Trading Operations (17,824) (12,665) (5,159) - Other (1,072) (34) (1,038) • Blue Label Mexico - Diluted from 70% to 40%
Slide 25: Income Statement
Income Statement FY 2011 FY 2010 Growth % R’000 R’000 R’000 Growth H dli earnings Headline i from f continuing ti i operations ti 367 788 367,788 316 690 316,690 51 098 51,098 16% Discontinued operation – APS Nigeria trading (18,341) 49,119 (67,460) (137%) Headline earnings 349,447 365,809 (16,362)
Slide 26: Impairments
Impairments FY 2011 R’000 Assets A t 20,648 20 648 Property, plant and equipment - Nigeria 5 592 Available-for-sale financial asset 15,056 Goodwill 27 985 Africa Prepaid Services Nigeria 13 296 SharedPhone International 5 380 Content Connect Africa 9 309 Intangibles 15 271 Africa Prepaid Services Ni
Slide 27: Balance Sheet
Balance Sheet Summarised Group Statement of Financial Position 2011 2010 as at 31 May R’000 R’000 Non- current assets 851,665 717,581 Property, plant and equipment 139,747 156,888 • R143m increase in Intangible assets and goodwill 433,513 436,824 investments in joint Investment in associates and joi
Slide 28: Cash Flow
Cash Flow Summarised Group Statement of Cash Flows as at 31 May 2011 2010 R’000 R’000 Cash generated by operations 566,053 622,992 Interest received 50,645 84,130 Interest paid -8 8,221 221 -5 5,131 131 Taxation paid -180,814 -186,081 Cash flows from operating activities 427,663 515,910 g activities
Slide 29: Dividend of 14 cents per share declared
Dividend Dividend of 14 cents per share declared 3 3 times Cover of 3.3 ti on HEPS 29
Slide 30: Prospects
Prospects • Airtime sales are expected to continue exceeding industry norms • Commissions C i i received i d on prepaid id electricity l t i it are lik likely l tto iincrease b both th organically i ll and d through contracts with additional electricity providers • Mobile segment g is expected p to
Slide 31: Thank you - Questions & Answers
Thank you y Questions & Answers
Slide 32: Supplementary Information
Supplementary Information 32
Slide 33: Supplementary: Shareholder Profile and Free Float
Supplementary: Shareholder Profile and Free Float Beneficial Shareholders Rest of World 4.2% UK and Europe 9.2% South S th Africa Af i 66.9% USA 19.7% Free Float Free Float 47.3% Strategic Holders 51.4% Below Threshold 1.3% 3333
Slide 34: Supplementary: Group Structure
Supplementary: Group Structure Blue Label Blue Label Blue Label Blue Label Blue Label South Africa International Mobile Technology Solutions African Prepaid Activi Technology Blue Label Distribution Cellfind Datacel Services (72%) Services The Prepaid Content Connect Gold Label Activi Velociti Compa
Slide 35: Supplementary: Global Footprint
Supplementary: Global Footprint Two strategies for international expansion: Bricks and Mortar & Technology Offerings Technology offering Austria Belgium Benin Canada China Czech Republic Denmark DRC Estonia Finland France Greece Guinea Bissau Haiti Hungary Ireland Italy Latvia Lesotho Liberia Mozamb
Slide 36: Supplementary: Barriers to Entry
Supplementary: Barriers to Entry • The following natural barriers to entry exist in the environments in which BLT p operates: - The ease of ability to integrate can be hindered by lag times in the negotiation of supplier and customer contracts - Lock out periods for the processing of new technologie
Slide 37: Supplementary: Technical Overview
Supplementary: Technical Overview PRODUCTS / SERVICES Blue Label or Third Party Utilities Gift voucher, (electricity / Loyalty card, Bill payments Airline tickets, Airtime Insurance / EFT b ti bus tickets k t OTHER water) etc Mobile BLUE LABEL TECHNOLOGY PLATFORM Devices (AEON) POSTILION BLUE LABEL
Slide 38: Supplementary: Core Competencies
Supplementary: Core Competencies The core technology service offering includes: • Facilitating secure financial transactions • Providing and enabling various types of secure e-tokens • Operational support to these e-token and transactional systems • Point of Sale device and customer field support •
Slide 39: Supplementary: mPesa Aggregator Model
Supplementary: mPesa Aggregator Model Vodacom M-PESA Head Office Setup and manage Outlets O l Head Outlet H d Office Offi Office Office Management of Float Assistant Terminal Accounts and Commissions Outlet Outlet Merchants Interact with Interact with Vodacom Vodacom M-PESA Outlet M-PESA Outlet Outl
Slide 40: Supplementary: UniPIN – Process Flow for Electricity Purchase
Supplementary: UniPIN – Process Flow for Electricity Purchase Step 5 Step 6 Received SMS is CigiCell sends a standard Online processed by Vending Request to Ekurhuleni CigiCell Server Step 9 Step 8 Ekurhuleni online Server Token is sent to CigiCell Token is sent back to Cigicell SMS platform Server
Slide 41: Supplementary: Oxigen India: Kiosk Banking
Supplementary: Oxigen India: Kiosk Banking 41
Slide 42: Supplementary: Oxigen India: Strategy and Presence
Supplementary: Oxigen India: Strategy and Presence • Synergise the targets of SBI for coverage in villages and urban Presence Established Achievement • 1,009 CSP’s appointed across 12 states • 329 CSP’s actively transacting • $38MM worth of banking transactions processed till date • 689 unbanked vil
Slide 43: Supplementary: Oxigen India: Nokia Mobile Money
Supplementary: Oxigen India: Nokia Mobile Money • Nokia Mobile Money A Prepaid Account - safe and convenient to use, you control how much you spend Cash can be deposited at your nearest Oxigen retailer Cash can be withdrawn at Oxigen retailers / ATMs Spend from your account using a mobile ap
Blue Label Unlimited Group — FY2011 Earnings Presentation on 6ix