Slide 1: FY 2011 Results Announcement
Safaricom Ltd FY 2011 Results Announcement 18th May 2011
Slide 2: Company Strategy
2 Company Strategy Maintain market leadership in subscriber & revenue market share Growth towards Total Communications Grow all Revenue streams through value addition Capitalize on the Data Opportunity Sustain Voice Revenue Increase penetration and product offering under M-PESA Drive organizational
Slide 3: Delivering on Strategy
3 Delivering on Strategy We have achieved Increased Growth in Maintained Market penetration of Revenues Leadership innovative products through well aligned actions Increased focus on Investment in Infrastructure to Passionately focused on the Data, M-PESA and Value support the quality & capacity cus
Slide 4: Market Dynamics
4 Market Dynamics Mobile Penetration Across Africa (%)- March 2011 • Mobile phones now the primary Zimbabwe communication tool for most Kenyans Uganda Tunisia • SIM penetration over 60% Tanzania • M-PESA is the preferred money South Africa Somalia transfer service globally Rwanda Nigeria • Most Keny
Slide 5: Company Performance
COMPANY PERFORMANCE
Slide 6: Revenue Growth
6 Revenue Growth 12.9% growth in Turnover to Ksh. 94.83 bn 9.8% growth in Ongoing Revenue to Ksh. 88.20 bn Ksh. 63.5bn Ksh. 7.54bn Ksh. 11.78bn Ksh. 5.37bn Ksh. 6.64bn 81.2.% 80.3% 56.0% 45.3% (1.7%) Voice SMS M-PESA Mobile & Fixed Acquisition Revenue Revenue Revenue Data Revenue Revenue % of Total
Slide 7: Revenue Growth Beats Expectations
7 Revenue Growth Beats Expectations Revenue 94.83 Subscribers Ksh. Billion 12.9% Million 83.96 8.8% 17.18 15.79 19.1% 18.8% 13.36 14.8% 70.48 10.23 30.6% 61.37 FY 2008 FY 2009 FY 2010 FY 2011 FY 2008 FY 2009 FY 2010 FY 2011 Revenues grew at a faster rate than subscriber growth as we continue to main
Slide 8: Exceptional Performance from Data & M-PESA
8 Exceptional Performance from Data & M-PESA M-PESA Revenue M-PESA Users 13.80 Kshs. Billion Million 11.78 45.5% 9.48 56% 7.56 53.4% 6.18 158% 197% 2.93 692% 2.08 0.37 FY 2008 FY 2009 FY 2010 FY 2011 FY 2008 FY 2009 FY 2010 FY 2011 Mobile& Fixed Data Revenue DATA Subscribers 4.90 Kshs. Billion 5.37
Slide 9: Phenomenal Growth
9 Phenomenal Growth Mobile Data/SMS/M-PESA Contribution to Ongoing Revenue 30% 26.0% 25% 20% 18.8% 15% 13.4% 12.9% 10% 9.4% 6.9% 8.5% 5% 4.3% 6.5% 6.1% 3.7% 0% 2.2% FY 2009 FY 2010 FY 2011 Mobile Data SMS M-PESA Total Data Revenue The 3 revenue channels now contribute over a quarter of revenues and
Slide 10: M-PESA: Expanding Further
10 M-PESA: Expanding Further M-PESA Customers/Agents Monthly P2P Transactions Ksh. Billion 16,000,000 30,000 50.00 45.00 14,000,000 25,000 40.00 12,000,000 20,000 35.00 CUSTOMERS 10,000,000 AGENTS 30.00 8,000,000 15,000 25.00 6,000,000 10,000 20.00 4,000,000 15.00 5,000 2,000,000 10.00 - - 5.00 Sep-
Slide 11: Sustained Voice
11 Sustained Voice • Voice remain the biggest revenue stream with Ksh. 63.5 bn generated by March 2011 • Declining prices and potential further reductions in mobile termination rates • Declining Voice ARPU Firming up Voice Revenues • Continued focus on the Customer to understand and satisfy their ne
Slide 12: Acquisition
12 Acquisition • Relative high cost of handsets and data enabled the main inhibitor to Data penetration in Kenya • Over 500, 000 data enabled handsets and laptops sold within the financial year • Acquisition revenues increased by 81.2% to Ksh. 6.64 bn (Ksh.3.66 bn in March’10) • Growing demand for S
Slide 13: Financials
FINANCIALS
Slide 14: Strong Operational Performance
14 Strong Operational Performance Revenue EBITDA/EBITDA Margin Kshs. Billion 12.9% 94.83 Kshs. Billion / % 36.60 2.4% 35.72 31.0% 83.96 0.7% 19.1% 28.15 27.95 14.8%70.48 61.37 45.9% 43.6% 39.7% 37.7% FY 2008 FY 2009 FY 2010 FY 2011 FY 2008 FY 2009 FY 2010 FY 2011 Profit Before Tax Net Income/ Margin
Slide 15: KPIs: Continued Revenue Growth
15 KPIs: Continued Revenue Growth YoY Revenues Analysis H1/H2 Revenue breakdown 12.9% Ksh. billions Ksh. billions 14.4% 19.7% 11.2 24.7 8.5 13.5 15.7 7.2 9.1 3.7 5.4 4.9 64.6 63.5 32.0 32.6 33.3 58.8 29.8 29.3 30.2 54.6 FY 2008 FY 2009 FY 2010 FY 2011 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011
Slide 16: KPIs: Robust ARPU
16 KPIs: Robust ARPU M-PESA SMS DATA VOICE Blended ARPU Kshs. Kshs. Kshs. Kshs. Kshs. 37 126 81 459 79 356 437 30 101 300 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 FY 2010 FY 2011 • Even with increase in M-PESA subscribers, M-PESA ARPU has increased by 2.7 % • SMS ARPU grew by
Slide 17: KPIs: Resilient EBITDA & Margins
17 KPIs: Resilient EBITDA & Margins YoY EBITDA H1/H2 EBITDA EBITDA EBITDA Margin % EBITDA EBITDA Margin Kshs. Billions 40 50% Kshs. Billions >60% Tariff cut 45.9% 40% Tariff cut 43.6% 25 46.4% 50% 35 45% 43.5% 39.7% 45% 37.7% 40.6% 40.0% 40% 30 20 35.4% 40% 35% 31.8% 35% 25 30% 15 30% 20 25% 36.60 3
Slide 18: Stable Cost Structure: OPEX
18 Stable Cost Structure: OPEX YoY Operating Expenses H1/H2 OPEX Breakdown 48% Ksh. billions 49% 46% 51% Ksh. millions 47% 46% 41% 45% 4.4 44% 8.1 42% 3.6 4.4 8.3 2.1 4.1 1.4 2.3 3.4 4.1 8.0 2.0 3.8 4.0 7.6 4.0 3.0 3.8 5.8 24.0 12.5 19.6 9.6 10.5 11.6 17.7 9.1 14.5 8.1 4.2 4.5 5.5 2.7 3.2 2.7 1.5 2.
Slide 19: Cost Structure: SG&A
19 Cost Structure: SG&A YoY SG&A H1/H2 SG&A Breakdown Ksh. billions 13.8% 14.0% Ksh. billions 15.3% 14.2% 13.9% 12.7% 13.0% 12.9% 1.4 2.80 12.2% 1.3 11.7% 1.5 2.50 1.2 3.70 1.9 1.8 3.10 1.3 1.1 1.4 2.70 1.3 1.90 1.0 2.30 1.3 2.30 6.80 3.3 3.5 5.60 2.7 2.9 2.5 4.30 1.8 3.20 FY 2008 FY 2009 FY 2010 FY
Slide 20: Capital Expenditure: Investing for the Future
20 Capital Expenditure:-Investing for the Future Base Stations CAPEX 30 40.2% Ksh. billion Total 40% 33.8% 26.9% 2501 25 20.8% 3G 0.99 1.69 2162 3.77 Wimax 20 2.98 4.07 1899 10% 1.64 1558 6.40 5.49 1.66 15 3.78 0.91 2.15 1140 3.55 10 2.56 -20% 607 12.63 12.84 5 10.11 8.98 301 116 140 186 0 -50% FY 2
Slide 21: Strong Operational Performance
21 Strong Operational Performance Gearing & Net/EBITDA Times Net debt/EBITDA Gearing 0.3 0.28 24% 26% 0.25 0.2 19% 19% 21% 0.16 0.13 16% 13% 0.1 11% 0 6% FY 2008 FY 2009 FY 2010 FY 2011 Highly under-leveraged Significant capacity to gear further
Slide 22: Dividends
22 Dividends Dividends Kshs. Billion 8.00 8.00 4.00 FY 2009 FY 2010 FY 2011 Consistent dividend payout despite lower earnings Increased payout ratio from 53% to 61%
Slide 23: Future Outlook
FUTURE OUTLOOK
Slide 24: Strategic Focus
24 Strategic Focus Customer segmentation Voice Revenue & ARPU Realignment of Company Strategy - SAFARICOM 2.0 Company focus Take ownership of the enterprise sector Mobile Data and Mobile Money- continued market leadership • M-PESA • Mobile Data • Fixed Data • Value Added Services • Network improveme
Slide 25: Disclaimer
25 Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentations may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or its contents. This presentation does n
Slide 26: Thank You
— Niko na “ Safari com