Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — Blue Label Telecoms — FY2015 Earnings Presentation
30 slides from Blu Label Unlimited's earnings presentation, August 2015
Slide 1: Results for the year ended 31 May 2015
Results for the year ended AIRTIME 31 May 2015
Slide 2: Disclaimer
AIRTIME DISCLAIMER: The information contained in this document 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 contained herein.
Slide 3: Group highlights for the year ended 31 May 2015
Audited Results for the year ended 31 May 2015 1 Group highlights for the year ended 31 May 2015 1 • Revenue increases 14% to R22 billion Gross Profit Contribution BLUE LABEL RESULTS FOR THE YEAR ENDED 31 MAY 2015 • Gross Profit increases 22% to R1.64 billion Airtime, Starter Packs and Data 90% • Gr
Slide 4: South African Distribution: Financial and operational highlights
South African Distribution Shareholder profile Brett Levy – Joint CEO 3 Financial and operational highlights 2 • Revenue up 13% to R21.7 billion Prepaid Airtime Revenue Growth BLUE LABEL RESULTS FOR THE YEAR ENDED 31 MAY 2015 3 000 Millions • Gross profit up 22% to R1.4 billion 2 500 2 000 1 500 • C
Slide 5: Prepaid Airtime, Data and Starter packs
Prepaid Airtime, Data and Starter packs Airtime Contribution by Channel • Connecting ~700,000 new SIMs per month 14%14% 13% • Distributing more products and services, especially data 59% • Informal/rural - 85% of revenue: Petroleum Independent - community based and customised benefit starter packs F
Slide 6: Edgars Connect and Prepaid Electricity
Edgars Connect • Opened Edgars Connect stand-alone stores • In conjunction with Edgars Division of Edcon Group • Main telephony products and services: - prepaid, postpaid, hybrid voice and data packages • Cash or Edcon group pre-approved credit facilities • 46 stores opened • 100 stores by calendar
Slide 7: Prepaid Electricity and Prepaid Water
Prepaid Electricity – Revenue and UniPIN UniPIN Redemptions 80 800 Thousands 70 700 Millions 60 600 50 500 40 400 30 300 20 200 10 100 - - Quantity (R millions) Value (R thousands) 6 Years' Prepaid Electricity - Revenue 1 200 1 000 900 800 700 600 Millions 500 400 300 200 100 0 9 Prepaid Water 5 • R
Slide 8: Ticketing by ticketpro; Financial and other Value Adding Services
Ticketing by ticketpro • ‘…selling a ticket to an experience’ • ‘… eventology by ticketpro’ • Striving for market differentiation, gaining brand recognition, and growing market share: - 2nd largest ticketing engine in SA - specialists in bulk ticketing through advanced technology - complete ticketin
Slide 9: Making a difference in South Africa; Shareholder profile
Firstly, making a difference in South Africa • Sophisticated proprietary technology • Distributing innovative products and services • Airtime, starter packs, electricity, financial services and • New solutions - ticketing and prepaid water • Take product to the people • Reaching un- and under-banked
Slide 10: International Distribution: Oxigen Services India macro environment
• International Distribution • Mobile, Solutions and Technology • Prospects Mark Levy – Joint CEO 15 Oxigen Services India – Macro Environment 8 • Government driving economic development and Paytm BLUE LABEL RESULTS FOR THE YEAR ENDED 31 MAY 2015 4 $ 600 Mn financial inclusion • Expanding e-commerce
Slide 11: Oxigen Services India - Operations
Oxigen Services India - Operations Total Value ($m) Banking, Oxigen • 50 million transactions per month Wallet & Service Aggregation 180 153 • 130,000 merchant points of presence 160 140 127 125 130 141 121 109 105 • Access through >60,000 government Common 120 100 93 98 97 100 Service Centres 80 60
Slide 12: Oxigen Services India - Wallet, online transfers, remittances
Oxigen Services India - Wallet/ on-line transfers/ remittances Oxigen Wallet ($m) 80 72 73 • Oxigen wallet ranked as a leading service provider 66 70 59 62 60 55 • Oxigen wallet awarded ‘Best Prepaid Issuer’ by NPCI’ 46 50 43 45 40 34 • Accelerating uptake - now hosting 5 million wallets 29 31 30 20
Slide 13: Blue Label Mexico - Active devices and Transactions
Blue Label Mexico – Active devices and Transactions Active Devices No. of Transactions (Top Up, 64 Bill Payments and Card Payments) 62 59.84 60 58.86 58.80 58.23 57.93 57.64 57.74 57.70 Thousands 58 56.66 56.86 Millions 55.49 56 54.62 54.65 54 Multicarrier 52 50 Jun. Jul. Aug. Sep. Oct. Nov. Dec. Ja
Slide 14: Blue Label Mexico - Airtime
Blue Label Mexico - Airtime Cont. • Total number top-up transactions 17.0 Total Top-up Transactions 16.3 Millions increasing - 16.3 million 16.0 15.0 Millions 14.0 13.2 13.0 12.0 Multicarrier 11.0 Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May. Jun. '14 '14 '14 '14 '14 '14 '14 '15 '15 '1
Slide 15: Blue Label Mexico - Card Acquiring
Blue Label Mexico – Card Acquiring • Partnership with VISA and Banamex Transactions • Steady growth in transactions – up 133% to 707,000 • Sales up 171% - a record in May 2015 • Transactions per day up 154% to 22,802 (May) • Transactions per merchant up 100% to 64 (May) • Increasing volumes and valu
Slide 16: Blue Label Mexico - Digital Food Vouchers
Blue Label Mexico - Digital Food Vouchers • Necessary nature of food drives growth Food Voucher Transactions • Flexibility for employees to buy food and groceries as a salary perk • Gaining foothold in market estimated at $5 billion • Agreement with all 5 major distributors • Reaching ~7m cardholder
Slide 17: Blue Label Mexico - SIM Cards and Remittances; Mobile Segment
Blue Label Mexico – SIM Cards and International Money Remittances • Sim Cards - agreements with most major networks - model includes a defined annuity income stream on topping-up - market awareness campaigning • International Money Remittances - commercials piloted in USA - validated and agreed - ap
Slide 18: Solutions Segment and Technology update
Solutions Segment • Blue Label Data Solutions – data intelligence & analytical services - reaching new heights Unique�Leads�Supplied - aggregation approach (vs ‘spray & pray’) 1 040 000� 1 020 000� - accessing deep and rich data bases - ~61m unique cell numbers 1 000 000� 1 024 150� 980 000� - SMS v
Slide 19: Prospects
Prospects • Oxigen Services India revenue streams set to increase: - Payment Bank licence pending, and - rollout of new proprietary micro-ATMs • Distribution of Digital Food Vouchers and SIM Cards at Blue Label Mexico positions the business to drive profitability • Establishing Edgars Connect stand-
Slide 20: Financial Overview: Highlights and Income Statement
Highlights Increase in Increase in Increase in Increase in revenue of gross profit gross profit EBITDA of 14% to of 22% to margins from 37% to R22 billion R1.64 billion 6.96% to 7.46% R1.08 billion Increase in Increase in core Capital and Increase in headline earnings earnings per Reserves dividend
Slide 21: South African Distribution financials and Associates
South African Distribution FY 2015 FY 2015 FY 2014 Growth % R’000 R’000 R’000 R’000 Growth Total group SA Distribution SA Distribution SA Distribution Revenue 22,044,222 21,657,891 19,103,652 2,554,239 13% Gross profit 1,644,340 1,444,730 1,180,376 264,354 22% Gross profit % 7.46% 6.67% 6.18% Gross
Slide 22: Joint Ventures and Income Statement
Joint Ventures FY 2015 FY 2014 Growth R’000 R’000 R’000 Share of losses from joint ventures (91,835) (65,321) (26,514) - Blue Label Mexico (88,508) (60,844) (27,664) - Other (3,327) (4,477) 1,150 • Blue Label Mexico - Revenue increased by 23% - Increase in losses due to: • Margin compression • Incre
Slide 23: Balance Sheet
Balance Sheet 2015 2014 Summarised Group Statement of Financial Position as at 31 May R’000 R’000 Non- current assets 2,040,214 1,798,307 Property, plant and equipment 106,684 97,200 • Net growth in intangible assets Intangible assets and goodwill 1,254,893 1,005,934 Investment in associates and joi
Slide 24: Dividend of 31 cents, cover of 2.62 times
Dividend Dividend of 31 cents per share declared Cover of 2.62 times 43 22 BLUE LABEL RESULTS FOR THE YEAR ENDED 31 MAY 2015 Supplementary Information August 2015 44
Slide 25: Supplementary - Macro environment in SA influencing growth drivers
Supplementary - Macro environment in SA influencing our growth drivers • Evolving MNO landscape: Group Gross Profit - telco’s becoming banks and vice versa R 1 800 R 1.64 R 1 600 - cost pressures competitive pricing determination on MTRs R 1.35 R 1 400 R 1.21 R 1.27 R 1.12 - increasing cost of SIM c
Slide 26: Supplementary - Oxigen Services India Macro Environment
Supplementary - Oxigen Services India – Macro Environment $ 627 Paytm Flipkart 5 Snapdeal 20 $ 550 Mn 4 $ 600 Mn 4 16 $ 700 Mn 3 3 $ 635 Mn 12 $ 5b $1 2 2 $ 3.7 b 8 $ 16b $ 133 Mn $ 105 Mn $ 150 Mn $ 11b 1 1 $ 2b 4 $ 7b $ 1b $ 1.2b $ 0.5b 0 0 0 Feb-14 May-14 Oct-14 Nov-14 Jan-15 Jul-15 Jul-14 Dec-14
Slide 27: Supplementary - Blue Label factsheet
Supplementary – Blue Label factsheet • Founded in 2001 • 2,179 employees Groupwide • Business model underpinned by long-term distribution contracts • Products and services include - airtime, starter packs and data - electricity and water - ticketing - financial and value adding services • Listed as
Slide 28: Supplementary - Barriers to entry
Supplementary – Barriers to entry • Lag times in negotiating supplier and customer contracts can hinder integration • Long term contracts – to ensure there is no cheaper pricing in the market • Lock-out periods for processing new and developing existing technologies. Roll-out of devices takes time •
Slide 29: Supplementary - Top shareholders as at May 2015
Supplementary – Top shareholders as at 31 May 2015 • Allan Gray and clients – 23.5% • Shotput Investments – 14.8% • B M Levy – 12.4% • M S Levy – 11.3% • Sanlam Investment Management – 3.1% • Nedbank Group - 2.8% • Deutsche Bank – 2.4% • Peregrine – 2.2% • 36ONE Asset Management – 2.2% • Grandeur Pe
Slide 30: Notes
BLUE LABEL RESULTS FOR THE YEAR ENDED 31 MAY 2015 28 NOTES