Safaricom Plc · NSEKE:SCOM
Safaricom — FY2022 Earnings Presentation
38 slides from Safaricom's earnings presentation, May 12, 2022
Slide 1: Safaricom PLC FY22 Investor Presentation
Safaricom PLC FY22 Investor Presentation 12 May 2022 th
Slide 2: Disclaimer
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 not
Slide 3: Our Purpose: Creating Shared Value
Our Purpose: Creating Shared Value Safaricom & M-PESA Foundations Sponsorships 3-Yr Impact 4.2Mn Lives impacted, 2,000 Partners 3.2Mn 0.6Mn 0.4Mn 0.4Mn Beneficiaries Beneficiaries Beneficiaries Beneficiaries Health Education Economic Sports Empowerment (Golf, Olympics, Athletics MNCH* Literacy & Num
Slide 4: Operating Environment: Sustained Regulatory Headwinds
Operating Environment: Sustained Regulatory Headwinds GDP growth* in Kenya Tailwinds 7.5% Improved macro-economic performance GDP growth surpassing 5.6% 5.0% pre-pandemic levels 3.8% COVID-19 positivity rate dropped to <1% -0.3% 2017 2018 2019 2020 2021 Headwinds Heightened regulatory risk Annual Av
Slide 5: Partnering to transform lives
The Foundations: Transforming Lives Through our Fistula Programme Partnering to transform lives 0:35 / 3:20 5
Slide 6: Sustainable Business: Building a Purpose Driven Brand
Sustainable Business: Building a Purpose Driven Brand Create Shared Value Planet Creating digital societies through our Net Zero by 2050, +1Mn trees planted products and services Building a Circular Economy Creating sustainable and inclusive Support society to decarbonise growth through the entire v
Slide 7: Our Strategy: On Course to Deliver our 5-Year Strategy
Our Strategy: On Course to Deliver our 5-Year Strategy Purpose Transforming lives FY22 Focus; Establish a Vision To be a purpose-led Technology Company Customer obsessed, digital first organization (delivering double Transformation Goal A digital-first, insights-led organization that enables platfor
Slide 8: Our Vision: Transforming Into a Technology Company
Our Vision: Transforming Into a Technology Company Agile Transformation Building Capability Enhanced level of Establish a cost leading, agile for inhouse tech automation & digitization customer-obsessed technology experts Digital Maturity Index Becoming a environment purpose-led technology company B
Slide 9: Performance Highlights: Strong Strategy Delivery in FY22
Perfomance Highlights: Strong Strategy Delivery in FY22 Market Shares* Network M-PESA Regional Expansion to Ethiopia 4G everywhere (97% population Celebrated 15 years 64.3% Mobile Data Customer Commercial launch within coverage) Crossed the 30Mn customer mark 70.4% Voice Traffic 2.4Mn 4G devices add
Slide 10: Customer Obsession: Relevant Products & Services
Customer Obsession: Relevant Products & Services Making our Customer Lives’ Better M-PESA M-PESA is now Sharia GlobalPay Mobile Data new a universal compliant Visa Virtual Card permanent payments mobile financial to support international M-PESA Junior pricing network service, Account partnering with
Slide 11: Our Recognition: Mentions & Awards Earned in the Year
Our Recognition: Mentions & Awards Earned in the Year Innovation Financial Inclusion M-PESA/Safaricom the most preferred GSMA Global Mobile Award (GLOMO) remittances service provider – mention in Best Mobile Innovation for Connected Living Kenya’s first CBK Diaspora Remittances Survey for the M-PESA
Slide 12: Ethiopia Update
ETHIOPIA UPDATE (Safaricom
Slide 13: Ethiopia Introductory Video
Ethiopia Introductory Video 0:35 / 2:01 13
Slide 14: Ethiopia: Macro Update
Ethiopia: Macro Update Political/ Sector/ Regulatory Macro-economic +8% projected Real GDP Lifted state of emergency, growth driven by industry and easing conflict services recovery (Source; AfDB) Real GDP Growth Partnership with Ethiotel Expected rebound in consumer (negotiations ongoing) spending,
Slide 15: Ethiopia: Commercial Launch Planned Within 2022
Ethiopia: Commercial Launch Planned Within 2022 Network & IT 1st data center deployed (1 under construction) 1st test call done Network under construction Sales & Distribution Distributors and retail shops identified Simcard production commenced Contact centre established Products; Voice, SMS, Mobil
Slide 16: FY22 Performance
FY22 Performance 16
Slide 17: FY22 Earnings Outperform Guidance
FY22 Earnings Outperform Guidance Safaricom Plc Kenya Safaricom Plc Group (Excluding Ethiopia) (Including Ethiopia) Guidance Guidance Guidance KShs 107-110Bn EBIT CAPEX KShs 40-43Bn Guidance KShs 97-100Bn EBIT CAPEX KShs 70-73Bn Achieved Achieved Achieved Achieved KShs 114.3Bn KShs 39.3Bn KShs 109.1
Slide 18: The Numbers
THE NUMBERS (a Safaricom
Slide 19: Highlights: Strong Group Performance in FY22
Highlights: Strong Group Performance in FY22 Service Revenue EBIT Capex One month active customers 281.1Bn 109.1Bn 49.8Bn 32.8Mn +12.3% +13.5% +42.4% +4.3% vs FY21 vs FY21 vs FY21 vs FY21 250.4Bn 96.2Bn 35.0Bn 31.5Mn *All numbers include Ethiopia in all financial slides except revenue & KPIs 19
Slide 20: Customer Focus: Sustained Growth in Customers Driving Revenue Growth
Customer Focus: Sustained Growth in Customers Driving Revenue Growth Contribution to Service Revenue growth from; Customer & ARPU growth 32.8 31.5 Customers ARPU* Service Revenue 28.6 +5.1% 26.2 +1.7% FY22 +6.8% +5.5% +12.3% -3.8% -9.1% FY19 FY20 FY21 FY22 One month active customers (Mn) One month a
Slide 21: Service Revenue: Strong Recovery Driven by M-PESA and Mobile Data
Service Revenue: Strong Recovery Driven by M-PESA and Mobile Data Evolution of Service Revenue Profile Contribution to Service Revenue (KShs Bn) Others Others 12.3% 10.9% Fixed Fixed M-PESA 2.4% M-PESA 2.5% 38.3% 0.7 0.7 FTTH 33.0% 1.0 281.1 FTTH 3.6 1.4% 1.5% 25.0 (0.3) Mobile 250.4 Data 17.9% FY21
Slide 22: M-PESA: Fintech Ecosystem Driving Growth
M-PESA: Fintech Ecosystem Driving Growth Contribution to M-PESA growth Accelerating New Growth Areas Global Payments Financial Services Business Payments, +37.2% YoY 1.2% 3.0% C2B +33.9% B2C +23.7% B2B +39.1% Business Payments LNM + 60.9% 24.0% FY19 7.6ppts Personal Payments 71.9% Personal Payments,
Slide 23: M-PESA: Accelerated Growth in the 2-sided Ecosystem
M-PESA: Accelerated Growth in the 2-sided Ecosystem Opportunity to Grow Usage Remains Total M-PESA Value (KShs Trn) Transfers & Withdrawals Value 21.2 (KShs Trn) 15.8 3.4 19.1 19.3 13.7 3.2 Chargeable transactions 13.0 3.1 (inc COVID-19 free transactions) 15.5 9.0 2.5 FY22 20.3 +16.6% YoY H1 FY21 H2
Slide 24: M-PESA: Developing Scalable Digital Platforms for Key Growth Areas
M-PESA: Developing Scalable Digital Platforms for Key Growth Areas Credit Business Mini Apps B2B +3.0Mn Businesses Consumer +492k Active Merchants C2B Wealth +30Mn Customers P2P Insurance Target Addressable E-Commerce Big Data Target Addressable Market Market 5 - 6Mn Loyaltly & Savings 42Mn Merchant
Slide 25: M-PESA Super App: Powering Digital Consumer Lifestyles
M-PESA Super App: Powering Digital Consumer Lifestyles +5.3Mn Driving Customer Engagement Downloads 1.0Mn +10% ARPU Growth Monthly active customers KShs 3.1Bn Revenue Consumer 30 +15% generated via App Average days of use in a month the App +23% Average number of 18 transactions in a month Transacti
Slide 26: M-PESA Business App: Empowering Businesses
M-PESA Business App: Empowering Businesses +176k Active Merchants using the app Driving Merchant Engagement +57% Transaction per Merchant growth KShs143.4Bn Value transacted Business via the App App 30 +52% Value per Merchant +75% 80.7% Average revenue Activity rate per Merchant 20% of Active LNM ti
Slide 27: Mobile Data: Strong Recovery in H2 Driven by Data Analytics/CVM Initiatives
Mobile Data: Strong Recovery in H2 Driven by Data Analytics/CVM* Initiatives Strong Data Revenue Growth in H2 Opportunity to Drive Usage and Growth Remains 14.1% +4.3% YoY 13.0% 32.8 12.2 31.7 13.7 31.5 10.0 10.0% 9.1% 7.9% +5.3% YoY 8.0 17.6 17.0 +15.0% YoY 6.3% 16.7 12.5 +29.3% YoY 4.1% 10.8 11.5
Slide 28: Fixed Service: Increased Connections Drive Revenue Growth
Fixed Service: Increased Connections Drive Revenue Growth FTTH 166.0 Contribution to Fixed Revenue growth (KShs Bn) 153.4 137.4 2,308 0.4 11.2 2,292 0.6 2,269 63.9% 0.7 +18.3% 52.9% YoY 9.5 58.5% H2 FY21 H1 FY22 H2 FY22 Closing customers ('000's) ARPU (KShs) Conversion rate (%) Fixed Enterprise 48.3
Slide 29: New Growth Areas: Performance is Gaining Momentum
New Growth Areas: Performance is Gaining Momentum New Growth Areas Revenue (KShs Bn) >100% +64.5% 100% +29.3% 0.5 0.5 0.4 0.4 0.3 0.3 0.2 0.0 Digifarm Revenue IOT Revenue Content Revenue ICT Revenue FY21 FY22 29
Slide 30: Group Net Income: Strong Performance on an Underlying Basis
Group Net Income: Strong Performance on an Underlying Basis 24.08 0.03 (4.04) (1.95) (0.03) 77.01 72.35 (9.76) 69.65 68.68 (4.66) (2.71) 408289 12.1% 5.4% 1.4% YoY YoY YoY FY21 Net Improved Operating Depreciation Financing Share of Taxation FY22 Ethiopia FY22 Ethiopia FY22 Income Performance Costs C
Slide 31: Overall Performance of the Group
Overall Performance of the Group Safaricom Kenya Safaricom Ethiopia Safaricom Group Safaricom Kenya Safaricom Group KShs Mn KShs Mn KShs Mn %YoY %YoY Service Revenue 281,107.3 - 281,107.3 12.3% 12.3% Total revenue 298,077.9 - 298,077.9 12.9% 12.9% Contribution margin 204,248.9 - 204,248.9 13.4% 13.4
Slide 32: Ethiopia: Our Financial Ambitions
Ethiopia: Our Financial Ambitions Capex Investment Network Rollout 5Yr plan: Y1: c1k sites at launch USD 1.5 - 2.0Bn Y10: 10k - 12k sites Y1 Funding including license payment (Safaricom PLC) USD 540Mn Funding sources; Enablers Equity, DFIs, Vendor EBITDA break-even Aggressive network Financing, loca
Slide 33: CAPEX: Diversifying Spend to Fund New Growth Areas
CAPEX: Diversifying Spend to Fund New Growth Areas Capex (KShs Bn) 49.8 FY22 Capex Split 10.4 FY22 Ethiopia 37.3 Capex 36.4 36.1 39.3 35.0 Operations, 5.0% IT Capex, 24.7% Radio Access , 35.1% FY18 FY19 FY20 FY21 FY22 Fixed Network 5.2% Ethiopia Capex Split FY22 (KShs Bn) Other Network Mobile Core N
Slide 34: FY22 Proposed Dividends: Consistently Delivering Value to Our Investors
FY22 Proposed Dividends: Consistently Delivering Value to Our Investors FY21 FY21 FY22 EPS/Dividend Yield Trend FY22 Proposed Interim Final Interim 1.92* Dividend Dividend Dividend Dividend 1.58 1.56 1.84 1.71 1.74 5.3% 4.5%* 4.5% 4.2%* 3.5% 3.8% KShs 18.03 Bn KShs 36.86 Bn KShs 25.64 Bn KShs 30.04
Slide 35: Outlook
Outlook 35
Slide 36: FY23 Focus: Accelerate New Growth Areas
FY23 Focus: Accelerate New Growth Areas Leverage M&A, Licenses and Partnerships Establish the right operating model and to unlock growth and shape our investment partnerships to scale IoT and ICT profile Scale fixed solutions (FTTH and FTTB Pro-actively allocate investment and services) for consumer
Slide 37: FY23 Guidance: Focus on Accelerating New Growth Areas
FY23 Guidance: Focus on Accelerating New Growth Areas Safaricom Plc Kenya Safaricom Plc Group (excluding Ethiopia) (including Ethiopia) EBIT CAPEX EBIT CAPEX KShs KShs KShs KShs 120-123Bn 40-43Bn 87-93Bn 100-108Bn This guidance is based on prevailing macro-economic and regulatory conditions. 37
Slide 38: Simple, Transparent, Honest
Simple «Transparent * Honest FOR YOU