Airtel Africa Plc · LSE:AAF
Airtel Africa — Q2 2025 Earnings Presentation
41 slides from Airtel Africa's earnings presentation, Oct 25, 2024
Slide 1: Results for half year ended 30 September 2024
Airtel Africa plc Results for half year ended 30 September 2024 25 October 2024
Slide 2: Disclaimer
Disclaimer Important Information Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements contained in this document reflect the knowledge and By reading this presentation you agree to be bound by th
Slide 3: Key highlights
Key highlights Growing demand and sustained network investment continues to support constant currency revenue growth momentum Sequential improvement in Q2’25 EBITDA margins reflects cost efficiency benefits Implementation of refreshed strategy with a focus on great customer experience Sustained inve
Slide 4: Continuing to deliver on our purpose of transforming lives in Africa
Continuing to deliver on our purpose of transforming lives in Africa Bridging the digital divide and Resilient business able to seize on Investing for the future and Strong capital structure to driving financial inclusion growth opportunity prioritising customer experience support value creation Pro
Slide 5: Operational and strategic review
Operational and strategic review
Slide 6: Structural growth opportunity across Africa
Structural growth opportunity across Africa • By 2030, addressable population (>15 years) expected to increase by 76 million to 461 million. By 2050, the addressable population is projected to increase by a further 300 million • Continued urbanisation and economic development are set to drive signif
Slide 7: Refreshed strategy to seize on compelling growth opportunity
Refreshed strategy to seize on compelling growth opportunity 7
Slide 8: Significant potential to grow quality customers
Significant potential to grow quality customers Significant upside potential in unique SIM penetration1 Smartphone2 adoption a key driver of growth ambitions 88.0% 86.6% 79.2% 86% 72.3% 82% 80% 68.6% 78% 78% 51.0% 48.5% 55% 43% Europe North LatAm World Asia Sub-saharan Footprint North Europe LatAm W
Slide 9: Capturing customer opportunity through growing distribution network
Capturing customer opportunity through growing distribution network Increasing customer activating outlets to capture demand Smartphone customer base increasing as distribution scales 80,0 00 60% 400 ,000 368,800 250 ,000 350 ,000 332,200 70,0 00 67,262 55% 200 ,000 300 ,000 271,500 60,0 00 55,628 5
Slide 10: Demand for data services across our footprint remains substantial
Demand for data services across our footprint remains substantial Significant potential in smartphone usage per customer Prospect for mobile data across region remains considerable (GBs)1 19.1 • Smartphone customers make up only 42.9% of total 18.2 17.3 customer base • Our data usage across the foot
Slide 11: Data opportunity unlocked through network quality and rollout
Data opportunity unlocked through network quality and rollout Total sites and network capacity Accelerating growth in data traffic across the network 35,961 4,00 0 7.0 33,144 30,149 3,50 0 6.6 6.0 33,960 26,751 3,00 0 2,579 5.0 28,287 2,50 0 5.1 4.0 2,00 0 4.3 1,742 19,009 3.0 1,50 0 3.3 1,215 13,75
Slide 12: Home broadband: investing for the future opportunity
Home broadband: investing for the future opportunity Significant opportunity across our entire footprint Over 500 million households across the footprint with very low home broadband penetration Fixed broadband penetration across Africa remains very low compared to global peers presenting a unique o
Slide 13: Mobile money: strategic priorities to enable financial inclusion
Mobile money: strategic priorities to enable financial inclusion 13
Slide 14: Mobile money: financial inclusion levels suggest significant opportunity
Mobile money: financial inclusion levels suggest significant opportunity Financial inclusion remains low across our footprint1 Growing distribution to educate and facilitate transactions North America 1,80 0,000 350 ,000 1,60 0,000 1,577,300 EU & C Asia 300 ,000 1,40 0,000 E Asia & Pac 250 ,000 1,20
Slide 15: Mobile money: a diversified business, with broad ecosystem of products
Mobile money: a diversified business, with broad ecosystem of products Diverse ecosystem drives strong growth in transaction Mobile money revenue contribution value Cash in/cash out 11% Total transaction value ($bn) 64 Cash in/cash out 56 Mobile recharges 14% 40 P2P services 49% 30 Billpay/merchant
Slide 16: Enterprise opportunity: digital transformation across Africa
Enterprise opportunity: digital transformation across Africa Evolving needs of enterprise segment in Africa as demand for digital services set to increase substantially over the medium-term Strong fibre footprint across Africa of 77,100+km presenting unique customer proposition in enterprise segment
Slide 17: Financial review
Financial review
Slide 18: Performance across key financial metrics
Performance across key financial metrics Revenue EBITDA EBITDA margin $2,370m $1,087m 45.8% Constant currency +19.9% Constant currency +13.5% Constant currency (258bps) Reported currency (9.7%) Reported currency (16.5%) Reported currency (378bps) Operating FCF Leverage EPS – before exceptionals 1 $7
Slide 19: Mobile services: trends supported by sustained customer and ARPU growth
Mobile services: trends supported by sustained customer and ARPU growth Customer base (m) ARPU Revenue 160 .0 155 .0 150 .0 156.6 $2.2 $2,013m 147.7 145 .0 140 .0 135 .0 Constant currency +9.7% Constant currency +18.4% 134.7 Reported currency (19.0%) Reported currency (12.6%) 130 .0 125 .0 120 .0 H1
Slide 20: Mobile money: revenue growth supported by increased adoption of services
Mobile money: revenue growth supported by increased adoption of services Customer base (m) ARPU Revenue 45.0 $2.0 40.0 41.5 35.0 30.0 25.0 29.7 36.5 $466m 20.0 15.0 Constant currency +10.9% Constant currency +28.8% Reported currency (3.7%) Reported currency +11.9% 10.0 5.0 - H1'23 H1'24 H1'25 Transa
Slide 21: Strong constant currency growth across all segments
Strong constant currency growth across all segments $m +19.9% constant currency growth (+$404m) +9.4% +28.4% +28.8% (17.9%) (7.7%) +11.9% 9.7% decline in reported currency (-$253m) H124 oice Data MobileMoney thers urrency H125 Devalua on H1’24 Voice Data Mobile money Others Currency H1’25 devaluatio
Slide 22: EBITDA margins impacted by inflationary headwinds
EBITDA margins impacted by inflationary headwinds $m +13.5% constant currency growth (+$133m) Margin 49.6% Margin 45.8% 16.5% decline in reported currency (-$215m) H124 evenue ther E pense urrency H125 OPEX 1 (incl. egulatory) Devalua on H1’24 Increased Currency H1’25 revenue increase devaluation 1
Slide 23: Nigeria: gathering momentum despite macro-economic challenges
Nigeria: gathering momentum despite macro-economic challenges Customer base Data customers Customer base impacted by KYC regulations 48.7m 26.3m Growth of +0.2% Growth of +8.6% Resilient demand for data services as growth in customer base and usage per customer continues Data revenue Total revenue $
Slide 24: East Africa: strong growth across the base, with 31% growth in mobile money
East Africa: strong growth across the base, with 31% growth in mobile money Voice revenue Data revenue Customer base the primary driver of strong voice revenue growth $439m $355m Constant currency +10.9% Constant currency +26.1% Reported currency (0.3%) Reported currency +14.7% Continued monetizatio
Slide 25: Francophone Africa: focussed execution translating into improved momentum
Francophone Africa: focussed execution translating into improved momentum Voice revenue Data revenue Inflationary pressure on consumer spend impacting voice revenues, but customer growth remains strong at 9% $313m $260m Constant currency (1.0%) Constant currency +18.1% Reported currency (1.1%) Repor
Slide 26: Finance costs: Higher cost local currency debt reduces exposure to FX volatility
Finance costs: Higher cost local currency debt reduces exposure to FX volatility $m H1 24 ease ther nance et H1 25 ower ower E cep onal H1 25 Finance ost iability cost interest cost Finance ost before Deriva ve F deriva ves F Finance ost deriva ves and F Interest costs are higher because of increase
Slide 27: EPS primarily impacted by currency devaluation
EPS primarily impacted by currency devaluation $ cents 3.5 10.5 1. .0 (4.5) 5.4 (2.0) 4.9 (0.3) (0.5) H1 24 E S H1 24 Deriva ve H1 24 E S urrency pera ng Finance harges Ta H1 25 E S H1 25 Deriva ve H1 25 E S Before EI and Fore loss Before EI Fore devalua on pro t ( ) (e cl. deriva ves thers 1 Before
Slide 28: Normalised FCF reflects sustained network investment
Normalised FCF reflects sustained network investment $m EBITDA Income ta ash cape 1 ash ease I ormalised icense renewal 2 ormalised H1 25 paid (e cl. license renewal) interest repayments dividend F F H1 25 F F H1 25 (before license renewal) Normalised free cashflow is defined as cash from operations
Slide 29: A balanced and transparent capital allocation policy
A balanced and transparent capital allocation policy • Group capex (excluding spectrum) of $316m, with 93% of capex geared towards growth, including rural 2 rollout and increased capacity. 1 • ape (e cluding spectrum) guidance for FY’25 of $725-$750m. Efficient Sustainable • Net debt/EBITDA of 2.3x.
Slide 30: ATC tower contract: accounting impact
ATC tower contract: accounting impact Lease accounting: Example of allocation between Accounting impact from ATC contract renewal capital and interest over term of lease Cash payment to lessor1 Cash flow: neutral to positive impact Early years of lease agreement, allocation to Allocation of payment
Slide 31: Localising debt to reduce balance sheet risk with net cash at HoldCo
Localising debt to reduce balance sheet risk with net cash at HoldCo Localisation of OpCo debt continues Balance sheet remains strong with net cash at HoldCo 2,5 00 89.1% 100 .0% As of Sep 30, 2024 As of Sep 30, 2023 90. 0% 1,985 2,0 00 71.4% 80. 0% 70. 0% $m times $m times 55.7% 51.7% OpCo debt: 2,
Slide 32: Conclusion
Conclusion
Slide 33: Summary and outlook
Summary and outlook Compelling growth outlook Supporting demographics and strong demand for essential services. Additional opportunities in fibre, data centres and enterprise. Industry leading EBITDA margins Operating leverage from strong revenue growth, supported by low exposure to US$ costs and co
Slide 34: Q&A
Q&A
Slide 35: Appendix
Appendix
Slide 36: Growth by service segment waterfalls
Growth by service segment waterfalls Voice revenue ($m) Data revenue ($m) 92 2 13 101 1,169 915 960 844 (294) (264) +9.4% constant currency growth +28.4% constant currency growth H1 24 ustomer base A urrency devalua on H1 25 H1 24 ustomer base A urrency devalua on H1 25 oice evenue Increase Increase
Slide 37: Continuing to invest for future growth opportunities
Continuing to invest for future growth opportunities apital e penditure in H1’25 ($316m) Investing to support future growth 4% • Total capital expenditure of $316m, marginally higher from 7% prior period. 27% • 93%+ of capex investment is towards growth initiatives, targeting enhanced network capaci
Slide 38: Sustainability strategy
Sustainability strategy We are committed to providing Africa with safe, Our people are at the heart of our sustainability Our dedication to supporting communities is Recognising the important role we play in AMBITIONS reliable and resilient telecommunications to journey. By fostering an environment
Slide 39: Effective tax rate
Effective tax rate Unit of Half-year ended Half-year ended Description measure Sep-24 Sep-23 Profit before Income tax Profit before Income tax Tax rate % Tax rate % taxation expense taxation expense Reported effective tax rate (after EI) $m 178 99 55.5% 12 25 207.7% Exceptional Items $m 231 80 471 1
Slide 40: Finance cost and forex
Finance cost and forex Description H1'25 H1'24 Change Total finance charges (Excluding exceptional items) were lower $m $m $m by $105 m, mainly due to: Interest on market debt 141 104 37 Interest income (12) (17) 5 • Derivatives and forex losses at $29m, $154m lower Net Interest Cost 129 88 42 compa
Slide 41: Currency effects – historical trends
Currency effects – historical trends Historical Trends CAGR Deval/(Appr.) Currency (LC per USD) Sep 2019 Sep 2021 Sep 2023 Sep 2024 1-year 3-year 5-year Nigerian naira 362.1 413.5 776.8 1,669.0 114.8% 59.2% 35.7% Uganda shilling 3,685.0 3,540.0 3,760.1 3,692.0 (1.8%) 1.4% 0.0% Tanzania shilling 2,29