Slide 1: MTN Group Results presentation for the year ended 31 December 2021
MTN Group Results presentation for the year ended 31 December 2021 ‘Leading digital solutions for Africa’s progress’
Slide 2: Disclaimer
Disclaimer 2 The information contained in this document (presentation) 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 containe
Slide 3: Agenda
Agenda 01 Changes to guidance & dividend policy 02 Operational review 03 Financial review 04 Looking ahead
Slide 4: Changes to guidance & dividend policy
01 Changes to guidance & dividend policy Ralph Mupita | Group President and CEO 4
Slide 5: MTN remains resilient & well-positioned for accelerating growth
MTN remains resilient & well-positioned for accelerating growth 5 Macro environment MTN presents challenges & opportunities is well-positioned in our markets • Ongoing socio-economic impacts of COVID-19 • Structurally sustained growth • Weakening local currencies against the rand | Oil price • ‘Seco
Slide 6: Structurally higher demand - data & fintech
Structurally higher demand - data & fintech 6 Data and fintech volume trends since Q1 19 in our markets Data traffic Fintech transaction volume 500 Lockdowns easing across our markets Lockdowns easing across our markets 250 450 Start of COVID-19 230 Start of COVID-19 +2.5 400 +781 210 350 190 300 +1
Slide 7: Structurally higher demand underpins enhanced guidance from 2022
Structurally higher demand underpins enhanced guidance from 2022 7 Enhanced medium-term guidance KPI Target Enhanced target Group: Low to mid-teens Group: at least mid-teens Service revenue South Africa: Mid-single-digit growth South Africa: Mid-single-digit growth Nigeria: Mid-teens Nigeria: at lea
Slide 8: Guided by our disciplined capital allocation framework
Guided by our disciplined capital allocation framework 8 1 Organic growth Capital investment to grow networks and platforms | Licences/spectrum | Reducing capex intensity (between 18% to 15%) 2 Reduce leverage Maintain Holdco leverage within guidance levels | Focus on optimising debt, paying down no
Slide 9: Revised dividend policy
Revised dividend policy 9 Dividend declared FY 21 Dividend policy • Guided minimum ordinary dividend of 260cps for FY 21 • Annual dividend declaration • Board decision to pay an ordinary DPS of 300cps • Aligned with capital allocation priorities − Enables accelerated investment into faster growth ar
Slide 10: Operational review
02 Operational review Ralph Mupita | Group President and CEO 10
Slide 11: Highlights
Highlights 11 Strong financial performance demonstrates resilience of the business and solid execution +18.3%* +36.5%* +30.9%* Service revenue Data revenue Fintech revenue R171.8bn R56.5bn R15.9bn +23.7%* +2.2pp* +26.6% EBITDA EBITDA margin Adjusted HEPS R80.8bn 44.5% 1 110cps 18.0% (capex intensity
Slide 12: South Africa
South Africa 12 Sustained commercial and operational execution yields solid growth across all business units Market context Key activities Solid results • Challenging macro | Unemployment • R9.1bn network investment | 5G acceleration • All core businesses maintained solid growth • Re-opening of the
Slide 13: Nigeria
Nigeria 13 Commercial momentum drives continued voice and data growth | Fintech business gaining traction Market context Key activities Solid results • Macroeconomic pressures | Strong oil price • Accelerating SIM registrations • Subscribers back into growth in Q4, ~+1m • Challenging fx environment
Slide 14: Regional operational review
Regional operational review 14 Strong performance across all regions underpinned by data and fintech growth SEA^ WECA^ MENA^^ +22.5%* +39.5%* +18.4%* +43.6%* +47.1%* +65.2%* service revenue data revenue service revenue data revenue service revenue data revenue • MTN Uganda solid performance in • Dou
Slide 15: Scaling our fintech platform
Scaling our fintech platform 15 Building the largest and most valuable platforms in Africa Total fintech transactions 10 billion tx volume +41.1% YoY US$239.4bn tx value +56.8% YoY Wallet Banktech 56.8m MoMo users +22.6% YoY US$1.1bn loan value +47.4% YoY 974k MoMo Active agents +21.5% YoY 2.4m acti
Slide 16: Fintech ecosystem expansion
Fintech ecosystem expansion 16 Strategy 2020 2021 MoMo MAU (m) 100 57 • 70% GSM base penetration 46 • 40% GSM base penetration • 46% GSM base penetration • Full offering in Nigeria (PSB) • PSB AIP in Nigeria • MoMo Agent Banking in Nigeria • Expand in new markets • Ready to launch MoMo: Sudan & Sout
Slide 17: Accelerate portfolio transformation
Accelerate portfolio transformation 17 Material progress in ARP delivery – R15.4bn^ since March 2020 E-commerce portfolio TowerCo investments Localisation & other Pan-AfricanFocus Pan-African Focus • IHS listed on NYSE • Completed sale of BICS with • Progressed with Progress to date cash proceeds of
Slide 18: Creating shared value
Creating shared value 18 Significant economic value added across our markets of ~R115bn, +10.7% Ambitions Eco- • GHG emissions reduction ~47% average Economic (vs. 2019 scope 1&2^^) ~16% responsibility reduction target by 2030 & net zero by value-added • Improve energy efficiency 2040 “We are commit
Slide 19: Progress against our medium-term guidance
Progress against our medium-term guidance 19 FY 21 delivered ahead of our medium-term targets KPI Target Performance Group: Low to mid teens 18.3%* Service revenue South Africa: Mid-single-digit growth 6.5% Nigeria: Mid teens 23.2%* Accelerate fintech platform growth >20% service revenue contributio
Slide 20: Financial review
03 Financial review Tsholo Molefe | Group CFO 20
Slide 21: Items impacting reported results
Items impacting reported results 21 Currencies Significant transactions Other Average rand stronger than naira (+18.5%), Disposal of assets IFRS 2 expenses and Rand closed weaker against the dollar (-7.9%) & extraordinary items cash upstreaming Stronger average rand exchange rate • BICS: Non-taxable
Slide 22: Group income statement
Group income statement 22 Strong overall Group results | Improvement in EBITDA margin % change % change (Rm) 2021 2020 reported constant currency * Revenue 181 646 179 361 1.3 17.6 Service revenue 171 821 170 072 1.0 18.3 EBITDA before once-off items 80 771 76 692 5.3 23.7 Once-off items (4 613) 4 6
Slide 23: Group service revenue
Group service revenue 23 Pleasing growth across all revenue segments (Rm) +18.3%* 3 756 2 002 978 171 835 171 821 15 107 606 -14 145 293 4 093 2020 Voice Data Digital Fintech Wholesale SMS, ICT 2021 Hyperinflation 2021 CC and Other CC Reported +5.2%* +36.5%* +22.8%* +30.9%* +49.7%* +14.5%* 2020 CC a
Slide 24: Fintech revenue
Fintech revenue 24 Contributes 9.3% to Group service revenue | Advanced services at 23% of MoMo revenue, +6pp MoMo revenue contribution Fintech highlights by services offered (Rm) 2020 2021 Remittances, Banktech & other 6% Revenue 12 150 15 906 +30.9%* Payments 17% EBITDA^ +31.5%* 5 648 7 428 EBITDA
Slide 25: South Africa
South Africa 25 Solid growth in data & wholesale | Expenses impacted by handsets & network costs | EBITDA margin excl. IFRS2 share based payments was 41.4% Service revenue Expenses EBITDA and capex (Rm) +6.5% 39.0% 38.9% EBITDA margin 39 446 37 024 +7.5% 16.6% 21.4% Capex intensity 29 817 14 074 Voi
Slide 26: South Africa service revenue
South Africa service revenue 26 Consumer, enterprise and wholesale business units all delivered healthy and sustained growth (Rm) +6.5% 1 021 39 446 -60 181 527 303 450 37 024 2020 Prepaid CBU Postpaid EBU Postpaid EBU Other Wholesale^ Other 2021 YoY +2.1% +4.5% +20.5% +11.0% +36.0% -3,9% +6.5% grow
Slide 27: Nigeria
Nigeria 27 Voice and data drive growth | Expenses up due to network costs | Margin expansion Service revenue Expenses EBITDA and capex (Rm) constant currency 51.0% 53.0% EBITDA margin +23.2% 59 943 +17.5% 23.5% 24.8% Capex intensity 28 197 48 650 35 258 Voice +8.0% +27.8% 24 000 31 852 EBITDA 9 863
Slide 28: Expenses
Expenses 28 Expense efficiency programme delivered total savings of R3.7bn in FY 21 Group Expenses Expense efficiency programme (Rm Constant currency) Savings realised by area Savings realised by region +13.1% 100 975 MENA 89 268 15% General & SA administration 31% Mobile 25% 45 829 Cost of Sales +1
Slide 29: Group EBITDA
Group EBITDA 29 Strong growth in revenue complemented by strict cost control measures drives margin expansion EBITDA (Rm) +23.7%* 4 014 749 904 80 773 76 158 7 026 1 569 65 297 1 214 -4 615 2020 CC SA Nigeria SEA WECA MENA Head office 2021 CC Other^ 2021 Reported EBITDA margin (%) +2.2pp* 42.3% 0.8
Slide 30: Adjusted HEPS
Adjusted HEPS 30 Growth underpinned by strong operational performance Reported Reported (Rcents) 2021 2020 change % Attributable earnings per share 763 946 (19.3) Impairment of goodwill, PPE and associates 64 61 Loss on deconsolidation of subsidiary 262 - Impairment loss on remeasurement of disposal
Slide 31: Capex
Capex 31 Acceleration of investment to capture growth | FY 22 capex of ~R34bn Capex (Rm) Capex breakdown Capex Capex breakdown (Rm) Capex per category Capex per region 3% 6% 28 609 32 688 1% 4% 26 281 Radio Access 9% IT Systems SA 28% Nigeria 35% Site 21% Infrastructure SEA 17.3% 16.0% 18.0% Transmi
Slide 32: Statement of cashflows
Statement of cashflows 32 Operating FCF increases 35.2% benefiting from positive operating leverage (Rm) 4 034 4 773 3 705 554 76 158 -10 954 10 894 +35.2% +13.2% 38 295 -28 991 32 061 -6 234 -2 084 4 272 124 10 278 8 383 -1 895 -24 095 EBITDA Non-cash Syria Working Tax paid Dividends Net Acquisitio
Slide 33: Holdco net debt
Holdco net debt 33 Faster deleveraging Holdco balance sheet | Progress in cash upstreaming supports Holdco leverage Holdco net debt Maturity profile R55.3bn R43.3bn USD 50.0% R30.1bn 48.0% 11 955 40.8% 7 970 ZAR 50.0% 52.0% 59.2% 7 874 6 871 4 822 3 772 2 890 1 394 1 323 0 2019 2020 2021 2021 2022 2
Slide 34: Statement of financial position
Statement of financial position 34 Stronger rand supports improved cash position | IHS valued at R19.1bn (Rm) 2021 2020 % change Other property, plant and equipment 99 769 100 576 (0.8) Right of use asset 42 957 46 156 (6.9) Intangible assets and goodwill 43 760 39 069 12.0 Other non-current assets
Slide 35: Improving returns
Improving returns 35 ROE up 2.6pp YoY, driven by solid operational performance reflecting improved quality of earnings +2.6pp 1.9% 4.9% 0.2% 0.3% 19.6% -2.7% -0.7% 17.0% -1.3% ROE Group EBITDA Depreciation and Finance Cost Taxation JV and Associates NCI Other# ROE 2020 Amortisation 2021 ROE progress
Slide 36: Looking ahead
04 Looking ahead Ralph Mupita | Group President and CEO 36
Slide 37: Macro context into 2022
Macro context into 2022 37 Economic outlook - GDP COVID-19 • Emerged from 4th wave of infections SSA South Africa Nigeria • Economies currently open with greater mobility 3.7% 3.8% 5.0% 2.6% 2.7% • ~11% of Africa fully vaccinated at 28 Feb 2022 2.2% • Africa needs to vaccinate 70% of population by e
Slide 38: 2022 priorities
2022 priorities 38 Leading digital solutions for Africa’s progress through continued execution of Ambition 2025 Accelerate MTN South Africa and MTN Nigeria growth Complete fintech structural separation; and secure strategic partners to support acceleration of Group Fintech Progress with ARP, cash up
Slide 39: Conclusion
Conclusion 39 Committed to delivery of Ambition 2025 strategy 01 Solid FY 21 growth through strong operational execution and sustained commercial momentum • 11m subscribers added (excl. MTN Nigeria) | Nigeria back into growth in Q4, ~+1m subs • ROE expanded 2.6pp YoY to 19.6% | Operating cashflow up
Slide 40: Investment case | A compelling Africa growth story
Investment case | A compelling Africa growth story 40 Platforms accelerating growth Africa’s leading and scale connectivity Exciting demographic opportunity and infrastructure business › Fast-growing, youthful population › #1 or #2 subscriber in all our markets API › Low data, fintech and digital ad
Slide 41: Thank you Q&A
41q Doing Thank you Doing for tomorrow, today… tomorrow, Q&A today.
Slide 42: Appendices
04 Appendices 42
Slide 43: Definitions
Definitions 43 • Capex based on IAS 17 excludes capex attributable to right-of-use (RoU) assets • Subscribers are Dec 21 vs Dec 20 – unless otherwise stated • GMV: Gross Merchandise Value • Service revenue excludes device and SIM card revenue • Voice revenue comprises of outgoing voice (excludes int
Slide 44: H1 vs H2 performance
H1 vs H2 performance 44 Resilient overall performance | Base effects & price reductions impacted H2 growth for voice and fintech Subscriber net adds Active data users net adds Fintech users net adds Back into growth Progressing well Scaling rapidly 5.5m 8.1m 7.9m 3.0m 2.6m (2.6m) H1 21 H2 21 H1 21 H
Slide 45: Delivered on 2021 priorities
Delivered on 2021 priorities 45 45 Tracking well against our strategic priorities as we strive to ‘lead digital solutions for Africa’s progress’ Priority Delivered SA service revenue +6.5% | EBITDA margin of 41.4%* Accelerate SA & Nigeria growth Nigeria service revenue +23.2%* | EBITDA margin of 53.
Slide 46: Mandatory vaccination policy
COVID-19 – use of MTN’s strong position to assist communities 46 Infection and vaccination rates across the Group Cases in MTN Vaccines Total Active 1 dose 1 dose cases cases in MTN in Africa 5 278 100 ~6% ~16% Recoveries Deaths Fully vaccinated Fully vaccinated 5 148 30 in MTN in Africa ~65% ~11% M
Slide 47: Macro indicators | FX average rates
Macro indicators | FX average rates 47 Rand stronger against most currencies a drag on reported revenue ZAR: LC ZAR: Local currency 2021 2020 Strengthening/(weakening) 125 Nigerian naira 27.54 23.24 18.5% 120 115 Iranian rial 15 425.94 10 117.96 52.5% 113,1% 110 110,0% Ghanaian cedi 0.40 0.35
Slide 48: Macro indicators | FX closing rates
Macro indicators | FX closing rates 48 ZAR: LC ZAR: Local currency 2021 2020 Strengthening/(weakening) Nigerian naira 26.61 27.28 (2.5%) Iranian rial 15 391.55 17 458.88 (11.8%) Ghanaian cedi 0.40 0.40 ➔ 0.0% Cameroonian franc 36.15 36.42 (0.7%) Ugandan shilling 222.99 249.19 (10.5%) South S
Slide 49: Finance costs
Finance costs 49 Lower finance costs on reduced debt and lower fx losses Finance costs 2021 2020 Group leverage Net interest paid 5 769 7 149 (Rm) 2021 2020 Finance costs – leases 6 128 6 547 Cash and cash equivalents (50 417) (46 567) Net forex losses / (gains) 2 551 4 537 Interest bearing liabilit
Slide 50: Forex losses/(gains) breakdown
Forex losses/(gains) breakdown 50 Forex losses / (gains) 2021 2020 Head offices 10 658 South Africa 355 537 South Sudan 695 877 Sudan 583 1 108 Zambia (174) 367 Nigeria 831 350 Other 251 640 Net forex losses/(gains) 2 551 4 537
Slide 51: Fintech revenue contribution by services offered
Fintech revenue contribution by services offered 51 Banktech, remittance and other 4% Airtime advance 29% 41% Withdrawals Payments 12% 14% P2P transfers
Slide 52: Share of results of associates and joint ventures after tax
Share of results of associates and joint ventures after tax 52 Improved performance from Iran, supported mainly by fx impact as a result of stronger IRR (Rm) 2021 2020 % Change Telco joint ventures 2 260 1 074 1.1 Iran 1 709 538 NM eSwatini 115 99 16.2 Botswana 436 437 (0.2) Digital group (86) (65)
Slide 53: Irancell (100%)
Irancell (100%) 53 Improved results underpinned by strong revenue growth & improved forex gains - stronger IRR rate vs USD +201% 3 492 8 1 114 3 487 1 268 22 2 373 -501 -2 286 -419 789 2020 CC Revenue Other Expenses Depreciation, Finance Equity Income Tax 2021 CC Hyperinflation 2021 Net profit incom
Slide 54: Taxation
Taxation 54 Group effective tax rate impacted by loss on deconsolidation of Syria and higher WHT on dividends Reconciliation to reported tax rate Reconciliation of normalised tax rate Statutory tax rate 28.0% Statutory tax rate 28.0% Non-deductible Sudan expenses 1.9% Non-deductible Sudan expenses 1
Slide 55: Net debt
Net debt 55 Cash and cash Net interest-bearing Net debt / (cash) Net debt / (cash) (Rm) equivalents◊ liabilities 2021 2020 South Africa 3 733 - (3 733) (1 901) Nigeria 17 467 18 539 1 072 1 877 SEA 1 907 4 558 2 651 1 725 Uganda 847 1 633 786 1 321 Zambia 81 1 426 1 345 962 Other 979 1 499 520 (558)
Slide 56: Net debt composition
Net debt composition 56 Improvement driven by Nigeria & head offices | Lower translated dollar debt in head offices reduced net debt Nigeria borrowings Head office borrowings (%) (%) 90% 56% 2020: (92%) 2020: (52%) Naira ZAR USD USD 10% 44% 2020: (8%) 2020: (48%) Nigeria cash Head office cash (%) (%
Slide 57: Capex | IAS 17
Capex | IAS 17 57 57 Higher capex across Group; increase in SA and Nigeria (Rm) 16.0% 18.0% 32 688 28 609 11 092 9 139 10 016 7 209 6 028 6 869 2 279 2 601 1 573 812 1 773 2 400 1 504 2 175 SA Nigeria SEA WECA MENA Iran^ Other Group 2020 2021 Capex intensity ^ Iran capex at 49% and is not part of th
Slide 58: Capex guidance FY 22
Capex guidance FY 22 58 Estimated Estimated Capitalised Capitalised Capitalised Capitalised (IFRS 16) (IAS 17) (IFRS 16) (IAS 17) (IFRS 16) (IAS 17) (Rm) 2022 2022 2021 2021 2020 2020 South Africa 9 539 8 650 10 409 9 139 7 542 7 209 Nigeria 15 777 10 444 14 905 11 092 12 694 10 016 SEA 4 015 2 977
Slide 59: Statement of cash flows | IFRS
Statement of cash flows | IFRS 59 Higher cash generated from operations due to better performance across the group (Rm) 2021 2020 Change % Cash generated from operations 88 670 78 580 12.8 Dividends received from associates and joint ventures 554 608 (8.9) Net interest (paid) / received (10 984) (12
Slide 60: Execution of Ambition 2025 to seize growth opportunities
Execution of Ambition 2025 to seize growth opportunities 60 Active data subscribers (m) Driving data penetration Accelerating broadband coverage 90% 3G 77% 80% 77% 65% 70% 340 64% 4G 62% 54% 45% 46% 38% 41% 40% 200 34% 30% 111 122 79 95 2018 2019 2020 2021 2025 2021 2018 2019 2020 2021 2025 2021 201