Safaricom Plc · NSEKE:SCOM
Safaricom — H1 FY21 Earnings Presentation
22 slides from Safaricom's earnings presentation, Nov 9, 2020
Slide 1: Safaricom PLC H1 FY21 Investor Presentation
Safaricom PLC H1 FY21 Investor Presentation 9th November 2020 1
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: Operating Environment | Well Positioned to Bounce Back
OPERATING ENVIRONMENT | WELL POSITIONED TO BOUNCE BACK With our Government As a country •Eight point economic •75% of the Kenyan stimulus package by population is under 35 government to mitigate years effects of the pandemic As an industry •Telecommunications As a company and mobile money •Strong ba
Slide 4: COVID-19 in Kenya | Low Rate of Confirmed Cases, High Socio-Economic Impact
COVID-19 IN KENYA | LOW RATE OF CONFIRMED CASES, HIGH RATE OF SOCIO-ECONOMIC IMPACT Q2 GDP contraction -5.7%* Unemployment Trend (APR 20 - JUN 20) • 43% Agriculture 50% • 7% Infrastructure & manufacturing • 40% of Kenya’s GDP is driven <1% Q1 (JAN 20 - MAR 20) Q2 (APR 20 - JUN 20) by SMEs 83% of wor
Slide 5: Strategic Focus | Unlocking the Next Phase of Growth
STRATEGIC FOCUS | UNLOCKING THE NEXT PHASE OF GROWTH TRANSFORMING LIVES Purpose Vision TO BE A PURPOSE-LED TECHNOLOGY COMPANY Transformation Goal A DIGITAL-FIRST, INSIGHTS-LED ORGANIZATION THAT ENABLES PLATFORMS AND ECOSYSTEM PARTNERSHIPS DEEPEN CUSTOMER ENGAGEMENT & EXPERIENCE Transformative To be
Slide 6: Strategic Focus | Transform into a Purpose Led Technology Company
STRATEGIC FOCUS | TO TRANSFORM INTO A PURPOSE LED TECHNOLOGY COMPANY Purpose: To Transform Lives Strengthen the core To be a financial services provider • Defending voice through use of Customer Value • Next financial services: Wealth management, Management (CVM) platforms savings, insurance, credit
Slide 7: COVID-19 Response | Supporting Our Country
COVID-19 RESPONSE | SUPPORTING OUR COUNTRY Our Economy Our Customers Value of zero-rated M-PESA transactions KShs 1.76Trn. Zero-rated educational resources. Bonga for Good; 2 billion bonga points KShs 0.4Bn. Double bandwidth to ensure connectivity for home KShs 130Mn COVID-19 support for dealer cust
Slide 8: Building Resilience in a Disruptive Period | Recovery Visible in Q2
BUILDING RESILIENCE IN A DISRUPTIVE PERIOD | RECOVERY VISIBLE IN Q2 Q2 SR 1.2% YoY decline Restrictions begin to lift REBUILD • Continuation of free fees on M-PESA Opening up of the transactions economy; • Enhanced one to one offerings (1.2mn Q1 SR 8.4% YoY decline • Airports and county customers da
Slide 9: Healthy Underlying Performance | Growth in Fundamental KPIs
HEALTHY UNDERLYING PERFORMANCE | GROWTH IN FUNDAMENTAL KPIs Outgoing minutes of use Average GBs per M-PESA Volume (Bn) chargeable user 148.2 2.8 126.1 1.3 1.4 119.0 2.2 2.3 1.2 Q4 FY20 Q1 FY20 Q2 FY21 Q4 FY20 Q1 FY20 Q2 FY21 Q4 FY20 Q1 FY20 Q2 FY21 Voice one month active One month active One month a
Slide 10: Numbers
Numbers For more details, refer to our our results booklet. Link <H1 FY21 Results Booklet>
Slide 11: HY21 Key Highlights | COVID-19 Response Weighs on Performance
HY21 KEY HIGHLIGHTS | COVID-19 RESPONSE WEIGHS ON PERFORMANCE Service Revenue EBIT -4.8% YoY, -10.5% YoY, KShs 118.41Bn HY21, KShs 44.97Bn HY21, KShs124.32Bn HY20 30.31Mn KShs 50.25Bn HY20 one month active customers up 10.2% YoY Capex Opex* +25.5% YoY, -10.6% YoY, KShs 22.75Bn HY21, KShs 21.23Bn HY2
Slide 12: HY21 Service Revenue | Strong Growth in Data, M-PESA & Voice Under Pressure
HY21 SERVICE REVENUE | STRONG GROWTH IN DATA, M-PESA & VOICE UNDER PRESSURE Contribution to Service Revenue Decline (KShs Bn) Evolution of Service Revenue Profile Fixed Data Other 5.1 % Fixed Data Other 6.8% 3.7% 3.8% 124.3 Mobile Voice Mobile Data Voice Outgoing Data 0.5 15.9% Outgoing 2.7 118.4 34
Slide 13: Revenue | Free Fees Impact Revenue Growth, Recovery Visible in Q2
REVENUE | FREE FEES IMPACT REVENUE GROWTH, RECOVERY VISIBLE IN Q2 Contribution to M-PESA Revenue (KShs Bn) 42.0 M-PESA Revenue Transfers Revenue (KShs Bn) (KShs Bn) 0.4 1.0 35.9 (4.5) 20.7 (1.6) (0.7) 6.8 (0.5) 19.4 5.3 16.5 4.3 Q4 FY20 Q1 FY21 Q2 FY21 Q4 FY20 Q1 FY21 Q2 FY21 Payments Withdrawals Re
Slide 14: Value | Acceleration of Velocity Driven by Change in Customer Behavior
VALUE | ACCELERATION OF VELOCITY DRIVEN BY CHANGE IN CUSTOMER BEHAVIOR Contribution to M-PESA Value (KShs Trn) 0.7 9.0 Total Value Transfers Value 0.9 0.1 (KShs Trn) (KShs Trn) (0.1) 5.2 0.3 0.9 3.8 0.7 0.7 0.3 3.6 6.8 Q4 FY20 Q1 FY21 Q2 FY21 Q4 FY20 Q1 FY21 Q2 FY21 Withdrawals Value Payments Value
Slide 15: Mobile Data | Driving Digital Acceleration to Deepen Customer Connectivity
MOBILE DATA | DRIVING DIGITAL ACCELERATION TO DEEPEN CUSTOMER CONNECTIVITY Mobile Data Revenue (KShs Bn) 22.2 19.5 +14.1% YoY 11.3 Q4 FY20 Q1 FY21 Q2 FY21 H1FY21 YoY% 11.0 Rate Per MB (cents) 14.7 13.9 13.5 -22.3% 10.4 Average GB per 1.2 1.3 1.4 +33.0% Chargeable User Data ARPU 180.8 182.2 185.4 +3.
Slide 16: Fixed Service | Continued Growth in Home, Enterprise Revenue Impacted by COVID
FIXED SERVICE | CONTINUED GROWTH IN HOME, ENTERPRISE REVENUE IMPACTED BY COVID DISRUPTION FTTH 2,530 Contribution to Fixed Revenue (KShs Bn) 119.1 97.7 108.2 2,410 0.5 0.1 4.6 4.5 (0.2) (0.5) 2,289 Q4 FY20 Q1 FY21 Q2 FY21 42.9% 48.1% 53.5% Penetration Penetration Penetration rate rate rate Closing C
Slide 17: EBIT | Sustained Operational Efficiencies Offset by Impact of COVID-19 Response
EBIT | SUSTAINED OPERATIONAL EFFICIENCIES OFFSET BY IMPACT OF COVID-19 RESPONSE HY21 EBIT KShs Bn Opex YoY Growth 50.2 1.1 0.4 45.0 2.2 (7.1) 11.9% (0.7) (0.5) (0.4) (0.3) 7.0% HY18 HY19 HY20 HY21 -0.9% -6.0% Opex YoY Growth* HY20 Contribution COVID Payroll Costs Forex Depreciation Opex savings One-
Slide 18: Capex | Sustained Investment, Enhanced 4G Acceleration and IT Capability
CAPEX | SUSTAINED INVESTMENT, ENHANCED 4G ACCELERATION AND IT CAPABILITY Capex Split Capex (KShs Bn) 35-38* 37.3 Core 36.3 Operations, 35.3 36.1 Network, 0.9% 22.8 2.0% 18.9 Fixed Network, 17.4 18.1 17.0 6.8% IT Capex, 41.3% Transmission, 6.1% 24.7ppt FY17 FY18 FY19 FY20 FY21 vs HY20 H1 FY Other Cap
Slide 19: Outlook and Summary
Outlook and Summary 19
Slide 20: FY21 Guidance | Focus on Recovery and Returning to Growth
FY 21 GUIDANCE| FOCUS ON RECOVERY AND RETURNING TO GROWTH EBIT Guidance Capex Guidance FY 20 FY 21 FY 20 FY 21 KShs KShs KShs KShs 91-94 Bn 36.10 Bn 35-38 Bn 101.5 Bn 20
Slide 21: Sustainable Business | Continued Focus on Nine SDGs, Even in the Face of COVID-19
59,811 carbon footprint 221 sites using solar and (tCO2e) hybrid clean power SUSTAINABLE BUSINESS | CONTINUED FOCUS ON NINE SDGs, EVEN IN THE FACE OF COVID-19 CRISIS 9.0% 12.8% 102,231 L 299,910 kg water consumption total waste collected (97% recycled or re-purpos True value Environment 2.4% 16.1% 5
Slide 22: Thank You
AK You. 27 “e a das |