Mtn Nigeria Communications Plc · NSENG:MTNN
Mtn Nigeria Communications — Q1 2022 Earnings Presentation
35 slides from Mtn Nigeria Communications's earnings presentation, April 2022
Slide 1: MTN Nigeria Results presentation for the quarter ended 31 March 2022
MTN Nigeria Results presentation for the quarter ended 31 March 2022
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, sufficiency, or correctness of the information or
Slide 3: Presentation Outline
Presentation Outline 01 Overview 02 Operational review 03 Financial review 04 Looking ahead
Slide 4: Presenters’ Profile
Presenters’ Profile Modupe Kadri Hassan Jaber Tobechukwu Okigbo Karl Toriola Chief Financial Officer / Executive Chief Operating Officer Chief Corporate Services Officer Chief Executive Officer Director • Former MTN Group VP, West and • Former COO, MTN Iran • Former CCSO, Smile • Former CFO / Execut
Slide 5: Overview
01 Overview Karl Toriola | CEO 5
Slide 6: MTN Nigeria at a Glance
MTN Nigeria at a Glance 6 Nigeria’s leading mobile operator and provider of communication services With over 70 million subscribers, we are connecting Key Highlights Nigerians with each other and to a world of people, ideas and opportunities. Leading operator with >50% market share Our belief is t
Slide 7: Leading Mobile Operator
Leading Mobile Operator 7 70.2 million 35.9 million 10.7 million 3.3 million subscribers data subscribers active MoMo users ayoba subscribers 71.7% 82.9% 91.5% 51.1% 50.0% 4G population coverage 3G population coverage 2G population coverage Data penetration Smartphone penetration Exciting data, digi
Slide 8: Our Management Team
Our Management Team 8 A strong management team, predominantly Nigerian with a mix of local & international expertise track record of execution Focus on operational execution, effective stakeholder management and governance Chief Executive Officer Chief Financial Officer/ Chief Operating Officer Chie
Slide 9: Our Board of Directors
Our Board of Directors 9 Our supportive Board of Directors brings to bear rich and diverse management experience Chairman Chief Executive Officer Ralph Mupita Jens Schulte-Bockum Michael Ajukwu Abubakar B Mahmoud Ernest Ndukwe, OFR Karl Toriola 1 Non-Executive Director 3,4 Non-Executive Director3 In
Slide 10: Risk and Compliance Governance Structure
Risk and Compliance Governance Structure Establishes the overall governance over risk management and compliance, ethics, strategy, risk MTN Nigeria Board framework and risk appetite. Ensures adequacy and effectiveness of risk management and compliance. Assists the Board in its Assists the Bo
Slide 11: Internal Audit & Forensics Services Structure
Internal Audit & Forensics Services Structure 1 MTN Nigeria Board Statutory Audit Board Audit Sub - Committee Committee MTNN CEO • Adopts a systematic and disciplined General Manager approach to evaluating and Internal Audit & Forensic Services improving the effectiveness of risk management, control
Slide 12: Creating Shared Value
Creating Shared Value 12 Ambition Eco- • GHG emissions reduction Net Zero emissions Economic responsibility by 2040 value-added • Improve energy efficiency “We are committed to boosting inclusive “We are committed to protecting our planet • Water management economic growth on the continent” Paid to
Slide 13: Improved Stakeholder Management delivering strong Outcomes
Improved Stakeholder Management delivering strong Outcomes 13 Regulatory risks are managed through improved The strong and improved relationship with the stakeholder relationships. Government post the 2015 fine shown by: Listing of MTN Nigeria on the Premium Board of the Nigerian Exchange Limited
Slide 14: Structurally Higher Demand - Data & Fintech
Structurally Higher Demand - Data & Fintech 14 Sustained increased demand for data and fintech services driving investment in network and fintech Data traffic has exploded and not impacted by Fintech transaction volume has proven the need for easing lockdowns and MTN’s ability to deliver a critical
Slide 15: Unlocking Fintech Opportunities
Unlocking Fintech Opportunities 15 Build the largest and most valuable Fintech platform in Nigeria Fintech Verticals Commenced MoMo PSB commercial operations 1. Launched our super-agent business under our subsidiary (YDFS) in 2019 2. Built an Agent network of over 166K Agents (RGA)1 Payment & Curren
Slide 16: Operational review
02 Operational review Hassan Jaber| COO 16
Slide 17: Competitive Landscape and Market Opportunities
Competitive Landscape and Market Opportunities 17 17 MTN is the leading player in the market with 50.7% of subscriber market share Market share by mobile subscribers1 Market opportunities 100% 4.4% 8.4% 6.0% 4.0% 3.7% 90% 14.0% 13.9% o Huge demographic opportunity with a youthful population 15.1% 14
Slide 18: Operational and Commercial Performance
Operational and Commercial Performance 18 Voice and data services driving continued commercial momentum 11%2 Mobile Subscribers, in millions -2% Total Data Subscribers, in millions Average Revenue per User, N 32% Incidental users 3.2% 2.5% Active users 71.5 61.5 1 59.4 58.1 58.5 60.4 70.2 2,088 2,15
Slide 19: Industry-wide SIM Registration
Industry-wide SIM Registration 19 19 Impact on voice revenue reduced by migration to higher quality of service and higher usage in active base Subscriber net adds Active data users net adds NIN registration update1 SIM activations normalising Steady recovery 1.6m 1.7m 1.1m 1.0m -5.0m -2.6m -1.4m 0.7
Slide 20: Driving Data Growth and Market Leadership
Driving Data Growth and Market Leadership 20 20 MTN Nigeria maintains leadership position on 4G with accelerated 4G rollout 4G Data Users Market Share1 Road to Ambition 2025 17.40% 16.7% 16.2% 15.7% 16.1% Active Data Ambition 2025 Subscribers today 80 million active 27.90% 28.7% 26.7% 26.1% 26.3% 35
Slide 21: Only Mobile Network Operator with a 5G Licence
Only Mobile Network Operator with a 5G Licence 21 21 10x 10x 10x 3x 100x 100x Experienced Decrease Connection Spectrum Traffic Network throughput: in latency: density: efficiency: capacity: efficiency: more uniform as low as 1ms enabling more achieving more bits driving hyper- optimising network mul
Slide 22: Own the Home
Own the Home 22 22 Competitive context Road to Ambition 2025 • Smaller players driving the market regionally Ambition 2025 • No differentiation in the Fibre Play apart from speed. Home 5 Million Home • Unlimited Data offering common among the smaller players Broadband today Broadband • Rise in deman
Slide 23: Financial review
03 Financial review Modupe Kadri| CFO 23
Slide 24: Q1 2022 Financial Highlights
Q1 2022 Financial Highlights 24 Strong financial performance demonstrates resilience of the business and solid execution +22.0% +54.0% +5.8% Service revenue Data revenue Voice revenue N469.8bn |$1.1bn N162.7bn |$392.0mn N258.8bn |$632.3mn +46.5% +25.7% +1.5pp Fintech revenue EBITDA EBITDA margin N20
Slide 25: Service Revenue Evolution
Service Revenue Evolution 25 Strong growth across all revenue segments with data revenue leading N bn +22.0% 14.1 6.6 1.4 1.3 1.6 57.0 469.8 385.1 Q1 2021 Data Voice Fintech Wholesale Digital Other Service Revenue1 Q1 2022 +54.0% +5.8% +46.5% +35.6% +35.3% +9.3% 1Other service revenue includes P2P m
Slide 26: Revenue Growth and Efficiency drive Margin Improvement
Revenue Growth and Efficiency drive Margin Improvement 26 Voice & data drive strong service revenue growth | Expenses up due to network costs | Margin expansion (Rm) constant currency N bn Service revenue Expenses EBITDA and capex +22.0%* 53.1% 54.6% EBITDA margin 469.8 +18.3% 213.8 385.1 258.8 Voic
Slide 27: EBITDA Evolution
EBITDA Evolution 27 Solid revenue growth and cost efficiencies enabled continued EBITDA growth and margin improvement N bn 257.1 242.6 212.7 217.3 204.6 53.1% 52.4% 52.4% 54.1% 54.6% Q1 2022 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Sensitivity: MTN Group - Internal
Slide 28: Disciplined approach to capital Expenditure and Funding Strategy
Disciplined approach to capital Expenditure and Funding Strategy 28 4G network expansion driving investment in capital expenditure Capex 1 Capex Funding Strategy N bn Capex is financed using a combination of operating cash flows and external borrowing, 81 ensuring protection of the balance sheet aga
Slide 29: Capital Structure
Capital Structure 29 Disciplined approach to funding activities to reduce market risk and maintain strong balance sheet Funding strategy Net debt (N bn) 284.0 231.8 • Diversify funding sources to optimise debt mix and cost – Tapped the domestic debt capital markets and raised N127 billion in commerc
Slide 30: Looking ahead
04 Looking ahead Karl Toriola | CEO 30
Slide 31: Ambition 2025
Ambition 2025 31 31 Framing our strategic priorities Belief “Everybody deserves the benefits of a modern connected life” statement Strategic intent Ambition 2025: “Leading digital solutions for Africa’s progress” Build the Drive 25 largest industry- Create Accelerate leading portfolio & most valuabl
Slide 32: Investment Case
Investment Case 32 32 A compelling growth story Nigeria’s leading and scale connectivity Exciting demographic opportunity and infrastructure business • Largest telco market in Africa • # 1 subscriber market and revenue share • Fast growing youthful population • Strong competitive advantage across al
Slide 33: Medium-term Guidance
Medium-term Guidance 27 Continued commercial momentum, with an eye on efficiencies KPI Target Revenue evolution At least 20% Q1 2022 Service Revenue 55% 45% 53-55% EBITDA Margin 35% Reducing intensity Capex intensity 2025 65% Minimum 80% of Dividend pay out distributable income Data, fintech and dig
Slide 34: Key Take-aways
Key Take-aways 34 Ambition 2025 provides a compelling and unique growth opportunity for our business Underpinned by a solid connectivity business and value unlock opportunities in fintech and digital Sustained increase in the demand for data, driving accelerated investments in our network 'Efficienc
Slide 35: Thank you
Thank you
MTN Nigeria Communications — Q1 2022 Earnings Presentation on 6ix