Mtn Group Limited · JSE:MTN
Mtn — FY2023 Earnings Presentation
48 slides from Mtn's earnings presentation, March 2024
Slide 1: MTN Group results presentation for the year ended 31 December 2023
MTN Group results presentation for the year ended 31 December 2023 Leading digital solutions for Africa’s progress
Slide 2: Disclaimer
Disclaimer 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 contained
Slide 3: Agenda
Agenda 01 FY 23 Highlights 02 Operational & strategic review 03 Financial review 04 Outlook and priorities 3
Slide 4: FY 23 Highlights
01 FY 23 Highlights Ralph Mupita Group President and CEO 4
Slide 5: Overview | FY 23
Highlights Operational & strategic review Financial review Outlook and priorities Overview | FY 23 Resilient underlying performance Navigating a challenging Solid commercial Financial resilience Good progress on external environment execution strategic priorities • Blended inflation of 16.7% • User
Slide 6: Highlights | financial
Highlights Operational & strategic review Financial review Outlook and priorities Highlights | financial Execution excellence supported resilient financial performance | Capex (ex-leases) of R41.1bn Growth Earnings Balance sheet Returns Service +13.5%* +9.8%* Group EBITDA 0.4x OpFCF^ R45.9bn revenue
Slide 7: Operational & strategic review
02 Operational & strategic review Ralph Mupita Group President and CEO 7
Slide 8: South Africa
Highlights Operational & strategic review Financial review Outlook and priorities South Africa Performance underpinned by significant advancement of network resilience Market context Key activities Solid results • Loadshedding • R10.1bn capex | Network resilience • Improved network availability and
Slide 9: Nigeria
Highlights Operational & strategic review Financial review Outlook and priorities Nigeria Strong underlying operating momentum | FX and inflation impacted results | FX revision and restatements Market context Key activities Solid results • Naira devaluation | Inflation of 24.5% • CVM and price optim
Slide 10: Markets
Highlights Operational & strategic review Financial review Outlook and priorities Markets Robust overall growth, with increased contribution to Group – led by MTN Ghana SEA WECA MENA +17.4%* +24.3%* +13.5%* +24.7%* -8.7%* -9.6%* service revenue data revenue service revenue data revenue service reven
Slide 11: Fintech ecosystem expansion
Highlights Operational & strategic review Financial review Outlook and priorities Fintech ecosystem expansion TX volume up +32.2% YoY | TX value up 47.4%* YoY to US$272.1bn MoMo MAU (m) Agents (‘000) Merchants (‘000) TX volume (bn) 100 17.6 3 000 2 000 73 69 13.4 2 080 57 1 269 1 324 10 1 461 974 78
Slide 12: Accelerate portfolio transformation
Highlights Operational & strategic review Financial review Outlook and priorities Accelerate portfolio transformation ARP progress hampered by market volatility | Portfolio transformation initiatives well progressed ARP | R19.6bn of target achieved to date Portfolio transformation Realisations & oth
Slide 13: Creating shared value
Highlights Operational & strategic review Financial review Outlook and priorities Creating shared value Significant economic value added across our markets of ~R159bn Doing for planet • Reduce GHG emissions • Improve energy efficiency ~13.1%^ Net Zero by 2040 Doing for growth “We are committed to pr
Slide 14: Progress against our medium-term guidance
Highlights Operational & strategic review Financial review Outlook and priorities Progress against our medium-term guidance Results delivered broadly in line with our medium-term targets KPI Target Performance Group: ‘at least mid-teens’ 13.5%* Service revenue growth South Africa: ‘mid-single-digit’
Slide 15: Financial review
03 Financial review Tsholofelo Molefe Group CFO 15
Slide 16: Significant items impacting reported results
Highlights Operational & strategic review Financial review Outlook and priorities Significant items impacting reported results Macro impacts Other impacts 1. FX volatility 1. MTN Nigeria restatement on 2022 (including translation) • Naira devaluation | FX losses in Nigeria of R21.0bn • 2022 equity p
Slide 17: Group income statement
Highlights Operational & strategic review Financial review Outlook and priorities Group income statement Resilient underlying financial performance | MTN Nigeria FX revision and restatement impacted earnings Restated % change % change (Rm) 2023 2022 reported constant currency Revenue 221 056 207 003
Slide 18: Group service revenue
Highlights Operational & strategic review Financial review Outlook and priorities Group service revenue Healthy topline result, impacted by conflict in Sudan | Service revenue +14.1%*, ex-MTN Sudan (Rm) constant currency +13.5% 4 698 210 139 1 480 1 104 205 441 3 680 15 310 316 180 965 2 586 2022 Vo
Slide 19: South Africa
Highlights Operational & strategic review Financial review Outlook and priorities South Africa Encouraging underlying momentum in topline | Higher power and resilience costs | R1.1bn in expense efficiencies (Rm) Service revenue Expenses EBITDA and Capex 38.5% 35.9% EBITDA margin^ +2.5% Capex intensi
Slide 20: Nigeria
Highlights Operational & strategic review Financial review Outlook and priorities Nigeria Strong service revenue | Cost increases driven by significant devaluation of the naira and inflation (Rm) constant currency Service revenue Expenses EBITDA and Capex 53.3% 49.7% EBITDA margin +22.1% Capex inten
Slide 21: Fintech revenue breakdown
Highlights Operational & strategic review Financial review Outlook and priorities Fintech revenue breakdown Strong growth in advanced services revenue, +54.8% (Rm) constant currency Revenue Fintech revenue contribution by services offered +21.8% 2023 20 584 Advanced services 20.4% 16 904 Airtime adv
Slide 22: Group expenses
Highlights Operational & strategic review Financial review Outlook and priorities Group expenses Cost pressures from higher network costs, particularly FX and CPI in Nigeria BTS lease rentals (Rm) constant currency Expenses Expenses breakdown % ch +15.3% 109 916 126 781 45.5% 10.9% 43.8% Cost of sal
Slide 23: Measures to curb macro impacts
Highlights Operational & strategic review Financial review Outlook and priorities Measures to curb macro impacts Ongoing expense efficiencies: R2.6bn (vs R1.5bn target for FY 23) | Group EBITDA margin of 41.5%* Expense efficiency programme Total costs to revenue contribution 57.4% 58.6% 55.6% Saving
Slide 24: Finance costs
Highlights Operational & strategic review Financial review Outlook and priorities Finance costs Material impact from forex losses, mainly in Nigeria Net finance costs Forex losses / (gains) Rm 2023 2022 Rm 2023 2022 Net interest paid 8 239 5 846 Head offices 999 2 743 Finance costs – leases 7 662 6
Slide 25: Adjusted HEPS
Highlights Operational & strategic review Financial review Outlook and priorities Adjusted HEPS Resilient underlying result in challenging conditions, with 9.5% decrease in Adjusted HEPS Reported Restated (R’cents) 2023 2022 % change Attributable EPS 277 1 054 (78.5) Impairment of goodwill, PPE and
Slide 26: Capex (ex-leases)
Highlights Operational & strategic review Financial review Outlook and priorities Capex (ex-leases) Includes R2.7bn of capitalised costs from ECW contract | Capex of R38.4bn excl ECW contract (Rm) Capex (ex-leases) capex segmentation across operations and regions CAPEX CAPEX Intensity 41 142 38 240
Slide 27: Statement of cash flows
Highlights Operational & strategic review Financial review Outlook and priorities Statement of cash flows Resilient OpFCF (before spectrum acquisitions), -6.4% YoY | Impacted by pressure on EBITDA and higher capex (Rm) 5 177 Nigeria R4.8bn 88 780 -830 SA R1.9bn -7 824 Ghana R687m Sudan R77m -6.4% -6
Slide 28: Leverage and liquidity profile
Highlights Operational & strategic review Financial review Outlook and priorities Leverage and liquidity profile Healthy Group ND/EBITDA of 0.4x | Good debt mix, part early-settlement of $353m of Eurobonds (Rbn) (Rm) Holdco Net Debt Maturity Profile R55.3bn ZAR USD 10 100 9 135 R43.3bn 8 777 USD 50%
Slide 29: Improving returns
Highlights Operational & strategic review Financial review Outlook and priorities Improving returns ROE supported by resilient operational performance and decrease in equity (Rm) 5-year ROE profile (restated) +0.2pp 24.2% 2.3% 24.4% 23.4% 0.8% -0.4% 1.4% 3.1% 0.3% 24.4% 24.2% -3.3% 19.6% -3.7% 17.4%
Slide 30: Outlook and priorities
04 Outlook and priorities Ralph Mupita Group President and CEO 30
Slide 31: Macro context into 2024
Highlights Operational & strategic review Financial review Outlook and priorities Macro context into 2024 Headwinds remain, particularly naira volatility Inflation Exchange rates / Regulatory Geopolitics FX paucity • Elevated in key markets • Naira volatility • Ongoing engagements on • > 60 election
Slide 32: Structurally higher demand for data & fintech
Highlights Operational & strategic review Financial review Outlook and priorities Structurally higher demand for data & fintech MTN’s investment case and medium-term growth outlook is underpinned by structural demand Data traffic Fintech transaction volume Average data traffic per quarter (Petabytes
Slide 33: A compelling African growth story
Highlights Operational & strategic review Financial review Outlook and priorities A compelling African growth story Exciting demographic Africa’s leading and scale opportunity connectivity & infrastructure t a Fin business • Fast-growing, youthful population te Da ch • #1 or #2 subscriber share in a
Slide 34: Capital allocation framework
Highlights Operational & strategic review Financial review Outlook and priorities Capital allocation framework Resilient performance and strategy execution underpinned by disciplined capital allocation 1 Organic growth Well-invested networks and platforms | Improving capex intensity 2 Stabilise leve
Slide 35: Our priorities
Highlights Operational & strategic review Financial review Outlook and priorities Our priorities Short-term outlook remains challenging | We remain focused on executing our strategy Sustain operational Accelerate Drive expense and Strengthen balance momentum platforms strategy capital efficiencies s
Slide 36: Medium-term guidance framework
Highlights Operational & strategic review Financial review Outlook and priorities Medium-term guidance framework Committed to delivering on our medium-term guidance KPI Target Group: ‘at least mid-teens’ South Africa: ‘mid-single-digit’ Service revenue growth Nigeria: ‘at least 20%’ Fintech: ‘high-2
Slide 37: Q&A
Q&A SSSSSSSS—
Slide 38: Thank you
Thank you 38
Slide 39: Appendices
Appendices 39
Slide 40: Definitions and notes
Definitions and notes • All financial numbers are YoY unless otherwise stated • All subscriber numbers are compared to end-December 2022 unless otherwise stated • Service revenue excludes device and SIM card revenue • Data revenue is mobile and fixed access data and excludes roaming and wholesale •
Slide 41: Macro indicators | Inflation
Macro indicators | Inflation Closing 2023 2022 Worsening /(Improving) MTN Group 14.1% 18.3% (4.2pp) South Africa 5.1% 7.2% (2.1pp) Nigeria 28.9% 21.5% 7.4pp Ghana 23.2% 50.0% (26.8pp) Cameroon 7.2% 4.4% 2.8pp Cote d’Ivoire 4.5% 5.2% (0.7pp) Uganda 2.6% 10.2% (7.6pp) Sudan 71.6% 73.9%
Slide 42: Macro indicators | average FX rates
Macro indicators | average FX rates ZAR: LC ZAR: Local currency 2023 2022 strengthening/(weakening) Nigerian naira 32.58 26.05 25.1% Iranian rial 19 379.16 15 736.47 23.1% Ghanaian cedi 0.64 0.54 18.5% Cameroonian franc 32.84 37.98 (13.5%) Ugandan shilling 202.47 225.50 (10.2%) South Sudan
Slide 43: Macro indicators | closing FX rates
Macro indicators | closing FX rates ZAR: LC ZAR: Local currency 2023 2022 strengthening/(weakening) Nigerian naira 49.65 27.05 83.5% Iranian rial 21 372.32 16 914.43 26.4% Ghanaian cedi 0.66 0.62 6.5% Cameroonian franc 32.45 35.93 (9.7%) Ugandan shilling 206.91 218.43 (5.3%) South Sudanese
Slide 44: Continued to invest in scaling fintech platform
Continued to invest in scaling fintech platform Total fintech transactions 17.7 billion tx volume +32.2% YoY US$272.1bn tx value +22.9%^ YoY ^47.4% constant currency Wallet BankTech 72.5m MoMo users +5.0% YoY US$1.9bn loan value +34.1%^ YoY 1.3m MoMo Active agents +3.2% YoY 3.2m unique users +69.0%
Slide 45: MoMo PSB in Nigeria
MoMo PSB in Nigeria Encouraging underlying momentum in ecosystem supported by acceleration programme MoMo users (m) Agents (‘000) Active wallets OTC 327 293 14.5 264 228 8.9 7.4 7.0 9.2 4.2 5.3 3.9 3.2 3.6 5.3 3.1 Q1 23 Q2 23 Q3 23 Q4 23 Q1 23 Q2 23 Q3 23 Q4 23 Merchants (‘000) TX volume (‘000) 324.
Slide 46: Share of results of associates and joint ventures after tax
Share of results of associates and joint ventures after tax % change constant (Rm) 2023 2022 % change currency Telco joint ventures 3 495 3 555 (1.7) 16.7 Iran 3 124 3 101 0.7 27.9 Iran (excl. hyperinflation) 2 000 1 927 3.8 27.9 Iran (hyperinflation) 1 174 1 174 (4.3) 0.0 eSwatini 71 91 (22.0) (22.
Slide 47: Capex (ex-leases)
Capex (ex-leases) (Rm) 18.5% 18.6% 41 142 38 240 13 673 12 652 10 101 10 314 8 816 8 063 4 421 3 469 4 424 3 260 1 425 896 1 692 1 257 SA Nigeria SEA WECA MENA Iran^ Other Group 2022 2023 Capex intensity 47 ^ Iran capex at 49% and is not part of the consolidated Group Capex
Slide 48: Net debt composition
Net debt composition Nigeria borrowings (%) Head office borrowings (%) 89%^ 77% (2022: 91%) (2022: 56%) Naira ZAR 11% Non-ZAR Non-Naira (2022: 9%) 23% (2022: 44%) Nigeria cash (%) Head office cash (%) 91% Non-ZAR (2022: 86%) ZAR Naira 9% Non-Naira 33% (2022: 14%) (2022: 32%) 67% (2022: 68%) 48 ^ Exc