Safaricom Plc · NSEKE:SCOM
Safaricom — H1 2012 Earnings Presentation
16 slides from Safaricom's earnings presentation, Nov 9, 2011
Slide 1: Presentation
Presentation 9th November, 2011 (Safaricé m
Slide 2: Operating Market Conditions
OPERATING MARKET CONDITIONS Growing demand for Corporate D: + Demand for enterprise business solutions + Strong growth in the SME/SOHO and Government sector + Big opportunity for bespoke solutions Industry Dynamics + Rising operational costs + Declining voice ARPU + Network cable cuts Growing Mobile
Slide 3: Market Dynamics
MARKET DYNAMICS M-PESA still transforming the lives of ordinary Kenyans Increased competition in voice services in a 4 player market CCK statistics: mobile phone penetration stands at 64.2% as at June 2011 CCK Statistics: 98% of Internet access being through the mobile platform
Slide 4: The Right Strategy
1. Revenue Growth + Provision of integrated communication solutions to our various customer segments 3. Sustained Investment + Invest in our network to ensure that we offer cutting- edge technology and reliable connectivity THE RIGHT STRATEGY 2. Reduce reliance on Voice + Expand our other revenue ch
Slide 5: Strategy Execution
STRATEGY EXECUTION 8.0 % growth in Customers 18.1 million customers 5.5% decline in Voice Revenues Kshs. 31.5 Billion 49.3% growth in M-PESA Revenues Kshs. 7.9 Billion 5.3% growth in Revenues Kshs. 49.6 Billion 30.4 % growth in Data Revenues Kshs. 14.6 Billion 36.3% growth in Broadband Revenues Kshs
Slide 6: M-PESA: Superior Results
M-PESA: Superior Results eo Product evolution Product penetration + 82.4% of our customer base + 9.8% growth in customer base to 14.9 million + Over 32,000 agents + Expanding portfolio with a more financial Revenue generation outlook + M-PESA revenue up by 49.3% to Kshs.7.9 bn + M-PESA is positioned
Slide 7: DATA: Right on Target
DATA: Right on Target (Safaricom
Slide 8: Enterprise Business
Enterprise Business + Fixed data connections up by 92% to 6,177 (3,223 in Sept. 2010) + Wide product range + Investing in technology and partnerships in the public and private sectors + Focus on Health and Education SafaricomCLOUD is the largest indigenous cloud offering local & secure managed servi
Slide 9: Forging ahead on Data and M-PESA
Continuously invest in our network to ensure that we offer the most advanced technology and reliable connectivity Further expand our distribution network and make available affordable data enabled devices to achieve our Data-for-All objective Forging ahead on Data and M-PESA Continue on M-PESA's tra
Slide 10: Financial Overview: Revenues
FINANCIAL OVERVIEW: REVENUES Revenue 49.63 . . Kshs. Billion 47.11 % Composition of Ongoing Revenues 12011 12012 — 7.9% 6% 40.66 17.3% 68.3% 7% voce BMCPESA Mobile Data SSMS Voice MM-PESA Mobile Data SMS 12010 12011 H12012 Mobile Data/SMS/M-PESA Contribution to Ongoing Revenue 35% 31.7% 30% 25.2% 25
Slide 11: Financial Overview: Costs
FINANCIAL OVERVIEW: COSTS OPEX has increased by 23% SG&A has increased by 26% + Growth in interconnect costs; + Driven by a net forex loss of Ksh. 1.3 bn * CCK License fees + Increased Payroll and personnel costs by + Increase in licence fees as a result of our 6% continued network expansion + Incre
Slide 12: Cost Management Initiatives
Cost Management Initiatives * Reducing data transmission costs, + Promotion of electronic top-ups, * Optimization of our corporate structure * Reducing site build costs. Savings of over Kshs. 1.8 bn. in the period
Slide 13: EBITDA and EBITDA excluding Forex
EBITDA EBITDA excluding Forex Kshs. Billion 18.83 Kshs. Billion 18.78 16.55 16.75 16.18 14.76 H1 2010 H1 2011 H1 2012 H1 2010 H1 2011 H1 2012 EBITDA declined by 21.6% inclusive of Forex * Impact of the rapidly depreciating shilling has led to a net forex loss ¢ Revaluation of trading balances of Ksh
Slide 14: CAPEX
CAPEX Kshs. 15.5 billion invested in the period Focus on * 3G coverage, improving 2G capacity and quality ¢ Switching capacity & Fibre connectivity Higher CAPEX intensity in the 1st half No. of Sites Total 9501 2604 3G 1972 @ Wimax 384 H110 H210 H111 H2 11 H112
Slide 15: Net Income & EPS
NET INCOME & EPS Net income has declined to Kshs. 4.01 bn Net Income Kshs. Billion 7.63 6.63 U : : : : 7 H1 2010 H1 2011 H1 2012 EPS has declined to Kshs. 0.10 Basic EPS Kshs. 0.19 0.17 UJ : H1 2010 H1 2011 H1 2012 <Sa fa > ricom
Slide 16: Future Outlook
FUTURE OUTLOOK Financial and Digital Inclusion Managing our costs + Nationwide reach of our network + Cutting edge data solutions + Become the partner of choice + Expand M-PESA into micro insurance, micro savings, micro credit and easy payment facilities. + Process re-engineering + Streamlining of t