Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — FY2018 Earnings Presentation
32 slides from Blu Label Unlimited's earnings presentation, May 31, 2018
Slide 1: Audited Results for the full year ended 31 May 2018
AUDITED RESULTS For the full year ended 31 May 2018
Slide 2: Highlights for the year ended 31 May 2018
Highlights for the year ended 31 May 2018 - Strong growth relative to telco industry Revenue Gross PINless Transactional Revenue increased 1% to R26.8 billion 30 Values 30 25 25 Including PINless revenue grew 9% 20 20 R'billion R'billions 15 15 GP increased 7% to R2.28 billion 10 10 5 5 EBIT
Slide 3: Strategic imperatives – Built resilient business
Strategic imperatives – Built resilient business, deliberate focus on organic & acquisitive growth FY18 - concluding acquisitions and designing integration Extension of distribution reach – organic & acquisitively Expanded product portfolio Investing in human capital – distribution specialis
Slide 4: Technology – Future proofing the organisation
Technology – Future proofing the organisation Transaction Volumes Continued investing in technology platforms & skills Adopting Global best practices – Strategic benefit, reducing the cost of transactions, increasing speed Smarter technology creates smarter interaction with customers Constan
Slide 5: SA & Africa Distribution – built strong base
SA & Africa Distribution – built strong base, optimizing for further organic growth Revenue grew 1% to R26.2 billion GP increased 8% to R2.0 billion EBITDA remained at R1.3 billion EBITDA margins decreased from 5.18% to 5.12% Core net profit up 56% to R1.4 billion Data management optimiz
Slide 6: Product Portfolio - Key to competitive positioning
Product Portfolio - Key to competitive positioning and preventing disintermediation 55922954 SA & Africa Distribution Revenue Rm’s Revenue growth across all product categories 60000000 Online continues to grow robustly 47862109 Further strides made in electricity 50000000 38520925 Bill Payme
Slide 7: Product Penetration – Focused product growth
Product Penetration – Focused product growth All products achieved increased penetration in channels Product Penetration 93.6% 94.3% 94.6% 94.9% 91.9% 92.7% 89.9% 89.6% 90.2% Management information & reporting strengthened 88.7% 88.3% 89.3% Allows intelligent growth of portfolio through: 74.9%
Slide 8: Channel Performance – Wider, deeper reach
Channel Performance – Wider, deeper reach, superb speed to market & excellent customer service Corporate and formal retail drive majority of gains Formal retail delivered 21% growth in face value revenue & 13% in 21% 4% 40062 9% 49% sales revenue Corporate has delivered 50% growth in face valu
Slide 9: Hub & Spoke Strategy
Hub & Spoke Strategy - Formal retail provides strong base, growth from independent market Financial inclusion depends on access to virtual products and services 31 million people earn less than R6000 per 81% month Although 70% of people have bank accounts they are only used as a means to access cash
Slide 10: Blue Label Mobile – new products, new geographies
Blue Label Mobile – new products, new geographies Operates in 4 verticals – integrated comms, value added services, financial services, marketing Highly competitive, mature market Mobile 2016 2017 2018 R’000 R’000 R’000 Regulatory and MNO restrictions impacting growth Revenue 291 856 347 858 3
Slide 11: Airvantage – new products, new geographies
Airvantage – new products, new geographies Acquired Airvantage: • Extensive experience in nano score card analysis and consumer behaviours • Guarantees the highest possible service revenue, ensures low levels of bad debt and churn Jan – May 2018 Airvantage Airvantage SA Brazil • Over 1 million adv
Slide 12: Blue Label Data Solutions – targeted analytics
Blue Label Data Solutions – targeted analytics POPI & CPA compliant Robust growth continues in competitive market Opt-In register of 21.1 million entries Solutions 2016 2017 2018 • Rebuilt monthly R’000 R’000 R’000 Revenue 190 326 177 621 195 089 Focus on lead generation EBITDA 35 889 34 020
Slide 13: 3G – product range extension; African focus
3G – product range extension: full suite of tier 1 – 4 mobiles; African Focus Despite the tough economic conditions in SA – 3G growing in a depressed retail environment Excellent growth (50%) in African operations – Namibia, Botswana, Mauritius 3G Mobile Aug 2017– May 2018 R’000 Biggest distri
Slide 14: Blue Label International – Mexico showing good potential
Blue Label International – Mexico showing good potential Active Point of Sale devices 000, UNTs Mexico: 66.0 65.0 Mexican economy remains sluggish 64.0 63.0 Inflation rate expected to decrease from 6.77% to 4.0% 62.0 61.0 60.0 Revenue increased 30% to R4 billion 59.0 58.0 GP increased 39% to
Slide 15: Cell C
CELL C Brett Levy Cell C Interim Results
Slide 16: Highlights – H1 2018 Key performance indicators
Highlights – H1 2018 Key performance indicators +5 % +16 % 13 % YOY YOY of revenue Revenue EBITDA Capital Expenditure R7.8 Billion R2.4 Billion R1 Billion +11 % +31 % -33 % YOY EBITDA Margin YOY Service Revenue YOY 3% Net Loss After Tax R6.9 Billion R0.6 Billion
Slide 17: Cell C – Strategy & Vision
Cell C – Strategy & Vision 1. DATA 2. VOICE • Data revenue increased by 20% whilst data traffic has increased • Voice revenue decreased by 6% YOY in line with a decrease in by 62% YOY voice traffic by 10% YOY • Data revenue now makes up 52% of mobile revenue compared to • Effective price of outgoing
Slide 18: Positive results
Positive results Summary of reported financial information R’m H1 2018 H1 2017 % Change Service revenue 6 861 6 196 11 Non-service revenue 914 1 189 -23 Total revenue 7 775 7 385 5 Gross margin 4 311 3 854 12 Gross margin % 55% 52% 3 EBITDA 2 378 2 048 16 EBITDA margin % 31% 28% 3 Net profit/(loss)
Slide 19: Unpacking our subscribers
Unpacking our subscribers H1 2018 Subscriber Base Other key performance indicators Composition 0.7 0.4 Million H1 2018 H1 2017 % Change 0.4 1.7 Total active subscribers 16.3 15.7 4 13.0 MVNO subscriber base 1.7 1.3 31 Total active data subscribers 12.1 12.6 4 Data revenue (R’m) 2 961 2 473 20 Capita
Slide 20: Revenue by subscriber type
Revenue by subscriber type Service revenue market share Segment (R mln) H1 2018 H1 2017 % change 12.60% 4.80% Prepaid 3 657 3 363 9 50.60% 32% Postpaid 906 882 3 Hybrid 721 774 7 Vodacom MTN Telkom Cell C Broadband 384 302 27 Mobile revenue 5 668 5 321 7 Service revenue growth 12.00% Other 183 162 1
Slide 21: Revenue segmented
Revenue segmented Segment (R mln) H1 2018 H1 2017 % change Voice 2 243 2 389 6 Data 2 961 2 473 20 Other 465 458 2 Mobile revenue 5 668 5 321 7 Wholesale, FTTH 669 485 38 and other Incoming 524 391 34 Service revenue 6 861 6 196 11 Equipment 914 1 189 23 revenue Total revenue 7 775 7 385 5
Slide 22: Available facilities
Available facilities Facility Estimated value Status New ZAR facility R1.4 billion Approved post June 2018 Vendor financing R1.4 billion In progress Shareholder support R1 billion In progress
Slide 23: Analysis of debt and finance cost
Analysis of debt and finance cost Debt Interest F-X Indicative interest rate R mln 2018 2017 2018 2017 2018 2017 2018 2017 Long term debt 6 418 17 914 427 591 145 32 17.8% 7.0% Short term debt 1 528 417 111 28 14.5% 13.4% Leases 5 465 5 081 447 451 16.4% 17.8% Other finance 80 81 218 - 30 n.r. n.r.
Slide 24: The Way Forward – integration into the Blue Label Machine
The Way Forward – integration into the Blue Label Machine Built exceptionally strong base Original Blue Label business geared for strong organic growth Acquisitions adding to Blue Label ecosystem Integration will generate efficiencies, new growth opportunities and shareholder returns 24
Slide 25: Financial Highlights
Financial Highlights Dean Suntup
Slide 26: Highlights
Highlights Increase in revenue to Increase in gross profit of R26.8 billion 7% to R2.28 billion Increase in core headline Increase in EBITDA of earnings of 30% to R1.03 4% to R1.34 billion billion Increase in core headline Increase in cash earnings per share of 4% generated from operating to 120.61
Slide 27: Income Statement
Income Statement May 2018 May 2017 Growth Growth R’000 R’000 R’000 % Revenue 26,800,265 26,469,581 330,684 1% Change in inventories of finished goods (24,518,173) (24,340,581) (177,592) (1%) Gross profit 2,282,092 2,129,000 153,092 7% Other income 81,704 16,814 64,890 386% Overheads (1,023,643) (858
Slide 28: Adjusted core headline earnings
Adjusted core headline earnings May 2018 May 2017 Growth Growth R'000 R'000 R'000 % Core headline earnings 1,032,016 795,684 236,332 30% Core HEPS (cents) 120.61 116.24 4.36 4% Core headline earnings adjusted for: Share of losses, fair value loss and loan impairments from Oxigen 256,941 (35,484) Sha
Slide 29: Cell C results
Cell C results R'million Cell C's losses for 5 months (1 Aug 2017 - 31 Dec 2017) (260) Cell C's losses for 5 months (1 Jan 2018 - 31 May 2018) (522) Cell C's losses for the 6 month period Jan 2018 -June 2018 (645) Less June's reported loss 124 Cell C's loss before tax for 10 months (782) Recognition
Slide 30: 3G Mobile results
3G Mobile results Aug - Nov 2017 Dec - May 2018 10 Months Equity Accounted Consolidated to May 2018 R’000 R’000 R’000 Revenue 1,165,196 1,387,029 2,552,225 Change in inventories of finished goods (1,025,718) (1,160,845) (2,186,563) Gross profit 139,478 226,184 365,662 Other income 959 1,657 2,616 Ov
Slide 31: Cash flow
Cash flow May 2018 May 2017 10 R’000 R’000 R' billion Cash generated by operations 3,588,780 1,753,991 Interest received 154,952 52,300 Interest paid (187,489) (105,518) Taxation paid (368,099) (338,814) 5 Cash flows from operating activities 3,188,144 1,361,959 Cash flows from investing activities
Slide 32: Thank You
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Blu Label Unlimited Group — FY2018 Earnings Presentation on 6ix