Mtn Group Limited · JSE:MTN
Mtn — H1 2024 Earnings Presentation
48 slides from Mtn's earnings presentation, August 2024
Slide 1: Results for the six months ended 30 June 2024
for the six months ended 30 June 2024 Years
Slide 2: Disclaimer
Gm) | 32. 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
Slide 3: Highlights
Ol Highlights Ralph Mupita Group President and CEO
Slide 4: H1 key messages
g Highlights ) ( Operational & strategic review ) ( Financial review ) ( Outlook & priorities ) H1 24 key messages [1 | Strong commercial momentum | Solid growth within the portfolio al Continued expansion of fintech platform | Strong advanced services growth [3 | Progressed key strategic initiative
Slide 5: Highlights | commercial momentum
T Highlights ») Ceverationara strategic review) ( Outlook & priorities ) Highlights | commercial momentum Solid commercial performance underpinned by execution excellence Gm) | 32. Data traffic Active data subscribers 9054 PB 150m 138m 6 673 PB 5628 PB ia 128m | H1 22 H1 23 H1 24 H1 22 H123 H1 24 Mo
Slide 6: Highlights | financial performance
<> <> S €& Highlights ) ( Operational & strategic review ) ( Financial review Outlook & priorities ) Highlights | financial performance Gm) | 32. -0.4%* Service oe Group 0.8x B R9.9bn revenue +12.1% EBITDA R29.0bn leverage OpFCF Data C EBITDA ~4.4pp" Holdco 1.6x Adjusted ° .' revenue +21.0% margin 3
Slide 7: Operational
O2 Operational & strategic review Ralph Mupita Group President and CEO
Slide 8: South Africa
( Highlights ) (GPerttionats strategic review ) ( Financial review ) ( Outlook & priorities ) South Africa Encouraging momentum supported by improved network availability Gm) | 32. NVA; : % Market context & Key activities lah,| Solid results = i i * Reduced loadshedding + R4.6bn capex (ex-leases) |
Slide 9: Nigeria
( Highlights ) (GPertticnars strategic review ) ( Financial review ) ( Outlook & priorities ) Nigeria Gm) | 32. Strong underlying operating performance, financial result impacted by inflation and naira devaluation % Market context & Key activities lah,| Solid results = * Naira devaluation, Jun 24: N
Slide 10: Successful renegotiation of tower lease terms in Nigeria
( Highlights ) (Gerationai & strategic review ) ( Financial review ) ( Outlook & priorities ) Gm) | 32. Successful renegotiation of tower lease terms in Nigeria Positions MTN Nigeria to better manage macro impacts, recover profitability & resolve negative equity position over the medium-term Salient
Slide 11: Illustrative impacts for MTN Nigeria of renegotiated lease terms
<S SOOLS < ZS A 7 a SS ( Highlights ) (GPertticnars strategic review ) ( Financial review ) ( Outlook & priorities ) Illustrative impacts for MTN Nigeria of renegotiated lease Ferms Gm) | 32. Improved commercial terms with reduced FX exposure and CPI discounts, with caps, support improved Financial
Slide 12: Markets
( Highlights Markets Robust overall performance, with pleasing data and fintech momentum ) (GPertticnars strategic review ) ( Financial review ) ( Outlook & priorities ) ~\ - SEA WECA ) a “d MENA 49.5%" +22.9%" +25.7%" service data fintech revenue revenue revenue * Subscribers +8.6% to 41.0m | Doubl
Slide 13: Continued progress in scaling fintech platform
( Highlights ) (GPertticnars strategic review ) ( Financial review ) ( Outlook & priorities ) Continued progress in scaling fintech platform Gm) | 32. Acceleration in commercial monetisation | App usage increased to 3.4m (H1 23: 2.3m) Wallet ) : BankTech 62.6m MoMo users +10.6% YoY US$731.5m loan va
Slide 14: Solid progress against our medium-term guidance
( Highlights ) (GPerttionats strategic review ) ( Financial review ) ( Outlook & priorities ) Solid progress against our medium-term guidance Results delivered broadly in line with our medium-term targets rx KPI Service revenue growth Holdco leverage Asset realisation Adjusted ROE : © Target (Gm) Gr
Slide 15: Financial review
O03 Financial review Tsholofelo Molefe Group CFO Gm) | 32. 15
Slide 16: Significant items impacting reported results
( Highlights ) ( Operational & strategic review ) € Financial review ) ( Outlook & priorities ) Significant items impacting reported results Gm) | 32. Macro impacts Other impacts 1. FX volatility 1. MTN Nigeria restatement of 2023 | i + Negative impacts of naira devaluation on * PAT reduced by R6.7b
Slide 17: Group income statement
Income tax expense ( Highlights ) ( Operational & strategic review ) € Financial review ) ( Looking ahead ) " Gm) | 32. Group income statement Financial result impacted by macro factors Restated % change % change (Rm) H123 reported constant currency Revenue 90 842 113 203 (19.8) 11.6 Service revenue
Slide 18: Illustrative service revenue normalisation
S S A ZS “ Ky) KA <> ZS SF gS < LK “as ZS gS ox< < BS KS S ; eS < A oS <> << ( Highlights dC Looking ahead ) Impacts on service revenue from MTN Sudan (conflict), Franslation of weaker local currencies (mainly naira) vs ZAR ) ( Operational & strategic review ) é& Financial review Illustrative servic
Slide 19: Group service revenue
( Highlights ) ( Operational & strategic review ) | Financial review ) ( Outlook & priorities ) Group service revenue Resilient topline growth | Service revenue +13.6%*, ex-MTN Sudan (Rm) constant currency < NF — S 85323 i 76878 B -122 i | 2023 Voice Data Digital Fintech Wholesale SMS, ICT and other
Slide 20: South Africa
SS ( Highlights ) ( Operational & strategic review ) é Financial review ) ( Outlook & priorities ) South Africa { Encouraging momentum in topline | Pressure in prepaid Gm) | 32. t (Rm) ~ Service revenue Expenses EBITDA and Capex EBITDA margin* 20431 +4.4% Capex intensity (ex-leases) i 5308 Voice! -6
Slide 21: Nigeria
( Highlights ) ( Operational & strategic review ) é Financial review ) ( Outlook & priorities ) Nigeria Gm) | 32. Strong service revenue performance | Cost increases driven by naira devaluation, inflation and new VAT on leases (Rm) constant currency Service revenue Expenses EBITDA and Capex 20523 EB
Slide 22: Fintech revenue breakdown
Sx xx KS xx SS gS xxx 2X SKS SS xXx SS < A ZaS <> << ( Highlights ) ( Operational & strategic review ) (Gp Fitanciatreview ) ( Outlook & priorities ) Fintech revenue breakdown Gm) | 32. Improved commercial monetisation | Continued strong growth in advanced services revenue, +58.2% iq (Rm) constant c
Slide 23: Group expenses
<< ( Highlights ) ( Operational & strategic review ) é Financial review ) ( Outlook & priorities ) Gm) | 32. Group expenses Cost pressures from higher network costs, particularly FX and CPI in Nigeria leases | Excl Nigeria, expenses up 10.0% (Rm) constant currency Expenses Expenses breakdown F 7 4 '
Slide 24: We continue to drive measures to curb macro impacts
( Highlights ) ( Operational & strategic review) é Financial review ) ( Looking ahead ) We continue fo drive measures fo curb macro impacts Gm) | 32. Savings of R2.4bn | Group EBITDA margin of 36.5%* (H1 23: 40.9%*) : Expense efficiency programme Total costs to revenue contribution (constant currenc
Slide 25: Finance costs
( Highlights ) ( Operational & strategic review ) é€ Financial review ) ( Outlook & priorities ) Finance costs Gm) | 32. Material impact from forex losses, mainly in Nigeria | Underlying Finance costs held flat Net Finance costs | Forex losses / (gains) Restated Restated Rm H1 23 Rm H1 23 Net intere
Slide 26: Adjusted HEPS
( Highlights ) ( Operational & strategic review) € Financial review ) ( Outlook & priorities ) Adjusted HEPS Result reflects impacts challenging operating environment Gm) | 32. Restated (R'cents) H123 % change Attributable EPS (409) 229 (278.6) Impairment of goodwill, PPE and associates 203 13 Impai
Slide 27: Illustrative AHEPS normalisation
S S A ZS “ Ky) KA <> ZS SF <> < LK “as ZS <> ox< < BS KS < A oS <> << ( Highlights ) ( Quanalitenall @ civaiate ma ) & Financial review dC Outlook & priorities Illustrative AHEPS normalisation AHEPS impacted by MTN Sudan, FX on MTN Nigeria tower leases and translation to reporting currency (R’cents)
Slide 28: Capex (ex-leases)
( Highlights ) ( Operational & strategic review ) € Financial review ) ( Outlook & priorities ) Gm) | 32. 3 Capex (ex-leases) | ~Focus on capex optimisation and efficiency | Intensity of 14.8% t (Rm) Capex (ex-leases) Capex segmentation across operations and regions (ex-leases) Wt 1@ NY x i Y i (9)
Slide 29: Free cash flow
<< ( Highlights ) ( Operational & strategic review ) é Financial review ) ( Looking ahead ) Free cash flow Gm) | 32. Financial result impacted by macro factors ooo = | | | -5 784 -2398 EBITDA Non-cash Working Capitalised Acquisition of PPE OpFCF before Spectrum OpFCF before Net interest Tax Paid Fre
Slide 30: Leverage and liquidity profile
<< ( Highlights ) ( Quanalitenall @ civaiate ma ) € Financial review ) ( Ouiltzal Orta ) Leverage and liquidity profile Gm) | 32. Group ND/EBITDA remained healthy at 0.8x | Holdco FX mix sustained within target range Holdco Net Debt (Rbn) Maturity Profile (Rbn) 55.3 =|ZAR USD 43, uD 33 40.3 a 30.1 3
Slide 31: Outlook and priorities
< SF a> 04 Outlook and priorities Ralph Mupita Group President and CEO Gm) | 32. 31
Slide 32: Macro outlook
( Highlights ) ( Operational & strategic review) ( Financial review ) ( Outlook & priorities ) Macro outlook GDP growth forecasted to pick up | Inflation expected to moderate Economic outlook — GDP Inflation rates SSA South Africa Nigeria Ghana 2024 2025F + SSA 15.3% 12.4% 3.7% 4-1-% 3.5% 4.2% * Sou
Slide 33: FY 2024 priorities
( Highlights Financial review ) ( Operational & strategic review ) ( FY 2024 priorities ) € Outlook and priorities ) Gm) | 32. We reiterate our focus on sustaining execution momentum of our key priorities Sustain operational momentum we alZ Complete MTN SA network resilience, prepaid momentum Recove
Slide 34: Structurally higher demand for data & fintech
( Highlights ) ( @panilanl Qcaelaae review) ( Financia ) é Outlook and priorities ) Structurally higher demand for data & fintech Gm) | 32. MTN’s investment case and medium-term growth outlook remains intact, underpinned by structural demand Data traffic Fintech transaction volume @® 2.1030 dato tra
Slide 35: Medium-term guidance maintained
( Highlights ) ( Operational & strategic review) ( Financial review ) € Outlook and priorities ) Medium-term guidance maintained Supported by a disciplined capital allocation framework KPI ) Target 7 aN a ©") Group: ‘at least mid-teens’ g 7 ©} _ South Africa: ‘mid-single-digit’ ervice revenue growt!
Slide 36: Q&A
Slide 37: Thank you
Thank you
Slide 38: Appendices
Appendices
Slide 39: Definitions
Gm) | 32. Definitions + All financial numbers are YoY unless otherwise stated + Allsubscriber numbers are compared to end-June 2023 unless otherwise stated * Service revenue excludes device and SIM card revenue + Data revenue is mobile and fixed access data and excludes roaming and wholesale + Finte
Slide 40: Macro indicator | inflation
<< Gm) | 32. Macro indicator | inflation Closing F 2023 Worsening /(Improving) MTN Group 15.3% 15.8% (0.5pp) South Africa 5.1% 5.4% (0.3pp) Nigeria 34.2% 22.8% 11.4pp Ghana 22.8% 42.5% (19.7pp) Cameroon 5.7% 5.8% (0,1pp) Cote d'Ivoire 7.8% 48% % 3.0pp Uganda 3.9% 4.9% (1.0pp) Sudan 145.5% 63.3% 82.2
Slide 41: Macro indicators | average FX rates
<< Gm) | 32. Macro indicators | average FX rates ZAR: LC ZAR: Local currency H123 strengthening/(weakening) Nigerian naira 74.24 26.42 “ 181.0% Iranian rial 21596.65 18 496.97 *# 16.8% Ghanaian cedi 0.71 0.66 7.6% Cameroonian Franc 32.33 33.14 v (2.4%) Ugandan shilling 204.22 204.29 (0.0%) South Sud
Slide 42: Macro indicators | closing FX rates
<< Gm) | 32. Macro indicators | closing FX rates ZAR: LC ZAR: Local currency Dec 23 strengthening/(weakening) Nigerian naira 82.53 49.65 * 66.2% Iranian rial 23 521.17 21372.32 % 10.1% Ghanaian cedi 0.84 0.66 27.3% Cameroonian Franc 33.56 32.45 3.4% Ugandan shilling 203.41 206.91 (1.7%) South Sudane
Slide 43: Strong execution and operational momentum
Gm) | 32. Strong execution and operational momentum Encouraging underlying momentum in challenging macro conditions Commercial execution ] Key operational initiatives Progress on Financial resilience strategic priorities C ia @ * Data traffic +35.7%* | Fintech + MTN SA network resilience + Localisat
Slide 44: Share of results of associates and joint ventures after tax
\Y ye 7 GD | 32. ) Share of results of associates and joint ventures after tax ) Y Xe 0) NC % change Q\ % change constant i i (Rm) H123 reported currency Ne Telco joint ventures 2026 935 116.7 60.5 y i 6) i Iran 1816 698 160.2 82.0 Ws Iran (excl. hyperinflation) 1427 918 55.4 82.0 xd ey Iran (hyperi
Slide 45: Statement of cash flows
<< Gm) | 32. Statement of cash flows (Rm) Mainly translation impact to ZAR on Bank and cash in Nigeria. “-214.0% -4639 -20376 EBITDA Non-cash Working Capitalised Acquisition OpFCF Spectrum OpFCF Netinterest TaxPaid Restricted Reclassification Free Other Other Dividends Fx Free cash Reported “adjustm
Slide 46: Naira ZAR Non-Naira
Naira ZAR Non-Naira Non-ZAR Non-ZAR ZAR Naira Non-Naira
Slide 47: A compelling African growth story
( Highlights ) ( Operational & strategic review ) ( Financial review ) ¢ Outlook & priorities ) A compelling African growth story Exciting demographic Or opportunity Well positioned For the long term Fast-growing, youthful population Low data, fintech and digital adoption Partner in socioeconomic de
Slide 48: Capital allocation framework
SHIN YS ; a Highlights Operational & strategic review Financial review Outlook and priorities Gm) | 32. <> )« Capital allocation framework <> 1 Organic growth NZ Well-invested networks and platforms | Improving capex intensity | i i S 2 Stabilise leverage Rebalancing the mix | Non-ZAR debt to remain