Blu Label Unlimited Group Ltd · JSE:BLU
Blu Label Unlimited — Blue Label Unlimited Group — FY2021 Earnings Presentation
58 slides from Blu Label Unlimited's earnings presentation, Aug 26, 2021
Slide 1: Who Dares Wins: Audited results year ended 31 May 2021
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 1 WHO DARES, WINS Audited results for the year ended 31 May 2021 B L UE L A B E L T E L E CO MS . CO . ZA
Slide 2: COVID-19
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 2 01 COVID-19 b luelab eltelecoms . co. za
Slide 3: Impact
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 3 IMPACT The COVID-19 pandemic continues to impact many of our merchants and their customers. The change in consumer behaviour to purchasing products through digital channels has remained, especially during the second and third waves. The Positives We are unb
Slide 4: Highlights
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 4 02 HIGHLIGHTS b luelab eltelecoms . co. za
Slide 5: Financial Highlights
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 5 FINANCIAL HIGHLIGHTS For the year ended 31 May 2021 REVENUE * GROSS PROFIT GROSS PROFIT NET CASH FROM MARGIN OPERATING ACTIVITIES R18.8bn R2.38bn 12.66% R1.5bn (2020: R21.1bn) (2020: R2.12bn) (2020: 10.05%) (2020: R1.3bn) * On inclusion of the gross amount
Slide 6: Gross Revenue & Profit
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 6 GROSS REVENUE & PROFIT Strong growth in Gross Revenue (10%) and Gross Profit (12%) in the current financial year. Gross Revenue Gross Profit 70 000 3 000 60 000 2 500 50 000 2 000 R'millions R'millions 40 000 1 500 30 000 1 000 20 000 10 000 500 - - 2017 20
Slide 7: Revenue, Debt & Cash Flow
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 7 REVENUE, DEBT Cash generation and interest-bearing debt & CASH FLOW 3 500 R'millions 3 000 2 500 2 000 Improved cash generation of R1.5 billion for the 1 500 year ended May 2021 with a consistent reduction 1 000 500 in interest-bearing debt, from R3.0 billi
Slide 8: Snapshot of the Year
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 8 SNAPSHOT OF THE YEAR The Group continues to increase market share and bolster its product and services mix in order to defend and expand its position in the market. Further, in the airtime and data prepaid market there has been a consistent adoption of conv
Slide 9: Products
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 9 PRODUCTS The Ringas platform is the main driver allowing for this digital transformation. Using the right technology solution, we have the ability to drive, for the short- to medium term, a disruptive Pinless wholesale strategy. Consumer Convenience Flexibi
Slide 10: SA Distribution
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 10 03 SA DISTRIBUTION b luelab eltelecoms . co. za
Slide 11: SA Distribution Results
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 11 SA DISTRIBUTION RESULTS Gross Profit R846m R2.3bn NPAT SA Distribution's strategic intent is to go back to basics, SIM Distribution improving efficiencies and focusing on our core services The prepaid market remains under and geographies, and to pressure,
Slide 12: Strategic Framework
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 12 STRATEGIC FRAMEWORK Back-to-Basics Disposals Unwinding Blue Label’s ‘Back-to-Basics’ The business has been However, legacy dealings strategy is progressing well as dramatically simplified through resulted in several financial we simplify our portfolio and
Slide 13: Product Performance
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 13 Gross revenue by product PRODUCT 30 000 PERFORMANCE R'millions 25 000 20 000 15 000 The year proved arduous following increased bad debts exposure, increased 10 000 fraud, an Eskom rate reduction, the cost of 5 000 bringing Sterring to market, and various
Slide 14: Channel Performance
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 14 Gross revenue by channel CHANNEL 35 000 R'millions PERFORMANCE 30 000 25 000 20 000 The Group continues to increase 15 000 channel visibility and bolster its 10 000 product and services mix in order to 5 000 defend and expand its positions - across the var
Slide 15: Informal Market
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 15 04 INFORMAL MARKET b luelab eltelecoms . co. za
Slide 16: About Us
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 16 ABOUT US Two decades ago, we Making these products accessible, launched to take together with financial inclusion, advantage of the explosive growth in prepaid airtime. remains our driving philosophy.
Slide 17: Service
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 17 SERVICE Over the years our growth was largely due to our financial institutions and informal market merchants. Through the improvements and growth of the customer interaction centre we have enhanced customer service.
Slide 18: Comm Equipment Company
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 18 05 COMM EQUIPMENT COMPANY equip men tco. co. za
Slide 19: CEC Highlights
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 19 HIGHLIGHTS Bank Debt vs. Profits R1 800,00 • Profit after tax of R289m for FY21, a growth of 35% on the Millions R1 600,00 Bank Debt prior year. R1 400,00 Profit After Tax • Reduced debt by 75% over 2 years while increasing profit R1 200,00 after tax by 28
Slide 20: Project Boston
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 20 The agreement has an initial term of 5 years (from Nov 2020) and is renewable for a further 4 years. 9 yrs PROJECT Cell C is using managed services support BOSTON for a range of back-office functions related to the servicing of the Postpaid base. CEC perfo
Slide 21: Project Boston benefits
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 21 CEC performs these Project Boston has also services in exchange for rewritten the way CEC a share of the Postpaid funds handsets to Cell C revenue billed to the subscribers. base and it is, so-far, proving to be a mutually Bad debt risk now sits with CEC.
Slide 22: Strategic Objectives
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 22 STRATEGIC OBJECTIVES Customers & Churn Retention & Upgrades Drive new customer acquisition Increase rate of subscriber and reduce subscriber churn. upgrades and retention. Awareness Customer Service Team Build product and brand awareness in Proactively mat
Slide 23: Cell C
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 23 06 CELL C cellc. co. za
Slide 24: Significant Turnaround in Profitability
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 24 130% 122% SIGNIFICANT Increase in EBIT * Increase in Net Income TURNAROUND IN PROFITABILITY Performance driven by optimisation of costs and network strategy. Earnings are up, margins are stabilising and there is a single-minded focus on cost management. 10
Slide 25: Fit-for-purpose entity post recapitalisation
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 25 The fit-for-purpose entity can effectively implement its business strategy and will benefit from a revised capital structure post recapitalisation to ensure long-term sustainability.
Slide 26: The Recap
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 26 THE RECAP The restructuring of Cell C is in progress and, as previously communicated, Cell C remains focused on its turnaround strategy which includes ensuring operational efficiencies, restructuring its balance sheet, implementing a revised network strate
Slide 27: Cigicell
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 27 07 CIGICELL cig icell. co. za
Slide 28: Overview
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 28 OVERVIEW The largest revenue earnings still come from electricity sales, though lowered margins will negatively impact the business going forward. Current Strategy Opportunities The business continues to We will continue to be We continue to pursue joint v
Slide 29: Gross Sales
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 29 GROSS SALES 3 000 R'million 2 500 2 000 1 500 1 000 500 - J UL 2 0 1 6 – M A Y 2 0 2 1 Consistent growth in gross sales, increasing by 18% to R27 billion for the year ended May 2021.
Slide 30: Next
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 30 We intend to be more aggressive NEXT in the building and positioning of the risk-free model with high revenue lines, which should, ultimately, set us apart from our competitors.
Slide 31: VRM Unipay
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 31 VRM VRM oversees the strategic planning, implementation, and evaluation of municipal services. Services include data integrity and verifications, credit control and soft collections, as well as indigent registrations, to ultimately integrate and optimise U
Slide 32: Blue Label Data Solutions
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 32 08 BLUE LABEL DATA SOLUTIONS b ld s . co. za
Slide 33: Blue Label Data Solutions overview
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 33 Blue Label Data Solutions is the premier provider of data and lead generation and management services in South Africa. Founding member of the >150 000 Qualified Direct Marketing Association hot leads per month Full WASPA affiliate Supplied to 24 different
Slide 34: Results
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 34 RESULTS The impact of a very tough economy affecting collection and response rates, coupled with a shift in thinking with regards to the call centre debit order process, had a meaningful impact on our profits.
Slide 35: Postpaid In-house Collections
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 35 Postpaid In-house Collections We continue to receive interest from Key initiatives underway include developing an in- large-scale clothing and goods house collections workstream to improve retailers interested in Postpaid collections and enhance access to
Slide 36: Blue Label Communications, Blue Train, Investment Opportunities
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 36 30% 45% Blue Label Communications Blue Train Blue Communication offers 3 business Blue Train Group has been founded to provide unfunded verticals that can grow overtime: Reverse learnerships, training, recruitment and payroll Data Billing, SMS, and Voice.
Slide 37: Sales Platform
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 37 SALES PLATFORM iTalk2U is a safe and secure web-based application that was developed during the COVID-19 pandemic, where working remotely was becoming more ‘normal’. It is a decentralised sales platform that allows people to make sales and earn a commissio
Slide 38: Transaction Junction
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 38 09 TRANSACTION JUNCTION tran s action jun ction . co. za
Slide 39: Growth
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 39 GROWTH Transaction Junction has continued to enjoy growth in the independent merchant space. Well-known POS provider solutions have continued to request integrations - further acknowledging the growth and success of our services in tier two and three. We h
Slide 40: Merchants
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 40 MERCHANTS Leading Brands Fast Growth Leading retailers use our services directly Our merchant acquisition or indirectly to enhance their own digital rate is over 100%. portfolios and VAS environments. > R2bn Transactions/month Certified TJ services over 50
Slide 41: Ticketpro
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 41 10 TICKETPRO tick etp ros . co. za
Slide 42: Ticketpro
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 42 TICKETPRO One of the obvious disappointments, through no fault of its own. This business was severely affected by the restrictions on in-person events, although during the year we introduced streaming events and three of our programmes are currently appear
Slide 43: Rebuilding the ticketing engine
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 43 We have used this quiet period to rebuild the ticketing engine, creating one of the most innovative bus transport ticketing systems in the country. While our cashflow from this division may be impaired in the short-term, future- forward transport ticketing
Slide 44: BluNova
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 44 11 BLUNOVA b lun ova. co. za
Slide 45: About BluNova
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 45 A u t omation ABOUT A I n s ights M a r ketplace BluNova is Blue Label’s data consolidation, insights and decisioning arm. Through data analytics and decisioning expertise, BluNova assists various Cloud Platform businesses within the Group by digitising an
Slide 46: Technology
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 46 12 TECHNOLOGY
Slide 47: Technology
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 47 01 TECHNOLOGY Our preparedness resulted in ongoing high quality service uptime across our innovative technology businesses. 02 Our refactored platforms are being driven through aggressive transformation programmes to leverage our newly established always-o
Slide 48: Financial Results
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 48 13 FINANCIAL RESULTS b luelab eltelecoms . co. za
Slide 49: Financial Highlights
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 49 FINANCIAL HIGHLIGHTS For the year ended 31 May 2021 REVENUE * GROSS PROFIT GROSS PROFIT NET CASH FROM MARGIN OPERATING ACTIVITIES R18.8bn R2.38bn 12.66% R1.5bn (2020: R21.1bn) (2020: R2.12bn) (2020: 10.05%) (2020: R1.3bn) * On inclusion of the gross amount
Slide 50: Group Income Statement
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 50 GROUP INCOME STATEMENT For the year ended 31 May 2021 Ext ra n e o u s Ext ra n e o u s Gro u p in co me * Re ma in in g Gro u p co st s* * Re ma in in g Gro wt h Gro wt h Ma y 2 0 2 1 Ma y 2 0 2 1 Ma y 2 0 2 1 Ma y 2 0 2 0 Ma y 2 0 2 0 Ma y 2 0 2 0 re ma
Slide 51: Extraneous Income
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 51 EXTRANEOUS INCOME For the year ended 31 May 2021 NOTES * The predominantly positive contributions to Group Ext ra n e o u s Fa ir va lu e earnings in the current year were attributable to: in co me * mo ve me n t s ( 1 ) WiC o n n e ct ( 2 ) O n ce -o f f
Slide 52: Extraneous Costs
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 52 EXTRANEOUS COSTS For the year ended 31 May 2020 NOTES ** The predominantly negative contributions to Ext ra n e o u s Fa ir va lu e Group earnings in the prior year were attributable to: co st s* * mo ve me n t s ( 4 ) Imp a irme n t s ( 5 ) WiC o n n e ct
Slide 53: Revenue
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 53 REVENUE For the year ended 31 May 2021 Group Group May 2021 May 2020 Variance Variance R'000 R'000 R'000 % NOTES Prepaid airtime, data and related revenue 35 615 630 33 875 843 1 739 787 5% Revenue generated by the continuing operations within the Group de
Slide 54: Balance Sheet
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 54 BALANCE SHEET For the year ended 31 May 2021 G ro u p G ro u p Ma y 2 0 2 1 Ma y 2 0 2 0 R'000 R'000 NOTES No n- c u r r e nt as s e t s 2 821 283 2 357 620 Of the net increase in intangible assets and goodwill Property, plant and equipment 194 193 198 688
Slide 55: Cash Flow
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 55 CASH FLOW For the year ended 31 May 2021 G ro u p G ro u p NOTES Ma y 2 0 2 1 Ma y 2 0 2 0 Cash generated from trading operations totalled R'000 R'000 R1.7 billion. Working capital movements comprised an increase in trade payables of R765 million, an incre
Slide 56: Strategic Outlook
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 56 STRATEGIC OUTLOOK 01 02 03 04 Through focused and relevant Grow the merchant base Continue to develop and Develop key capabilities for market insights, develop and while retaining the existing mature our data, analytics analytics, insights generation and d
Slide 57: Conclusion
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 57 CONCLUSION While it has been a tough year, the entire group has risen We know our people drive our performance and our success up and met these challenges and has on many fronts been depends on talent sustainability. We are committed to supporting able to
Slide 58: Thank You
B LUE L ABEL AUDITED RESULTS 31 MAY 2021 58 THANK YOU bluelabeltelecoms.co.za HEAD O FFIC E PO STAL ADDRESS CO NTACT 75 Grayston Drive P.O. Box 652261 +27 (0)11 523 3030 Sandton, Johannesburg Benmore info@blts.co.za South Africa 2010 investors@blts.co.za
Blue Label Unlimited Group — FY2021 Earnings Presentation on 6ix