Safaricom Plc · NSEKE:SCOM
Safaricom — H1 2008/2009 Earnings Presentation
22 slides from Safaricom's earnings presentation, Nov 12, 2008
Slide 1: HY 2008/2009 Investor Presentation
HY 2008/2009 Investor Presentation 12th November 2008 The Better Option. 1
Slide 2: Agenda
Agenda: •1H 2008/2009 Update – Michael Joseph •Investor Update – Les Baillie •Q & A The Better Option. 2
Slide 3: H1 2008/2009 update at 30th Sept 2008
H1 2008/2009 update at 30th Sept 2008 (March 08 figures in parenthesis) • Subscribers increased by 1,614,400 to 11.956m (10.23m) • MPESA subscribers increased to 4.1m (2.1m) • Base stations increased to 1,749 (1,558) • 3G base stations increased to 156 (116) • Market share declined marginally to 81%
Slide 4: Strong Financial Results
Strong Financial Results Turnover 20% to Ksh. 34.5 bn EBITDA 16% to Ksh. 15.0 bn Shareholders Funds 30% to Ksh. 46.9 bn Subscribers 50% to 11.9 mn Market Share 7% to 81% The Better Option. 4
Slide 5: HY 2008/2009 Results Highlights - Revenue
HY 2008/2009 Results Highlights - Revenue • Total revenue grew by 20.44% to Ksh 34.508 bn Revenue in the 12 months to Sept. 2008 due to the (Ksh MM) increase in subscriber base 35,000 3,720 30,000 • Voice revenue increased by 17% for the 12 2,112 months to September 2008 to Ksh 29.7bn 25,000 20,000
Slide 6: HY 2008/2009 Results Highlights - EBITDA
HY 2008/2009 Results Highlights - EBITDA • Margin declined due to conscious decision to EBITDA invest for growth in FY2008/2009 (% margin) (Ksh MM) − Growth of 15.6 % 60 14,000 − Planned effect of the aggressive customer acquisition 50 12,000 45.3 strategy 43.5 10,000 15,013 40 − Costs of publicity
Slide 7: HY 2008/2009 Results Highlights – ARPU & Churn
HY 2008/2009 Results Highlights – ARPU & Churn Monthly ARPU Average Revenue Per User (ARPU) (Prepaid/Blended Ksh) (Postpaid Ksh) 3,000 6,000 • Blended ARPU for prepaid and postpaid 2,500 reduced to Ksh 503 by Sept. 08 from Ksh 665 4 ,0 7 6 3 ,8 7 2 2,000 3 ,6 7 7 4,000 at Sept. 07 1,500 • Reduction
Slide 8: Capital Expenditure
Capital Expenditure Capex continues to keep ahead of growth Base Stations • Cumulative capex of Ksh. 106 bn since start of 1,750 1,500 operations 1,250 1,000 1,749 1,558 • 191 base stations installed in the past 6 months 750 1,150 1,289 500 −114 for rural expansion 250 0 −77 for urban capacity M ar-
Slide 9: Subscriber Base – Quarterly Growth
Subscriber Base – Quarterly Growth Strong Market Growth Driven by Prepaid Subscribers • Safaricom reached 11.956 million subscribers in September 2008 • Prepaid subscribers account for 99% of total subscribers Subscribers (000s) 14,000 11,955 11,102 132 12,000 10,231 128 120 9,246 10,000 114 % 7,957
Slide 10: Subscribers
Subscribers Unparalleled Market Leadership Mobile Subscribers and Penetration in Kenya (000s) 15,000 40.0 317 38.7 32.9 12,000 205 30.1 30.0 83 9,000 23.7 11,956 2 20.0 17.4 10,231 8,000 6,000 - 6,083 11.5 - 3,943 8.2 10.0 3,000 4.8 38.7 - 2,513 1,530 30.1 - 2,558 2,558 865 2,284 2,013 1,757 1,132 1
Slide 11: M-PESA
M-PESA Significant growth continues • 4.14 million total registered users as at 30th •Distributed through 4,230 retail outlets September 2008 (0.636 million in Sept. 07) countrywide (960 outlets in Sept. 07) • Y-o-Y growth rate of 550% •Agents continue to grow at over 500 per month • Average of 13,8
Slide 12: M-PESA
M-PESA P2P Transaction values continue to rise P2P Transactions Value of Transactions • Kshs 39.1bn transferred person to person in •Total transactions value in September, 2008 Kshs HY2008/2009 (Ksh 2.77bn in HY2007/2008) 28.66bn ( Ksh. 3bn in Sept 07) • Kshs 9.6bn transferred in September 2008 (Ksh
Slide 13: M-Pesa
M-Pesa Towards A Full Mobile Wallet… Cash In Cash Out Person 2 Person Transfer Airtime Top-Up Bill Payment ATM Withdrawals Social Payments International Transfer – Pilot Merchant Payments – Future The Better Option. 13
Slide 14: Mobile Data
Mobile Data Building a high speed network for future growth •Mobile Data −Over 1 million of Safaricom subscribers using data services as of September 2008 – a 160% growth from 383,000 subscribers in March 2008; and representing 9% of subscriber base. −Steady growth of broadband internet users over 3
Slide 15: Competitive Landscape
Competitive Landscape • Ongoing brand awareness campaign. Zain • Launched flat tariff of Ksh 8 (on net/off net) in September 2008. • 2.56m subscribers at 30th September 2008 • GSM network launched under the Orange brand in September 2008 • Fixed Line services offered under a rebranded Telkom Kenya.
Slide 16: Growth Potential
Growth Potential Mobile Penetration Still Has Plenty of Room To Grow Mobile Penetration Across Africa (%) – September 2008 • In the past 6 months % South Africa 102.8 − Total Market increased by 1.98 m subscribers Libya 114.4 − Penetration went up from 33.5% as of March 2008 to 38.7% in Tunisia 79.5
Slide 17: Strengths
Strengths Our major assets for future growth • Extensive network of over 1,700 base stations • 3G enabled base stations • Large distribution network –350 exclusive dealers –150,000 points of presence • 3G & Wimax licenses –Only operator with 3G •Largest shareholder in TEAMS • Very low gearing • 84%
Slide 18: Our Strategy
Our Strategy Building on our Strengths • Maintain #1 Market • Focus on maintaining our position as the #1 provider of communications services to the Kenyan mass market Position • Vigorously defend our corporate base and high value customers • Mobile & Fixed Data Full commercial launch of 3G Incr
Slide 19: Shareholder Summary
Shareholder Summary Excluding Vodafone & Treasury Jun-08 Oct-08 Movement Local individuals 810,316 96.17% 798,193 96.11% (12,123) Local Corporates 30,284 3.59% 30,269 3.64% (15) Foreign Individuals 1,946 0.23% 1,983 0.24% 37 Foreign Corporates 71 0.01% 85 0.01% 14 Total 842,617 830,530 (12,087) Jun-
Slide 20: Investor Distribution
Investor Distribution Excluding Vodafone & Treasury Investor Distribution 3,500,000 3,000,000 2,500,000 Jun-08 2,000,000 Jul-08 Aug-08 1,500,000 Sep-08 1,000,000 Oct-08 500,000 - ≤10 0 0 1, 0 0 1 - 10 , 0 0 0 10 , 0 0 1 - 10 0 , 0 0 1 - 1, 0 0 0 , 0 0 1 - 10 , 0 0 0 , 0 0 1 - > 10 0 , 0 0 0 , 0 0 0
Slide 21: Investor Distribution
Investor Distribution Excluding Vodafone & Treasury Shareholding Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 ≤1000 300,992 290,248 296,089 292,995 290,723 1,001 - 10,000 912,399 927,141 924,648 927,080 926,033 10,001 - 100,000 1,273,040 1,332,577 1,302,101 1,312,912 1,322,273 100,001 - 1,000,000 1,521,093 1,
Slide 22: Q&A
Q&A The Better Option. 22