Mtn Group Limited · JSE:MTN
Mtn — Investor Presentation (2010)
27 slides from Mtn's investor presentation, 2010
Slide 1: Introduction and Overview – Cameroon
Introduction and Overview Cameroon Phillippe Vandebrouck – CEO Cameroon
Slide 2: Country overview
Country overview Population 19.6m Market sizing 9.7m (2014) Penetration 38% Economics *GDP per capita (USD 2010 : 2,236 at PPP)) , 2011 : 2,289 2010 : average 1.9% Inflation (ave.) 2011 : average 4.3% Commercial banks' 14% prime lending rate (typical MTN fixed rate : 6%) FCFA Exchange rate Euro : 65
Slide 3: Market dynamics
Market dynamics • Presidential elections planned for H211, President Paul Biya is expected to be re-elected Political P liti l • EIU: disputes over poll results, ethnic and regional rivalries, cost of environment living, lack of jobs, social welfare and services • Multi-directional lobbying between
Slide 4: GSM competitors – Jun 10
GSM competitors – Jun 10 MTN Orange Launch date Apr 2000 May 1999 Subscribers 4,543,000 3,023,00 Market share 60% 40% MTN Mauritius : 70% Shareholders L Local l / Private P i t : 30% Orange SA : 99.5% • GSM/EDGE network • BlackBerry • GSM/EDGE network • USB Modem proliferation • iphone Initiatives •
Slide 5: Management team
Management team Philippe Vandebrouck Chief Executive Officer Christian Gilbert Ngono Mike Blackburn Jean-Simon Ngann Jean-Claude Ottou Chief Technical Chief Financial Chief Marketing & GM Corporate Affairs Officer Officer Distribution Officer Regulatory Lyna-Laure Amana Abdelhamid Benayat Felix Fon-
Slide 6: Licences
Licences • Licence from Feb 00 to Feb 15 • Spectrum: GSM 900 and GSM 1800 MHz (by special dispensation) Period • ISP licence from Mar 06 to Mar 16 • Wimax: 3500 MHz • VAS licence (for MobileMoney): granted Dec 09 Upfront fees • GSM - FCFA 44 billion (USD 85m) • National N i l road d coverage: 6 6,07
Slide 7: 2.5G network rollout
2.5G network rollout • 771 BTS BTS’ss • 8 MSC’s, 12 BSC’s • 194 cities and towns • Over 3,000 villages and communities covered 7
Slide 8: 2.5G network rollout cont…
2.5G network rollout cont… • Road coverage • 4,900 km completed • 5,557 5 557 km to be covered by end 2010 (91.5% of licence obligation) • Focus on optimising cost to deploy operate and maintain 8
Slide 9: Wimax network rollout
Wimax network rollout • 31 cities and towns covered by our WIMAX network • 133 Wimax Base Stations connected to our nationwide MPLS network • MTN positioned as the leader in VPN/Data services in the corporate segment 9
Slide 10: Distribution channel
Distribution channel Selection of competent…. Ensuring the availability of products and services • Spread over 4 regions in the market efficiently and competitively using a proximity model that : • 7 EVD Partners, • provides fair returns to our distribution partners. • promotes a controlled environm
Slide 11: Data - ISP
Data -ISP Licence • Mar 06 (MTN Network Solutions) • Over 3,000 customers, currently focused on corporates and small business Customers • MTN NS is the market leader in the corporate internet market segment • VPN MPLS • Internet access via WIMAX or EDGE • Prepaid Internet: WIMAX in conjunction with
Slide 12: Products & services (mass market)
Products & services (mass market) Trendies Survivors Her & Home Trader Progress Achievers Voice, SMS, prepaid internet, mobile data, mobile money Usage Favorite country Instant proposition First digit free Messaging Negative balance Mobile broadband LBC children Favorite country Cont
Slide 13: Brand leadership
Brand leadership Q210 Market Share 61% Brand Preference 55.6% Brand Awareness 53.3% Brand Affinity 54.5% MTN remains the most preferred brand in the Cameroon telecoms space 13
Slide 14: MTN Cameroon Financials
MTN Cameroon Financials Mike Blackburn CFO - Cameroon
Slide 15: Revenue analysis
Revenue analysis 1.4% 83.4 84.6 • Airtime and subscriptions fees • Lower marginal subscribers come on board • Interconnect revenue • Volume growth partly off-set by reductions in interconnect tariffs driven by the regulator 17.3% • Other 18.3 15.6 10% • GSM Data, SMS, VAS, VPN’s and 6.0 6.6 internet
Slide 16: Operating expenses analysis
Operating expenses analysis • Interconnect and roaming 3.6% • Interconnect traffic increase in 1.0% 11.0 11.4 volume offset by reduction in 9.9 10.0 tariffs • Direct network operating costs • Increase in maintenance cost, although benefits from lower cost Group contracts and outsourcing has assisted
Slide 17: Operating expenses analysis
Operating expenses analysis • Staff costs 12 9% 12.9% 14.0 • Increase in headcount 12.4 9.3% • Selling, marketing and 10.8 11.8 distribution • Restructure of dealer commission 1.5% to ensure a more sustainable 6.4 64 6.5 65 model Staff costs Selling, Selling Marketing, Marketing Others Distribution
Slide 18: Tax considerations
Tax considerations Effective tax rates % Material reconciling items: 44 1 44.1 43.6 • Effective tax rate reconciliation to 38.5% • Prior year over-provisions over provisions 3.1% 3 1% 39 1 39.1 38.7 37.8 • Deferred tax 1.0% • Investment Tax relief 6.4% Forecast to December 2010 2005 2006 2007 2008 2
Slide 19: Capital trends (USD millions)
Capital trends (USD millions) 120 30% 24% 24% 100 25% 21% 98 19% 19% 90 80 20% 60 15% 62 55 40 46 10% 20 5% 0 0% 2005 2006 2007 2008 2009 Capex Capex to revenue % 19
Slide 20: Looking forward
Looking forward Cameroon Phillippe Vandebrouck – CEO Cameroon
Slide 21: MTN Foundation
MTN Foundation • Launched in Feb 05 and conducted as an in-house organisation • Reorganized eo ga ed as a sepa separate ate e entity t ty in Dec ec 09 • Flagship of the MTNC Corporate Social Responsibility program General • MTN Cameroon invests up to 1% of its PAT • Partnerships with organizations e
Slide 22: Looking forward: Opportunities and Challenges
Looking forward Opportunities Challenges • Strong brand and image • Regulation and telecom law • Prepaid internet by wifi hotspot • 3rd entrant • Hosting Services • Registration of subscribers • Mobile Money • Regional synergies 22
Slide 23: Thank you
Thank you Questions
Slide 24: Notice
Notice The information contained in this document 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 contained herein. Opinions and
Slide 25: Cameroon - income statement
Cameroon - income statement (LC) % FCFA millions Jun 10 Jun 09 change Revenue 109,538 105,056 4.3% EBITDA , 54,263 53,457 , 1.5% EBITDA margin (%) 49.5% 50.9% - 1.4 points Depreciation & amortisation 21,440 18,585 15.4% Net finance costs 1 602 1,602 1 265 1,265 26 7% 26.7% Profit before taxation 31,
Slide 26: Cameroon - balance sheet
Cameroon - balance sheet CFA millions as at Jun 10 as at Jun 09 Non current assets Non-current 171 565 171,565 167 975 167,975 Property. plant and equipment 126,094 115,279 Intangible assets 34,907 40,835 Other non-current assets 10,565 11,861 Current assets 46,079 49,244 Bank and cash 14,374 16,799
Slide 27: Cameroon - funding structure
Cameroon - funding structure • Syndicated Medium Term Loan: FCFA 44 billion • Nominal rate 6.85% • Raised in 2007 Facility A • Final half yearly payment of CFA 5 billion in July 2012 • Participants: Standard Chartered, Citibank, SGBC, BICEC, Credit Agricole • All participants ti i t hhave agreed d t