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FY2010 Results Announcement
FY2010 Results Announcement
Increase M-PESA
Penetration
Expansion of M-PESA
services Increase product offering
under M-PESA
15
15.79mn
79mn Ksh
Ksh. 83.96
83 96 bn K h 36
Ksh. 60b K
36.60bn h 15
Ksh. 15b
15.15bn K h 00.38
Ksh. 38 K
Ksh.
h 88.00bn
00b
18.9%
18.2% 19.1% 31.0% 43.8% 44.2% 100.%
S b ib
Subscribers T rn er
Turnover EBITDA Net
N t EPS Di id d
Dividends
Income
OPERATING ENVIRONMENT
6 Regulatory Environment
• Termination Rates
7 Market Dynamics
Mobile Penetration Across Africa (%)
Zimbabwe
Uganda
Tunisia
Togo • Sub-Saharan Africa still the fastest
Tanzania
South Africa
growing mobile market in the world
Somalia
Seychelles
Senegal • Mobile penetration in Kenya at 50 % as
Réunion
Nigeria at 31st March 2010;
Mayotte
M iti
Mauritius
Mali
Madagascar
• Data penetration still below 10%
Libya
Liberia
Kenya
Guinea Republic
• Focus on expansion into the Data
Gambia segment as operators tap into the 3G
Egypt networks and under-sea data cables
Djibouti
Congo
Comoros Islands
Chad • Declining Voice ARPU
Cameroon
Burundi
Burkina Faso
Botswana
Benin
Algeria
43.6%
39.7%
15 0%
15.0%
78.3%
15.79
15 79 million
illi subscribers
b ib by
b March
M h 2010 Market
M k leader
l d withi h 78.3%
78 3% off customer market
k
representing an increase of 2.43 million new share (79.1% in March ’09)
subscribers within the financial year Revenue market share rose by 1.3% to 84.3%
11 Staying Ahead
Through cutting-edge products and
services we ensure customer satisfaction
and retention
• M-PESA
• Bonga Points
• Dynamic tariffs with low calling rates
• 3G network platform
• Low cost recharge vouchers
12 Aggressive push on Acquisition products
7.56
6.18
Data Users
2.93 M-PESA Users
2.98
0.37 1.51 2.64
0 34
0.34 2.08
4.67 5.19 1.47
4.26
0.96
Data revenue increased by 72.8% representing Strong growth in the number of Data
18.7% of revenue (12.9 % in March 09) driven by the users (79.6%) and M-PESA users
combined effect of (53.4%)
M-PESA up 158.1% (9.0% of revenue)
Data up 97.7% (3.6% of revenue)
SMS up 11.3% (6.2% of revenue)
14 DATA Penetration
Data Subscribers & Penetration
16.71%
3.00 18.00%
16.00%
2.50
2.64
14.00%
2.00 12.00%
on
Data Subs -Millio
Penetration
10.00%
1.50
8.00%
1.00 6.00%
4 00%
4.00%
0.50
2.00%
- 0.00%
ar-09
ar-10
Sep-08
ct-08
c-08
Sep-09
ct-09
c-09
pr-08
pr-09
v-08
n-09
v-09
n-10
y-08
n-08
ul-08
g-08
b-09
y-09
n-09
ul-09
g-09
b-10
May
Jan
May
Jan
Aug
Dec
Aug
Dec
Jun
Feb
Jun
Feb
Nov
Nov
Ju
Ju
Oc
Oc
Ap
Ma
Ap
Ma
Subscribers Data Penetration
9,000,000
25.00
8,000,000
, ,
7,000,000 20 00
20.00
6,000,000
5,000,000 15.00
4,000,000
10.00
3,000,000
2,000,000 5.00
1,000,000
0 0.00
n-09
Febb-10
Marr-09
Aprr-09
Mayy-09
ul-09
Augg-09
p-09
Octt-09
Novv-09
Decc-09
n-10
Marr-10
Jun
Sep
Jan
Ju
The M-PESA customer base continues to Person-to-Person transactions for March 2010
grow with 9.48 Million users as at March 2010 stood at Ksh. 28.59 Billion
The M-PESA agent base is also expanding Cumulative value of transactions from inception
with 17,652 agents across the country was Ksh. 405.52 billion as at end of period
16 M-PESA: Much more than money transfer
M PESA is
M-PESA i now used
d for
f
• Airtime purchase
• Utilityy bill ppayments
y
• Bulk cash payments e.g salary payments
• International money transfer
• ATM withdrawals
• Dividend
Di id d paymentt
• Social/Charitable collections
• Banking
17 Safaricom Business: Total Communications Solutions
Going beyond
Business Data connectivity to Business Voice
providing total
communication
service solutions.
Consolidate
Data Growth
Expansion Maintain
of #1
products Market
Enhance under the
Mobile Position
M-PESA
and Fixed service
Company Stable data
Focus cost growth
control
FINANCIALS
Key Financials: FY2010 Summary
Ksh. Billion Mar-10 Mar-09 % CHANGE
Revenue 83.961 70.480 19.1%
EBITDA 36.603 27.951 31.0%
EBITDA Margin
g 43.6% 39.7%
Operating Profit 22.611 16.175 39.8%
Profit Before Tax 20.967 15.304 37.0%
N IIncome
Net 15 148
15.148 10 537
10.537 43 8%
43.8%
Key KPIs
Basic EPS 0.38 0.27 44.2%
Dividend 8.000 4.000 100.0%
Shareholder Funds 62541 51253 22.0%
Free cashflow 6 090
6,090 (1 053)
(1,053) 678 3%
678.3%
Gearing (Gross Borrowing) 24% 19%
Net debt/EBITDA(times) 0.16 0.25
21 KPIs: Continued Revenue Growth
YoY Revenues Analysis Data Revenue Breakdown
Ksh. billions Ksh. Billions / % of Revenue
63,405
54,203 58,795 7.56 9.0%
41,508
• Data revenue continues to grow by 72.8% • Broadband data services (97.7% increase)
30.6%
356 27 2%
27.2%
24.3%
22.4% 18.2%
126
79
3.2%
1.6%
-10.5%
Blended ARPU declined 3.4% to Ksh. 458.5 due to • Churn rate of 27.2% that is lower in
• Increased penetration into rural areas comparison to the prepay industry average
• Lower disposable incomes coupled • Continued positive impact of M-PESA and
• Lower average tariffs Bonga Loyalty Scheme
Offset by increased contribution from Data
23 KPIs: Expanding EBITDA & Margins
YoY EBITDA Revenue/EBITDA Analysis
EBITDA EBITDA Margin (%)
Ksh. Billion 60 83.96
35
51.7% 55
30
45.9% 50 (36.55)
43.6%
25 45
39.7%
20 40
36.6
(10.80) 36.60
35
15 28.2 28.0
24.5 30
10
25
5 20
0 15
Revenue
R Opex
O SG&A EBITDA
FY 07 FY 08 FY 09 FY 10
• Strongg EBITDA ggrowth of 31% to Ksh 36.60bn • OPEX and SG&A cost ggrew byy 11.4%
from Ksh 27.95bn in March 2009 reflecting a compared to a 19.1% growth in Revenue
higher EBITDA margin of 43.6%
24 Stable Cost Structure: OPEX & SG&A
OPEX & SG&A Breakdown Cost Intensity (% of Revenue)
2,689
2,662 46.5%
2,436 5,625 42.5% 43.5%
2,301
4,325 4,447 38.3%
1,816
2,291 3 356
3,356
3,155 6,566
2,960 7,126
1,263
7,994
2,331 6,749 7,557
1,846
3,674 13.8% 12.9%
5,783 10.8%
0.8% 11.8%
4,339 13 023
13,023
10,579
5,805 7,847
FY 07 FY 08 FY 09 FY 10 FY 07 FY 08 FY 09 FY 10
Interconnection Airtime Network
Acquisition & Retention Other Payroll OPEX SG&A
Marketing General
B
Base S i
Stations CAPEX
Ksh. billion
30.0
2302 Total 40.2% 40%
3G 25.0 33.8%
1899 30%
Wi
Wimax 20.0 7.8 6.5
1558 20.8% 20%
15.0 3.4 3.0 4.0
2.3 1.0 10%
2.1
10.0 0%
85
8.5 76
7.6
607 10.5
5.0 -10%
301 1.4
3.6 2.6
116 140 0.0 0.9 -20%
FY 08 FY 09 FY 10
3G Network Wimax 2G Network
FY 2008 FY 2009 FY 2010
Transmission Core Network Other
% of Revenue
Network growth from 1,899 sites to 2,302 sites Capital expenditure expected to continue at a
high level in these key investment areas
Reduction in Capex, for the period by 24.3% to • Fixed data infrastructure
Ksh.17.43bn. • 3G Network equipment
• Upgrade of existing 2G equipment
Outstanding capital commitments of Ksh.
Ksh 6.1bn
6 1bn (Quality & Capacity)
Disclaimer
The following presentation is being made only to, and is only directed at, persons to whom such
presentations may lawfully be communicated (“relevant persons”). Any person who is not a
relevant person should not act or rely on this presentation or its contents.
This presentation does not constitute an offering of securities or otherwise constitute an
invitation or inducement to any person to underwrite subscribe for or otherwise acquire
securities in the Company.
The presentation also contains certain non-GAAP financial information. The Group’s management
believes these measures provide valuable additional information in understanding the performance
of the Company’s businesses because they provide measures used by the Company to assess
performance. Although these measures are important in the management of the business, they
should not be viewed as replacements for, but rather as complementary to, the comparable GAAP
measures.
S f
Safaricom, M-PESA
SA and Safaricom/M-PESA
S f / SA logos are trademarks off Safaricom
S f Ltd. Other
O products
and company names mentioned herein maybe the trademarks of their respective owners.
THANK YOU
Q &A