AUDITED ITED RES ESULTS ULTS For the full year ended 31 May 2018 - PowerPoint PPT Presentation

AUDITED ITED RES ESULTS ULTS For the full year ended 31 May 2018

Highlights for the year ended 31 May 2018 - Strong growth relative to telco industry Revenue Gross PINless Transactional  Revenue increased 1% to R26.8 billion Values 30 30 25 25  Including PINless revenue grew 9% 20 20 R'billion R'billions 15 15  GP increased 7% to R2.28 billion 10 10 5 5  EBITDA increase 4% to R1.34 billion - 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018  Core EPS increased 4% to 120.61c EBITDA Gross Profit NAV per share 1 600 2 500 1 200.00  HEPS increased 1% to 115.42c 1 400 1 000.00 2 000 1 200 800.00 1 000  Share buy back programme approved R'million R'million 1 500 Cents 800 600.00 1 000 600 400.00 400 500 200.00 200 - - - 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018

Strategic imperatives – Built resilient business, deliberate focus on organic & acquisitive growth  FY18 - concluding acquisitions and designing integration  Extension of distribution reach – organic & acquisitively  Expanded product portfolio  Investing in human capital – distribution specialists  Streamlining operational processes – focused customer targeting, speed to market & performance culture  Investing in technology The RITE Strategy 3

Technology – Future proofing the organisation Transaction Volumes  Continued investing in technology platforms & skills  Adopting Global best practices – Strategic benefit, reducing the cost of transactions, increasing speed  Smarter technology creates smarter interaction with customers  Constantly evolving to provide better service & greater access Total  Technology differentiates us from competitors  Direct correlation in technology, foot traffic and sales  Developing Artificial Intelligence & Machine Learning capabilities  Agility 2013 2014 2015 2015 2016 2016 2017 2018 » Blue Label Ventures: • Boutique Tech business accelerator • iCrypto acquired – disruptive authentication and identity solution • Security solution establishing true identity through multifactor identification 4

SA & Africa Distribution – built strong base, optimizing for further organic growth  Revenue grew 1% to R26.2 billion  GP increased 8% to R2.0 billion  EBITDA remained at R1.3 billion  EBITDA margins decreased from 5.18% to 5.12%  Core net profit up 56% to R1.4 billion  Data management optimized for targeted growth  National Coverage, across all channels  Hub and spoke strategy developed for increased reach SA & Africa 2016 2017 2018  Business processes streamlined for speed to market R’000 R’000 R’000 Distribution  Performance management processes geared up Revenue 25 722 540 25 944 102 26 245 206 EBITDA 1 133 433 1 344 714 1 344 824  Strategic partnership focus Core NPAT 750 951 893 106 1 385 494 5

Product Portfolio - Key to competitive positioning and preventing disintermediation 55922954 SA & Africa Distribution Revenue Rm’s  Revenue growth across all product categories 60000000  Online continues to grow robustly 47862109  Further strides made in electricity 50000000 38520925  Bill Payments - new products added – DSTV 40000000  Ticketing provides differentiation  Other products – early days with strong growth 2016 30000000 19087000 18909000 2017  Growing product portfolio provides new revenue streams 15755000 2018 13588234 and discourages disintermediation 20000000 10551793 10373515 8123579 7567679 7746414 7754295  Blue Label provides a one-stop shop for retailers: 7241124 4870703 4101704 3241641 2543530 10000000 • Blu Approved kiosks increased revenue for retailers 366186 282736 146859 25278 29402 • A magnet for foot traffic 316 0 Wholesale Topups Topups Electricity Bill Ticketing Other Total online offline Payments * Bill payments not included in gross transactional value 6

Product Penetration – Focused product growth  All products achieved increased penetration in channels Product Penetration 94.9% 94.6% 94.3% 93.6% 92.7% 91.9% 90.2% 89.9%  Management information & reporting strengthened 89.6% 89.3% 88.7% 88.3%  Allows intelligent growth of portfolio through: 76.7% 76.5% 74.9% 72.4% 69.3% • Promotion 65.3% 63.9% 61.8% 69.2% 68.2% 68.1% 68.9% • Incentives 59.5% 58.5% 66.6% 66.1% 54.8% 53.2% 61.7% • Targeted placements 57.9% 54.0% 51.6%  Ensuring quality subscriber growth for the networks 46.8% 33.4% 43.4%  Intelligent credit extension to merchants 29.5% 27.1% 24.5% 31.1% 23.0%  Bad debt controlled 19.2% 17.7% 23.9% 13.4% 13.2% 21.0% 17.6% 9.3%  Strive to increase products and services available to 7.0% 5.6% 13.7% 4.8% 2.3% 0.9% 0.9% 0.9% 0.9% customers 1.0% 5.4% 5.2% 5.1% 4.8% 2.9% 2.1% 0.5% 1.4% 0.5% 0.5% 0.6% 0.6%  Focus on driving additional product sales per channel F16 Q1 F16 Q2 F16 Q3 F16 Q4 F17 Q1 F17 Q2 F17 Q3 F17 Q4 F18 Q1 F18 Q2 F18 Q3 F18 Q4 Airtime Data Electricity Other Financial Services Ticketing 7

Channel Performance – Wider, deeper reach, superb speed to market & excellent customer service  Corporate and formal retail drive majority of gains  Formal retail delivered 21% growth in face value revenue & 13% in 40062 4% 21% 9% 49% sales revenue  Corporate has delivered 50% growth in face value revenue & 33% in 32008 0% 1% 28% sales revenue 59% 3%  Banks looking to deal with one-stop shop and decrease admin costs 20%  Independent market represents major growth platform – hub & 22689 spoke strategy  Improved data collection & reporting – know where to concentrate expansion drive through customer insights 8

Hub & Spoke Strategy - Formal retail provides strong base, growth from independent market Financial inclusion depends on access to virtual products and services 31 million people earn less than R6000 per 81% month Although 70% of people have bank accounts they are only used as a means to access cash. Consumers are shopping closer to home and finding value in doing so. 4500 spokes and 100 hubs delivered in three months - more signed up daily 9

Blue Label Mobile – new products, new geographies  Operates in 4 verticals – integrated comms, value added services, financial services, marketing  Highly competitive, mature market Mobile 2016 2017 2018 R’000 R’000 R’000  Regulatory and MNO restrictions impacting growth Revenue 291 856 347 858 359 970 EBITDA 111 142 99 101 101 883  Focusing on B2B vs. B2C Core NPAT 65 333 56 327 59 553  Strategic drive to bundle service offerings & focus on growth segments across the group  Expand geographically – only at marginal cost and specific fit with MNOs  Deploy complementary MNO grade technology platforms 10

Airvantage – new products, new geographies  Acquired Airvantage: • Extensive experience in nano score card analysis and consumer behaviours • Guarantees the highest possible service revenue, ensures low levels of bad Jan – May 2018 Airvantage Airvantage debt and churn SA Brazil R’000 R’000 • Over 1 million advances per day and over 1 billion USD to date • Expand top- up offerings over BLU’s product range Revenue 36 929 - • Expansion into Brazil & Africa EBITDA 20 649 (12 049) NPAT 8 267 (5 640) • Offer clients a fully managed end to end solution • Take over non- performing network product & manage on MNO’s behalf • Evolving/morphing the platform to other business units within BLT 11

Blue Label Data Solutions – targeted analytics  POPI & CPA compliant  Robust growth continues in competitive market  Opt-In register of 21.1 million entries Solutions 2016 2017 2018 R’000 R’000 R’000 • Rebuilt monthly Revenue 190 326 177 621 195 089  Focus on lead generation EBITDA 35 889 34 020 42 838  Blue Nova Core NPAT 16 116 18 956 29 836 • Data analytics drives future business • Driving understanding of customer behaviour  AI / Data Lakes / Machine Learning 12

3G – product range extension: full suite of tier 1 – 4 mobiles; African Focus  Despite the tough economic conditions in SA – 3G growing in a depressed retail environment Aug 2017 – May 2018 3G Mobile  Excellent growth (50%) in African operations – Namibia, Botswana, Mauritius R’000  Biggest distributor of handsets outside of SA Operators Revenue 2 552 225 EBITDA 286 592  The only distributor in Africa that has Tier 1 – 4 handsets NPAT 196 204  Only 4PL mobile provider in Africa – full supply chain logistics provider  Further growth into financing hardware infrastructure into government entities and decoders 13