UNAUDITED INTERIM RESULTS For the half year ended 30 November 2017 - PowerPoint PPT Presentation

UNAUDITED INTERIM RESULTS For the half year ended 30 November 2017

G r o u p h ig h lig h t s f o r t h e h a lf y e a r e n d e d 3 0 N o v e m b e r 2 0 1 7 2  Increase in revenue to R13.5 billion* Gross PINless transactional values**  Increase in PINless GTV by 27% to R12.4 billion 14  Increase in EBITDA of 9% to R778 million 12  Increase in earnings per share of 110% to 167.43 cents 10 R'billion 8  Increase HEPS of 109% to 166.68 cents 6  Increase in core headline earnings per share of 108% to 168.42 cents 4 2  Increase in cash generated from operating activities to R3.1 billion - Nov 13 Nov 14 Nov 15 Nov 16 Nov 17  Acquisitions - Cell C and 3G Mobile **includes gross electricity and PINless top-ups  Acquisition – Airvantage after period end EBITDA 900,000 800,000 700,000 600,000 R'000 500,000 400,000 300,000 200,000 100,000 - Nov 2013 Nov 2014 Nov 2015 Nov 2016 Nov 2017 * On including PINless top-ups, revenue increased by 10%

 ‘Going for Growth’ SOUTH AFRICAN DISTRIBUTION  Prepaid airtime, data and starter packs  Handsets and Tablets BRETT LEVY – JOINT CEO  Prepaid electricity and water  Ticketing  Financial and other Value Added Services  Cell C

O p e r a t io n a l a n d F in a n c ia l H ig h lig h t s 4 Prepaid Airtime Revenue Growth  Revenue up 2% to R13.3 billion 3,500 Millions  PINless top-up revenue increase by R1.2 billion to R4 billion: 3,000 • when imputed to revenue effective growth is 10% 2,500  Gross profit margin declined slightly to 7.68%: 2,000 1,500 2017 • early settlement discounts forfeited to conserve cash 2016 1,000 • partly offset by marketing rebates received 500  Growth plan - Direct Top Up - PINless Airtime Growth 800 Millions 700 600 500 400 2017 300 2016 200 100 -

‘G o in g f o r g r o w t h ’ 5  Management team of experienced distribution professionals: • systematic and clinical review of all business aspects • “Going for growth” initiative  Ensuring customer centric approach  Identifying and focusing on growth pillars  Main/informal market: • hub and spoke model • small retail outlets  Relaunched brand identity - Blu Approved

P r e p a id A ir t im e , D a t a a n d S t a r t e r p a c k s 6  Maintaining up to 800,000 new SIM connections/month: • reinforcing market strengths of stability, trust and payment convenience  Campaigning by truck & footsoldier/gig-rigs  Exceptional growth in corporate channel’s banking sector  Maintaining constructive relationships with all networks  Competitive pricing from networks through bundled offerings  Current market: • competitive pricing through bundled offering • demand for data – > convergence of voice, data and content • consumers migrating to smartphones driving data consumption

H a n d s e t s a n d T a b le t s 7  Distributing a complete range of handsets and tablets from tier 1 to tier 4:  3G Mobile (tiers 1 and 2): • distributing top-end smartphones and tablets - Apple, Samsung, Huawei, ZTE and Nokia ; and • financing for handset element of post paid and hybrid contracts – by CEC • 47.37% acquired 2 Aug 2017 – R900 million; 52.63% acquired 6 Dec 2017 – R1 billion • funding of remaining tranche on track • tough market conditions  Existing handset and tablet business (tier 3) : • handsets, phones, tablets, POS devices, smart watches, fitness bands - Boost, Verssed, Blaupunkt, Go, Vibe and Pulse • online radio app Touch HD loaded onto hardware  Reware (tier 4): • capitalising on market shifting from feature phones to inexpensive smartphones • sources, refurbishes, certifies, repackages and distributes pre-owned smartphones

R e t a il D is t r ib u t io n 8  Distributing hardware ‘in the last mile ’: • mobile devices, tablets, wearables, accessories, gadgets, smart home concepts & automation, wifi routers and laptops  Edgars Connect:  Stand alone store with unique proposition connecting to a mix of customer needs, across a range of products: • BLU Approved products and services • Specialist services and expert advice • 64 stores open, with 3 more launches shortly

P r e p a id E le c t r ic it y a n d W a t e r 9 Prepaid Electricity - Revenue  Growth continues: 1,600 Millions • commissions earned up 21% to R124 million 1,400 • equates to R8.4 billion in sales, up 20% 1,200 1,000 800 2017  Growth drivers: 600 2016 2015 • Securing additional prepaid electricity contracts: 400 200  Buffalo City and NW405 Municipalities - • Bill Payments services:  Ekurhuleni and Cape Town Municipalities

T ic k e t in g 10  Ticketing for events, sports and transport sectors  Growing market share at 28%  Long-term ticketing arrangements: • Spar, FMCG chain • Putco, commuter bus service:  transporting 250,000 passengers/month  Ticketpro at >200 merchant outlets on key routes  2.9m tickets sold  82 different venues served  Revenue up by 79%

F in a n c ia l a n d o t h e r V a lu e A d d e d S e r v ic e s 11  Rapid growth in digital capabilities across banking sector: • e.g. 71% of all transactions through self-help devices at Capitec  Bill Payments: • processing ~535,000 transactions/month for 187 bill issuers • revenue up by 25% • number of transactions increased by 32%

C e ll C – A t u r n a r o u n d s t o r y u n d e r p in n e d b y s u s t a in a b le g r o w t h 12 2018 & beyond 2017 2015-16 RECAPITALISATION PROCESS • Recapitalisation: Innovation 2012-13 • • New shareholders - equity R7.5 billion Service Innovation-driven revenue • • Debt for equity conversion - R9 billion Quality growth • • Restructured debt - R6 billion People Price-driven revenue growth Service Revenue EBITDA 12% R’bn R’bn 9.3% 5.9% 15.9% 13.1 11.8 10.8 10.2 R e p o r t 7.8 8.8 e d >100% 63.2% >100% 3.1 >100% 1.9 3.7 0.8 0.4 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 -0.7

C e ll C – H ig h lig h t s : F Y 2 0 1 7 K e y p e r f o r m a n c e in d ic a t o r s 13 +12% YOY +7% YOY Service Revenue Revenue R13.2 billion R15.7 billion +151% YOY +29% YOY EBITDA EBITDA Margin R7.8 billion 50% +660% 8% of revenue Net profit after tax Capital Expenditure R4.1 billion R1.2 billion

C e ll C - P o s it iv e r e s u lt s F Y 2 0 1 7 14 Summary of reported financial information R’m 2017 2016 % Change Service revenue 13 147 11 752 12 Non-service revenue 2 568 2 894 11 Total revenue 15 715 14 646 7 8 170 7 454 10 Gross margin 52% 51% 1 Gross margin % EBITDA 7 793 3 106 >100 EBITDA margin % 50% 21% 29 Net profit after tax 4 114 541 >100

C e ll C – F Y 2 0 1 7 R e s u lt s 15 NORMALISED FINANCIAL KEY PERFORMANCE INDICATORS 7 months 2017 5 months 2017 Total 2017 2016 R’m % Change Pre-recap Post-recap Dec Dec Total revenue 9 013 6 702 15 715 14 646 7 Normalised EBITDA 1 960 1 694 3 654 2 892 26 Normalised EBIT 792 796 1 588 1 121 42 Net finance costs -2 661 -1 064 -3 724 -801 >100 Normalised net (loss)/profit before tax -1 869 -267 -2 136 320 >100 Tax - 2 111 2 111 - - Normalised net (loss)/profit -1 869 1 844 -25 320 >100

 Technology INTERNATIONAL DISTRIBUTION  Oxigen Services India  Blue Label Mexico MARK LEVY – JOINT CEO  Mobile Segment  Solutions Segment  Group Prospects

T e c h n o lo g y in o u r e c o s y s t e m 17 Large Store Revenue growth with increased BLT Category Penetration  Capabilities and offerings advance, strengthened by acquisitions  AEON platform expanding by incremental layering offering more solutions  Positive inflection - technology stack re-energising business models  Customers gaining access to our products and services  Ecosystem is de-commoditised with VAS driving customer experience  Direct correlation in technology, foot traffic and sales  AEON links suppliers and partners  Technology stack extends reach and opportunities • 1.5 billion transactions/month Medium Store Revenue growth with increased BLT Category Penetration

O x ig e n S e r v ic e s In d ia - S y n o p s is 18  Core businesses provides financial services and a universal payments platform: • offline: POP devices in retail outlets • online: e-wallet platform for subscribers Total Revenue (GTV)  Government’s digitisation of cash economy  Guidelines and legislation for Fintech sector  Oxigen pursuing offline opportunities  Demonetisation impacting revenue and profitability Jun July Aug Sep Oct Nov H1 16-17 H1 17-18

O x ig e n S e r v ic e s In d ia – O f f lin e A ir t im e R e c h a r g e a n d B a n k in g 19 Business Correspondent Banking  Serving >200,000 retail merchants nationwide  Expanding digital footprint by rolling out micro- ATM’s  Aligns with Government’s financial inclusion agenda  Requires capital investment  With ICICI Bank in tier 2 and 3 cities: • enabling cash deposits, withdrawals, bill payments, travel ticketing • act as service delivery and payment points  Business Correspondent Banking services : Jun July Aug Sep Oct Nov H1 16-17 H1 17-18 • revenue growth 14%: • Adarsh Credit Co-operative Society with 809 branches • Goa State Co-operative Bank with 67 branches