MTN Group Limited · 2019. 2. 15. · capacity on network 4,519 • Completed phase 2 of 3G rollout 3,674 4,789 1,553 1,810 3,942 2,121 5,703 2,979 Dec-06 Dec-07 Dec-08 Dec-09 H2

MTN Group Limited Final audited results for the year ended Final audited results for the year ended 31 December 2009

Agenda

2

Agenda

Strategic and operational overviewPh th Nhl kPhuthuma Nhleko

Group President and CEO

Financial overviewNazir Patel

Group Finance Director

Looking aheadgPhuthuma Nhleko

Group President and CEO

Strategic and operational overviewPhuthuma NhlekoPhuthuma NhlekoGroup President and CEO

MTN vision

4

MTN vision

To be the leader in telecommunications in emerging markets

Leverage existing Leverage existing Consolidation & diversification

Consolidation & diversification

Leverage existing footprint &

intellectual capacity

Leverage existing footprint &

intellectual capacity

Convergence & operational evolution

Convergence & operational evolution

Increased competitiveness

Best practice Procurement synergies

Value proposition

Hub and cluster Diversification Skills

optimisation BrandBest practice Procurement synergies

Value proposition

Hub and cluster Diversification Skills

optimisation Brand

Execution excellenceExecution excellence

Solid operational performance

5

Solid operational performance

We delivered

Strong subs growth

Network rollout execution

We delivered…

growth

Improved distribution

Aggressive competition

Maintained or improved

market share

distributionmodel Increased

regulatoryrequirements

through

Under challenging

market conditionsmarket share Segmental

value propositions

Slowing

requirementsconditions

Strong brand preference Increased focus

on data

economies

on data

Negatively impacted by FX

Group highlights

6

Group highlights

Group subscribers Revenue EBITDAGroup subscribersUp 28,0% to116,0 million

RevenueUp 9,2% to

ZAR 111,9 billion

EBITDAUp 6,7% to

ZAR 46,1 billion

Adjusted headline EPS(excluding the impact of functional

currency losses)

Up 8,5% to

Dividendper share of192 cents

Capex executionUp by 10,6% toZAR 31,2 billion

p ,878.9 cents

Group initiatives

7

Group initiatives

• Centralised procurement

Standardisationand operational

• Centralised procurement • Standardisation of equipment• Rationalisation of network suppliers

• Best practice guidelines to ensure operational efficiencies • Site build network management radio access network deployment p

efficiencies• Site build, network management, radio access network deployment

and electro magnetic field safety toolkits rolled out in 09 • Activity based accounting pilot in Nigeria, Iran and Syria • Infrastructure sharing

FixedMTN B i

MobileC i d 3G ll

Convergence

Data

• MTN Business• Successful integration• Launched Sep09• Pan African opportunity

23% k t h

• Continued 3G rollout• Wimax

• Rolled out in Uganda, Rwanda, Cameroon, Iran, Ni i ( i l) C d’I i Data • 23% market share

• Enterprise Solutions • Integration of VGC into MTN

NigeriaF t t

Nigeria (trial), Cote d’Ivoire, Liberia and Congo B

• Main focus on SME segment• Coverage in high density

• Focus on corporate segment• Continued expansion of fixed

network

areas• Product drive

Group initiatives

8

Group initiatives

Submarinecables

• Committed USD 191 m to date• Access to cable capacity on EASSy (H2:10), EIG (H2:10), SAT-

3/SAFE(operational), TEAMs (operational Nov09) and WACS (H2:11)

• MTN Academy

/ ( p ), ( p ) ( )

People

• MTN Academy • Talent management• Y’ello stars• Knowledge shareKnowledge share

• Focus on money transfers

Mobile money

Focus on money transfers • Rolled out in RSA, Uganda, Rwanda, Ghana, Cote d’Ivoire, Benin

and Yemen• Uganda surpassed 680 000 subscribers to date• SA business model slightly different with innovative products such

as mDirect and Eazi recharge

Subscriber contribution by region

9

Subscriber contribution by region

MTN GroupTotal Proportionate*Total(subscriber million)

p(subscriber million)

116.0 70.488.5

61.4

90.7

32%29% 26%

50.423%

19%23%

45%44%

46% 47%45%45%

19%

23%27%31%

45%

27%32%36%

Dec-07 Dec-08 Dec-09 Dec-07 Dec-08 Dec-09

27%31%

Increased diversification

SEA WECA MENA

Revenue and EBITDA by region

10

Revenue and EBITDA by region

Contribution* Contribution* EBITDA margin%

41 1%

(Revenue) (EBITDA)

36.6%

35.4%SEA

42.1%

32 0%

41.1%Group

29.8%

27.6%SEA

46.5%

45.2%WECA

34.4%

53 5%

32.0%SEA

58.7%

58.7%WECA

19.2%MENA

53.1%

26 9%

53.5%WECA

12.6%MENA

16.8%MENA

27.0%

26.9%MENA10.8%

MENA

2009 2008

Mix variance due to lower margins in SA and Syria

*Difference in Head Office

South Africa

11

- operational highlightsLaunched Jun 1994 Market share 32% Population 49.4m Market sizing 64.3m (2014) Penetration 103% Shareholding 100%

• Marginal increase in postpaid

• Strong growth in hybrid packages

Subscribers(’000)

14,799

17,16916,067

10,36812,306

14,415 13,044

P id

Strong growth in hybrid packages

• Loyalty programs

• Disappointing prepaid growth

12,655

2,288 2,493 2,754 3,023

Dec-06 Dec-07 Dec-08 Dec-09

Prepaid

Postpaid• H1 system challenges and competition

• H2 RICANet additions

2,0621,198 1,579

• System improvements remain a key focus

• Improved brand awareness in H2

Net additions(’000)

2,275 2,1442,370

213946 791 62

-1,164

H2 H1

p

• Ayoba campaign

• 5.5 million prepaid subs RICA’d


-1,102

South Africa

12

- operational highlights

• Declining postpaid ARPU indicating ARPUZARDeclining postpaid ARPU indicating

slowing consumer spend

• Lower out of bundle usage

ZAR

441

396 403

365

• Migration onto lower value packages

• Increased prepaid ARPU

365

159• Impact of disconnections post RICA

• Mobile termination rates

P k t d ff ti 1 M 10

159 149 148 145

95 92 97 100

Postpaid

Blended

P epaid• Peak rate decrease effective 1 Mar10 from ZAR 1.25 to ZAR 0.89

• ICASA to provide feedback in Jun10


Prepaid

Avg. total MOU comprises both incoming and 124 106 102 100

• Reducing fixed to mobile interconnect traffic

incoming andoutgoing minutes

Outgoing MOU 79 65 64 64

South Africa

13

- infrastructure and data highlights

• Capacity increased by 12% (2G) and CapexZAR (million) 6 034

3,096

3,034

Capacity increased by 12% (2G) and 22% (3G)

• 496 (2G) and 659 (3G) BTS’s integrated

ZAR (million)

2,3912,843

4,868

6,034

1,205 1,294 1,7723,000

1,186 1,549


H2 H1

g

• Improved 3G population coverage from 35% to 48%

• Fibre deployment

,

p y• Ongoing deployment of national long

distance

• Gauteng northern ring to be completed by Jul10 Data revenue

Capex as % of revenue 9.7 10.1 15.0 18.2

1,900

2,444

1 938

2,756

3,596

4,496completed by Jul10

• Modernisation and efficiency programs implemented

• Improved data focus and offerings

Data revenueZAR (million)

7791,221

1,696 2,0521,159

1,535

H2 H1

1,938• Improved data focus and offerings• 1.9 million 3G devices

• 75% increase in data traffic

• Packet switch data rev increased 44% Dec-06 Dec-07 Dec-08 Dec-09• Packet switch data rev increased 44%

• SMS contribution to data rev decreased to 45% from 50%

As % of SA revenue (excluding handsets) 9.0 11.0 12.4 14.8

Nigeria

14

- operational highlightsLaunched Aug 2001 Market share 50% Population 147m Market sizing 111m (2014) Penetration 42% Shareholding 76%*

16 511

23,077

30,827

• Strong subscriber growth• Continued improvements in network

quality and capacity

Subscribers (‘000)/ARPU ($)

12,281

16,511

MTN Subscribers ('000)

ARPU (USD)

quality and capacity• Innovative segmental value

propositions• Efficient sales and distribution

18 17 16 12

Dec-06 Dec-07 Dec-08 Dec -09

( )

framework• Declining USD ARPU

• 25% devaluation of the Naira against the USD in H1 Net additions

Outgoing MOU 53 52 55 53

3,489

6,566

7,750

the USD in H1• Relatively stable in H2

• Reduction in interconnect tariffs, effective 31 Dec09


4,2612,645

2,475

4,512

H2 H1

3,911 4,230• In line with expectation to NGN8.3• 79% on net traffic reducing impact

• SIM card registration• To be implemented on 1 May10

1,266 1,755 2,054


H2 H1• To be implemented on 1 May10• Strong distribution to assist registration

process*Legal

Nigeria

15


• Significantly improved quality and CapexZAR (million)

10,2229,610

5,668

4,519

Significantly improved quality and capacity on network

• Completed phase 2 of 3G rollout

ZAR (million)

3,674

4,789

1,553 1,8103,942

5,7032,1212,979


H2 H1

• 561 3G sites rolled out

• Phase 3 underway

• Transmission expansion• Transmission expansion

• 1 562 km of new backbone – 99% complete

BTS Rollout


1 560

802

• 110 km of metro fibre (87% complete)

• 25 363 active Blackberrysubscribers

BTS Rollout

1,220

785

1,560

758209

639

726• 78 331 data modems398

189 146

494209


H2 H1

Ghana

16

- operational highlightsLaunched Nov 1996 Market share 55% Population 24m Market sizing 22.5m (2014) Penetration 61% Shareholding 98%

6,428

8,001• Maintained market share in extremely competitive market


2,585

4,016

MTN Subscribers ('000)ARPU (USD)

• Significant increase in subs in Q4 • Improvements in network quality and

capacity • Enhanced value propositions (MTN Zone 17

14 12 8

Outgoing MOU - 104 119 105


a ced a ue p opos t o s ( o eOpt)

• Reduced churn and improved MOU from Jun09

Net additions

1,4311,573

• Mega - promotions

• Increased distribution footprint• Declined ARPU

• 27% depreciation of the Cedi against


1 431

2,412

981

624

, 3

782

• 27% depreciation of the Cedi against USD

• 13% decline in local currency ARPU

• Further competition expected to 567

1,431

807 981791

567


H2 H1p p

launch in H1:10, 6 in total• SIM registration to commence 1 Jul10

Ghana

17


• Significantly improved network CapexZAR (million)

2,586

938

1,411

Significantly improved network quality

• Completed major fibre rings

ZAR (million)

801

1,239

1,854

317 262

8401,175484

977

Dec-06 Dec-07 Dec-08 Dec-09H2 H1

• Enhanced data offerings

• Increase in data usage – 10% increase in H2

801

• 3G mobile broadband

• Internet SIM launched – PAYGBTS Rollout


729718

390

221

440

• Unlimited bundles – corporate customers

• MTN Loaded (1 million unique hits)

BTS Rollout 729704718

328

483

289302

• Data is 6% of rev 302

289


H2 H1

Iran

18

- operational highlightsLaunched Aug 2006 Market share 40% Population 72,5m Market sizing 75.8m (2014) Penetration 80% Shareholding 49%

16,039

23,260

• Increased market share

• 52% share of net adds


154 6,006MTN Subscribers ('000)

ARPU (USD)

• Attractive acquisition promo’s (WOW, BOGOF, reduction in price of SIMS packs) 9 10 9 8

Dec-06 Dec-07 Dec-08 Dec-09• Loyalty programs (magic number and family and friend)

• Improved capacity and coverage of network Net additions

Outgoing MOU - 69* 60* 62

4,446

network

• Focus on increased sales and distribution footprint and electronic channels


7,221

10,033

5,587

4,023

4,073

channels

• Reducing churn and dormancy remains a priority

• Decision on launch of 3rd operator is

5,852

1,8293,148


H2 H1• Decision on launch of 3rd operator is unclear

*Restated to exclude free minutes

154

Iran

19


• Continued aggressive rolloutCapex (49%)ZAR (million)

3,326

2,142

2,282

Continued aggressive rollout

• 1 429 towns and cities now covered

• 4 996km additional road coverage (10 928k i t t l)

ZAR (million)

1,559

2,743

98714 601

1,044675

845

Dec 06 Dec 07 Dec 08 Dec 09

H2 H1

928km in total)

• Network quality remains a priority in main cities (Tehran, Tabriz and E f h )

773

Dec-06 Dec-07 Dec-08 Dec-09Esfahan)

• Site acquisitions still a concern, co-location with other operators BTS Rollout

Capex as % of revenue - 116.3 55.6 43.6

1 250

• Successful launch of Wimax Dec09

• Coverage focus on high density areas

BTS Rollout

2,043

1,6421,529

748 793

894833

1,250• 328 integrated sites

361748 696 793

361


H2 H1

Syria

20

- operational highlightsLaunched Jun 2002 Market share 45% Population 20,5m Market sizing 12.7m (2014) Penetration 46% Shareholding 75%

2 237

3,1093,539

4,249• Strong subscriber uptake in H2

• Improved promos (MTN Gold and billing


2,237

MTN Subscribers ('000)

ARPU (USD)

• Improved promos (MTN Gold and billing per a second)

• Segmental product offerings (youth)22 20 19 18

Dec-06 Dec-07 Dec-08 Dec-09• Churn management remains a priority

• Rev share now at 50% Net additions

Outgoing MOU 134 130 124 120

872

517

Rev share now at 50%

• Progress on BOT

• Government consultant appointed


494

872

710

355266

494

164 699

H2

pp

• Expected to resolve by year end

494430

266


H1 11

Syria

21


• Continued but limited expansion and CapexZAR (million)

1,039

730362

Continued but limited expansion and upgrades on network due to BOT uncertainty

• Outsourced maintenance of sites

ZAR (million)

748

418

119247 309 386219171


H2 H1

• Outsourced maintenance of sites

• Implementation of new network management system

338

Dec-06 Dec-07 Dec-08 Dec-09• Transmission expansion and

optimisation

• Limited 3G services BTS Rollout


596

444

• Focus mainly on internet access for corporates and consumers

S i t b ff d b ISP

BTS Rollout

504

596

221191

193

444 283• Services to be offered by ISP260

317

69124 152

221


H2 H1

In summary

22

In summary

• Total subs increased 28% from Dec08

Strong subs growth

• Total subs increased 28% from Dec08• Iran -45%• Syria – 20%• Nigeria – 34%

Gh 24%growth • Ghana – 24%• Rest – 38%• SA is the exception

Maintained or improved

• Improved market share in Nigeria and Iran• Maintained market share in Ghana and Syria (from Jun09)improved

market share• Maintained market share in Ghana and Syria (from Jun09)• Marginal loss of market share in SA

Strong brand • Percentage share of net additions

• Iran – 52%preference • Nigeria – 78%

• Ghana – 55%

Financial overviewNazir PatelNazir PatelGroup Finance Director

Group summary

24

p yZAR ‘m

Key Points Dec Dec VarianceKey Points

• Strong ZAR and Naira weakness impact ZAR reported results

Dec2009

Dec2008

Variance%

Revenue 111 947 102 526 9.2

• EBITDA margin decline mainly due to RSA and Syria

• Negative functional currency impact

EBITDA 46 063 43 166 6.7

EBITDAg y p

on AHEPS ZAR 124.6 cents (2008: 94.2 cents positive impact)

• Peak capex year to sustain subscriber

EBITDAmargin % 41.1 42.1 (1.0pts)

AHEPS 754 3 904 4 (16 6)Peak capex year to sustain subscriber growth

• Continued strong operating free cash flow generation

AHEPS 754.3 904.4 (16.6)

CAPEX(incl.software)

31 248 28 263 10.6flow generation software)

% of rev 27.9 27.6 0.3pts

Free cash flow 6 580 5 863 12.2

2009 Financial Overview

25

2009 Financial Overview

Trading conditions

• Difficult economic and trading conditions

• Stagnant and declining GDP’s impact customer spending behaviourg g p p g

Foreign Exchange

Rates

• ZAR reported results negatively impacted by weakening of key currencies vs US dollar

• 09 Functional currency loss ZAR 3.2bn vs ZAR 2.4bn gain in 08Rates y g

• ZAR strength has positive impact on capex spend

Regulatory• RICA implementation adversely impacts RSA performance

• Limited effect of MTR changes across footprint • Limited effect of MTR changes across footprint

Key accounting considerations

26

Key accounting considerations

• Acquisition of 100% of Verizon SA (Feb09) 59% of iTalk (Jan09)

Change in ownership

• Acquisition of 100% of Verizon SA (Feb09), 59% of iTalk (Jan09)

• Swapped ICS assets for 20% stake in Belgacom International Carrier Services

• Uganda step-up from 95% to 97%ownership Uganda step up from 95% to 97%

• Zambia shareholding reduced from 100% to 97.8%

• Disposal of DMTV JV stake of 50% (Jan09)

• Impact of put option MTN share ZAR 906m credit (Dec08: ZAR 825m debit)

• Financial cost - ZAR 537mPut Option • Fair value adjustment – (ZAR 537m)

• Forex gain - (ZAR 701m)

• Minority share of profits - (ZAR 205m)y p ( )

T ti

• Group effective tax rate declines to 33.4% (Dec08: 39.9%) due to expiry of Nigeria commencement provisions in Mar08 and put

i di Taxation option credit

Average exchange rates

27

Average exchange rates

USD: Local currencyy

129 128 128 126 117 118

147 148

9 0869 169 9 243 9 300 9 175 9 365

9 830 9 943

Rial

Naira

0.9 0.9 0.9 0.9 1.0 1.1 1.4 1.4

6.3 7.0 7.1 7.0 7.6 8.1 9.1 8.3

118 Naira

ZAR

Cedis

ZAR: Local currency

H1-06 H2-06 H1-07 H2-07 H1-08 H2-08 H1-09 H2-09

ZAR: Local currency

1 450 1 3651 292 1 320

1 1981 152

1 0911 195

Rial20.318.7 17.9 17.9

15.4 14.5 16.117.8

1 152 Rial

Naira

Cedis0.14 0.13 0.13 0.13 0.13 0.13 0.15 0.17

H1-06 H2-06 H1-07 H2-07 H1-08 H2-08 H1-09 H2-09

Revenue trends

28

ZAR ‘m

Key PointsFX impact ZAR 10.9bn

47 7

,548

1,7

38

1,6

53

886

6

Key Points

• Strong underlying organic growth in key markets except RSA

19.9%

111,9

4

122,8

102,5

26

• ZAR reported revenues adversely impacted by decline in Naira and Cedi vs US dollar

2009

Nig

eria

Ghan

a

Oth

er

Rev

@ P

Y

FX 2008• 2009 revenues at constant prior year

fx would be 19.9% higher than the prior year

• Nigeria, Ghana and Iran revenue driven by strong subscriber growth Revenue growth

ZAR %

LC%

Ni i 5 6 30 0Nigeria 5.6 30.0

Iran 54.5 60.0

Ghana (6.3) 25.1

Syria 7 4 8 2Syria 7.4 8.2

Uganda 9.3 26.4

South Africa 3.1 3.1

Revenue trends (cont.)

29

( )ZAR ‘m

• Airtime and subscription revenue Dec DecAirtime and subscription revenue contribution decreased due to fximpact, RSA flat YoY

• Data contribution increase due to RSA

2009 2008

Airtime and subscription

76 814

68.6%

70 963

69.2%Data contribution increase due to RSA – GPRS up 39%

• SMS contribution increased due to Iran and Nigeria – 76% and 13%

Data3 329

3.0%

2 690

2.6%g

respectively increase due to growth in subscriber base

• Interconnect contribution decreased

SMS5 437

4.9%

4 394

4.3%

19 516 18 364due to Nigeria - 6% YoY decrease (increase 15% in LC)

• Cellular phones and accessories

Interconnect19 516

17.4%

18 364

17.9%

Cellular phones and 3 279 3 551

contribution decreased due to RSA –handset volumes up but reduced selling prices

h b

accessories 2.9% 3.5%

Other3 572

3 2%

2 564

2 5%• Other contribution up increase to acquisition of Verizon

3.2% 2.5%

Revenue 111 947 102 526

EBITDA trends

30

ZAR ‘m

• Strong organic EBITDA growth in key FX impact ZAR 5.1bn

063 4,3

10

725

31

1,1

29

166

Strong organic EBITDA growth in key markets

• Nigeria margins higher 1.4pts to 59 3% on lower fuel costs opex

18.4%

46,

51

43,1

09

ria

na

her FX 08

59.3% on lower fuel costs, opexcontrol

• RSA margins lower 1.5pts due to integration of iTalk CellPlace IT

200

Nig

er

Gha

Ot h

EBIT

DA @

PY

200integration of iTalk, CellPlace, IT

outsourcing costs and lower net interconnect

• Iran margins increase 4 7pts to Iran margins increase 4.7pts to 34.9pts on higher revenue, opexcontrol

• Full year revenue share impact lowers EBITDA growth

ZAR %

LC%

Nigeria 8 2 32 4Full year revenue share impact lowers Syria margin 8.5pts to 19.6%

• 09 EBITDA at constant prior year fxwould be 18 4% higher than the prior

Nigeria 8.2 32.4

Iran 78.6 85.3

Ghana (6.5) 25.1

Syria (24 9) (23 5)would be 18.4% higher than the prior year

Syria (24.9) (23.5)

Uganda 8.6 23.7

South Africa (1.7) (1.7)

EBITDA

31

ZAR ‘m

• Direct network cost increased due to Dec

2009Dec

2008Direct network cost increased due to Syria revenue share and increase in number of sites in Iran

• Handsets and accessories costs

2009 2008

Revenue 111 947 102 526

Direct network 15 925 14 140Handsets and accessories costs decreased due to RSA - distribution of cheaper prepaid handsets

• Interconnect and roaming cost

operating costs15 925

14.2%

14 140

13.8%

Cost of handsets and other accessories

6 297 5 985g

increased due to RSA - increase in traffic to other mobile operators and international traffic

5.6% 5.8%

Interconnect and roaming

15 166

13.5%

13 217

12.9%

• Employee costs increased due to RSA – increase in headcount due to Cellplace and iTalk integration

Employee benefits 5 843

5.2%

4 776

4.7%

Selling, distribution 14 649 13 274• Selling, distribution and marketing increased due to FIFA and distribution cost

h l d h

g,and marketing expenses

14 649

13.1%

13 274

12.9%

Other expenses 8 004 7 968

• Other expenses include the ZAR 354m recovery of Cell C settlement

7.1% 7.8%

EBITDAEBITDA margin %

46 06341.1%

43 16642.1%

EBITDA margin recon

32

g(%)

• NigeriaNigeria

• Fixed cost control and opex savings

• Syria

EBITDA margin 2008 42.1

• Full year impact of revenue share increase

• RSA

Nigeria 0.7

Syria (0 6)• RSA

• Interconnect margin lower

• Selling, distribution costs from

Syria (0.6)

RSA (0.5)acquisitions

• IT outsourcing costs

• Positive benefits from Cell C settlement Other opcos (0.6)

Positive benefits from Cell C settlement / licence fee charge

• Other opcos EBITDA margin 2009 41.1

• Verizon margin dilution

Interest and tax

33

ZAR ‘m

Effective tax rateNet finance cost

Dec2009

Dec2008

Net interest paid 2 201 1 851

Net forex losses 1 106 1 249

39.5% 39.9%

Effective tax rate

Net forex losses 1 106 1 249

Functional currency losses /(gains) 3 204 (2 442)

Put option (701) 1 259

33.4%

p ( )

Total 5 810 1 9172007 2008 2009

F ti l l i l d

Income taxDec

2009Dec

2008

Normal tax 6 425 7 338

• Functional currency loss mainly due to Iran loans and cash balances

• Group effective tax lower than prior year due to favourable put impact Normal tax 6 425 7 338

Deferred tax 992 3 060

STC and witholding 1 195 957

year due to favourable put impact and expiry of commencement provision in Nigeria

• Future Group effective tax rate is taxes 1 195 957

Total 8 612 11 355

• Future Group effective tax rate is expected to remain in the lower 30’s

Earnings per share

34

gcents

Dec Dec Variance2009 2008 %

Attributable earnings per share 791.4 821.0 (3.6)

Loss on disposal of non-current assets 3.8 6.0 (36.7)Loss on disposal of non current assets 3.8 6.0 (36.7)

Impairment of PPE / Investments 8.0 9.5 (15.8)

Basic headline earnings per share 803.2 836.5 (4.0)g p ( )

Reversal of the subsequent utilisation of deferred tax asset - 23.6

Reversal of the put option in respect of (48 9) 44 3Reversal of the put option in respect of subsidiary (48.9) 44.3

Adjusted headline earnings per share 754.3 904.4 (16.6)

Functional currency impact loss / (gain) (net of Functional currency impact loss / (gain) (net of deferred tax) 124.6 (94.2)

Adjusted headline earnings per share net of functional currency impact 878.9 810.2 8.5

• ZAR strength vs US dollar adversely impacted attributable earnings per share• Functional currency impact in adjusted headline earnings per share 124.6

Income statement

35

ZAR ‘m

De De V i eDec2009

Dec2008

Variance%

Revenue 111 947 102 526 9.2

EBITDA 46 063 43 166 6 7EBITDA 46 063 43 166 6.7

EBITDA Margin % 41.1% 42.1% (1.0pts)

Depreciation (11 807) (9 939) (18.8)

Amortisation (2 668) (2 820) 5.4

Profit from operations 31 588 30 407 3.9

Net finance cost (5 810) (1 917) (203.1)

Share of losses from associate (5) - -

Profit before tax 25 773 28 490 (9.5)

Income tax expense (8 612) (11 355) 24 2Income tax expense (8 612) (11 355) 24.2

Profit after tax 17 161 17 135 0.2

Minority interests (2 511) (1 820) (38.0)

Attributable profit 14 650 15 315 (4.3)

Effective tax rate 33.4% 39.9% 6.5pts

Balance sheet

36

ZAR ‘m

Dec DecDec2009

Dec2008

Non-current assets 110 213 115 319Property, plant and equipment 67 541 64 193Goodwill and other intangible Goodwill and other intangible assets 37 526 45 786

Other non-current assets 5 146 5 340Current assets 46 024 54 787

Bank balances 23 999 26 961Bank balances 23 999 26 961Restricted cash 742 1 778Other current assets 21 283 26 048

Total assets 156 237 170 106C it l d 72 866 80 542Capital and reserves 72 866 80 542Non-current liabilities 28 426 34 973

Long term liabilities 21 066 29 100Deferred taxation and other

t li biliti 7 360 5 873non-current liabilities 7 360 5 873

Current liabilities 54 945 54 591Non–interest bearing liabilities 39 094 42 101Interest bearing liabilities 15 851 12 490

Total equity and liabilities 156 237 170 106Net debtNet debt / EBITDA

12 176.26

12 851.30

Analysis of net debt

37

Analysis of net debt

• Net debt to EBITDA of 0 26x Debt of ZAR 36,916bn• Net debt to EBITDA of 0.26x • USD 462.5m of non recourse

fundraising closed in 09• Investcom unproductive reduced to

1%

15%,

ZAR 600m and eliminated after year end

• Intercompany loans (excl holding companies and SA) total ZAR 7.6bn

52%

32%Holdco's and SAco pa es a d S ) tota 6b

mainly to Iran, Sudan and Afghanistan

Debt repayment profile

Nigeria

Iran

Ghana11%

Cash of ZAR 24,741bn

15 818

11 928

Syria

Other14%

11%

4 847

1 340 1 746

48%

7%

2%

2010 2011 2012 2013 2104

1 340 1 746

18%

Net debt of ZAR 12, 176bn

Cash flow statement

38

ZAR ‘m

Dec2009

Dec20082009 2008

Net cash generated by operations 49 634 44 836

Net interest paid (3 127) (1 283)

Taxation paid (6 843) (6 781)

Dividends paid (3 382) (2 536)

Cash inflows from operating activities 36 282 34 236

Acquisitions of PPE (excluding software) (27 720) (26 896)

Acquisition of intangible assets (1 982) (1 477)

Other investing activities (3 490) 1 196Other investing activities (3 490) 1 196

Cash outflows from investing activities (33 192) (27 177)

Cash (out) / in flows from financing activities (926) 292

Net movement in cash and cash equivalents 2 164 7 351

Cash and cash equivalents at the beg. of the year 25 596 15 546

Realised (losses)/ gains on bank accounts (5 114) 2 699

Cash and cash equivalents at the end of the year 22 646 25 596

Capex (cont)

39

p ( )ZAR ‘m

• 09 peak capex year for the Group Underspend ZAR 7.2bn09 peak capex year for the Group

• Higher spend vs competition in key markets justified by strong subscriber / revenue growth

42,0

31

-3,5

60

-3,3

82

-1,6

07

-154

-2,0

80

31,2

48

/ revenue growth

• Actual spend of ZAR 31.2bn positively impacted by fx – ZAR 3.5bn

dget FX

eria

ana

Iran

ther

tual

• Low spend vs authorised, based on optimization of spend vs traffic / network capacity demand

Bud

Nig

e

Gh I

Ot

Act

27.6% 27.9%

48

19.0%21.0%

9,7

78

15,3

48 28,2

63

31,2

4

9

2006 2007 2008 2009

Actual spend Capex as % of Revenue

Capital expenditures

40

ZAR ‘m (incl. software)

Actual Authorised Actual Dec Dec 2009* 2010** 2008***

South & East Africa 8 645 6 111 7 350

South Africa 6 034 4 245 4 868

Other operations 2 611 1 866 2 482

West & Central Africa 16 518 10 414 15 024

Nigeria 10 222 6 424 9 610Nigeria 10 222 6 424 9 610

Ghana 2 586 1 551 1 854


Middle East & North Africa 5 785 6 123 5 772

Iran 3 326 2 666 2 743

Syria 748 456 1 039y a 8 56 03


Head Office Companies 300 951 117

Total 31 248 23 599 28 263

* USD:ZAR 8.30** USD:ZAR 8.07*** USD:ZAR 8.13

Looking forward

Phuthuma Nhleko

Looking forward

42

Looking forward

l k lExpansion opportunities

• Actively seeking value-accretive opportunities in emerging markets to reduce concentration risk and leverage economies of scale

Rollout• Monitoring infrastructure investments to ensure appropriate

levels of capacity and quality of service continued investment in fib d bl t i l i i d d t i t fibre and cable to service evolving voice and data requirements

O i l • Optimising efficiencies including infrastructure sharing, Operational evolution

Optimising efficiencies including infrastructure sharing, standardisation of systems and process, rationalisation of suppliers, cost management and cash optimisation

Regulatory • Continued engagement with regulatory authorities in the development and refinement of the telecommunications sector

BEE • The implementation of MTN’s BEE transaction

Subscriber guidance 2010

43

Net additions guidance for 2010

Subscriber guidance 2010

Net additions guidance for 2010

South Africa 800

Nigeria 6 000

Ghana 800Ghana 800

Iran 5 000

Syria 400

Rest 7 000Rest 7 000

20 000

Thank you

Questions

Notice

45

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 forward looking statements expressed represent those of the Company at the time. Undue reliance should not be placed on such statements and opinions because by nature they are subjective to known and unknown risk and uncertainties statements and opinions because by nature, they are subjective to known and unknown risk and uncertainties and can be affected by other factors that could cause actual results and Company plans and objectives to differ materially from those expressed or implied in the forward looking statements.

Neither the Company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (based on negligence or otherwise) for any loss howsoever arising from any use of this whatsoever (based on negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation and do not undertake to publicly update or revise any of its opinions or forward looking statements whether to reflect new information or future events or circumstances otherwise.

This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

Annexures

South Africa (excl. NS and BS)

47

ZAR ‘m

Revenue

5 0

7 1

7.6

8.1

9.1

8.3

32,1

48

905

320

28

33,1

49

6.3

7.0 7.1 7.0

6 6 7 7 8 8 9 9

ZAR:USD(2

52)

8 s o s r 9• H d t l Y Y lli

H1

-0

6

H2

-0

6

H1

-0

7

H2

-0

7

H1

-0

8

H2

-0

8

H1

-0

9

H2

-0

9

EBITDA

2008

Airt

& S

ubs

Inte

rco

Acc

ess

Oth

er

2009

2

• Handset volumes up YoY as average selling prices reduced, costs decreased driving margins up

• Net interconnect margin lower due to higher international rates and lower fixed to mobile

10,5

85

1,0

01

458)

(1,2

60)

542

10,4

10

international rates and lower fixed to mobile traffic

• Trading down of postpaid subscribers and lower out of bundle usageI i i l f l h f l l

(4

(

2008

enue

dis

tr

Roam

Oth

er

2009

• Initial cost of launch of loyalty programmes• Increased costs due to increased distribution

costs

2

Rev

e

Sel

l &

Inte

rco &

R O 2

Nigeria

48

gZAR ‘m

Revenue 38

20

20.3

18.7 17.9 17.9 17.8

146.9 148.0

31

,55

8

8,9

66

6 2

8)

40

,87

4

48

)

33

,32

6

15.4

14.5

16.1 128.8 128.5 128.2

126.0

116.7

118.2

6 6 7 7 8 8 9 9

ZAR

Dollar

(30

8

(7,5

4

00

8

ubs

rco

ess

her

FX FX

00

9EBITDA

H1

-0

6

H2

-0

6

H1

-0

7

H2

-0

7

H1

-0

8

H2

-0

8

H1

-0

9

H2

-0

9

20

Airt

& S

u

Inte

Acce Oth

Rev

@ P

Y 20

• Overall cost savings

• Average 18% drop in fuel price resulting in margin improvement1

8,2

48

9,3

16

,053)

37)

604)

361)

953)

24,0

56

(4,3

10)

19,7

46

• Control of marketing and consulting projects

• Increase in on-net traffic

(1,

(5 (6 (3 (9

(

2008

enue

dis

tr

Roam

oper

dse

ts

Oth

er

Y F

X FX

2009

2

Rev

e

Sel

l &

Inte

rco &

R

Dir n

et o

Han

d O

EBIT

DA @

PY 2

Ghana

49

ZAR ‘m

Revenue1 37

1.42

0.14

0 13 0 15

0.17

1.04 1.06

1.37

ZAR

6,0

47

934

330

28

66

7,4

05

738)

5,6

67

0.13 0.13 0.13

0.13 0.13

0.15

0.92 0.92 0.93 0.93

ZAR

Dollar

(1,7

2008

Subs

nte

rco

Acc

ess

Oth

er

PY F

X FX

2009

EBITDA

H1 -

06

H2 -

06

H1 -

07

H2 -

07

H1 -

08

H2 -

08

H1 -

09

H2 -

09

Air

t &

In A O

Rev

@

• Communication service tax of 6% on revenue – effective Jun08

• Selling and distribution increase – FIFA d ti i2

,786

1,3

58

9)

6) 3) 5) 3,2

91

725)

,566

advertising

• Increase in site lease rentals (network expansion) and increase in local fuel

• Increase in on net traffic MTN Zone

2

(21

(216

(113

(30 ( 7 2

2008

enue

dis

tr

oper

dse

ts

Oth

er

PY F

X FX

2009

• Increase in on-net traffic – MTN Zone2

Rev

e

Sel

l &

Dir n

et

Han

d O

EBIT

DA @

P

2

Iran

50

ZAR ‘m

Revenue 1,450.0 1,365.3 1 291 9 1,320.4 9,830.1

9, 924.7

1,291.9 ,1,197.8 1,151.9

1,090.6

1,195.0

9,168.9

ZAR

935

373

534

7,8

32

7,6

25

9,085.5

9,243.2 9,300.1

9,174.9

9,365.0 ZAR

Dollar

4,

2,

(10)

(207)

008

ubs

erco her

Y F

X FX

009

EBITDA• Cost optimisation from single vendor

H1 -

06

H2 -

06

H1 -

07

H2 -

07

H1 -

08

H2 -

08

H1 -

09

H2 -

0920

Airt

& S

u

Inte Ot

Rev

@ P

Y 20

• Cost optimisation from single vendor maintenance

• Sims/recharge vouchers locally sourced; intro of virtual recharge vouchers

1,4

92

2,8

97

(148)

(956)

(532)

2,7

53

(89)

2,6

64

• Positive improvement in interconnect margins due to growth in on-net traffic

• Focus on general cost control e.g. marketing campaigns and overall cost

(

2008

enue

dis

tr

oper

Oth

er

PY F

X FX

2009

marketing campaigns and overall cost efficiencies


2

Rev

e

Sel

l &

Dir n

et O

EBIT

DA @

P

2

Syria

51

ZAR ‘m

Revenue 7.3 7.1 7.1 7.1

6.1 5.7

5.3 5.6 51.2 51.5 51.1

49.9

47 4

ZAR

Dollar

6,5

08 2

51

34 8

89

6,8

90

97

6,9

87

46.6 46.0

47.4 46.9

6 608 bs

co ss er PY

FX 09

EBITDA

H1 -

06

H2 -

06

H1 -

07

H2 -

07

H1 -

08

H2 -

08

H1 -

09

H2 -

09

200

Air

t &

Sub

Inte

rc

Acc

es

Oth

e

Rev

@ P

Rat

es

F

200

• Revenue share increase


1,8

29

382

(669)

(233)

1,3

09

64

,373

( 1

2008

enue

oper

ther

Y F

X FX

2009

2

Rev

e

Dir n

et o O

EBIT

DA @

PY 2

Net debt

52

ZAR ‘m

Interest Net debt / Net debt /

(cash)Cash and cash

equivalents

Interest bearing

liabilities*Intercompany

eliminations

Net debt / (cash)

Dec 2009

(cash)Dec

2008

South & East Africa (4 209) 12 327 (8 901) (783) 248

S th Af i (3 390) 9 347 (7 809) ( 1 852) (100)South Africa (3 390) 9 347 (7 809) ( 1 852) (100)

Other operations (819) 2 980 (1 092) 1 069 348

West & Central Africa (6 165) 15 840 (702) 8 973 7 209

Nigeria (4 547) 12 008 - 7 461 7 440

Ghana (469) - - (469) (1 770)

Other operations (1 149) 3 832 (702) 1 981 1 539

Middle East & North Africa (5 867) 7 906 (7 108) (5 069) (4 445)

Iran (1 665) 4 491 (4 176) (1 350) 59

S i (3 331) (3 331) (4 160)Syria (3 331) - - (3 331) (4 160)

Other operations (871) 3 415 (2 932) (388) (344)

Head Office Companies (8 500) 25 201 (7 646) 9 055 9 839

Total (24 741) 61 274 (24 357) 12 176 12 851

* Including long-term and short-term borrowings and overdrafts

Exchange rates analysis

53

Exchange rates analysis

Average (EBITDA) Closing

Dec 09 Dec 08 % var Dec 09 Dec 08 % var

Rand per Dollar 8.32 8.13 (2) 7.39 9.35 21

Ni i N i D ll 148 34 118 22 (25) 149 97 141 00 (6)Nigerian Naira per Dollar 148.34 118.22 (25) 149.97 141.00 (6)

Nigerian Naira per Rand 17.83 14.54 (23) 20.29 15.07 (35)

Iranian Rials per Dollar 9 942 9 364.98 (6) 10 004.00 9 801.00 (2)

I i Ri l R d 1 195 03 1 151 90 (4) 1 353 72 1 047 81 (29)Iranian Rials per Rand 1 195.03 1 151.90 (4) 1 353.72 1 047.81 (29)

Ghanaian Cedis per Rand 0.17 0.13 (31) 0.19 0.13 (46)

Syrian Pounds per Rand 5.60 5.74 2 6.20 4.96 (25)

MTN – data sheet part 1MTN data sheet part 1

Group SEA WECA MENA RSA Nigeria Ghana Syria Iran

Market overview

Population (m) 519.9 107.8 222.0 190.1 49.4 146.6 24.0 20.5 72.5

Mobile penetration (%) 103 42 61 46 80(%)

Number of operators 78 20 40 18 3 5 6 2 3

Operational data

Subscribers (‘000) 116 025 26 152 52 859 37 014 16 067 30 827 8 001 4 249 23 260Subscribers ( 000) 116 025 26 152 52 859 37 014 16 067 30 827 8 001 4 249 23 260

ARPU (USD) 17 12 8 18 8

Outgoing MOU (mins) 64 53 105 120 62

Market share (%) 32 50 55 45 40( )

Operational data (ZAR ‘m)

Revenue 111 947 39 669 50 543 21 525 33 149 33 326 5 667 6 987 7 625

EBITDA 46 063 12 701 27 029 5 782 10 410 19 746 2 566 1 373 2 664

EBITDA margin (%) 41.1 32.0 53.5 26.9 31.4 59.3 45.3 19.7 34.9

CAPEX 31 248 8 645 16 518 5 785 6 034 10 222 2 586 748 3 326

DEPRECIATION 11 807 2 744 6 693 2 362 1 995 4 809 553 645 832

AMORTISATION 2 668 508 1 375 762 220 215 447 315 161

MTN – data sheet part 2 (SEA)MTN data sheet part 2 (SEA)

Sub Total RSA Botswana Zambia Swaziland Uganda RwandaSub Total RSA Botswana Zambia Swaziland Uganda Rwanda

Shareholding (%) 100 53 98 30 97 55

Licence period (years) 20 15 15 10 20 13

M k iMarket overview

Population (m) 107.8 49.4 1.9 13.1 1.0 32.4 10.0

Mobile penetration (%) 103 120 28 54 25 19

Market position 2 1 2 1 1 1

Number of operators 3 3 3 1 7 3

Market size (m) (2014) 102.9 64.3 2.8 10.9 1.0 19.2 4.8Market size (m) (2014) 102.9 64.3 2.8 10.9 1.0 19.2 4.8

Operational data

Subscribers (‘000) 26 152 16 067 1 202 1 165 642 5 222 1 854

ARPU (USD) 17 11 7 13 6 6

Market share (%) 32 56 32 100 63 88

MTN – data sheet part 3 (WECA)MTN data sheet part 3 (WECA)

Sub Total Nigeria Ghana Cameroon Congo B Benin G Bissau G Conakry Liberia Cote d’IvoireSub Total Nigeria Ghana Cameroon Congo B Benin G. Bissau G. Conakry Liberia Cote d Ivoire

Shareholding (%) 76 98 70 100 75 100 75 60 65

Licence period (years) 15 15 15 15 10 10 18 15 20

Market overview

Population (m) 222.0 146.6 24.0 18.1 4.1 8.8 1.5 10.5 3.7 22.7

Mobile penetration (%) 42 61 39 67 45 34 29 32 51(%) 42 61 39 67 45 34 29 32 51

Market position 1 1 1 1 1 1 1 1 1

Number of operators 5 6 3 3 6 3 5 4 5

Market size (m) (2014) 185.5 110.7 22.5 9.7 4.1 6.1 1.0 6.9 1.8 23.0

Operational data

Subscribers (‘000) 52 859 30 827 8 001 4 364 1 274 1 564 413 1 273 719 4 424Subscribers ( 000) 52 859 30 827 8 001 4 364 1 274 1 564 413 1 273 719 4 424

ARPU (USD) 12 8 9 13 12 10 7 11 9

Market share (%) 50 55 61 46 40 78 41 66 38

MTN – data sheet part 4 (MENA)MTN data sheet part 4 (MENA)

Sub Total Sudan Iran Afghanistan Cyprus Syria YemenSub Total Sudan Iran Afghanistan Cyprus Syria Yemen

Shareholding (%) 85 49 100 51 75 85

Licence period (years) 20 15 15 20 15(BOT) 15

Market overview

Population (m) 190.1 39.1 72.5 33.5 0.8 20.5 23.4

Mobile penetration (%) 34 80 30 106 46 25

Market position 2 2 1 2 2 1

Number of operators 3 3 4 2 2 4

Market size (m) (2014) 148.6 26.6 75.8 18.0 1.0 12.7 14.5Market size (m) (2014) 148.6 26.6 75.8 18.0 1.0 12.7 14.5

Operational data

Subscribers (‘000) 37 014 3 773 23 260 3 186 205 4 249 2 343

ARPU (USD) 5 8 5 39 18 7

Market share (%) 28 40 32 24 45 40

Documents

MTN Group Limited · 2019. 2. 15. · capacity on network 4,519 • Completed phase 2 of 3G rollout 3,674 4,789 1,553 1,810 3,942 2,121 5,703 2,979 Dec-06 Dec-07 Dec-08 Dec-09 H2