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
Dec-06 Dec-07 Dec-08 Dec-09
-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
Dec-06 Dec-07 Dec-08 Dec-09
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
Dec-06 Dec-07 Dec-08 Dec-09
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 ($)
12,281
16,511
MTN Subscribers ('000)
ARPU (USD)
quality and capacity• Innovative segmental value
propositions• Efficient sales and distribution
18 17 16 12
Dec-06 Dec-07 Dec-08 Dec -09
( )
framework• Declining USD ARPU
• 25% devaluation of the Naira against the USD in H1 Net additions
Outgoing MOU 53 52 55 53
3,489
6,566
7,750
the USD in H1• Relatively stable in H2
• Reduction in interconnect tariffs, effective 31 Dec09
Net additions(’000)
4,2612,645
2,475
4,512
H2 H1
3,911 4,230• In line with expectation to NGN8.3• 79% on net traffic reducing impact
• SIM card registration• To be implemented on 1 May10
1,266 1,755 2,054
Dec-06 Dec-07 Dec-08 Dec-09
H2 H1• To be implemented on 1 May10• Strong distribution to assist registration
process*Legal
Nigeria
15
- infrastructure and data highlights
• Significantly improved quality and CapexZAR (million)
10,2229,610
5,668
4,519
Significantly improved quality and capacity on network
• Completed phase 2 of 3G rollout
ZAR (million)
3,674
4,789
1,553 1,8103,942
5,7032,1212,979
Dec-06 Dec-07 Dec-08 Dec-09
H2 H1
• 561 3G sites rolled out
• Phase 3 underway
• Transmission expansion• Transmission expansion
• 1 562 km of new backbone – 99% complete
BTS Rollout
Capex as % of revenue 24.6 23.6 30.5 30.7
1 560
802
• 110 km of metro fibre (87% complete)
• 25 363 active Blackberrysubscribers
BTS Rollout
1,220
785
1,560
758209
639
726• 78 331 data modems398
189 146
494209
Dec-06 Dec-07 Dec-08 Dec-09
H2 H1
Ghana
16
- operational highlightsLaunched Nov 1996 Market share 55% Population 24m Market sizing 22.5m (2014) Penetration 61% Shareholding 98%
6,428
8,001• Maintained market share in extremely competitive market
Subscribers (‘000)/ARPU ($)
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
Dec-06 Dec-07 Dec-08 Dec-09
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
Net additions(’000)
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
Dec-06 Dec-07 Dec-08 Dec-09
H2 H1p p
launch in H1:10, 6 in total• SIM registration to commence 1 Jul10
Ghana
17
- infrastructure and data highlights
• 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
Capex as % of revenue 28.5 32.8 30.7 45.6
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
Dec-06 Dec-07 Dec-08 Dec-09
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
Subscribers (‘000)/ARPU ($)
154 6,006MTN Subscribers ('000)
ARPU (USD)
• Attractive acquisition promo’s (WOW, BOGOF, reduction in price of SIMS packs) 9 10 9 8
Dec-06 Dec-07 Dec-08 Dec-09• Loyalty programs (magic number and family and friend)
• Improved capacity and coverage of network Net additions
Outgoing MOU - 69* 60* 62
4,446
network
• Focus on increased sales and distribution footprint and electronic channels
Net additions(’000)
7,221
10,033
5,587
4,023
4,073
channels
• Reducing churn and dormancy remains a priority
• Decision on launch of 3rd operator is
5,852
1,8293,148
Dec-06 Dec-07 Dec-08 Dec-09
H2 H1• Decision on launch of 3rd operator is unclear
*Restated to exclude free minutes
154
Iran
19
- infrastructure and data highlights
• Continued aggressive rolloutCapex (49%)ZAR (million)
3,326
2,142
2,282
Continued aggressive rollout
• 1 429 towns and cities now covered
• 4 996km additional road coverage (10 928k i t t l)
ZAR (million)
1,559
2,743
98714 601
1,044675
845
Dec 06 Dec 07 Dec 08 Dec 09
H2 H1
928km in total)
• Network quality remains a priority in main cities (Tehran, Tabriz and E f h )
773
Dec-06 Dec-07 Dec-08 Dec-09Esfahan)
• Site acquisitions still a concern, co-location with other operators BTS Rollout
Capex as % of revenue - 116.3 55.6 43.6
1 250
• Successful launch of Wimax Dec09
• Coverage focus on high density areas
BTS Rollout
2,043
1,6421,529
748 793
894833
1,250• 328 integrated sites
361748 696 793
361
Dec-06 Dec-07 Dec-08 Dec-09
H2 H1
Syria
20
- operational highlightsLaunched Jun 2002 Market share 45% Population 20,5m Market sizing 12.7m (2014) Penetration 46% Shareholding 75%
2 237
3,1093,539
4,249• Strong subscriber uptake in H2
• Improved promos (MTN Gold and billing
Subscribers (‘000)/ARPU ($)
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
Net additions(’000)
494
872
710
355266
494
164 699
H2
pp
• Expected to resolve by year end
494430
266
Dec-06 Dec-07 Dec-08 Dec-09
H1 11
Syria
21
- infrastructure and data highlights
• 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
Dec-06 Dec-07 Dec-08 Dec-09
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
Capex as % of revenue 9.8 9.0 16.0 10.7
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
Dec-06 Dec-07 Dec-08 Dec-09
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
Other operations 3 710 2 439 3 560
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
Other operations 1 711 3 001 1 990
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
• Increase in on-net traffic
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
• Increase in on-net traffic
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